Earnings call transcript Q1 2023

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Operator

Thank you for standing by. Welcome to Schrodinger's Conference Call to review First Quarter 2020 Financial Results. My name is Joanna, and I will be your operator for today's call. 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. President Relations Vice Corporate Senior Madden, of and Investor Affairs. Jaren ahead. go Please

Jaren Madden

company first at you, Welcome today, financial provide and on we the everyone. good we available an which is progress review today's on Thank release afternoon, results which issued to a and summarizing results. XXXX quarter financial call shordinger.com. press during update across website and Earlier company, our our our will the

Officer; are with Therapeutics. Chief Geoff me Executive on Farid, Here Akinsanya, R&D Porges, today Officer; of Ramy Karen call and Financial Chief our President

our call Following prepared Q&A. remarks, the we'll for open

I'd represent the June our like for you business XXXX, Private our Act of Securities today's safe without made during important to to forward-looking Factors the considerations may will Risk XXXX, quarter of are ending our the These a call, are future due differ result Litigation statements on outlook and Reform management new to our SEC, our remind available including, expectations, Form them related we to currently we caution or that what pursuant views as not quarter the strategic XXXX, intentions, plans, factors, related of a we about section made. the make described limitation, our future, you year provisions we statements in make full XX, and including us for in to that information, harbor statements filings our of Actual business statements that strategies use of the we only of operating XXXX. clinical XX, our project timing and which our growth and views with submissions the of cash potential materially initiation of have events our the the results the forward-looking based the our properties accelerate information drug expenses. well related current on compounds, and discovery and expectations proprietary the our These as our of potential number programs, as otherwise. favorable to the our to and and including collaborative forward-looking whether elsewhere today, trials prospects are the proprietary reflect discovery as our software clinical today the ended plans IND March from assumptions drug may and to XX-Q programs, advance resources for future in update of

Also GAAP generally our accordance and our substitute in measures. the most only today's tables addition for or superior the measures principles is of at directly to certain measures. Please website available which release, considered in for a call on non-GAAP included be these in prepared should measures financial the of refer GAAP financial not reconciliations to to comparable to are press accepted measures. end with non-GAAP non-GAAP not These accounting are and

With that, to the over like call I'd turn to Ramy.

Ramy Farid

and for everyone, you, joining us Thanks, today. Jaren, thank

continue along years them conducting and This steadfast our help discovery to learning. when are founded year. We strong start pipeline. the significantly, our pursuing the validate presented and machine the our of been many vision advance We over approach. of integrating scale our and million, remain to has physics revenue our started of XX% strengthened balance we eventually quarterly overcame molecular with and we quarter first increase journey the reported $XX.X to the speed of year. We through XX challenges but accuracy very even last a sheet pleased ago, of Schrodinger with companies we

stories success validated many our becoming have the believe we approach we our that platform are have and benefits using Today, of irrefutable.

give of Nimbus companies in Structure co-founded, are These pipeline. us the potential serve validation of very drug in proprietary discovery including the tremendous of we own unique at progress confidence now as recent clinic, and approach our programs, strong the with thrilled Morphic. are the and We programs which our

will Karen, progress track now our have pipeline quarter. have our of IND inhibitor, with year. is X our We from Phase the underway. inhibitor this CDCX SGRXXXX submission of As very hear our for for first important on made And MALTX half we SGR-XXXX you I studies this

We are including significantly drug and progress collaborative partnered excellent also program SOSXKRAS first across advancing discovery programs, our to quarter. is with the status. This BMS reported in our development candidate revenue making contributed our program to

and and platform methods. lower computational that discovery at compared enables novel is Our therapeutics faster cost the to of the traditional engine better materials

invest to continue platform of our in push to molecular discovery. We the frontiers

We, be addressable be used sufficiently to research useful recently on computational drug enabled focusing refine to how targets. physics include expanding number initiatives published AI-generated our the high accuracy showing in example, Our discovery. protein to for can of methods structures

proprietary strong illustrate this QX from broad clinic. business, successfully to are the contributions year. well our significant have Our results milestones reported unique the to we positioned platform. the and create opportunities With portfolio capital computational start, value into our from for our strong deliver software our our and from collaborations transitioned on we We objectives new

I that over corporate call last to we published highlight report. the Jeff, want sustainability turning to inaugural week, Before our

always committed thing, doing formalizing to have the in been milestone this our strategy key right major around a ESG we report While represents matters.

for to opportunity are hard our express talented exceptionally critical the take and of to achieving like also our dedication mission. my work gratitude to the would all who employees I deep

Geoff?

Geoff Porges

We afternoon, sheet made everyone. Thank record quarterly We We Ramy, results. progress and continued Shorting our showed trends pipeline. positive our good revenue significant had and expense we an our and excellent quarter reported QX. margin a performance, in balance with you, materially. in strengthened

guidance expectations overall very the year. our about for and remain outlook with business for the consistent were and our positive quarter, we financial results Our

the turn results the Let quarter. me to for financial

the just in Software under not QX benefited up deals revenue in for multiyear was the that million, was QX large XXXX. quarter renewal which million reported several from $XX we $XX for QX XXXX XXXX. were

the in for quarter were last $XX.X weeks software reached QX was We doubled our QX status from compared with million programs. Drug if development candidate revenue revenue than that we our recognition to collaborations as the more of expected, that compared variety few software and the signed BMS of As the declined milestone XXXX. annual associated was multiyear during and the quarter. Discovery in a XXXX. The the came a of contracts rest revenue collaboration to implemented revenue of Discovery our

Total revenue was $XX.X compared and XX% to and million QX XX% year increased to last QX compared by by XXXX.

The QX software model million was and and ever Our of X% balanced benefits but total in our by increased reflects revenue teams business, margin quarterly results this and XXXX. decreased the discovery with our same similar highest reflect to of Cost gross of software of by The X% year-over-year discovery overall progression QX. XX% to to quarter royalty decrease contributing quarter of collaborations, obligations XX% quarter in from reallocation to programs the $XX the the to increased programs revenue to our business. driving quarter reduced our compared collaboration compared total. proprietary business drug discovery internal for revenue and XXXX, compared this

recognition. $XX previously, depending our will trend expenses we software were higher bounce operating than in our generally around from compared expect of we quarter-to-quarter anticipate on business gross positively, and the discovery trend to margin last profitability teams revenue although by will Total increase ago. line that our our as by $XX clinical also drug it new XX% As payments indicated and year widely million to and milestone late headcount to slightly $XX reallocate year same was the staff advance we added in a to and and preclinical support as driven $XX from was million increased R&D programs development programs programs. million into from XXXX. in million to QX proprietary The we increased existing and collaborations quarter

programs This collaboration characterization activities. for known quarter, increased to and internal who of also Biology addition existing protein increased exclusively structures CRO absorbing of our Technology of are and drug organization, have solutions by discovery and the forecast also of spending exile, been early year-over-year, we as driven advanced. now our our to deployed our the also broadened portfolio. programs the the Structural expenses portfolio progress formerly our undisclosed

portfolio the increase clinical expect our investment programs to and as the into We R&D and progress development through expenses earlier we advanced our our in increase most programs. our year molecules into

potential programs of discuss planning and We are which of September roading Day, Pipeline intend year. the also we outline for most earlier first this several the progress our and to the at advanced programs

our and QX. number year marketing prior quarter, expense increase geographic mainly the accounts. expansion The new global to of million, to our compared the XX% was growing to During support sales by increased $X into to due industry an support and was our increase verticals commercialize to staffing

Our sales for revenue the distribution likely marketing of and to of the year. our follow rest software the expense is

XXXX. Nimbus was also acquisition headcount, distribution G&A have QX QX, increased, assets increase due through an XXXX. related significant QX recognized royalty in in higher stable be associated was accelerated with Takeda QX $XX.X G&A obligations we and our the of increase XXXX. loss TYKX QX million to compared XXXX our in the and We million a the gain million items a Overall, QX as program $XXX balance sale income Nimbus from from highly of of was $XX.X We Extel to quarterly to of in $XX operations is XXXX. expenses in amortization lease Our were Other to of Pharmaceuticals. $XX.X to Travel relatively of million million this and which in XX% intangible result QX expect to the and quarter. compared expense This

a Other Overall, and expense the on from Therapeutics a compares ownership fair in of reflects we Morphic. our stake reported structured in change XXXX. portfolio. also which higher was gain market other investments, income total reported change a adjustment and equity This We interest our income $XX.X mark-to-market million million, tax and value QX in million of are million. we to our of $XX.X equity loss $XXX valuation valuation was in $X.X of for million receiving the $X.X a reflects noncash ownership and investment of the

basis. earnings As we on $XXX a income per $X.XX million result share of a reported of diluted of and these fully net items,

the of tax in expect to through We the expected the quarters in remaining losses we progressively incur that operating QX be as quarters. year reversed we liability future reported

cash $XX.X the the and non-GAAP net activities was and the quarter quarter Our in million, events quarter, results million. cash improved for operating $XX loss during balance on in significantly. our used Based the was

end end XXXX, part of second to XXXX. the securities development Subsequent received to XX, the million resources $XXX milestone the from cash we the the and reported marketable distribution BMS partner March for of of cash we the of and December $XXX As Nimbus. million our from quarter, at of the compared

were payments While the to QX cash these subsequent XXXX balance in the quarter. included to securities million the marketable results, end $XX of cash and our our added

discuss financial now guidance. our I'll

$XX discovery Compared growth of revenue be towards XX% quarter. is revenue million Our forecast and customer renewal growth our to revenue. for the incremental few drug to million $XX revenue drug And million more of in and balance that We expect QX. will $XX guidance revenue. XX% do the revenue our QX being we relatively to year opportunities guidance reason, to be the of unchanged in QX, software distributed for range software large discovery that for new at business for anticipate drive offers than and QX the that QX not the QX and

expense are profitability for position to cash our year. and start of our expectations above Our expect at and unchanged, position be to growth at year-end the cash we the continue

provide for partner last few have development remarkable corporate and The now brief I'll a progress companies. seen activity. on update business as shorting months

X that as discovery companies Therapeutics of partner. clinical been and long-standing of have Schrodinger of all are the all Our founder, therapeutics all development. key structured advanced our developers. Morphic partners roles drug and Therapeutic In companies, these and scientists investor their and beneficiaries of had and in cabinets in technology our discovery They a drug as drug number

We of congratulate their made and companies technology all X are and their success to innovations. our proud contributions staff on have the

Schrodinger, opportunities As companies, creation of future. see there significant further value and for them for remain of equity success holders value the in in for sources each these we and

that provides technology portfolio. More of our importantly, success platform, are and same proprietary and platform companies the the team more validation technology even building these it's for our

opportunities and into are other emerging We equity and considering in capital our entrepreneurial more investments now to actively technology invest have in ventures. our time, companies portfolio other

companies new across engaged in our activity, to new industry. Beyond discussions collaborations we and about company specific partnerships with continue the be program

commitments and With more we value new becoming selective of our to about plan be inventions the partners. our even to thoughtful apparent,

terms match programs We account resources them we will value and of advance and the the only program, capabilities on to increasingly attributes the when features including of our the assessment have the the value of our confers. the partner unique own that believe product technology and our risk-adjusted

to continue our into value XXXX add corporate for activities and development the opportunities business We many see and venture to to future. Schrodinger well in

Karen pipeline. and discuss our turn collaborations to our I'll to over now the call

Karen Akinsanya

Thank you, and everyone. good Jeff, afternoon,

so year the across we've proprietary really collaborative pleased of and our far made with pipeline We advancements are programs. this

success drug of our such We leveraging work X power partners strong We from continue platform. beta clinic, highlighting discovered differentiated candidates currently see full our our our inhibitor. collaborative alpha Morphic to X to have design research the computational the with collaborators with X who team our programs molecules, as in

that we we licensed Oncology KRAS This candidate of collaboration also advanced which the quarter, SOSX as a status. reported to Precision BMS a multi-target program, part has development

as the Now preclinical and to that sales and additional development, we on has our program as add milestone for program to have regulatory royalties clinical transitioned the the BMS therapeutics team as payments commercial well development, progresses. opportunity

and BMS these collaboration, we progressing. immunology neurology with work on the are within programs pleased programs We oncology, are how are continuing with and to

of our therapeutics business more point recent programs. important and and the development achievement from significant activities creation represents this payment shows opportunity for milestone turning drug partnered business value The an our discovery

Turning to inhibitor. our start wholly owned MART-X our an with on update programs. SGR-XXXX, I'll

clinical pursuing and preliminary pharmacodynamics development a gather team antitumor safety pharmacokinetic is Our activity. strategy development to global

trials SGR We patients the study XXXX also We've pharmacology drug-drug support plan underway B-cell of of cohorts, designed are ongoing subject from study our malignancies development data malignancies. with B-cell effect on our XXXX is plans. profile generate begun other and assessments healthy dosing to we and and to second indications. to leverage a planned clinical This that advanced additional dosing food subjects. in in is potentially the in The in data inform includes these SGR to healthy pleased and study interaction

IND-enabling monotherapy SGRXXXX activity and of AML this antitumor CDCX for are patient-derived on SGRXXXX, models preclinical and our genetic IND in drivers, Moving strong to of submission to in of our half year. inhibitor, FDA track are this Based agents. first as completion in the we candidate, the shown nearing we to the independent exhibits studies which activity multiple an standard planning with with Earlier are in of used study we our combination selected year, advanced to patients Phase in development X study SGRXXXX, data, antitumor initiate a preclinical care models durable on inhibitors. Wen more AML. these has I relapsed/refractory both

of Clinical and ovarian companies including cancer we encouraging in data evidence high clinical has unmet need, from several won with of of provided proof programs other in concept uterine activity forms cancers.

over the SGR-XXXX about drug-drug believe We may inhibitors, interaction are and selectivity. prior optimized excited advantages including potential minimal it profile offer kinase of and

of In addition, I our types synthetic tumor and translational our work Phase design. inform has progressed substantially with lethality trial to the potential identification sensitive relationships

we to we primarily design and next an with to through continuing To submission IND date, previously protein are move known We the enable IND-enabling FDA for studies characterize SGRXXXX have programs challenges year. to structures. targets pursued as

humans. activity further strides our evidence of Following with support to novel the integration are in making in first-in-class XXXX, in strong opportunities biology of structures targets protein for structural capabilities important we product obtaining

to points. elect partner may inflection new continuing programs are to independently advance to or initiate key We we that

multiple undisclosed several in immunology. have and at discovery various including areas, programs We oncology stages

with summary, continued made in have we In across the very are progress programs. expect and advancements this pipeline our proprietary XXXX pleased quarter collaborative of we and

work about We details forward are our to are patients, to better the September. about sharing in work doing medicines and Day more late Pipeline excited look we at advance we to

Ramy. to it turn now back over will I

Ramy Farid

Karen. you, Thank

very happy coming this As on start forward well the over take we'd your our you progress a keeping time, can and strong for look hear, positioned we year. our you this goals months. to questions. are deliver on We off be At updated year to the to are to

Operator

First Stanley. Vikram Morgan question Instructions] Purohit of [Operator comes you. from Thank

Vikram Purohit

revenues. had X we on discovery So drug

$XXX the million And still secondly, hold line this target of item? you for million a million as the this for us to $XX do guidance what remind $XX just potential guidance, contemplate? then you bookends First, could

Ramy Farid

Vikram. Sure,

So this we goal still yes, achieving have of million $XXX the year.

the see as year, of achievement and in is good BMS number the guidance [ph] see you Our getting from getting goal. strategic to guidance quarter, -- paths to the range a of to to can milestone certainly the we to really also had a $XX but for million. $XX into million that Solan QX with We

to guidance, to that indicated business but low end we the we necessary development we not when significant of goal, get a we -- activity As the range provided achieve means. significant contemplating it's to the guidance the any contribution are get to by

still of to contribute the commentary, maintaining to we're because be elements back year I of So the the that all guidance. of as that going towards my the And that revenue outlook just half indicated the is range. in skewed timing though,

Vikram Purohit

follow-up Understood. on then. a question that And if ask could I

a which clarity? be revisit and is think there in at would it that year could year you'd it in guidance upwards, if when of of have point So the half second the potentially the the moving you then

Ramy Farid

this then, business Look, signal don't just If call those just how we'd the We then update is something as of or we'll course, suggested, But it. I the contingent progressing to part timing. as announce on we year. upon of development discussions to aim would discussions. announce, do cadence quarterly the guidance the there's throughout want normally of our to

Operator

at Michael question comes from next The Yee Jefferies.

Unidentified Analyst

question next [ph] have This software guidance for for quarter. Vision a is Michael on

So trend of software. your is $XX not a curious factors do keeping cadence the But you unchanged guidance this just year-to-year last are in which have any XX%. XX% mind driven might be year, here whether might And to in on increase? for year rest the the full some have that guidance just comments this previous midpoint, the was year what decrease looking and which million at below unusual. revenue, on Like I QX years, for is believe the

Geoff Porges

question. So yes, thanks for the

of the are increases size contracts continuing number and customers affected activities outlook acutely this our Our absence value. IPO business our significant large are focused of in with customers our those that for current The our increasingly and concentrated contract the opportunities at terms commercial by alignment simply, activity end also the the felt those and the scale for value. customers, their the renewal up is increasingly growth that renewals and for the in QX quarter. global renewals QX on in for and software financing is for The of most reflects during year. contracts in the of in this small and Because expectations biotech annual of of mix period the are follow-on the contracts period. and in are customers guidance Put present relatively the opportunities

towards look be are to in Now million more new multimillion actively dollar existing contracts contracts. contracts multiyear than are and likely the of of biopharma already customers. to year, we with end a dozen global the number these increases A dollar plus discussing software

their We in potential the for guidance QX but year. to renewed discussions these contracts large also QX we that expect signed of to year. the our out full our in confidence and pin XXXX multiyear this be in It's

to Ramy, is there anything you'd add? like

Ramy Farid

their Yes. all given year, we're that. to the was our and really Thanks, the that outlook of enthusiasm and about with from Jeff. emphasize key. scale, stage on that's the want just agree that at these seeing I the the programs perfectly for really confident them customers feeling our number we're discussions, the I deploy to That of discovery platform stated. of

and these of I see can for know a long shift I've time, I clear the think doing real discussions. you a and nature been this

deals of for are the giving year. it increased summarized technology a more up that programs. sense to come their will urgency in us this of later And deploy by feeling when can confidence our that really think fully companies they I renewal is close these saying on actually be

Operator

Citi. The you. comes next David from question from Thank Lebowitz

David Lebowitz

side. know of been speaking, and we XQ. year of that, all for of cadence into as that on I XQ? towards that shift some its towards as given we guided from the go second find have that the moving you've the XQ is Does way guidance balance historically XQ software through think that third full relatively Or something maintained. I guess, Is the down does growth quarters, for year-end? on to the quarter the quarter Specifically guidance year

Geoff Porges

do get we're for stage. sight renewals answer But Thanks back line about QX. really QX we're we can in and question, for you updating quarter stage, some tell contribute at days, giving that in of guidance It's substantial think full David. that not at we're the the have QX. my this this guidance half year from opportunities that the But of numbers. I can there think year the question, to We Look, growth. for QX to are earlier the to -- of confident very to providing not our but relatively and early about

David Lebowitz

has Would continue is quarter fair mean, every trend it be XXXX, as fair much Would since going it to that fourth as percentage of say, annual the in pretty be I probably a 'XX well? up. to year, ticked say to

Geoff Porges

to That's that to, those definitely general to because I the think coming you're timing sense. in give a want correct. a I don't of only fruition. of percentage for mentioned Ramy we're and I not a think of observation, firm you that sort sort conversations our as sense But I that alluded conversations locking

David Lebowitz

you for questions. my Thank taking Agreed.

Geoff Porges

Thanks.

Operator

Thank you.

comes Our German [ph]. next Markets from question Vince at

Unidentified Analyst

the Rating progress all the quarter. on

capital how focused that your for, Just coming do some investing own of clearly, maybe Are So how in assets of some your partners, your more you you've had meaningful capabilities? some I going with guess, acquiring that on in. with can success allocation you payoffs thinking forward? and more utilize about that some now partnerships, think platform R&D success you are about Morphis with your from revenues you

Geoff Porges

the for Thanks question, Evan.

months dynamic now the signaled we're invest remarks here in that Karen about and portfolio, the from capital continue also substantial there. in our to with into have in we and other X is in this my outlined prepared a comments -- for platform. And that being continuing we're my But of I about we're to excited sense that we've opportunities to platform. that particular, think prosecute proprietary lots opportunities environment very very

to all and that. as So platform invest do And well point out, capitalized our our continue to our own priority others is in to above very you portfolio. first way

Now we additional looking are at opportunities.

more our platform. think we're Karen's can very You enabling capital for actively putting We hear sensible there. at looking adjacency. from about And a comments targets that's

And from us of logical our a extension value that. anything platform. do already I'm telegraphing specific, the but you've seen not that's creation

going we're of right a that, that's company amount well-capitalized fair industry disruption through now. Beyond a and an

always engaged but we're in we're So a most think conversations, I account. of We platform. have that our sort differentiated it what don't ourselves think doing about excited on we highly own we're -- that

Ramy Farid

just we underlying the Yes, see to industry to in sees the such are the projects. by impact a in on exactly. And as of I'll that add, science very ourselves, the having leader huge to way much and I and discovery us and space. that kinds continue breakthroughs think we keep standard this really And continuing intend invest the make gold it

Unidentified Analyst

I Excellent. you for appreciate that. it. Thank

Geoff Porges

Yes. Thanks.

Operator

you. Thank from of Shibutani Chris question next The comes Goldman Sachs.

Chris Shibutani

and the Two the you've and under thinking hood and sort the were books at whatnot. of to X chance questions. about look Jeff, joined how had structured since months now for contracts

a potential turn, what to way strengthen for that have about ours. rolling visibility your you also something visibility way the to an observing? struggled a the that gets discussion for in historically, think of the see quarters understanding report, get this as you're that improve cumulative of to X earnings visibility seems the the from have company. you you're approach, with and how anything revenues the from guidance and I contract -- But restructure that be about I see there case. and your investors how doing shaped Is we that Q&A is trying

you replicated is collaborators, but there. but suppose, be any quantifiably an there somehow CX anything certainly there outcome conviction some question, have that, your generate in is And customers all then one, the mind. on tremendous much because assurance halo a form in quantifiable translate would clinical IMV, do I that on and congratulations in effect, that that their then be there development forward, to a of second potential can Is Morphic the that greater can a way has the success clearly can

the Just curious obvious collaboration. revenues presenting the that you're the how beyond and thinking about successes to

Ramy Farid

the maybe the like and and seeing I'll little participation our from then how Ron talk can in spilling on a about the off market Chris, Martin start visibility talk secondary contracts. we're effects bit software that's and the overall of And things industry. sort about over that to the

and it? customers, cycle, the at their the R&D end what through many of -- drives step-up the of We that lives use reality say, current year. would much you make to and as very tend starting can what more revenue sort your our had like we people prefer Chris, you imagine, through to make go how course, up So I more How up, they that's many revenue look year, software; year do predictable. But and step steady the up. like easier on do our this? visibility that a more they -- the of full of that programs, those we driven and by and heavily lives contracts want how is how And then, many like Do this? our licenses, large that make everything not and we is the more ramp

there would think know, recognition, different revenue certainly be that our that number sort we over to market. are and out currently shifting and and is not little we you behoove That changes transparent, our contracts to hard a to to of smoothing our revenue and skewing whether now would for that kind us we're in implement some it to of are that. entail go contracts models that could As there alter something are a we licensing contemplating more That heavy as bit. upfront. look seeing a software take recognition and relationships. at cloud-hosted drive to modify contracts, we sort sales certainly and of how things and that of more particularly that can that the -- are But ready I you're

you largest So huge about our doing again, of in to reiterate, that. technology there's a we're excitement customers. that But imagine those amount can

that excitement of is to the a talk to on want focus you certain going about our of the format and business contracting not potential we're hold do revenue. Rob, capitalizing growing mean I primary change And opportunities. over that? to up or these to realizing

Geoff Porges

that good we've Jeff that. gotten have said out our have meeting add was everything that about also we it's guidance, long will I and Yes. to quarters, important been really, really at track the good that and point record I of right, pretty but a we predicting think

and year. So the full and I can talk a guidance we point we've what hope to when us that where our you about for future we in quarters gotten trust see

I'm going the case to I'm and if Chris, long please the for me I Now question, your question, in you answer won't I'm go not not. answering question tell asked try too and second but

really about this. from So back way. getting that we're the a partners go become mean really -- The our validation quite we're I that it's -- excited

big shy story fortunate about are into getting and and we're excite, collaborations platform pretty we Nimbus unique of Morphic structure, have fantastic out, not course, our about participating also that's and so that that a really a there. them. and then, As And recent talked about more really to is effort we're that for talking -- putting company, we're partners internal of set think I programs. but And our validation overwhelming

about That's as a our have those of are you expertise. imagine. the and incredibly our technology in joining We talking can and helpful discussions us partners and lot role been

of changing And of noticing, before, no is can that saying what meetings which that in I question -- internal tell and of present have We lots lots was there's can research I venues and companies it's this are the -- data. and pharma various the nature of and heads really discussions. we that you

getting compelling is your stories us those really we're Did I answer result there. I think of enthusiasm the this direct question? talking out about

Chris Shibutani

perspective. Yes, helpful. I that appreciate the was Thanks. really

Operator

question at Thank from comes next Our you. of [Operator Instructions] America. Ryskin Michael Bank

Michael Ryskin

couple me past, is mix color A sort on Great. quick. for One closures. real your given in a lot of of us customer your the customer you've and

side but last been a in that larger I'm smaller curious you the your Obviously, recognize of larger the part are and the that, things. there. lot I'm on that of in end in So mix, biotechs, of couple software it of tail terms your there's months? in a of is of small I seeing a deterioration any biased if wondering, just conversations of biotech terms certainly with pharma you towards It's change so lot just part of of debate just the tone

Ramy Farid

take Jeff, then if the there's any... one Yes, and do want to you first

Ramy Farid

Sure.

just comment to on mix. the customer So

full said we've context, average customer As small I is take full size. to average smaller in bit a normally, of the customer little if give a year, relatively our companies biopharma component but the size -- is revenue, than of the past, of year the less you QX half the

are that's mix when are up. the those So customers just and renewing contracts of

in So sort answer that's highlighted I why not in of that felt most is my the emerging companies quarter. of that financed earlier being effect

seeing is seeing we're not what to okay, meaning contract a new, our company activities. start new want and we show we're -- drug Now sort significant software up of of the say, absence it's sign and a discovery

of revenue use engaged companies with we're really in that conversations discussions. to investors in and companies those We're to go they in some have target, that particular definitely them provided. is after the for venture software the they're volume almost increasingly, drug been been But in generally the But kind the and with and a virtual absence guidance of X, position that opportunities to are what using that counter It's are to efforts capital our I the would like X, aren't our years. and a have not for sticky. that is customers years, existing out -- X, away. the going new giving contributing X The they've just of that their that technology prior to discovery

helps question. that hopefully, answer So your

Michael Ryskin

was the it think second... I

Ramy Farid

think was it, second right? there I part? Was that a

Michael Ryskin

first part. the was That

is growing is if year-to-date of question sheet. part the year going that. about this your at in part to revenue a you of unrelated you've look of drug it discovery and contributors about be But second to And the potentially of think continue sort second discovery the at business. inflows you to meaningful XQ, the the cash as recognized comments positive really look we made and forward, some So balance drug you sort should

roll dollars add in from gross -- rolling you So together you're and software. that you you generated the profit

way bit positive out, but cash self-cash area any starting now breakeven, a approaching about your if essentially think free flow terms programs, -- it year we in potentially a in your you rate does and your the ones perspective from on You're change negative, internal where spend this that going sometimes little of of sufficient? are

Ramy Farid

unique a And that question probably in really Yes. a in good about from is the those have time really, think emerging a certainly opportunity quite a are question. That's from the our to and point a think, we that invest a we that technology. all and invest unique technology unique conclusion, lot. At technology, I programs discussions

you're so And right. --

some that deliver I that investors. we of uniques we the we achieve described. fail that can kind ahead kind we can on then picture we the you that for to fail described, trajectories, and see of capitalize If that will to think -- of achieve that you if all I we those look at value you can But think

opportunities. all So I that want of to we take think of really these advantage

Operator

next you. [ph]. from The Thank question comes Gaurav Berenberg Goparaju from

Unidentified Analyst

for million would revenue in sales-based regarding seeing [ph] time. contribution then around customers This of have the which X on also And cash to Takeda, Shortage if existing received, $X the Nimbus new percentage more assume you from upfront are X% by and licensing customers was billion $X or imply software from Takeda, is increasing I billion starting the in similar $XX potential One, million should on the first consumption milestones, tax year, software the achieved. a Gaurav. we the Annabel questions. payment which $XXX for given

Ramy Farid

Okay.

first add is I'll the tackle question. me the Let Yes answer.

We X last that additional those are get milestones. revenue distribution assuming we the for

milestones. you distribution yes, are that occur, miles that the significant ahead. there trigger tranches as would assume those we is if know, turns revenue Go calculated. But you would As those

Unidentified Analyst

no, Yes. No, no.

Ramy Farid

ahead. Sorry, you go

Unidentified Analyst

Go ahead.

Ramy Farid

it's the of absolutely So answer seeing is customers, they're existing from and coming and software why in again which from question growth more we've the the what we're QX. simple, more increasing from coming really saying their customers more been more really, larger and usage to and about where the is this in shift

Operator

I That further Ramy, this today's you. Thank concludes questions showing time. no am call. at

disconnect. You may now

Schrödinger (SDGR) 4 May 232023 Q1 Earnings call transcript