Total Revenue

+63% (from $36.598M in Q1 2024 to $59.551M in Q1 2025)

Revenue growth was driven by robust increases across segments: Software revenue grew by 46% and Drug Discovery revenue surged by 236%, while a dramatic improvement in EMEA performance (over 220% increase) helped offset the comparatively lower revenues in Q1 2024. " " " " " "

Software Segment Revenue

+46% (from $33.415M in Q1 2024 to $48.8M in Q1 2025)

Growth resulted from stronger on-premise and hosted software sales along with new software contribution agreements, reflecting a marked improvement over the previous period where hosted software and related revenue streams were lower. " " "

Drug Discovery Revenue

+236% (from $3.183M in Q1 2024 to $10.7M in Q1 2025)

The surge was primarily due to new collaborations such as the Novartis partnership and accelerated progress in existing projects, which generated substantially higher revenue compared to the modest figures seen in Q1 2024. " " "

Geographic Performance (EMEA)

Over +220% (from $7.196M in Q1 2024 to $23.08M in Q1 2025)

Remarkable improvement in EMEA revenue indicates expanded market penetration and increased adoption in this region, contrasting with the relatively modest performance in Q1 2024. " "

Gross Profit

+65% (from $18,890K in Q1 2024 to $31,124K in Q1 2025)

Gross profit improved significantly as the revenue uplift outpaced cost increases, demonstrating favorable margin expansion compared to Q1 2024. " "

Operating Expenses

-5% (from $86,323K in Q1 2024 to $82,013K in Q1 2025)

A reduction in operating expenses, achieved via improved efficiencies and cost controls, helped narrow the loss from operations despite the higher scale of business compared to Q1 2024. " "

Net Loss

+9% (from $54,724K in Q1 2024 to $59,808K in Q1 2025)

Even though operating expenses decreased, factors such as a higher cost of revenues and a significant negative swing in other expense items contributed to a modest increase in net loss over the period compared to Q1 2024. " "

Liquidity (Cash & Restricted Cash)

+105% (from $160,416K in Q3 2024 to $325,997K in Q1 2025)

Liquidity strengthened markedly due to strong cash generation from operations and positive cash flows from investing activities, although the previous period was characterized by lower marketable securities and higher collection delays. " "

Total Liabilities

+68% (from $219,871K in Q3 2024 to $369,528K in Q1 2025)

The significant increase in total liabilities was driven by higher deferred revenues and adjustments in accrued liabilities, indicating increased leverage compared to the prior period. " "

Clinical Pipeline Progress

In Q4 2024, Q3 2024, and Q2 2024, the clinical pipeline was consistently discussed with updates on SGR-1505 (MALT1 inhibitor), SGR-2921 (CDC7 inhibitor), and SGR-3515. These periods emphasized ongoing Phase I studies, data timelines for initial readouts (Q2/first half of 2025), and potential partnerships (e.g., combination with established drugs). " " " "

In Q1 2025, the company provided more detailed progress on its clinical pipeline, including clear timelines (e.g., EHA presentation in mid-June and ICML later in June) and expanded insights into each program’s development, particularly for SGR-1505 and the emerging CDC7 inhibitor data. " " "

Consistent focus on advancing clinical assets with increasingly detailed timelines and stronger data-sharing commitments. Sentiment remains positive with an emphasis on the platform’s potential to drive future R&D achievements.

Software Revenue Transition

Across Q2, Q3, and Q4 2024, there was a consistent emphasis on the shift from on‑prem to hosted recurring revenue—with notable hosted growth in Q4 (86% hosted in Q4, 28% in Q3, and significant gains in Q2)—highlighting a gradual revenue mix evolution. " " "

In Q1 2025, the discussion continued with robust increases in both on‑prem (up 44%) and hosted (up 52%) revenue. The emphasis remained on the ongoing transition to a recurring hosted model, which is set to reduce quarter‐concentration compared to previous years. " "

Steady transition with an increasing share of hosted revenue. The narrative has evolved toward balancing the revenue mix while reducing Q4 dependency, signaling a positive long‑term operational trend.

Customer Engagement and Retention

Q2, Q3, and Q4 2024 consistently highlighted strong customer retention, near 100% retention for large ACV accounts, and robust renewals from major pharmaceutical companies. However, each period also noted churn among small biotech accounts, attributed to acquisitions and restructuring. " " "

Q1 2025 maintained the theme: strong renewals from larger accounts drive growth, even as small/emerging biotech churn persists. The commentary underlined that Schrödinger’s software is viewed as “necessary” in large pharma settings, despite limited new small biotech contributions. " "

Ongoing strength in large account retention and engagement, with persistent challenges in the small biotech segment. The sentiment remained positive overall, underpinned by strong renewals and incremental growth from established customers.

Strategic Collaborations with Major Pharma

In Q2 and Q3 2024, the focus was on key partnerships—with Q3 emphasizing a significant Novartis collaboration (including an upfront payment and multi-target strategy) and Q2 discussing deals around Morphic and others, while Q4 highlighted expanded relationships with Novartis, Lilly, and Otsuka. " " "

Q1 2025 continued to underscore robust collaborations, notably the Novartis partnership’s upfront revenue impact and expanded commitments with other major pharma like Lilly. The strategic narrative positioned these collaborations as central to de‑risking R&D investments. " "

Sustained emphasis on partnerships as a core growth driver. The collaborations remain a consistent, positive theme that supports both R&D progress and financial health. The incremental revenue boosts and strategic benefits are reinforcing the company’s long‑term positioning.

Financial Health and Cash Management

Q2, Q3, and Q4 2024 raised concerns regarding cash burn and liquidity—even though there were initiatives (such as the Morphic sale in Q3 and Novartis receivables in Q4) to bolster the balance sheet. There was cautious optimism despite operating losses and increased operating expenses. " " "

In Q1 2025, the narrative shifted toward an improved cash position with a strong reversal of cash burn (net operating cash flow turning positive) driven by the Novartis upfront payment and improved collections, though liquidity remains under close watch. "

Noticeable improvement in cash management in Q1 2025 compared to earlier periods. While earlier periods reflected ongoing liquidity concerns, the current period shows stronger cash inflows, suggesting effective short‑term mitigation though vigilance remains necessary for long‑term sustainability.

Revenue Guidance and Milestone Uncertainty

Q2, Q3, and Q4 2024 emphasized a heavy reliance on Q4 for revenue recognition and an inherent uncertainty in milestone achievements, with revised forecasts particularly for drug discovery revenues. Expectations were tempered by late‑year dependency and variability in milestone timing. " "

Q1 2025 maintained similar themes with revenue guidance noting significant Q4 contributions for software revenue, and acknowledgment of milestone uncertainty (e.g., delayed Novartis revenue ramp-up). Currency fluctuations were also noted as a near‑term variable. "

Persistent dependency on late‑year milestones and revenue recognition. Although forecasts are being refined progressively, uncertainty in milestone timing continues. The guidance remains cautiously optimistic with refined ranges but still reliant on Q4 performance.

R&D Investment and Resource Constraints

In Q2 and Q3 2024 and also highlighted in Q4 2024, the company discussed increasing R&D expenses (driven by higher headcounts and CRO costs) and the challenge of allocating resources between proprietary programs and collaborations. There was also talk of exploring partnerships to offset internal funding needs. " "

In Q1 2025, R&D expenses were slightly reduced due to reallocation of staff from proprietary discovery efforts to collaborations, with an emphasis that the current investment level is sustainable. The approach continues to balance internal R&D with strategic partnerships. " "

Consistent management of R&D investments with ongoing resource constraints. The strategy of leveraging partnerships to offset expenses remains constant, although the current period shows a slight expense reduction, suggesting a measured approach to resource allocation and cost control.

Competitive Landscape in Therapeutic Areas

Although not broadly covered across all previous periods, Q4 2024 uniquely highlighted rising competition in the MALT1 inhibitor space (citing new entrants like J&J and AbbVie). Q2 and Q3 2024 did not emphasize competitive pressures significantly. " "

Q1 2025 did not mention competitive pressures, suggesting that the focus shifted to internal clinical progress rather than external competitive dynamics.

Deprioritization of the competitive landscape discussion in the current period. While Q4 2024 raised concerns about increasing competition in MALT1 inhibitors, this topic has faded from the Q1 2025 narrative—indicating either a strategic de‑emphasis or a temporary lull in competitive commentary.

Operational Initiatives Impacting Margins

In Q2, Q3, and Q4 2024, the predictive toxicology initiative (funded by the Gates Foundation) was consistently noted as impacting gross margins—in Q4 margins declined noticeably, while Q3 and Q2 described temporary negative effects that were expected to reverse post‑grant. " " "

In Q1 2025, the initiative continued to affect margins, as software gross margins fell due to a change in revenue mix; however, management reiterated that the impact is temporary and margins should rebound post mid‑2026. " "

Steady short‑term pressure on margins from the predictive tox initiative. Across all periods, the operational impact is acknowledged as temporary with expectations for recovery. The sentiment remains cautious but confident that the negative margin effect will reverse, supporting long‑term margin improvement.