Schrodinger(SDGR)2021-05-11 16:54Financial Data and Key Metrics Changes - Total revenue for Q1 2021 was 26.3 million, reflecting an 11% growth year-over-year [35] - Drug discovery revenue was 2.4 million in Q1 2020, including 16.2 million, a 3% increase from the previous year, with software gross margin at 78%, down from 83% [38] - Operating expenses rose to 27.4 million in Q1 2020, driven by R&D investments and public company infrastructure costs [39] - The company recorded a net loss of approximately 13.8 million in the prior year [41] - Cash and equivalents at the end of Q1 2021 were 643.2 million at the end of Q4 2020 [41] Business Line Data and Key Metrics Changes - Software revenue growth was attributed to increased deployment of solutions and new customer growth [35] - Drug discovery revenue included significant contributions from collaborations, particularly with Bristol Myers Squibb [36][37] Market Data and Key Metrics Changes - The company is experiencing a strong financial position, allowing for continued investment in R&D and growth initiatives [16] Company Strategy and Development Direction - The company aims to leverage its computational platform for drug discovery and materials applications, focusing on high-quality molecule identification [9][10] - Strategic collaborations, such as with NVIDIA and AstraZeneca, are intended to enhance platform capabilities and broaden deployment [15][13] - The company is committed to advancing its internal drug discovery pipeline and expanding its software business [16][14] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about returning to in-person work by Q4 2021 and highlighted the dedication of employees during COVID-19 challenges [17] - The company reaffirmed its full-year revenue guidance, expecting total annual revenue between 142 million [42] - Anticipated software revenue growth is expected to be higher in the second half of the year, particularly in Q4 [43] Other Important Information - The company is focused on maintaining its leadership in physics-based computation and machine learning to enhance prediction accuracy [14] - The internal drug discovery pipeline is advancing, with plans for IND submissions in 2022 for several programs [21][32] Q&A Session Summary Question: Software revenue guidance and confidence - Management maintained guidance for software revenue, expecting higher growth in the second half of the year, particularly in Q4 [52][54] Question: MALT1 program and IND submissions - The company plans to move forward with IND studies for the MALT1 program and remains open to potential partnerships [56][57] Question: Software revenue seasonality - Management confirmed that Q1 typically shows stronger software revenue compared to Q2, with expectations for higher growth in the second half of the year [61][62] Question: AstraZeneca collaboration details - The expanded collaboration with AstraZeneca is a significant step, transitioning from a pilot program to broader deployment across their programs [72][73] Question: Cost of constructing internal programs - The estimated cost for external companies to construct similar internal programs is around 40 million for software licenses alone [75] Question: Progress on collaborative programs - The company remains confident in advancing collaborative programs through GLP-tox studies and IND enabling studies [80] Question: Pharmaceutical purchasing dynamics - Most contracts are annual, but companies may make incremental decisions throughout the year based on needs [88][89]