Schrodinger, Inc. (SDGR): Results of Operations and Financial Condition
Schrodinger, Inc. (SDGR) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 Schrödinger Reports Second Quarter 2026 Financial Results Second Quarter ACV of $30 Million, Representing 27% Growth Launched Early Access Version of Bunsen, A New Agentic AI Co-Scientist for Molecular Discovery New York, August 5, 2026 – Schrödinger, Inc. (Nasdaq: S
How this was made
The 30-second read
Why it matters
Key tradable items are the updated ACV and drug discovery revenue guidance ranges, the driver being the $10M Ajax collaboration milestone, and the shift toward hosted software licensing with higher software gross margin.
Market read
Traders can update models immediately using the raised FY drug discovery revenue range and the ACV growth trajectory, with a clear milestone-based explanation.
What to watch
Other income surged due to a gain tied to Eli Lilly completing the Ajax acquisition, which may not be repeatable; traders may focus on operating performance excluding investment gains.
Second Quarter ACV of $30 Million, Representing 27% Growth; Launched Early Access Version of Bunsen, A New Agentic AI Co-Scientist for Molecular Discovery
ACV grew 27% and total revenue increased 8%, while drug discovery revenue benefited from a $10 million collaboration milestone. Software revenue declined 10%, contribution revenue declined, and net income was primarily supported by other income associated with the Ajax Therapeutics acquisition.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Annual contract value (ACV)other | $29.6 million | – | 27% increase |
| Annual contract value (ACV), trailing four-quarter basisother | $208 million | – | – |
| ACV excluding contribution ACVother | $22.6 million | – | 23% increase |
| ACV excluding contribution ACV, trailing four-quarter basisother | $196 million | – | – |
| Total revenueGAAP | $58.9 million | – | 8% increase |
| Software gross marginGAAP | 71% | – | – |
| Hosted revenue as a percentage of total software revenueother | 47% | – | – |
| Hosted revenue as a percentage of total software revenue, trailing four-quarter basisother | 30% | – | – |
| Operating expensesGAAP | $74.0 million | – | 6% decrease |
| Other incomeGAAP | $48.9 million | – | – |
| Net incomeGAAP | $6.0 million | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Software revenuePrimarily reflecting continued progress in the company’s accelerated transition to hosted software licensing. | $32.5 million | – | 10% decrease |
| Drug discovery revenuePrimarily due to the achievement of a $10 million collaboration milestone associated with the Ajax Therapeutics acquisition. | $23.0 million | – | – |
| Contribution revenuePrimarily due to timing of revenue associated with the Gates Foundation predictive toxicology and Gates Ventures battery project grants. | $3.4 million | – | – |
fiscal year ending December 31, 2026 and third quarter of 2026 outlook
- Operating expensesOperating expenses are expected to be less than 2025.
- NoteFiscal year 2026 ACV is expected to range from $218 million to $228 million, representing 10-15% growth over 2025.
- NoteFiscal year 2026 drug discovery revenue is expected to range from $65 million to $75 million, compared to the prior expectation of $55 million to $65 million, due to the achievement of a $10 million collaboration milestone associated with the Ajax acquisition.
- NoteFor the third quarter of 2026, ACV is expected to range from $41 million to $45 million, excluding contribution ACV, compared to $38.3 million in the third quarter of 2025, which included $2.2 million of contribution ACV.
What drove it
- ACV was $29.6 million, a 27% increase.
- Drug discovery revenue included a $10 million collaboration milestone associated with the Ajax Therapeutics acquisition.
- Schrödinger launched the early access version of Bunsen, its agentic AI co-scientist for molecular discovery.
- Schrödinger announced a strategic software agreement with Bristol Myers Squibb to deploy Bunsen.
- Schrödinger announced a global drug discovery and development collaboration with Simcere Pharmaceutical Group.
Concerns
- Software revenue was $32.5 million, a 10% decrease, primarily reflecting the accelerated transition to hosted software licensing.
- Software gross margin was 71%, reflecting the planned accelerated transition to hosted software licensing.
- Contribution revenue was $3.4 million, compared to $4.8 million, primarily due to timing of grant-related revenue.
- Other income was $48.9 million primarily due to a gain associated with the completion of Eli Lilly and Company’s acquisition of Ajax Therapeutics.
What to watch
- Execution of the fiscal year 2026 ACV outlook of $218 million to $228 million.
- Third-quarter 2026 ACV, expected to range from $41 million to $45 million, excluding contribution ACV.
- Adoption of Bunsen following its early access launch and deployment under the Bristol Myers Squibb software agreement.
- The pace of the transition to hosted software licensing and its effect on software revenue and software gross margin.
- Drug discovery revenue delivery against the increased fiscal year 2026 outlook of $65 million to $75 million.
Balance sheet and cash flow
- Cash, cash equivalents, restricted cash and marketable securities were $418.8 million.
Analysis
Schrödinger reported second-quarter ACV of $29.6 million, a 27% increase, with ACV excluding contribution ACV of $22.6 million, a 23% increase. Total revenue was $58.9 million, an 8% increase. The result indicates growth in the company’s underlying software commercial activity as measured by ACV, which the company presents independently of GAAP revenue recognition timing, delivery models, and billing structures.
Management, verbatim
We are very pleased with our second quarter results, delivering ACV of $29.6 million, which represents 27% growth. Our results reflect growing industry adoption of a predict-first approach to molecular discovery.
Ramy Farid, Ph.D., chief executive officer of Schrödinger
Not in the filing
stated, not guessed- GAAP operating income or loss
- GAAP gross profit and total gross margin
- GAAP diluted EPS and basic EPS
- Adjusted EBITDA result and its reconciliation to GAAP net income or loss
- Prior-year total revenue amount
- Prior-year software revenue amount
- Percentage change for drug discovery revenue
- Percentage change for contribution revenue
- Prior-year operating expenses amount
- Prior-year other income amount
- Prior-year software gross margin
- Prior-quarter comparisons for reported metrics
- Operating cash flow
- Free cash flow
- Debt
- Share repurchases
- Dividends
- Total revenue guidance
- Gross margin guidance
- Tax-rate guidance
- Prior outlook section for comparison with actual reported results
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
This is an SEC 8-K (Item 2.02) with Q2 2026 results and updated FY 2026 guidance, plus product and customer/collaboration updates around Bunsen.
Ticker impact
Schrodinger reported Q2 2026 ACV of $29.6M (+27%) and raised FY drug discovery revenue guidance to $65M-$75M.
Likely positive near-term bias as traders reprice FY drug discovery revenue and ACV growth trajectory.
The filing is a primary disclosure (8-K) with specific quarterly results and updated full-year guidance, including a clear driver (Ajax milestone) and improving operating metrics (operating expenses down, software gross margin 71%).
Market effects
Reinforces demand for physics-based simulation plus agentic AI in molecular discovery, supporting sentiment for computational drug discovery software.
Limited, primarily US-listed biotech/AI software sentiment.
Moderate, as collaborations with large pharma (BMS) and global cloud/AI partners signal broader enterprise adoption.
Counterpoint
Software revenue declined 10% year over year, so the market may question whether hosted transition and ACV growth fully offset near-term revenue mix pressure.
Key entities
- companySchrodinger, Inc.
Nasdaq-listed computational molecular discovery company reporting Q2 results and FY 2026 guidance.
- productBunsen
Agentic AI co-scientist early access version for molecular discovery workflows.
- customer_partnerBristol Myers Squibb
Strategic software agreement to deploy Bunsen across its research organization.
- collaboration_partnerSimcere Pharmaceutical Group
Global drug discovery and development collaboration for an unmet clinical-need program.
- transaction_partnerEli Lilly and Company
Completion of acquisition of Ajax Therapeutics drove a gain in other income.
