Schrodinger, Inc.

Thank you for your standby. Welcome to Schrodinger's conference call for the fourth quarter and full year 2021 financial results. My name is Charlie, and I'll be your operator for today's call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. If you require any further assistance, please press star 0. 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 call, Ms. Jaron Madden, Senior Vice President of Investor Relations and Corporate Affairs. Please go ahead.

Thank you, and good afternoon, everyone. Welcome to today's call, during which we will provide an update on the company and review our fourth quarter and full year 2021 financial results. Earlier today, we issued a press release summarizing our financial results and progress across the company, which is available on our website at schrodinger.com. Here with me on our call today are Rami Fareed, Chief Executive Officer, Joel Lebowitz, Chief Financial Officer, and Karen Akinsanya, President of R&D Therapeutics. Following our prepared remarks, we'll open the call for Q&A. I'd like to remind you that during today's call, management will make statements related to our business that are forward-looking and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including without limitation statements related to our future financial performance, including our outlook for the full year 2022 and the quarter ending March 31, 2022. our strategic goals for 2022 and 2023, the potential advantages of our platform, our strategic plans to accelerate the growth of our software business and advance our collaborative and internal drug discovery programs, risks relating to the COVID-19 pandemic, our expectations related to the use of our cash, cash equivalents, and marketable securities, as well as our future operating expenses. 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 the forward-looking statements and are subject to a variety of assumptions, uncertainties, risks, and important factors that are beyond our control, including the demand for our software solutions, our ability to develop our computational platform, our reliance upon our drug discovery collaborators, and other risks detailed under the caption Risk Factors and elsewhere in our most recent Securities and Exchange Commission filings and reports. Except as required by law, we undertake no duty or obligation to update any forward-looking statements discussed on this call as a result of new information, future events, changes in expectations, or otherwise. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to today. During this call, we will also discuss certain financial and operating metrics, which are further described in our financial results, press release, and SEC filings. With that, I'd like to turn the call over to Rami.

Thanks, Sharon, and thank you, everyone, for joining us today. We are extremely pleased with our execution across all elements of the business in 2021. We continue to drive scale-up and adoption of our software, both life sciences and material science companies. We also progressed our collaborative programs seven of which are in the clinic, underscoring the impact of our platform. And we nominated two development candidates in our wholly owned programs. Total revenue was $137.9 million, a 28% increase over the prior year, and this was capped by fourth quarter software revenue of $38.6 million, a 55% increase over the fourth quarter of 2020. We ended 2021 in a strong financial position with cash resources of approximately $579 million, These achievements set us up for high-value milestones in 2022 and a very bright future ahead. As you'll hear from Karen, we also made excellent progress on our internal pipeline. Our first three internal programs continue to advance toward the clinic, the most advanced of which is expected to enter the clinic later this year. And we added two new programs to our pipeline in the areas of oncology and immunology. We now have five wholly owned programs and expect to initiate additional programs this year. To support our drug discovery efforts, we expanded our structural biology capabilities through the acquisition of Extel Biostructures, a private company based in the greater Boston area that provides structural biology services to the pharmaceutical and biotechnology industries. With this acquisition, we have access to more structures and will leverage our protein structure refinement methods to scale up production of high-resolution structures which are starting points for our physics-based computational platform. We have also expanded our global footprint to support multiple areas of our business. In January, we established operations in Seoul, South Korea to enhance competitive positioning and support both life sciences and material science customers in this region. In December, we expanded our operations in Hyderabad, India. Employees in Hyderabad are focused on a broad range of strategic initiatives across the company, including software development and support of our software platform and our drug discovery programs. I'm also very pleased to announce Karen's promotion to President of R&D and Therapeutics. The promotion reflects Karen's extraordinary contributions to leading our drug discovery team, as well as her strategic contributions to expanding and advancing our collaborative and wholly owned programs. We are excited by the many advances we've made over the past year, and we expect continued progress across all aspects of our business, our internal pipeline, our collaborative and partner programs, and our software business to support both drug discovery and materials design. Looking ahead, we will continue to invest in our computational platform, and we expect continued scale-up and adoption of our software as our collaborators and customers continue to experience success in rapidly generating high-quality molecules to advance the next generation of therapeutics and materials. Before I turn the call over to Joel, who recently announced his retirement at the end of February, I want to thank him for his incredible commitment and service over the past three years, during which time we debuted as a public company, secured additional financing and a follow-on offering, and strengthened our balance sheet to support continued investment across our business. During his tenure, Joel helped create our strong financial profile, contributed to the execution of our strategy, continued to build out our strong finance team, and established the investor relations and corporate affairs function. We wish him the very best in his future endeavors. We are actively searching for Joel's successor, and we are very pleased with the caliber of the candidates we have reviewed so far. I will now turn the call over to Joel to review our financial results.