Schrodinger (NASDAQ:SDGR) Issues Earnings Results, Beats Expectations By $0.17 EPS

Schrodinger (NASDAQ:SDGR) announced its quarterly earnings results on Wednesday. The company reported ($0.50) earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of ($0.67) by $0.17, FiscalAI reports. Schrodinger had a negative net margin of 20.98% and a negative return on equity of 16.37%. The firm had revenue of $64.49 million for the quarter, compared to the consensus estimate of $47.73 million. During the same period in the prior year, the firm posted ($0.45) earnings per share. The firm’s quarterly revenue was up 18.7% compared to the same quarter last year.

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 Stock Performance

Shares of NASDAQ SDGR traded up $0.12 during mid-day trading on Thursday, reaching $28.64. The company’s stock had a trading volume of 1,276,855 shares, compared to its average volume of 1,544,294. The stock has a 50-day moving average of $25.43 and a two-hundred day moving average of $16.95. The stock has a market capitalization of $2.11 billion, a P/E ratio of -38.62 and a beta of 1.69. Schrodinger has a 1-year low of $10.94 and a 1-year high of $33.78.

Analysts Set New Price Targets

Several research firms have recently issued reports on SDGR. TD Cowen increased their target price on shares of Schrodinger from $20.00 to $31.00 and gave the stock a “buy” rating in a research note on Tuesday, October 13th. Zacks Research lowered shares of Schrodinger from a “strong-buy” rating to a “hold” rating in a report on Tuesday. Weiss Ratings raised shares of Schrodinger from a “sell (e+)” rating to a “sell (d-)” rating in a report on Thursday, August 27th. 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 note on Friday, October 16th. Finally, UBS Group upped their price target on shares of Schrodinger from $19.00 to $21.00 and gave the stock a “neutral” rating in a research report on Tuesday, October 20th. Four equities research analysts have rated the stock with a Buy rating, three have given a Hold rating and one has issued a Sell rating to the company’s stock. According to data from MarketBeat.com, Schrodinger has an average rating of “Hold” and a consensus price target of $25.83.

Insiders Place Their Bets

In related news, insider Karen Akinsanya sold 31,599 shares of the business’s stock in a transaction dated Thursday, September 17th. The shares were sold at an average price of $29.37, for a total transaction of $928,062.63. Following the transaction, the insider directly owned 69,956 shares in the company, valued at approximately $2,054,607.72. The trade was a 31.12% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which can be accessed through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders own 10.10% of the company’s stock.

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.