Schrodinger, Inc.

Thank you for standing by. Welcome to Schrodinger's conference call to review second quarter 2025 financial results. My name is Rob and I'll be your operator for today's call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press star one. 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, Chief Corporate Affairs Officer and Head of Investor Relations. 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 second quarter 2025 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, Richie Jane, Chief Financial Officer, and Karen Akinsanya, President, Head of Therapeutics, R&D, and Chief Strategy Officer, Partnerships. 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 third quarter 2025, our plans to accelerate the growth of our software business and advance our collaborative and proprietary drug discovery programs, the timing of 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 represent our current views and reflect 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 June 30, 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-GAAP financial measures. These non-GAAP financial measures are not prepared in accordance with generally accepting 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. And with that, I'd like to turn the call over to Rami.

Thanks, Jaron, and thank you everyone for joining us today. We made very solid progress in the first half of 2025. Total revenue was $54.8 million in the second quarter, a 16% increase from the second quarter of 2024. Software revenue was $40.5 million, representing 15% year-over-year growth. Drug discovery revenue was $14.2 million, highlighting the progress and growth of our collaborative portfolio. While the macroeconomic environment has been highly uncertain, we continue to see demand of our software platform driven by the industry's need for validated computational approaches that are critical for innovation and efficient R&D. We believe we are uniquely positioned at the forefront of the ongoing transformation of integrating predictive methods into all stages of molecular discovery. We are maintaining our full-year software revenue growth guidance, reflecting the productive conversations we're having with our software customers around renewals and scale-ups in the second half of the year. As you will hear from Karen, we continue to make progress across our pipeline and recently presented encouraging Phase I data from SGR1505, our proprietary MALT1 inhibitor. The emerging profile of SGR1505 shows best-in-class potential, and we are exploring strategic opportunities to accelerate clinical development and maximize the potential of this program. We expect to report initial phase one data from our other two clinical programs, SGR 2921 and SGR 3515 in the fourth quarter. We are continuing to make significant improvements to the performance and usability of our software platform and continue to add streamlined workflows to enhance the user experience and make our software more accessible to scientists without a computational chemistry background. We are also advancing our predictive toxicology initiative in support of the FDA's efforts to modernize drug discovery through its new alternative methods program to reduce reliance on animal models, including through the development and deployment of predictive computational models. To this end, we recently released the beta version of a virtual kinase panel to prospectively identify potential liabilities for an initial set of approximately 50 representative kinases. Our platform now also supports prediction of binding to the known off-targets HERG, PXR, and three common SIPs. We expect to expand the number of supported off-targets as we continue to advance the technology. Overall, we have made considerable progress during the quarter and we are excited about the opportunities ahead. I want to thank our employees who are critical to achieving our goals for their hard work and dedication. I will now turn the call over to Richie Jane, who was appointed Chief Financial Officer in May. Richie has made significant contributions during his tenure at Schrodinger, including working across the company to pursue strategic initiatives and secure and expand strategic collaborations. And I'm very pleased to have him on the call today. Richie?