Schrodinger(SDGR) - 2022 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Total revenue for Q2 2022 was $38.5 million, representing a 29$30 million, a 25% growth year-over-year [8][17] - Drug discovery revenue was $8.5 million, up from$5.7 million in Q2 2021 [19] - Gross profit was $17.1 million, reflecting a 43$47.7 million for Q2 2022, compared to a loss of $35 million in Q2 2021 [21] Business Line Data and Key Metrics Changes - Software revenue growth was driven by increased adoption from existing customers and new customer additions [18] - Drug discovery revenue included$5.4 million from collaboration with Bristol-Myers Squibb and preclinical milestones [19] Market Data and Key Metrics Changes - The company ended the quarter with approximately $513 million in cash, down from$529 million at the end of Q1 2022 [22] - The company expects software revenue for Q3 2022 to range from $23 million to$25 million, similar to Q3 2021 [24] Company Strategy and Development Direction - The company aims to accelerate growth in its software business and advance drug discovery programs [5] - The company is focused on maintaining a strong financial position to fund operations and advance clinical studies [10] - The company plans to continue investing in its platform and pipeline while pursuing profitability [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining full-year financial guidance despite anticipated fluctuations in software revenue [9][25] - The company expects total annual revenue to be between $161 million and$181 million, indicating 17% to 31% growth over 2021 [25] Other Important Information - The company submitted its first internal IND for the MALT1 inhibitor SGR-1505 and is preparing to initiate a Phase I trial [12][31] - The company has added four new early discovery programs in precision oncology and immunology [40] Q&A Session Summary Question: Clarification on Q3 software guidance and customer renewals - Management noted that Q3 is typically the lowest revenue quarter and there are fewer large customers up for renewal [49] Question: Customer spending patterns and ACV growth - Management indicated no signs of weakness in customer spending and maintained guidance for ACV growth in 2023 [51][52] Question: New business wins in life sciences and material sciences - Management highlighted that growth primarily comes from existing customers, with some new customer growth observed [58] Question: Internal capabilities for drug development - Management confirmed the addition of experts to the team to support upcoming clinical trials [60] Question: Visibility on new oncology and immunology programs - Management stated that new programs are being developed with a focus on differentiation and validation [64] Question: Details on the design of the SGR-1505 study - Management explained that the study aims to establish safety and tolerability, with pharmacokinetic and pharmacodynamic data being collected [68] Question: Impact of recent discontinuation of a Wee1 inhibitor on their program - Management expressed optimism about their Wee1 inhibitor program, emphasizing enhanced selectivity and drug-like properties [71]