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Here are brief analogies to describe Schrödinger (SDGR):

• Autodesk for molecular design.
• A software-driven pharmaceutical company.

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• Physics-based Software Platform: Schrödinger provides a sophisticated software platform to clients in life sciences and materials science for the discovery of novel molecules.
• Drug Discovery and Development: The company actively engages in the discovery and advancement of novel molecules, building a portfolio of preclinical and clinical drug programs internally and through collaborations.

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Schrodinger (SDGR) primarily sells its software and engages in drug discovery collaborations with other companies and institutions.

Based on the provided background information, its major customers are identified by the following categories of organizations:

• Biopharmaceutical companies
• Industrial companies (especially in materials science industries)
• Academic institutions
• Government laboratories

The provided background information does not list specific names of individual customer companies or their public symbols.

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Amazon.com Inc. (AMZN)

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Ramy Farid, Ph.D. President and Chief Executive Officer

Ramy Farid joined Schrödinger in 2002, becoming President in January 2008 and Chief Executive Officer in January 2017. He has been instrumental in over 40 research collaborations and joint ventures and led the company through its initial public offering in 2020. Dr. Farid previously served as an assistant professor in chemistry at Rutgers University. He holds a Ph.D. in chemistry from Caltech and completed an NIH postdoctoral fellowship at the University of Pennsylvania. He serves on the boards of Vir Biotechnology, Inc., Ajax Therapeutics, Inc., and Oak Hill Bio Ltd., and previously on the boards of Structure Therapeutics Inc., and Nimbus Therapeutics, which he co-founded in 2009. He also served on the board of Morphic Therapeutic, Inc., which was later acquired by Eli Lilly and Company.

Richie Jain Chief Financial Officer

Richie Jain was appointed Executive Vice President, Chief Financial Officer, and Treasurer of Schrödinger in May 2025. Prior to this role, he served as Senior Vice President, Strategic Finance, and Head of Corporate and Business Development at Schrödinger since February 2024. Before joining Schrödinger, Mr. Jain was a Managing Director in healthcare investment banking and mergers and acquisitions at Morgan Stanley & Co. LLC. His background also includes an electrical engineering position at Boston Scientific Corporation. He holds a B.S. in electrical engineering from the University of Michigan and an MBA from the University of Chicago Booth School of Business.

Karen Akinsanya, Ph.D. President, Head of Therapeutics R&D and Chief Strategy Officer, Partnerships

Dr. Karen Akinsanya is the President, Head of Therapeutics R&D and Chief Strategy Officer, Partnerships at Schrödinger. In this role, she oversees the clinical development of the company's internal pipeline.

Robert Abel, Ph.D. Executive Vice President, Chief Scientific Officer, Platform

Robert Abel joined Schrödinger in 2009. He is responsible for advancing the company's computational science platform and leads the computational chemistry team within its drug discovery group. Dr. Abel earned his Ph.D. from Columbia University, where his doctoral research focused on developing methods to quantify the role of solvent in protein-ligand binding.

Mannix Aklian Executive Vice President, Chief Commercial Officer, Global Head of Software Sales and Marketing

Mannix Aklian serves as the Executive Vice President, Chief Commercial Officer, and Global Head of Software Sales and Marketing at Schrödinger.

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The key risks to Schrödinger's business (NASDAQ: SDGR) primarily stem from the inherent challenges within its drug discovery segment, intense competition in its operational markets, and a history of significant operating losses.

1. Drug Discovery Segment's High Risk and Capital Intensity

Schrödinger's drug discovery segment is characterized by inherent risks, including a high failure rate for clinical candidates and significant capital requirements. The success of this segment heavily relies on favorable clinical trial outcomes and timely regulatory approvals. For instance, the cancellation of drug collaborations, as seen with a prior agreement where a partner significantly reduced its targets, highlights the volatility of revenue streams from such partnerships. Negative results from internal clinical programs, like the discontinuation of the SGR-2921 program due to adverse events, can severely impact valuation and investor sentiment. The dependence on this risky and capital-intensive segment for future revenue growth exposes the company to the unpredictable nature of drug development.

2. Intense Competition

Schrödinger operates in highly competitive life sciences and software industries, where numerous companies are vying for market share. This competitive landscape necessitates continuous innovation and adaptation to maintain an edge. The company faces pressure from established players, emerging startups, and even the potential for open-source software or new AI-native drug discovery firms to offer competitive or superior solutions, which could impact its software's value proposition and market adoption.

3. Operating Losses and Path to Profitability

Despite experiencing robust revenue growth in both its software and drug discovery segments, Schrödinger has consistently incurred significant operating losses and negative operating cash flow. The substantial expenses associated with its drug discovery programs contribute significantly to these losses. The company's ability to effectively manage these losses and achieve sustained profitability is crucial for its long-term financial stability and to maintain investor confidence.

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Schrödinger (NASDAQ: SDGR) operates in two main segments: Software and Drug Discovery. The company's physics-based software platform supports the discovery of novel molecules for drug development and materials applications.

Software Segment Addressable Markets

• Computational Chemistry Software / Services: The global computational chemistry service market was valued at approximately USD 5.03 billion in 2024 and is projected to reach USD 13.54 billion by 2033, growing at a compound annual growth rate (CAGR) of 15.2%. Another estimate placed the computational chemistry sector at USD 3.3 billion in 2023, expected to expand at a CAGR of 15.5% through 2032.
• Quantum Chemistry Software: The global quantum-chemistry software market size reached USD 620 million in 2024 and is projected to grow to USD 1.75 billion by 2033, with a CAGR of 12.3%. North America accounts for approximately 38% of this market.
• Chemical Software: The chemical software market is forecast to increase by USD 561 million, with a CAGR of 11.4% between 2024 and 2029. Another report states the chemistry software market is expected to grow from USD 2.33 billion in 2025 to USD 3.99 billion by 2032, at a CAGR of 8.00%.
• Computer-Aided Drug Discovery (CADD) Software: The computer-aided drug discovery market is estimated to be around USD 7.5 billion and is projected to exceed USD 12 billion by the end of the decade, globally.
• Materials Modelling Software: The total global market size for materials modelling software was estimated to be approximately €339.5 million (around USD 360 million) in 2020.
• Materials Informatics Market: The global materials informatics market size was valued at USD 305.98 million in 2025 and is estimated to reach approximately USD 2,174.33 million by 2035, growing at a CAGR of 23.24% from 2026 to 2035. North America held a 44% market share in 2025. Another source reported the global market at USD 208.41 million in 2025, projected to reach USD 1,139.45 million by 2034, with a CAGR of 20.80%. North America dominated this market with a 39.20% share in 2024.

Drug Discovery Segment Addressable Markets

• Global Drug Discovery Market: The global drug discovery market size was estimated at USD 60.9 billion in 2024 and is expected to reach USD 138.5 billion by 2033, with a CAGR of 9.6%. North America is a dominant region in this market. The U.S. drug discovery market alone is projected to be valued at USD 25.0 billion in 2024, growing to USD 54.5 billion by 2033 at a CAGR of 9.0%.
• Drug Discovery Services Market: The global drug discovery services market size was estimated at USD 19.37 billion in 2022 and is projected to surpass USD 75.68 billion by 2032, exhibiting a CAGR of 14.6% from 2023 to 2032. North America is expected to contribute the largest share to this industry.
• AI in Drug Discovery Market: The global AI in drug discovery market is valued at USD 19.89 billion in 2025 and is projected to reach approximately USD 133.92 billion by 2034, with a CAGR of 23.22%.

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Schrödinger (SDGR) is expected to drive future revenue growth over the next 2-3 years through several key initiatives:

1. Expansion of the computational platform and new product offerings: The company is expanding its computational platform to encompass biologics and materials science. Furthermore, the launch and increasing adoption of new products, such as predictive toxicology solutions, are anticipated to attract new customers and deepen engagement with existing ones, contributing to software revenue growth.
2. Increased Annual Contract Value (ACV) from software, driven by a shift to hosted contracts: Schrödinger is accelerating its transition from traditional on-premise software licenses to hosted, ratable software contracts. This strategic shift is projected to lead to annual software ACV growth of 10% to 15% and is expected to enhance long-term revenue predictability, despite potential short-term variability in reported revenue.
3. Advancement and expansion of drug discovery collaborative programs: Revenue from the Drug Discovery segment is largely dependent on the achievement of milestones within its collaborative programs. The continued progress and expansion of high-value collaborations, including partnerships with pharmaceutical giants like Novartis and Lilly's TuneLab, are critical for generating milestone and royalty revenue.
4. Strategic implementation of a throughput-based licensing model: A strategic shift towards a throughput-based licensing model within the software segment is expected to enhance future revenue streams by aligning pricing more closely with the value generated by customers using Schrödinger's platform.

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Share Issuance

• Schrodinger completed its Initial Public Offering (IPO) in February 2020, issuing 13,664,704 shares of common stock at $17.00 per share, which generated approximately $232.3 million in gross proceeds.
• In August 2020, the company conducted a public offering of 4,500,000 shares of its common stock at $66.00 per share, resulting in gross proceeds of $297.0 million for the company.
• The diluted average shares outstanding for Schrodinger were 72.7 million in 2024 and 73.4 million in 2025. As of December 2025, the diluted average shares outstanding were 73.7 million.

Inbound Investments

• Schrodinger expects to receive an upfront payment of $150 million from Novartis in the first quarter of 2025, as part of an expanded multi-target research collaboration and licensing agreement that could include up to $2.3 billion in milestone payments and royalties.
• In 2024, the Bill & Melinda Gates Foundation provided $19.5 million in grants to fund Schrodinger's initiative to expand its computational platform for predictive toxicology.
• Schrödinger received approximately $48 million in cash from the acquisition of Structure Therapeutics, a company it co-founded, by Eli Lilly for approximately $3.2 billion.

Outbound Investments

• In January 2022, Schrodinger acquired XTAL BioStructures, Inc., a structural biology services company, for $6 million in an all-cash transaction to enhance its structural biology capabilities.

Capital Expenditures

• Capital expenditures were approximately $1.44 million for the trailing twelve months ending March 2026.
• Reported capital expenditures were $7.31 million in fiscal year 2024, $13.4 million in fiscal year 2023, $8.01 million in fiscal year 2022, and $7.17 million in fiscal year 2021.
• The primary focus of capital allocation involves significant investment in research and development (R&D), particularly for its proprietary drug discovery programs and advancing its computational platform.