Schrodinger, Inc.

Thank you for standing by. Welcome to Schrodinger's conference call to review first quarter 2025 financial results. My name is Calvin 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. Sharon 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 2025 financial results. Earlier today, we issued the 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 Akinsanya, President of R&D Therapeutics. Following our prepared remarks, we'll open the call for Q&A. During today's call, management will make statements that are forward-looking and made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 including without limitation statements related to our financial outlook for the full year 2025 and the second quarter 2025, our plans to accelerate the growth of our software business and advance our collaborative and proprietary drug discovery programs, the timing of and initiation of and readouts from our clinical trials, the clinical potential and properties of our compounds, the use of our cash resources, as well as our future 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 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, 2025. these forward-looking statements represent our views only as of today and we caution you that except as required by law 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-gap financial measures these non-gap 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 gap 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. And with that, I'd like to turn the call over to Rami.

Thanks, Jaron, and thank you everyone for joining us today. We are pleased with our progress during the first quarter, which builds on the positive momentum from 2024. Our software and drug discovery revenue demonstrated strong growth. We are confident about our revenue outlook for the year and are reiterating our full year financial guidance. We are having productive discussions with customers and are encouraged about the opportunities for increased adoption of our software, even with the potential challenges of the macroeconomic environment. Total revenue for the quarter was $59.6 million. Software revenue was $48.8 million, representing 46% growth. Drug discovery revenue for the quarter was $10.7 million, with growth driven by milestones from collaborative programs and the recognition of upfront revenue from our collaboration with Novartis. We are encouraged by the FDA's recently stated goal to reduce preclinical animal testing. We have been pioneering computational molecular discovery for nearly 35 years and continue to develop new solutions that integrate physics with machine learning to accelerate the discovery of safer drugs. We already offer our customers solutions that can be used to reduce the potential for toxicity associated with binding to off-targets. We're also continuing to advance our predictive toxicology initiative. We have structurally enabled more than 50 off targets and have been leveraging this technology within our collaborative and proprietary programs with highly encouraging results. We expect to proceed with a beta release of this solution to select customers later this year and expect to make it broadly available to customers once beta testing is completed. We are optimistic about its potential to contribute meaningfully to our long-term revenue growth trajectory. We are also continuing to advance the science underlying other aspects of our platform. This week, we released our second software update of the year. Major enhancements include new crystal structure prediction software to identify stable crystal polymorphs, which has important applications for drug formulation. And we have also expanded support for protein degrader modeling and launched new capabilities to enable machine learning based T cell receptor structure prediction, which is important for biologics discovery. We're also continuing to advance our collaborative and proprietary pipeline. We look forward to sharing initial phase one data from our three lead clinical programs starting this quarter with SGR 1505, our MULT1 inhibitor. Overall, we are well positioned to advance all aspects of our business in 2025. This is a pivotal year for the company and we look forward to providing updates throughout the year. I will now turn the call over to Jeff.