Schrodinger, Inc.SDGR

Schrodinger, Inc. Commitments Disclosure

10-KFiled Feb 25, 20262 min read
Commitments and Contingencies
(a)    Leases
The Company has multiple operating leases for office space and a finance lease for equipment that expire at various dates through 2037. The Company has elected the package of practical expedients under the transition guidance of ASC Topic 842, Leases, to exclude short-term leases from the balance sheet and to combine lease and non-lease components. The Company classifies finance lease right of use assets under property and equipment, net and finance short-term and long-term lease liabilities under other accrued liabilities and other liabilities, long-term, respectively.
Upon inception of a lease, the Company determines if an arrangement is a lease, if it is classified as an operating or finance lease, if it includes options to extend or terminate the lease, and if it is reasonably certain that the Company will exercise the options. Lease cost, representing lease payments over the term of the lease and any capitalizable direct costs less any incentives received, is recognized on a straight-line basis over the lease term as lease expense.
In determining the present value of lease payments, the Company uses its incremental borrowing rate based on the information available at the lease commencement date if the rate implicit in the lease is not readily determinable. Upon execution of a new lease, the Company performs an analysis to determine its incremental borrowing rate using its current borrowing rate, adjusted for various factors including level of collateralization and lease term. As of December 31, 2025, the remaining weighted average lease term for operating and finance leases was 10 years.
Variable and short-term lease costs for the Company's operating and finance leases were immaterial for the year ended December 31, 2025. Additional details of the Company's operating and finance leases are presented in the following table:
Year Ended December 31,
202520242023
Lease costs$18,015 $18,097 $16,769 
Cash paid for leases17,492 17,718 12,263 
Maturities of operating and finance lease liabilities as of December 31, 2025 under noncancelable leases were as follows:
Year ending December 31:
2026$17,182 
202715,997 
202814,959 
202914,521 
203014,624 
Thereafter82,885 
Total future minimum lease payments160,168 
Less: imputed interest(50,857)
Present value of future minimum lease payments109,311 
Less: current portion of lease payments16,495 
Lease liabilities, long-term$92,816 
(b)    Legal Matters
From time to time, the Company may become involved in routine litigation arising in the ordinary course of business. While the results of such litigation cannot be predicted with certainty, management believes that the final outcome of such matters is not likely to have a material adverse effect on the Company’s financial position or results of operations or cash flows for the years ended December 31, 2025 and 2024.

Historical Timeline

Fiscal YearFiled
2025Feb 25, 2026Showing above
2024Feb 26, 2025
2023Feb 28, 2024
2022Feb 28, 2023
2021Feb 24, 2022
2020Mar 4, 2021

About Commitments Disclosures

Commitments and contingencies disclosures catalog a company's off-balance-sheet obligations and legal exposures — purchase commitments, guarantee arrangements, pending litigation, and regulatory proceedings. These items represent potential future cash outflows that may not appear as liabilities on the balance sheet until they become probable and estimable.

Key signals: litigation reserves and disclosed loss ranges quantify management's estimate of legal exposure, but unquantified "reasonably possible" losses often represent the larger risk. Watch for changes in language around pending cases — shifts from "remote" to "reasonably possible" or increases in estimated loss ranges signal deteriorating outcomes. Unconditional purchase obligations and take-or-pay contracts create fixed cost structures that reduce operational flexibility. Guarantee arrangements for subsidiaries or joint ventures can create cascading obligations. Compare the total commitment schedule against projected free cash flow to assess whether the company can meet its obligations without additional financing.

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