Schrodinger (NASDAQ:SDGR) Issues Quarterly Earnings Results

Key Points

• Schrödinger beat quarterly estimates: It reported a loss of $0.50 per share, better than the consensus loss of $0.67, and revenue of $64.49 million versus expectations of $47.73 million.
• Business outlook strengthened: Third-quarter ACV increased 17% year over year to $44.7 million, and the company raised its 2026 ACV guidance to $222 million–$232 million. It also lifted full-year drug discovery revenue guidance to $75 million–$85 million.
• Losses persisted despite lower expenses: Third-quarter net loss widened to $38 million from $33 million a year earlier, while operating expenses declined 13% to $64 million. Schrödinger ended the quarter with $373 million in cash and marketable securities.

Schrodinger (NASDAQ:SDGR - Get Free Report) released its earnings results on Wednesday. The company reported ($0.50) earnings per share (EPS) for the quarter, topping the consensus estimate of ($0.67) by $0.17, FiscalAI reports. The company had revenue of $64.49 million for the quarter, compared to analysts' expectations of $47.73 million. Schrodinger had a negative return on equity of 16.37% and a negative net margin of 20.98%.

Here are the key takeaways from Schrodinger's conference call:

• ACV growth and outlook improved: Third-quarter ACV rose 17% year over year to $44.7 million, or 24% excluding contribution ACV, with growth across large pharma, biotech, and materials customers. Schrödinger raised its 2026 ACV guidance to $222 million–$232 million.
• Hosted licensing continued to expand, with a near-term reporting trade-off: Hosted revenue grew 49% and reached 45% of software revenue, while management said the shift to ratable recognition temporarily moderates reported software revenue; software gross margin was 75%, down from 77% a year earlier.
• Drug discovery revenue guidance rose on milestone activity: Revenue was $24.2 million versus $13 million a year ago, primarily due to a Structure Therapeutics milestone, and full-year guidance increased to $75 million–$85 million from $65 million–$75 million. The company also highlighted Tectora’s launch, Takeda’s priority review for zasocitinib, and progress in other partnered clinical programs.
• New computational products are gaining traction: Management reported strong early interest in Bunsen, which handles about 80% of Schrödinger’s internal high-throughput calculations, and said predictive toxicology evaluations are progressing and have already contributed to ACV. Bunsen remains in early access, and the company did not disclose customer usage or monetization details.
• Net loss widened despite lower operating expenses: Third-quarter net loss was $38 million, compared with $33 million a year earlier, while operating expenses fell 13% to $64 million. The company ended the quarter with $373 million in cash and marketable securities.

Schrodinger Price Performance

Shares of SDGR stock traded up $1.34 during midday trading on Wednesday, reaching $28.52. 1,894,047 shares of the company traded hands, compared to its average volume of 1,545,854. The firm's 50 day simple moving average is $25.26 and its two-hundred day simple moving average is $16.90. The firm has a market cap of $2.11 billion, a PE ratio of -38.54 and a beta of 1.69. Schrodinger has a 1-year low of $10.94 and a 1-year high of $33.78.

Insiders Place Their Bets

In other news, insider Karen Akinsanya sold 31,599 shares of the firm's stock in a transaction on Thursday, September 17th. The stock was sold at an average price of $29.37, for a total value of $928,062.63. Following the completion of the transaction, the insider owned 69,956 shares in the company, valued at $2,054,607.72. This trade represents a 31.12% decrease in their ownership of the stock. The sale was disclosed in a filing with the SEC, which is available through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Company insiders own 10.10% of the company's stock.

Analyst Upgrades and Downgrades

A number of analysts recently weighed in on SDGR shares. UBS Group lifted their price target on Schrodinger from $19.00 to $21.00 and gave the company a "neutral" rating in a research note on Tuesday, October 20th. Wall Street Zen upgraded Schrodinger from a "strong sell" rating to a "hold" rating in a research report on Saturday, August 8th. BMO Capital Markets raised their target price on Schrodinger from $24.00 to $30.00 and gave the company an "outperform" rating in a report on Monday, October 12th. KeyCorp boosted their target price on shares of Schrodinger from $20.00 to $32.00 and gave the stock an "overweight" rating in a research report on Friday, October 16th. Finally, Weiss Ratings raised shares of Schrodinger from a "sell (e+)" rating to a "sell (d-)" rating in a research note on Thursday, August 27th. One investment analyst has rated the stock with a Strong Buy rating, four have issued a Buy rating, two have given a Hold rating and one has issued a Sell rating to the company. According to data from MarketBeat, the stock has an average rating of "Moderate Buy" and a consensus target price of $25.83.

About Schrodinger

Schrödinger, Inc develops computational software and services designed to support pharmaceutical, biotechnology and materials research. Its platform uses physics-based modeling, machine learning and other computational methods to help scientists analyze molecular interactions, design compounds and prioritize candidates for experimental testing.

The company's software offerings include tools for molecular modeling, quantum chemistry, molecular dynamics, virtual screening, property prediction and free-energy calculations.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.