Schrödinger (SDGR) 2026 KeyBanc Capital Markets Healthcare Forum summary

Platform innovation and validation

• Developed a computational platform enabling rapid, efficient molecule design for life sciences and materials science, aiming to replace traditional trial-and-error experimentation.

• Platform validated through 15+ years of internal and partnered drug discovery, with 15-16 programs in the clinic and high customer retention.

• Nearly all major pharma companies use the platform, with a handful leveraging it at scale and others ramping up, presenting significant growth opportunities.

• Recent product launches, including Predictive Tox, address major industry challenges like early toxicity prediction and expand the platform’s reach.

• Ongoing scientific breakthroughs and new products are expected to drive further adoption and growth.

Strategic business shifts and financial outlook

• Simplified business structure by seeking partners for clinical programs, focusing on software and discovery phases, and emphasizing hosted contracts over on-premise.

• Transitioning software business from 25% to 75% hosted contracts over three years, impacting near-term revenue recognition but supporting long-term growth.

• Set a three-year goal to achieve adjusted EBITDA profitability by growing both software and drug discovery segments while maintaining expense discipline.

• ACV adopted as a key metric to track business growth during the transition, with revenue expected to align with ACV over time.

• Transition to hosted solutions improves customer support, deployment speed, and provides smoother, more predictable revenue streams.

Market environment and growth drivers

• Funding environment and budget allocations in pharma and biotech are improving, with guidance for 10%-15% ACV growth this year.

• New product releases, such as Predictive Tox, are unlocking additional customer budgets and expanding total addressable market.

• Predictive Tox leverages physics-based methods for early, accurate toxicity prediction, enabling earlier intervention and broader usage.

• Product innovation is driven by internal discovery needs and customer feedback, with potential for complementary M&A to enhance the platform.

• Regular cadence of multiple new product releases or major enhancements each year, supported by a large R&D effort.