SEC Filings

Schrödinger Burned $96.5 Million In Nine Months While Its Contracted Backlog Shrank

The drug-software maker raised its 2026 outlook even as operating cash swung from $30.0 million generated to $96.5 million used.

Matteo Parrino Jonathan Ponciano

Matteo Parrino, Jonathan Ponciano

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Schrödinger Burned $96.5 Million In Nine Months While Its Contracted Backlog Shrank

Schrödinger, which makes physics-based molecular modeling software and runs drug discovery programs with partners, used $96.5 million of operating cash in the first nine months of 2026, against $30.0 million generated a year earlier. Its 10-Q, filed Wednesday, also shows remaining contracted work falling, even as management raised full-year guidance.

A cash swing from Novartis timing

The nine-month swing is largely a collections story. Collections of accounts receivable contributed $34.7 million to operating cash, down from $206.3 million a year earlier. The company ties the 2025 figure to cash collected from its Novartis collaboration, which paid a $150.0 million upfront fee in January 2025.

The net loss for the nine months was $91.8 million, versus $135.8 million a year earlier. It includes a $17.6 million non-cash gain on equity investments, partly offset by $25.8 million of stock-based compensation.

The third quarter alone was a net loss of $37.7 million, against $32.8 million a year earlier, on revenue of $64.5 million, up 19%. A $14.8 million loss from the change in fair value of equity investments, driven by a roughly $15.3 million unrealized loss on Structure Therapeutics, compares with a $9.7 million gain a year earlier.

Backlog down, guidance up

Remaining performance obligations, the contracted work still to be recognized as revenue, stood at $186.7 million at September 30, versus $239.9 million at year-end. The drug discovery portion fell to $103.7 million from $134.7 million.

Management nonetheless raised its outlook, according to the company's earnings release. Annual contract value is now expected at $222 million to $232 million, from $218 million to $228 million. Drug discovery revenue is now expected at $75 million to $85 million, from $65 million to $75 million.

The company also says it expects revenue to decline in the near term as it moves customers from on-premise licenses to hosted subscriptions, which recognize revenue over the contract term rather than upfront.

Receivables lean on two customers

Two customers made up 31% and 24% of accounts receivable at September 30, up from 27% and 23% at June 30. They accounted for 20% and 15% of third-quarter revenue.

The company says its $373.4 million of cash and securities will fund operations for at least 24 months, the same wording as in its prior quarterly filing. The pool stood at $418.8 million at June 30.

The cushion has been built partly by partner payouts, including a roughly $57.2 million cash payment in June when Eli Lilly acquired Ajax Therapeutics. In August, Schrödinger also co-founded Tectora Therapeutics and received 7,154,439 Tectora shares for licensing two early-stage programs.

The company's market value was $2.0 billion at the time of the report, and it will host a call on its third-quarter results Wednesday at 4:30 p.m. ET.

Sources

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