While the strong 2025 revenue growth and improved profitability are positive, traders should focus on the accelerating transition to hosted software, which will create a headwind for reported software revenue growth in the near term. Monitor ACV growth (guided at 10-15% for 2026) and net dollar retention as better indicators of underlying software business health. The path to positive adjusted EBITDA by 2028 is a key long-term milestone.
Price Chart
Executive Summary
Schrodinger reported strong full-year 2025 financial results with total revenue of $255.9 million, representing 23.3% year-over-year growth, driven by a 10.6% increase in software revenue and a significant jump in drug discovery revenue. The company is accelerating its transition to a hosted software model, which will shift revenue recognition from upfront to ratable, potentially reducing near-term GAAP revenue despite stable ACV growth. Management provided 2026 guidance and 2028 objectives, including a path to positive adjusted EBITDA.
Key Financial Metrics
Key Facts
- Full-year 2025 total revenue was $255.9 million, up 23.3% YoY.
- Software revenue grew 10.6% to $199.5 million, while drug discovery revenue more than doubled to $56.4 million.
- Net loss narrowed to $103.3 million from $187.1 million in 2024.
- The company is accelerating its transition to hosted software, which will shift revenue recognition from upfront to ratable, impacting near-term GAAP revenue.
- 2025 Software ACV was $198.5 million, up 4.0% YoY, with net dollar retention at 100%.
- 2026 guidance includes Software ACV of $218M-$228M (10-15% growth) and drug discovery revenue of $55M-$65M.
- The company aims for positive adjusted EBITDA by the end of 2028.
Financial Impact
Total revenue increased by $48.3 million YoY to $255.9 million, with drug discovery revenue contributing $29.2 million of that growth. The shift to hosted revenue recognition is expected to create a short-to-medium term headwind for software revenue growth despite strong underlying ACV growth.
Segment Breakdown
| Segment | Revenue | Growth |
|---|---|---|
| Software | $199.5M | +10.6% |
| Drug Discovery | $56.4M | +107.4% |
Risk Factors
- The transition to hosted software will likely cause reported software revenue to decline in the short-to-medium term, which could pressure the stock despite stable ACV.
- Net dollar retention for commercial customers declined to 100% in 2025 from 113% in 2024, indicating reduced expansion revenue from the existing customer base.
- The company remains unprofitable on a GAAP basis, with a net loss of $103.3 million in 2025, and positive adjusted EBITDA is not expected until 2028.
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 5 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 8-K Filing (Primary) | 0001490978-26-000009 |
| Document: sdgr-20260225.htm | 0001490978-26-000009 |
| Document: 0001490978-26-000009-index-headers.html | 0001490978-26-000009 |
| Document: 0001490978-26-000009-index.html | 0001490978-26-000009 |
| Document: 0001490978-26-000009.txt | 0001490978-26-000009 |
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Jun 29, 2026 17w ago | 8-K | $16.25 $29.23 | ▲ +79.88% | ▲ +77.06% | $24.50 (+50.77%) |
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