Q2 2024 Schrodinger Inc Earnings Call Transcript
Key Points
- Schrodinger Inc (SDGR) reported strong revenue growth with total revenue for Q2 2024 at $47.3 million, up from $35.2 million in the same period last year.
- Software revenue increased by 21% year-over-year to $35.4 million, driven by higher revenue from global accounts and combined software drug discovery collaboration customers.
- The company initiated dosing in a Phase 1 solid tumor study for SGR-3515, a Wee1 and Myt1 inhibitor, and is progressing well with its first two clinical programs in Phase 1 studies.
- Schrodinger Inc (SDGR) received a $10 million grant from the Bill & Melinda Gates Foundation to fund a new computational initiative aimed at reducing the risk of development failure due to off-target protein binding.
- The company maintained its full-year software and drug discovery revenue guidance, reflecting confidence in its revenue outlook and ongoing customer engagements.
- Despite the revenue growth, Schrodinger Inc (SDGR) reported an operating loss of $52.7 million for Q2 2024, although this was an improvement from a loss of $61.1 million in the same period last year.
- The company continues to face challenges in certain geographies, particularly in China, due to reduced availability of capital for biopharma research and geopolitical issues.
- There is volatility around renewals and scale purchasing among emerging and small biotech customers, with some reducing or halting drug discovery efforts due to balance sheet and strategic concerns.
- The gross margin for software is expected to be slightly lower than last year due to the lower profitability of the grant-funded predictive toxicology project compared to software revenue from contracts with customers.
- Schrodinger Inc (SDGR) anticipates higher cash use this year compared to last year, and there are concerns about the company's cash position and potential need for additional capital in the future.
Thank you for standing by. Welcome to Schrödinger's conference call to review our second-quarter 2024 financial results. My name is Madison and I will be your operator for today's call. (Operator Instructions)
Please be advised that this call is being recorded at the company's request.
Now I would like to introduce your host for today's conference, Ms. Jaren Madden, Senior Vice President of Investor Relations and Corporate Affairs. Please go ahead.
Thank you, and good afternoon, everyone. Welcome to today's call during which we will provide an update on the company and review our second-quarter 2024 financial results. Earlier today, we issued a press release summarizing our financial results and progress across the company, which is available on our website at schrodinger.com.
Here with me on our call today are Ramy Farid, Chief Executive Officer; Geoff Porges, Chief Financial Officer; and Karen Akinsanya, President of R&D and
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