Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for promised goods or services. The Company’s performance obligations are satisfied either over time or at a point in time, which can result in different revenue recognition patterns.


	Year Ended December 31,
	2024		2023		2022
Software products and services – point in time	51.4	%	49.1	%	47.3	%
Software products and services – over time	35.5		24.3		27.6
Drug Discovery – point in time	6.8		12.7		8.8
Drug Discovery – over time	6.3		13.9		16.3

The Company enters into contracts that can include various combinations of licenses, products and services, most of which are distinct and are accounted for as separate performance obligations. For contracts with multiple performance obligations, the Company allocates the transaction price of the contract to each performance obligation on a relative standalone selling price ("SSP") basis. Revenue is recognized net of any sale and value-added taxes collected from customers and subsequently remitted to governmental authorities.

The Company's software business derives revenue from five sources: (i) on-premise software license fees, (ii) hosted software subscription fees, (iii) software maintenance fees, (iv) professional services fees, and (v) contributions.

On-premise software. The Company's on-premise software license arrangements grant customers the right to use its software on their own in-house servers or their own cloud instances for a specified term, typically for one year, though in recent years, the Company has entered into a small number of large multi-year on-premise software license agreements. The Company recognizes revenue for on-premise software license fees upfront, either upon transfer of control of the license or the effective date of the agreement, whichever is later. In instances where the timing of the transfer of control differs from the timing of invoicing, the Company considers whether a significant financing component exists. The Company has elected the practical expedient to not assess for significant financing where the term is less than one year. The Company's updates and upgrades are not integral to maintaining the utility of the software licenses. Payments typically are received upfront or annually.

Hosted software. Hosted software revenue consists primarily of fees to provide the Company's customers with hosted licenses, which allows these customers to access the Company's cloud-based software solution on their own hardware without taking control of the licenses, and is recognized ratably over the term of the arrangement, which is typically one year, though in recent years, the Company has entered into a small number of large multi-year hosted software license agreements. When a customer enters into a hosted arrangement for which revenue is recognized over time,

Software maintenance. Software maintenance includes technical support, updates, and upgrades related to the Company's on-premise software licenses. Software maintenance revenue is recognized ratably over the term of the arrangement. Software maintenance activities are performed in connection with the use of the Company's on-premise software.

Professional services. Professional services include training, technical setup, installation or assisting customers with modeling services, where the Company uses its software to perform tasks such as virtual screening on behalf of the Company’s customers. These services are generally not related to the core functionality of the Company's software and are recognized as revenue when resources are consumed.

Software contribution revenue. Software contribution revenue consists of funds received under non-reciprocal agreements with Gates Ventures, LLC and the Bill & Melinda Gates Foundation. The agreement with Gates Ventures, LLC was originally entered into in June 2020 and further extended through August 2026. The agreement is an unconditional non-exchange contribution without restrictions. Revenue is recognized annually, when invoiced, in accordance with ASC Topic 958, Not-for-Profit Entities ("Topic 958"), as the agreement is not an exchange transaction.

The agreement with Gates Ventures, LLC initially covered the period from June 23, 2020 through June 22, 2023 for total consideration of up to $3,000. The agreement was then extended through August 13, 2026 and provides for total additional consideration of up to $6,000. The Company recognized revenue of $2,000, $1,800, and $1,000 related to these agreements during the years ended December 31, 2024, 2023, and 2022, respectively. As of December 31, 2024, the Company had no deferred revenue balance related to this agreement. As of December 31, 2024 and 2023, the Company had no accounts receivable related to this agreement.

In July 2024, the Company entered into a one-year agreement with the Bill & Melinda Gates Foundation to fund the initiative to accelerate the expansion of the Company's computational platform to predict toxicity associated with binding to off-target proteins. In November 2024, the Company and the Bill & Melinda Gates Foundation entered into an amendment to the agreement to expand the original term of the agreement to April 30, 2026 and provide supplemental funds on terms similar to the original agreement. Revenue is recognized as conditions are met and on a cost reimbursement basis in accordance with Topic 958. The Company recognized revenue of $6,016 related to these agreements during the year ended December 31, 2024. As of December 31, 2024, the Company had a $8,484 deferred revenue balance related to these agreements. As of December 31, 2024, the Company had no accounts receivable related to these agreements.


	Year Ended December 31,
	2024		2023		2022
On-premise software	$	104,020	$	104,511	$	84,487
Hosted software	35,253		20,381		14,890
Software maintenance	23,279		23,066		19,996
Professional services	9,797		9,366		15,205
Revenue from contracts with customers	172,349		157,324		134,578
Software contribution	8,016		1,800		1,000
Total software revenue	$	180,365	$	159,124	$	135,578

Research services revenue is generally recognized over time, typically by measuring the progress toward complete satisfaction of the relevant performance obligation using an appropriate input method based on the services promised to the customer, such as costs incurred and hours expended. This method of recognizing revenue requires the Company to make estimates of the work required to complete the performance obligation in order to determine the progress towards

In addition, the Company is generally entitled to receive variable consideration as certain milestones are achieved. The Company estimates the amount of variable consideration using the most likely amount method. The Company evaluates milestones on a case-by-case basis, including whether there are factors outside the Company’s control that could result in a significant reversal of revenue, and the likelihood and magnitude of a potential reversal. If achievement of a milestone is not considered probable or the event is outside of the Company's control, the Company constrains (reduces) variable consideration to exclude the milestone payment until it is deemed probable of being achieved or the event occurs. Upon removal of the constraint on variable consideration, revenue may be recognized at a point in time or over time by applying the allocation guidance of ASC Topic 606, Revenue from Contracts with Customers ("Topic 606").

As of December 31, 2024, there were no milestones not yet achieved that were determined to be probable of achievement. As of December 31, 2023 and 2022, milestones not yet achieved that were determined to be probable of achievement totaled $350 and $4,000, respectively, and $350 and $3,939 of those milestones were recognized as revenue for the years ended December 31, 2023, and 2022, respectively.

Drug discovery contribution revenue. Drug discovery contribution revenue consists of funds received under an agreement with the Bill & Melinda Gates Foundation on a cost reimbursement basis, to perform services aimed at accelerating drug discovery in women's health. The initial agreement began in November 2021 and expired in September 2023. In September 2023, the Company entered into a new agreement with the Bill & Melinda Gates Foundation to perform services aimed at accelerating drug discovery in women's health that expires in October 2025. Revenue is recognized as costs are incurred in accordance with Topic 958. As of December 31, 2024 and 2023, the Company had deferred revenue balances related to these agreements of $949 and $1,581, respectively.


	Year Ended December 31,
	2024		2023		2022
Drug discovery services revenue from contracts with customers	$	25,143	$	54,720	$	43,427
Drug discovery contribution	2,031		2,822		1,950
Total drug discovery revenue	$	27,174	$	57,542	$	45,377

Bristol Myers-Squibb. On November 22, 2020, the Company entered into an exclusive, worldwide collaboration and license agreement with Bristol-Myers Squibb Company ("BMS"), pursuant to which the Company and BMS agreed to collaborate in the discovery, research and preclinical development of new small molecule compounds for disease indications in oncology, neurology, and immunology therapeutics areas. Under the agreement, the Company was initially responsible, at its own cost and expense, for the discovery of small molecule compounds directed to five specified biological targets pursuant to a mutually agreed research plan for each such target. In December 2022, the Company and BMS entered into an amendment to the agreement to include an additional target in neurology on terms similar to the original agreement. As a result of BMS electing not to proceed with further development of certain targets, there is one remaining neurology target under the agreement, as amended, as of December 31, 2024.

Once a development candidate meeting specified criteria for a target under the agreement has been identified by the Company, BMS will be solely responsible for the further development, manufacturing and commercialization of such development candidate at its own cost and expense. The Company is solely responsible for the development of any programs that have been returned by BMS.

Under the terms of the agreement, as amended, BMS paid the Company an initial upfront payment of $55.0 million in November 2020, an additional upfront payment in December 2022, and a program fee in December 2024. As of December 31, 2024 the Company is eligible to receive up to $482.0 million in total milestone payments related to the one remaining neurology target currently subject to the collaboration, consisting of up to $257.0 million in the aggregate for the achievement of certain specified research, development, and regulatory milestones and $225.0 million in the aggregate for

The Company is also entitled to a tiered percentage royalty on annual net sales ranging from mid-single digits to low-double digits, subject to certain specified reductions. Royalties are payable by BMS on a licensed product-by-licensed product and country-by-country basis until the later of the expiration of the last valid claim covering the licensed product in such country, expiration of all applicable regulatory exclusivities in such country for such licensed product and the tenth anniversary of the first commercial sale of such licensed product in such country.

The Company assessed the collaboration and license agreement in accordance with Topic 606 and concluded that BMS is a customer based on the agreement structure. At inception, the Company identified one performance obligation for each of the five programs initially covered under the agreement, which includes research activities for each program and a license grant for the underlying intellectual property. The Company determined that the license grant for intellectual property is not separable from the research activities, as the research activities are expected to significantly modify or enhance the license grant over the period of service, and therefore are not distinct in the context of the contract.

The Company determined that the transaction price at the onset of the agreement was $55.0 million. Additional consideration to be paid to the Company upon the achievement of future milestone payments was excluded from the transaction price as they represent milestone payments that were not considered probable as of the inception date such that there is not a significant risk of revenue reversal.

The Company has allocated the transaction price of $55.0 million to each performance obligation based on the SSP of each performance obligation at inception. The Company determined the estimated SSP at contract inception of the research activities based on internal estimates of the costs to perform the services, inclusive of a reasonable profit margin. Significant inputs used to determine the total costs to perform the research activities included the length of time required, the internal hours expected to be incurred on the services and the number and costs of various studies that will be performed to complete the research plan.

Revenue associated with the research activities is recognized on a proportional performance basis over the period of service for research activities, using input-based measurements of total costs of research incurred to estimate the proportion performed. Progress towards completion is remeasured at the end of each reporting period.

During the years ended December 31, 2024, 2023, and 2022, the Company recognized $10.8 million, $43.2 million, and $22.1 million, respectively, of revenue associated with the agreement based on the research activities performed and milestones achieved. As of December 31, 2024 and 2023, there was $5.9 million and $7.3 million, respectively, of deferred revenue related to the agreement, which was classified as either current or non-current in the consolidated balance sheet based on the period the services are expected to be performed. As of December 31, 2024 and 2023, the Company had no outstanding receivables for this collaboration.

Novartis. On November 11, 2024, the Company entered into a research collaboration and license agreement with Novartis Pharma AG ("Novartis"), pursuant to which the Company and Novartis agreed to collaborate on the discovery, research and preclinical development of small molecule compounds for targets in certain specified therapeutic areas. The agreement is intended to advance multiple development candidates for development and commercialization by Novartis. The Company also entered into an expanded three-year software agreement with Novartis that substantially increases Novartis' access to the Company’s computational predictive modeling technology and enterprise informatics platform. Under Topic 606, the research collaboration and license agreement as well as the three-year software agreement ("the agreements") are collectively accounted for as a single contract.

Under the terms of the research collaboration and license agreement, once a development candidate has been identified, Novartis will be solely responsible for the further development, manufacturing and commercialization of such development candidate.

Novartis agreed to pay the Company an initial upfront payment of $150.0 million under the terms of the research collaboration and license agreement, and the Company will be eligible to eligible to receive up to $2.272 billion in total milestone payments across the initial programs. Such milestones consist of up to $892.0 million in discovery and development milestones and up to $1.38 billion in commercial milestones. The Company is also entitled to a tiered percentage royalty ranging from mid-single-digits to low double-digits on products commercialized by Novartis under the

The Company assessed the research collaboration and license agreement in accordance with Topic 606 and concluded that Novartis is a customer based on the agreement structure. The promises identified by the Company include research activities for each program under the agreement, a license grant for the underlying intellectual property, and software licenses and services. The Company determined that the license grant for intellectual property is not separable from the research activities, as the research activities are expected to significantly modify or enhance the license grant over the period of service, and therefore are not distinct in the context of the contract. Software licenses and services provided under the agreement are considered distinct and are accounted for as separate performance obligations in accordance with Topic 606.

The Company has allocated the transaction price for the agreements to each performance obligation based on the SSP of each performance obligation at inception. The Company determined the estimated SSP at contract inception of the research activities based on internal estimates of the costs to perform the services, inclusive of a reasonable profit margin. Significant inputs used to determine the total costs to perform the research activities included the length of time required, the internal hours expected to be incurred on the services and the number and costs of various studies that will be performed to complete the research plan.

During the year ended December 31, 2024, the Company recognized $0.6 million of revenue associated with the research collaboration and license agreement. As of December 31, 2024, there was $116.7 million of deferred revenue, net of contract assets, related to the agreements, which was classified as either current or non-current in the condensed consolidated balance sheet based on the period the services are expected to be performed. As of December 31, 2024, the Company had $150.0 million outstanding receivables for this collaboration.

Significant judgments and estimates are required under Topic 606. Due to the complexity of certain contracts, the actual revenue recognition treatment required under Topic 606 for the Company’s arrangements may be dependent on contract-specific terms and may vary in some instances.

The Company's contracts with customers often include but are not limited to promises to transfer multiple software products and services, including training, professional services, technical support services, and rights to unspecified updates, as well as collaborative research services, licenses to intellectual properties, and customer options. Determining whether licenses and services are distinct performance obligations that should be accounted for separately, or are not distinct and therefore should be accounted for together, requires significant judgment. In some arrangements, such as most of the Company's term-based software license arrangements, may include multiple software licenses, a right to updates or upgrades to the licensed software products, and technical support. The Company has concluded that such promised licenses and services are separate distinct performance obligations. In other arrangements, including collaboration services arrangements, the licenses and certain services may not be distinct from each other.

The Company is required to estimate the total consideration expected to be received from contracts with customers, including any variable consideration. For collaborative arrangements, under which the Company is eligible to receive variable consideration in the form of milestones payments, judgment is required to evaluate whether the milestones are considered probable of being achieved. If it is probable that a significant revenue reversal would not occur, the constraint is removed and value of the associated milestone is included in the estimated transaction price using the most likely amount method based on contractual requirements and historical experience. Once the estimated transaction price is established, amounts are allocated to the performance obligations that have been identified. The transaction price is allocated to each separate performance obligation on a relative SSP basis consistent with the allocation objectives of Topic 606.

Judgment is required to determine the SSP for each distinct performance obligation. The Company rarely licenses or sells products on a standalone basis, so the Company is required to estimate the range of SSPs for each performance obligation. In instances where the SSP is not directly observable because the Company does not sell the license, product, or service separately, the Company determines the SSP using information that includes historical discounting practices,

market conditions, cost-plus analysis, and other observable inputs. The Company typically has more than one SSP for individual software license performance obligations due to the stratification of those items by volume of sales, classes of customers and other relevant circumstances. In these instances, the Company may use information such as the size and geographic region of the customer in determining the SSP. Professional service revenue is recognized as costs and hours are incurred, and judgment is required in estimating both the project status and the costs incurred or hours expended.

If a group of agreements are so closely related to each other that they are, in effect, part of a single arrangement, such agreements are deemed to be one arrangement for revenue recognition purposes. The Company exercises significant judgment to evaluate the relevant facts and circumstances in determining whether the separate agreements should be accounted for separately or as, in substance, a single arrangement. The Company's judgments about whether a group of contracts comprises a single arrangement can affect the allocation of consideration to the distinct performance obligations, which could have an effect on results of operations for the periods involved.

Judgment is required to determine the total costs to perform research activities, which include the length of time required, the internal hours expected to be incurred on the services, and the number and costs of various studies that may be performed by third parties to complete the research plan.

The Company's estimates related to revenue recognition may require significant judgment and a change in these estimates could have an effect on the Company's results of operations during the periods involved.

The timing of revenue recognition may differ from the timing of invoicing to customers and these timing differences result in receivables, contract assets, or contract liabilities (deferred revenue) on the consolidated balance sheets. The Company records a contract asset when revenue is recognized prior to invoicing. A deferred revenue liability is recorded when revenue is expected to be recognized subsequent to invoicing. For the Company's time-based software agreements, customers are generally invoiced at the beginning of the arrangement for the entire term, though when the term spans multiple years the customers may be invoiced on an annual basis. For certain drug discovery agreements where the milestones are deemed probable in a period prior to when the milestone is achieved, the Company records a contract asset for the full value of the milestone.


	As of December 31, 2024		As of December 31, 2023
Contract assets	$	16,564	$	21,107
Deferred revenue, short-term:
Software products and services	75,660		44,218
Drug discovery	36,284		12,013
Deferred revenue, long-term:
Software products and services	14,393		2,407
Drug discovery	94,421		6,636

For the years ended December 31, 2024 and 2023, the Company recognized $53,438 and $64,120 of revenue, respectively, that was included in deferred revenue at the end of the respective preceding periods. All other deferred revenue activity is due to the timing of invoices in relation to the timing of revenue, as described above. The Company expects to recognize as revenue approximately 51% of its December 31, 2024 deferred revenue balance in the next 12 months and the remainder thereafter. Additionally, contracted but unsatisfied performance obligations that had not yet been billed to the customer or included in deferred revenue were $59,519 as of December 31, 2024.

Payment terms and conditions vary by contract type, although terms typically require payment within 30 to 60 days. In instances where the timing of revenue recognition differs from that of invoicing, the Company has determined that its contracts generally do not include a significant financing component. The primary purpose of invoicing terms is to provide customers with simplified and predictable ways of purchasing the Company’s products and services, not to facilitate financing arrangements.

The Company has applied the practical expedient for sales commission expense, as any material compensation paid to sales representatives to obtain a contract relates to a period of one year or less. The Company has not capitalized any costs related to sales commissions.