Q2 2024 Earnings Summary
Reported on Feb 18, 2025 (After Market Close)
Pre-Earnings Price$22.28Last close (Jul 31, 2024)
Post-Earnings Price$24.32Open (Aug 1, 2024)
Price Change
$2.04(+9.16%)
- Schrödinger is experiencing strong customer engagement with large pharmaceutical companies, with significant interest in scaling up software usage, suggesting future revenue growth and increased market penetration. The company expects near 100% customer retention rate, and customers are likely to renew at increased scale in the fourth quarter.
- Clinical programs are progressing well, with enrollment going as planned and the initiation of dosing in the third program. The company has tightened the timelines for data readouts, planning to present initial clinical data from their MALT1 inhibitor in the first half of 2025 and from their CDC7 inhibitor in the second half of 2025, indicating positive momentum in their therapeutics pipeline.
- Despite challenging conditions for small biotech companies, Schrödinger is seeing more new accounts and significantly more growth accounts than reducing accounts, indicating resilience in their customer base and potential for continued software revenue growth. The company notes that newly formed companies are frequently reaching out to become software customers, and they are absorbing any negative impacts in their results and guidance.
- The company's cash burn is high, and with projected end-of-year cash around $366 million, they may have less than a year of cash if they don't secure additional capital through partnerships or other means.
- Revenue growth is heavily dependent on Q4 renewals and scale-ups, introducing uncertainty in their guidance; the range reflects the unknown scale of customer contract renewals ,.
- The improvements in gross margins may not be sustainable and could reverse if collaborations increase; additionally, software gross margins will be temporarily reduced due to the predictive tox initiative, funded by the Gates Foundation.
Research analysts covering Schrodinger.