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Dec 31, 2025
Schrodinger Q4 2025 Earnings Report
Schrodinger Q4 2025 Earnings Report
Key Takeaways
Schrodinger reported a mixed fourth quarter with total revenue declining slightly by 1.2% due to a transition in software revenue recognition, though the company achieved a net income of $32.5 million compared to a loss in the prior year. The company is accelerating its shift to a hosted software model to improve revenue predictability by 2028.
Total Q4 revenue was $87.2 million, a slight 1.2% decrease year-over-year.
Software revenue decreased 13% to $69.3 million as the company transitions from upfront to ratable hosted revenue recognition.
Drug discovery revenue grew significantly to $18.0 million, up from $8.7 million in Q4 2024.
The company reported a net income of $32.5 million for the quarter, bolstered by a $47 million gain in the fair value of equity investments.
Revenue by Segment
Forward Guidance
Schrodinger provided a 2026 outlook focusing on ACV growth and expense discipline as it transitions to a hosted software model.
Positive Outlook
- Software ACV expected to grow 10-15% to $218M-$228M.
- Drug discovery revenue projected between $55M and $65M.
- Operating expenses expected to be lower than 2025 levels.
- Goal to achieve positive Adjusted EBITDA by year-end 2028.
- Q1 2026 Software ACV expected to be between $24M and $28M.
Challenges Ahead
- Transition to hosted model will cause short-to-medium term declines in GAAP software revenue.
- Drug discovery revenue remains variable due to milestone-driven timing.
- Software gross margin currently below the long-term target of high 70s (on a full-year basis).
- Net Dollar Retention for commercial customers dropped to 100% in 2025 from 113% in 2024.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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