Schrodinger, Inc.

Thank you for standing by. Welcome to Schrodinger's conference call to review first quarter 2023 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. 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 first quarter 2023 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, Jeff Porges, Chief Financial Officer, and Karen Nakansania, 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 outlook for the full year 2023, our quarter ending June 30th, 2023, our strategic plans to accelerate the growth of our software business and advance our collaborative and proprietary drug discovery programs, the timing of potential IND submissions, and the initiation of clinical trials for our proprietary drug discovery programs, the clinical potential and favorable properties of our compounds, our expectations related to the use of our cash resources, 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 what we project today due to a number of important factors, including the considerations described in the risk factors section and elsewhere in the filings we make with the SEC, including our Form 10-Q for the quarter ended March 31, 2023. These forward-looking statements represent our views only as of today, and we caution you that we may not update them in the future, whether as a result of new information, future events, or otherwise. Also included in today's call are certain non-GAAP financial measures. These non-GAAP financial measures are not prepared in accordance with generally accepted accounting principles and should be considered only in addition to and not a substitute for or superior to GAAP measures. Please refer to the tables at the end of our press release, which is available on our website, for reconciliations of these non-GAAP measures to the most directly comparable GAAP measures. With that, I'd like to turn the call over to Rami.

Thanks, Jaron, and thank you everyone for joining us today. We are very pleased with our strong start to the year. We reported quarterly revenue of $64.8 million, a 33% increase over the first quarter of last year. We strengthened our balance sheet significantly and we continue to advance our pipeline. Schrodinger has been pursuing the vision of conducting molecular discovery through integrating the accuracy of physics with the speed and scale of machine learning. This presented many challenges when we started 33 years ago. but we remained steadfast and eventually overcame them and even founded companies along our journey to help validate our approach. Today, we have many success stories that have validated our approach, and we believe the benefits of using our platform are becoming irrefutable. We are thrilled with the recent progress of the drug discovery programs at companies we co-founded, including Nimbus, Structure, and Morphic. These programs, which are now in the clinic, serve as very strong validation of our unique approach and give us tremendous confidence in the potential of our own proprietary pipeline. As you will hear from Karen, we have made very important progress with our pipeline this quarter. We now have two Phase I studies of our MALT1 inhibitor, SGR1505, underway, and our IND submission for our CDC7 inhibitor, SGR2921, is on track for the first half of this year. We are also making excellent progress across our collaborative programs, including advancing our SOS1 KRAS program to development candidate status. This program is partnered with BMS and contributed significantly to our reported drug discovery revenue in the first quarter. Our computational platform is the engine that enables the discovery of better therapeutics and novel materials faster and at lower cost compared to traditional methods. We continue to invest in our platform to push the frontiers of molecular discovery. Our initiatives include focusing on expanding the number of addressable targets. We, for example, recently published research showing how our computational methods can be used to refine AI generator protein structures to sufficiently high accuracy to be useful in physics-enabled drug discovery. Our Q1 results illustrate the broad opportunities we have to create value from our unique computational platform. We reported strong contributions from our software business, significant milestones and new capital from our collaborations, and successfully transitioned our proprietary portfolio into the clinic. With this strong start, we are well positioned to deliver on our objectives for the year. Before turning the call over to Jeff, I want to highlight that last week we published our inaugural corporate sustainability report. While we have always been committed to doing the right thing, this report represents a major milestone in formalizing our strategy around key ESG matters. I would also like to take the opportunity to express my deep gratitude for the dedication and hard work of all our exceptionally talented employees who are critical to achieving our mission. Jeff?