Full Press Release Details
Schr dinger Reports Financial Results for the Fourth Quarter and Full Year 2020 and Provides Outlook for 2021
Total revenue of $108.1 million in 2020, up 26 percent year-over-year
Software revenue of $92.5 million in 2020, up 39 percent year-over-year
Strong financial position enables continued investment in advancing the science underlying Schr dinger's computational platform
Internal pipeline progressing, with plans to submit investigational new drug applications in 2022
Conference call today, Thursday, March 4, at 8:30 a.m. ET
New York, March 4, 2021 - Schr dinger, Inc. (Nasdaq: SDGR), whose physics-based software platform is transforming the way therapeutics and materials are discovered, today announced financial results for the fourth quarter and full year ended December 31, 2020, and provided its financial outlook for 2021.
"2020 was a very strong year for Schr dinger across all aspects of our business. Software revenue increased substantially, and we expect continued growth in 2021. We believe this growth reflects the power of our physics-based platform to accelerate the discovery of new medicines and materials," stated Ramy Farid, Ph.D., chief executive officer at Schr dinger.
"We finished 2020 in a strong financial position. Looking across multiple key indicators, we believe our underlying business is poised for continued growth this year," said Joel Lebowitz, chief financial officer at Schr dinger. "Importantly, our balance sheet and growing revenue enable us to make strategic investments in both our computational platform and our internal pipeline to build for the future."
Delivered strong operating performance and strategic execution
Progressed internal pipeline
Advanced the science underlying Schr dinger's computational platform
Fourth Quarter 2020 Financial Results
Full Year 2020 Financial Results
Full Year 2020 Key Performance Indicators
For additional information about our Key Performance Indicators, see "Operating Metrics" below.
Full-Year 2021 Revenue Outlook
As of March 4, 2021, Schr dinger expects total revenue to range from $124 million to $142 million, with software revenue expected to range from $102 million to $110 million, and drug discovery revenue expected to range from $22 million to $32 million for the fiscal year ended December 31, 2021.
Webcast and Conference Call Information
Schr dinger will host a conference call to discuss its third quarter financial results on Thursday, March 4, 2020, at 8:30 a.m. ET. The conference call can be accessed live by dialing (833) 727-9520 (domestic) or +1 (830) 213-7697 (international) and referring to conference ID 9686253. The webcast can also be accessed under "News & Events" in the investors section of Schr dinger's website, https://ir.schrodinger.com/news-and-events/event-calendar. The archived webcast will be available on Schr dinger's website following the event.
Schr dinger is transforming the way therapeutics and materials are discovered. Schr dinger has pioneered a physics-based software platform that enables discovery of high-quality, novel molecules for drug development and materials applications more rapidly and at lower cost compared to traditional methods. The software platform is used by biopharmaceutical and industrial companies, academic institutions, and government laboratories around the world. Schr dinger's multidisciplinary drug discovery team also leverages its software platform to advance collaborative programs and its own pipeline of novel therapeutics to address unmet medical needs.
To supplement the financial measures presented in our press release and related conference call or webcast in accordance with generally accepted accounting principles in the United States ("GAAP"), we also present certain other performance metrics, such as annual contract value and customer retention rate.
Annual Contract Value (ACV). We track the ACV for each of our customers. With respect to contracts that have a duration of one year or less, or contracts of more than one year in duration that are billed annually, we define ACV as the contract value billed during the applicable period. For contracts with a duration of more than one year that are billed upfront, ACV in each period represents the total billed contract value divided by the term. ACV should be viewed independently of revenue and does not represent revenue calculated in accordance with GAAP on an annualized basis, as it is an operating metric that can be impacted by contract execution start and end dates and renewal rates. ACV is not intended to be a replacement for, or forecast of, revenue.
Customer Retention for our customers with an ACV of over $100,000. We calculate year-over-year customer retention for our customers in this cohort by starting with the number of customers we had in the previous fiscal year. We then calculate how many of these customers were active customers in the current fiscal year. We then divide this number by the number of customers with an ACV over $100,000 we had in the previous fiscal year to arrive at the year-over-year customer retention rate for such customers.
Active Customers. We define an active customer as a customer that had an ACV of at least $1,000 in the fiscal year. We use $1,000 as a threshold for defining our active customers as this amount will generally exclude customers that only license our PyMOL software, which is our open-source molecular visualization system broadly available at low cost.
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995 including, but not limited to those regarding our expectations about the speed and capacity of our computational platform, our outlook for the fiscal year ended December 31, 2021, our plans to continue to invest in research and our strategic plans to accelerate the growth of our software business and advance our collaborative and internal drug discovery programs, our ability to improve and advance the science underlying our platform, including through these use of new technologies, the timing of potential IND applications for our internal drug discovery programs, our ability to realize potential milestones, royalties or other payments under our collaborations, as well as our expectations related to the use of our cash, cash equivalents, and marketable securities. Statements including words such as "anticipate," "believe," "contemplate," "continue," "could," "estimate," "expect," "intend," "may," "might," "plan," "potential," "predict," "project," "should," "target," "will," "would" and statements in the future tense are forward-looking statements. These forward-looking statements reflect our current views about our plans, intentions, expectations, strategies and prospects, which are based on the information currently available to us and on assumptions we have made. Actual results may differ materially from those described in these forward-looking statements and are subject to a variety of assumptions, uncertainties, risks and factors that are beyond our control, including the demand for our software solutions, our ability to further develop our computational platform, our reliance upon third-party providers of cloud-based infrastructure to host our software solutions, our reliance upon our third-party drug discovery
collaborators, the uncertainties inherent in drug development and commercialization, uncertainties associated with the regulatory review of clinical trials and applications for marketing approvals, the ability to retain and hire key personnel and the direct and indirect impacts of the ongoing COVID-19 pandemic on our business and other risks detailed under the caption "Risk Factors" and elsewhere in our Securities and Exchange Commission filings and reports, including our Annual Report on Form 10-K for the year ended December 31, 2020, filed with the Securities and Exchange Commission on March 4, 2021, as well as future filings and reports by us. Any forward-looking statements contained in this press release speak only as of the date hereof. Except as required by law, we undertake no duty or obligation to update any forward-looking statements contained in this press release as a result of new information, future events, changes in expectations or otherwise.
Stephanie Simon (media)
Ten Bridge Communications
| Consolidated Statements of Operations | ||||||||
| (in thousands, except for share and per share amounts) | ||||||||
| Year Ended December 31, | ||||||||
| 2020 | 2019 | |||||||
| Revenues: | ||||||||
| Software products and services | $ | 92,530 | $ | 66,735 | ||||
| Drug discovery | 15,565 | 18,808 | ||||||
| Total revenues | 108,095 | 85,543 | ||||||
| Cost of revenues: | ||||||||
| Software products and services | 18,003 | 13,646 | ||||||
| Drug discovery | 26,620 | 22,804 | ||||||
| Total cost of revenues | 44,623 | 36,450 | ||||||
| Gross profit | 63,472 | 49,093 | ||||||
| Operating expenses: | ||||||||
| Research and development | 64,695 | 39,404 | ||||||
| Sales and marketing | 17,795 | 21,364 | ||||||
| General and administrative | 41,898 | 27,040 | ||||||
| Total operating expenses | 124,388 | 87,808 | ||||||
| Loss from operations | (60,916 | ) | (38,715 | ) | ||||
| Other income: | ||||||||
| Gain on equity investments | 4,108 | 943 | ||||||
| Change in fair value | 28,263 | 9,922 | ||||||
| Interest income | 2,253 | 1,878 | ||||||
| Total other income | 34,624 | 12,743 | ||||||
| Loss before income taxes | (26,292 | ) | (25,972 | ) | ||||
| Income tax expense (benefit) | 345 | (291 | ) | |||||
| Net loss | (26,637 | ) | (25,681 | ) | ||||
| Net loss attributable to noncontrolling interest | (2,174 | ) | (1,110 | ) | ||||
| Net loss attributable to Schr dinger common and limited common stockholders | $ | (24,463 | ) | $ | (24,571 | ) | ||
| Net loss per share attributable to Schr dinger common and limited common stockholders, basic and diluted: | $ | (0.41 | ) | $ | (4.09 | ) | ||
| Weighted average shares used to compute net loss per share attributable to Schr dinger common and limited common stockholders, basic and diluted: | 60,024,658 | 6,004,500 |
| Consolidated Balance Sheets | ||||||||
| (in thousands, except for share and per share amounts) | ||||||||
| Assets | December 31, 2020 | December 31, 2019 | ||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 202,296 | $ | 25,986 | ||||
| Restricted cash | 500 | 500 | ||||||
| Marketable securities | 440,395 | 59,844 | ||||||
| Accounts receivable, net of allowance for doubtful accounts of $60 and $50 | 31,423 | 18,676 | ||||||
| Unbilled and other receivables | 3,955 | 7,062 | ||||||
| Prepaid expenses | 4,409 | 6,468 | ||||||
| Total current assets | 682,978 | 118,536 | ||||||
| Property and equipment, net | 5,140 | 6,268 | ||||||
| Equity investments | 45,664 | 15,366 | ||||||
| Right of use assets | 10,129 | 12,762 | ||||||
| Other assets | 2,352 | 2,338 | ||||||
| Total assets | $ | 746,263 | $ | 155,270 | ||||
| Liabilities, Convertible Preferred Stock, and Stockholders' Equity (Deficit) | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 8,398 | $ | 3,524 | ||||
| Accrued payroll, taxes, and benefits | 12,000 | 7,034 | ||||||
| Deferred revenue | 45,403 | 25,054 | ||||||
| Lease liabilities | 4,543 | 5,584 | ||||||
| Other accrued liabilities | 2,861 | 3,824 | ||||||
| Total current liabilities | 73,205 | 45,020 | ||||||
| Deferred revenue, long-term | 41,164 | 2,205 | ||||||
| Lease liabilities, long-term | 7,221 | 8,888 | ||||||
| Other liabilities, long-term | 654 | 900 | ||||||
| Total liabilities | 122,244 | 57,013 | ||||||
| Commitments and contingencies | ||||||||
| Convertible preferred stock: | ||||||||
| Series E convertible preferred stock, $0.01 par value. Authorized zero and 77,150,132 shares; zero and 73,795,777 shares issued and outstanding at December 31, 2020 and December 31, 2019, respectively | - | 109,270 | ||||||
| Series D convertible preferred stock, $0.01 par value. Authorized zero and 39,540,611 shares; zero and 39,540,611 shares issued and outstanding at December 31, 2020 and December 31, 2019, respectively | - | 22,000 | ||||||
| Series C convertible preferred stock, $0.01 par value. Authorized zero and 47,242,235 shares; zero and 47,242,235 shares issued and outstanding at December 31, 2020 and December 31, 2019, respectively | - | 19,844 | ||||||
| Series B convertible preferred stock, $0.01 par value. Authorized zero and 29,468,101 shares; zero and 29,468,101 shares issued and outstanding at December 31, 2020 and December 31, 2019, respectively | - | 9,840 | ||||||
| Series A convertible preferred stock, $0.01 par value. Authorized zero and 134,704,785 shares; zero and 134,704,785 shares issued and outstanding at December 31, 2020 and December 31, 2019, respectively | - | 30,626 | ||||||
| Total convertible preferred stock | - | 191,580 | ||||||
| Stockholders' equity (deficit): | ||||||||
| Common stock, $0.01 par value. Authorized 500,000,000 and 425,000,000 shares; 60,713,534 and 6,121,821 shares issued and outstanding at December 31, 2020 and December 31, 2019, respectively | 607 | 61 | ||||||
| Limited common stock, $0.01 par value. Authorized 100,000,000 and 146,199,885 shares; 9,164,193 and zero shares issued and outstanding at December 31, 2020 and December 31, 2019, respectively | 92 | - | ||||||
| Additional paid-in capital | 752,558 | 11,655 | ||||||
| Accumulated deficit | (129,559 | ) | (105,096 | ) | ||||
| Accumulated other comprehensive income | 317 | 16 | ||||||
| Total stockholders' equity (deficit) of Schr dinger stockholders | 624,015 | (93,364 | ) | |||||
| Noncontrolling interest | 4 | 41 | ||||||
| Total stockholders' equity (deficit) | 624,019 | (93,323 | ) | |||||
| Total liabilities, convertible preferred stock, and stockholders' equity (deficit) | $ | 746,263 | $ | 155,270 |
| Consolidated Statements of Cash Flows | ||||||||
| (in thousands) | ||||||||
| Year Ended December 31, | ||||||||
| 2020 | 2019 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | (26,637 | ) | $ | (25,681 | ) | ||
| Adjustments to reconcile net loss to net cash provided by (used in) | ||||||||
| operating activities: | ||||||||
| Gain on equity investments | (4,108 | ) | (943 | ) | ||||
| Noncash revenue from equity investments | (397 | ) | (186 | ) | ||||
| Fair value adjustments | (28,263 | ) | (9,922 | ) | ||||
| Depreciation | 3,658 | 3,640 | ||||||
| Stock-based compensation | 10,545 | 2,193 | ||||||
| Noncash research and development expenses | 2,137 | 1,051 | ||||||
| Noncash investment accretion | 646 | (506 | ) | |||||
| Decrease (increase) in assets: | ||||||||
| Accounts receivable, net | (12,747 | ) | (5,038 | ) | ||||
| Unbilled and other receivables | 3,468 | (1,556 | ) | |||||
| Reduction in the carrying amount of right of use assets | 5,342 | 4,177 | ||||||
| Prepaid expenses and other assets | 187 | 410 | ||||||
| Increase (decrease) in liabilities: | ||||||||
| Accounts payable | 4,882 | (294 | ) | |||||
| Accrued payroll, taxes, and benefits | 4,966 | 2,948 | ||||||
| Deferred revenue | 59,705 | 6,715 | ||||||
| Lease liabilities | (5,417 | ) | (4,025 | ) | ||||
| Other accrued liabilities | (1,210 | ) | 958 | |||||
| Net cash provided by (used in) operating activities | 16,757 | (26,059 | ) | |||||
| Cash flows from investing activities: | ||||||||
| Purchases of property and equipment | (2,538 | ) | (1,836 | ) | ||||
| Purchases of equity investments | (2,869 | ) | - | |||||
| Distribution from equity investment | 4,582 | 943 | ||||||
| Purchases of marketable securities | (519,668 | ) | (110,187 | ) | ||||
| Proceeds from sale and maturity of marketable securities | 138,772 | 57,225 | ||||||
| Net cash used in investing activities | (381,721 | ) | (53,855 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Issuances of common stock upon initial public offering, net | 211,491 | - | ||||||
| Issuances of common stock upon follow-on public offering, net | 325,600 | - | ||||||
| Issuances of Series E preferred stock, net | - | 29,893 | ||||||
| Issuances of common stock upon stock option exercise | 4,183 | 549 | ||||||
| Contribution by noncontrolling interest | - | 100 | ||||||
| Deferred offering costs | - | (1,858 | ) | |||||
| Net cash provided by financing activities | 541,274 | 28,684 | ||||||
| Net increase (decrease) in cash and cash equivalents and restricted cash | 176,310 | (51,230 | ) | |||||
| Cash and cash equivalents and restricted cash, beginning of year | 26,486 | 77,716 | ||||||
| Cash and cash equivalents and restricted cash, end of year | $ | 202,796 | $ | 26,486 | ||||
| Supplemental disclosure of cash flow and noncash information | ||||||||
| Cash paid for income taxes | $ | 381 | $ | 139 | ||||
| Supplemental disclosure of non-cash investing and financing activities | ||||||||
| Accrued deferred offering costs | - | 2,142 | ||||||
| Purchases of property and equipment | 8 | 90 | ||||||
| Acquisitions of right of use assets in exchange for lease obligations | 2,709 | 464 | ||||||
| Right of use assets recognized on adoption | - | 16,475 | ||||||
| Reclassification of deferred financing costs to additional paid-in capital | 1,858 | - |