Schrödinger's Q2 2025: Unpacking Contradictions in Customer Engagement, Toxicology Feedback, and Revenue Confidence

Customer engagement and renewals, predictive toxicology adoption and feedback, customer demand and retention, out-licensing and strategic partnerships, financial guidance and revenue confidence are the key contradictions discussed in Schrödinger's latest 2025Q2 earnings call.



Revenue Growth and Strong Software Demand:
- Schrodinger Inc reported total revenue of $54.8 million in Q2 2025, a 16% increase year-over-year.
- Software revenue reached $40.5 million, marking a 15% year-over-year growth.
- The growth was driven by sustained demand for the company's software platform, validated computational approaches, and industry need for efficient R&D processes.

Progress in Therapeutic Pipeline:
- The company reported encouraging Phase I data for its proprietary MALT1 inhibitor, SGR-1505, showing a well-tolerated profile with clear monotherapy signals in heavily pretreated chronic lymphocytic leukemia and Waldenstrom's macroglobulinemia.
- Additionally, Schrodinger plans to share initial Phase I data for SGR-2921 and SGR-3515 in Q4 2025.
- This progress is attributed to the company's efficient drug discovery programs and strategic partnerships.

Operating Expenses Reduction:
- Schrodinger reduced R&D expenses to $43.1 million in Q2 2025, a 15% decrease from the previous year.
- The company's total operating expenses were $79 million, a 6% decrease year-over-year.
- These reductions were primarily due to the shift in expenses from the predictive toxicology initiative into software cost of goods sold and reduced CRO and FTE spending following the $30 million expense reduction initiatives.

Predictive Toxicology Initiative:
- Schrodinger released the beta version of a virtual kinase panel to prospectively identify potential liabilities for an initial set of approximately 50 representative kinases.
- The company now supports prediction of binding to off-targets like hERG, PXR, and three common Singh Indians.
- This initiative is part of the FDA's efforts to reduce reliance on animal models in drug discovery, enhancing regulatory compliance and potentially lowering costs.