Dynatrace (NYSE: DT), the leading AI-powered observability platform, today announced financial results for the first quarter of fiscal 2027 ended June 30, 2026.
“Dynatrace delivered an exceptional quarter, led by 41% organic net new ARR growth,”1 said Rick McConnell, Chief Executive Officer of Dynatrace. “Demand continues to strengthen as enterprises expand cloud-native workloads and accelerate their AI initiatives. As software becomes increasingly AI-driven, customers are turning to Dynatrace for the deterministic answers, contextual analytics, and intelligent automation required to operate at scale, and we are increasingly confident in the opportunity ahead.”
“In Q1, we exceeded the high end of our top-line and profitability guidance, increased free cash flow, and returned capital to shareholders,” said Jim Benson, Chief Financial Officer, Dynatrace. “These strong results reflect the competitive differentiation of our platform and the momentum in our business, providing a solid start toward our goal of accelerating ARR growth in fiscal 2027. During the quarter, we also repurchased $275 million of Dynatrace stock, underscoring our confidence in our long-term growth trajectory and our commitment to delivering shareholder value.”
First Quarter Fiscal 2027 Financial and Other Recent Business Highlights:
All growth rates are compared to the first quarter of fiscal 2026, unless otherwise noted.
Financial Highlights:
- Total ARR of $2,136 million, an increase of 17% on an as reported and constant currency basis
- Total revenue of $555 million, an increase of 16%, or 15% on a constant currency basis
- Subscription revenue of $530 million, an increase of 16%, or 15% on a constant currency basis
- GAAP income from operations of $71 million and non-GAAP income from operations of $162 million
- GAAP net income per share of $0.12 and non-GAAP net income per share of $0.48, on a dilutive basis
Business Highlights
- Demonstrated four consecutive quarters of acceleration in trailing-twelve-month organic net new ARR growth.
- Nearly doubled annualized logs consumption in the last two quarters to $200 million, growing well over 100% year-over-year.
- Named a Leader in the 2026 Gartner® Magic Quadrant™ for Observability Platforms for the 16th consecutive year.2
- Named a Leader and an Outperformer in the 2026 GigaOm Radar for Kubernetes Observability.
- Launched the private preview of our observability offering for AI-first teams, Dynatrace Bluebox, at the AWS Summit New York.
- Delivered significant advancements of Dynatrace Intelligence, extending the power of the Dynatrace platform. New capabilities include Autonomous SRE agent, Cloud SE agent, and Agent Building to help customers move beyond analysis and recommendations into trusted, autonomous execution.
Share Repurchase Program
- During the first quarter of fiscal 2027, Dynatrace spent $275 million to repurchase 7.1 million shares at an average price of $38.88 under that program.
| _________________________ |
|
1 Represents the quarterly increase in ARR for the first quarter of fiscal 2027 compared to ARR for the first quarter of fiscal 2026, adjusted for foreign exchange, and excludes $13 million of ARR contributed from the Bindplane acquisition. |
|
2 Gartner, Magic Quadrant for Observability Platforms, Padraig Byrne, Martin Caren, D.B. Cummings, Neil Young, 13 July 2026. See below for disclaimers. |
CFO Leadership Update
Dynatrace also announced today that in connection with his planned retirement, Jim Benson will resign from his position as Chief Financial Officer by the company’s current fiscal year end on March 31, 2027. Dynatrace has initiated a search for a new CFO, and Mr. Benson will ensure a smooth transition of his duties once a new CFO is appointed.
“I want to thank Jim for his leadership and many contributions to Dynatrace,” said Rick McConnell. “Jim has played a critical role in scaling the business, strengthening our financial profile, and positioning Dynatrace for its next phase of growth acceleration. Jim built a world-class Finance organization, and we will miss his valuable insights and guidance when he retires.”
“Serving as CFO of Dynatrace has been a privilege, and I am proud of what we have accomplished over the last four years,” said Jim Benson. “During my tenure, Dynatrace delivered consistent growth and profitability with disciplined capital allocation, strategic investment, and a relentless focus on shareholder value creation. The momentum across the business and the opportunities ahead give me tremendous confidence in Dynatrace’s future. I am committed to assisting Rick in the search process and ensuring a smooth transition once a new CFO is appointed.”
|
First Quarter 2027 Financial Highlights (Unaudited – In thousands, except per share data) |
|||||||
|
|
Three Months Ended June 30, |
||||||
|
|
2026 |
|
2025 |
||||
|
Annual recurring revenue (ARR): |
|
|
|
||||
|
Total ARR |
$ |
2,135,982 |
|
|
$ |
1,822,205 |
|
|
Year-over-Year Increase |
|
17 |
% |
|
|
||
|
Year-over-Year Increase – constant currency (*) |
|
17 |
% |
|
|
||
|
|
|
|
|
||||
|
Revenue: |
|
|
|
||||
|
Total revenue |
$ |
554,548 |
|
|
$ |
477,349 |
|
|
Year-over-Year Increase |
|
16 |
% |
|
|
||
|
Year-over-Year Increase – constant currency (*) |
|
15 |
% |
|
|
||
|
|
|
|
|
||||
|
Subscription revenue |
$ |
530,255 |
|
|
$ |
457,507 |
|
|
Year-over-Year Increase |
|
16 |
% |
|
|
||
|
Year-over-Year Increase – constant currency (*) |
|
15 |
% |
|
|
||
|
|
|
|
|
||||
|
GAAP Financial Measures: |
|
|
|
||||
|
GAAP income from operations |
$ |
71,476 |
|
|
$ |
62,338 |
|
|
GAAP operating margin |
|
13 |
% |
|
|
13 |
% |
|
|
|
|
|
||||
|
GAAP net income |
$ |
36,651 |
|
|
$ |
47,955 |
|
|
|
|
|
|
||||
|
GAAP net income per share – diluted |
$ |
0.12 |
|
|
$ |
0.16 |
|
|
|
|
|
|
||||
|
GAAP shares outstanding – diluted |
|
293,744 |
|
|
|
304,160 |
|
|
|
|
|
|
||||
|
Net cash provided by operating activities |
$ |
306,240 |
|
|
$ |
269,692 |
|
|
Net cash provided by operating activities as a percent of revenue |
|
55 |
% |
|
|
56 |
% |
|
|
|
|
|
||||
|
Non-GAAP Financial Measures (*): |
|
|
|
||||
|
Non-GAAP income from operations |
$ |
161,600 |
|
|
$ |
143,106 |
|
|
Non-GAAP operating margin |
|
29 |
% |
|
|
30 |
% |
|
|
|
|
|
||||
|
Non-GAAP net income |
$ |
139,721 |
|
|
$ |
126,277 |
|
|
|
|
|
|
||||
|
Non-GAAP net income per share – diluted |
$ |
0.48 |
|
|
$ |
0.42 |
|
|
|
|
|
|
||||
|
Non-GAAP shares outstanding – diluted |
|
293,744 |
|
|
|
304,160 |
|
|
|
|
|
|
||||
|
Adjusted free cash flow |
$ |
309,177 |
|
|
$ |
262,157 |
|
|
Adjusted free cash flow margin |
|
56 |
% |
|
|
55 |
% |
| * For additional information, please see the “Non-GAAP Financial Measures” and “Definitions – Non-GAAP and Other Metrics” sections of this press release. | |||||||
Financial Outlook
Based on information available as of August 5, 2026, Dynatrace is issuing guidance for the second quarter and updating its prior guidance for full year fiscal 2027 in the tables below.
This guidance is based on foreign exchange rates as of June 30, 2026. We expect foreign exchange to be a headwind of approximately $14 million on ARR and approximately $4 million on revenue for fiscal 2027 compared to ARR and revenue at constant currency. This represents an incremental headwind of approximately $23 million to ARR and $19 million to revenue compared to our prior guidance. This guidance also excludes the impact of any share repurchases after June 30, 2026.
Growth rates for ARR, Total revenue, and Subscription revenue are presented in constant currency to provide better visibility into the underlying growth of the business.
All growth rates below are compared to the full year and second quarter of fiscal 2026.
|
(In millions, except per share data) |
Current Guidance Fiscal 2027 |
|
Prior Guidance Fiscal 2027* |
|
Guidance Change at Midpoint** |
|
ARR |
$2,359 – $2,379 |
|
$2,382 – $2,402 |
|
$(23) |
|
As reported |
15% – 16% |
|
16% – 17% |
|
(100) bps |
|
Constant currency |
15.5% – 16.5% |
|
15.5% – 16.5% |
|
— |
|
Total revenue |
$2,306 – $2,320 |
|
$2,317 – $2,335 |
|
$(13) |
|
As reported |
14% – 15% |
|
15% – 16% |
|
(100) bps |
|
Constant currency |
14.5% – 15% |
|
14% – 15% |
|
25 bps |
|
Subscription revenue |
$2,206 – $2,220 |
|
$2,217 – $2,235 |
|
$(13) |
|
As reported |
14% – 15% |
|
15% – 16% |
|
(100) bps |
|
Constant currency |
14.5% – 15% |
|
14% – 15% |
|
25 bps |
|
Non-GAAP income from operations |
$682 – $690 |
|
$682 – $690 |
|
$— |
|
Non-GAAP operating margin |
29.5% – 29.75% |
|
29.5% |
|
13 bps |
|
Non-GAAP net income |
$581 – $591 |
|
$584 – $594 |
|
$(3) |
|
Non-GAAP net income per diluted share |
$1.97 – $1.99 |
|
$1.93 – $1.95 |
|
$0.04 |
|
Diluted weighted average shares outstanding |
295 – 297 |
|
302 – 304 |
|
(7) |
|
Adjusted free cash flow* |
$610 – $615 |
|
$613 – $620 |
|
$(4) |
|
Adjusted free cash flow margin* |
26.5% |
|
26.5% |
|
— |
| *Beginning in the first quarter of fiscal 2027, we updated our non-GAAP liquidity measure from free cash flow to adjusted free cash flow (with a corresponding update to the related margin). For additional information, please see the “Non-GAAP Financial Measures” and “Definitions – Non-GAAP and Other Metrics” sections of this press release. Our prior guidance for fiscal 2027 issued on May 13, 2026 (as set forth in this table) reflected our previous definition of free cash flow and the related margin and there were no “below the line” items contemplated at the time to be adjusted (as set forth in our current definition of adjusted free cash flow). | |||||
| **Guidance change at midpoint is rounded to the nearest million. | |||||
|
(In millions, except per share data) |
Q2 Fiscal 2027 Guidance |
|
Total revenue |
$565 – $570 |
|
As reported |
14% – 15% |
|
Constant currency |
15% – 16% |
|
Subscription revenue |
$540 – $545 |
|
As reported |
14% – 15% |
|
Constant currency |
15% – 16% |
|
Non-GAAP income from operations |
$166 – $170 |
|
Non-GAAP operating margin |
29.5% – 30% |
|
Non-GAAP net income |
$141 – $145 |
|
Non-GAAP net income per diluted share |
$0.48 – $0.49 |
|
Diluted weighted average shares outstanding |
293 – 294 |
Conference Call and Webcast Information
Dynatrace will host a conference call and live webcast to discuss its results and business outlook at 8:00 a.m. Eastern Time today, August 5, 2026. To access the conference call from the U.S. and Canada, dial (866) 405-1247, or internationally, dial (201) 689-8045 with event confirmation #: 13761927. The call will also be available live via webcast on the company’s website, ir.dynatrace.com.
An audio replay of the call will also be available until 11:59 p.m. Eastern Time on August 19, 2026 by dialing (877) 660-6853 from the U.S. and Canada, or for international callers by dialing (201) 612-7415 and entering event confirmation #: 13761927. In addition, an archived webcast will be available at ir.dynatrace.com.
We announce material financial information to our investors using our Investor Relations website, press releases, SEC filings and public conference calls and webcasts. We also use these channels to disclose information about the company, our planned financial and other announcements, attendance at upcoming investor and industry conferences, and for complying with our disclosure obligations under Regulation FD.
Non-GAAP Financial Measures
In addition to disclosing financial measures prepared in accordance with GAAP, this press release and the accompanying tables contain certain non-GAAP financial measures as defined by Regulation G, including non-GAAP income from operations, non-GAAP operating margin, non-GAAP net income, non-GAAP net income per diluted share, adjusted free cash flow, and adjusted free cash flow margin. We also use or discuss non-GAAP financial measures in conference calls, slide presentations and webcasts.
We use these non-GAAP financial measures for financial and operational decision-making purposes, and as a means to evaluate period-to-period comparisons and liquidity. We believe that these non-GAAP financial measures provide useful information about our operating results, enhance the overall understanding of past financial performance and allow for greater transparency with respect to metrics used by our management in its financial and operational decision-making.
The presentation of the non-GAAP financial measures is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. Our non-GAAP financial measures may not provide information that is directly comparable to similarly titled metrics provided by other companies.
Non-GAAP financial measures are defined in this press release and the tables included in this press release include reconciliations of historical non-GAAP financial measures to their most directly comparable GAAP measures.
We also include non-GAAP financial measures in our financial outlook included in this press release. Reconciliations of forward-looking non-GAAP income from operations, non-GAAP net income, non-GAAP net income per diluted share, and adjusted free cash flow guidance to the most directly comparable GAAP measures are not available without unreasonable efforts due to the high variability, complexity, and low visibility with respect to the charges excluded from these non-GAAP measures; in particular, the measures and effects of share-based compensation expense, employer taxes and tax deductions specific to equity compensation awards that are directly impacted by future hiring, turnover and retention needs, as well as unpredictable fluctuations in our stock price. We expect the variability of the above charges to have a significant, and potentially unpredictable, impact on our future GAAP financial results.
Beginning in the first quarter of fiscal 2027, we updated our non-GAAP liquidity measure from free cash flow to adjusted free cash flow (with a corresponding update to the related margin) to exclude the impact of certain items that management does not consider indicative of ongoing operating performance. We believe that adjusted free cash flow is a more useful measure as excluding payments for acquisition-related, restructuring, and other non-recurring and unusual items provides investors with better comparability of cash generated from our business period over period. Adjusted free cash flow is not residual cash flow available for our discretionary expenditures. Prior period results have been recast to conform to the current period presentation for comparability.
Definitions – Non-GAAP and Other Metrics
Adjusted Free Cash Flow is defined as the net cash provided by or used in operating activities less capital expenditures, reflected as purchase of property and equipment and capitalized software additions in our financial statements, plus cash paid for acquisition-related, restructuring, and other non-recurring and unusual items. The related adjusted free cash flow margin is adjusted free cash flow expressed as a percentage of total revenue. We previously defined free cash flow as the net cash provided by or used in operating activities less capital expenditures, reflected as purchase of property and equipment and capitalized software additions in our financial statements. The related free cash flow margin was previously defined as free cash flow expressed as a percentage of total revenue.
Annual Recurring Revenue (ARR) is defined as the daily revenue of all subscription agreements that are actively generating revenue as of the last day of the reporting period multiplied by 365. We exclude from our calculation of ARR any revenues derived from month-to-month agreements and/or product usage overage billings.
Constant Currency amounts for ARR, Total revenue, and Subscription revenue are presented to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign exchange rate fluctuations. To present this information, current and comparative prior period results for entities reporting in currencies other than United States dollars are converted into United States dollars using the average exchange rates from the comparative period rather than the actual exchange rates in effect during the respective periods. All growth comparisons relate to the corresponding period in the last fiscal year.
Non-GAAP Income from Operations is defined as GAAP income from operations adjusted for the following items: share-based compensation; employer payroll taxes on employee stock transactions; amortization of intangibles; acquisition-related, restructuring and other non-recurring or unusual items that may arise from time to time. The related Non-GAAP Operating Margin is non-GAAP income from operations expressed as a percentage of total revenue.
Non-GAAP Net Income is defined as GAAP net income adjusted for the following items: income tax expense/benefit; non-GAAP effective cash taxes; net interest expense and income; net cash received from and paid for interest; share-based compensation; employer payroll taxes on employee stock transactions, amortization of intangibles; gains and losses on currency translation; and acquisition-related, restructuring and other non-recurring or unusual items that may arise from time to time. Non-GAAP net income per diluted share is calculated as non-GAAP net income divided by the diluted weighted average shares outstanding used to compute GAAP net income per diluted share.
About Dynatrace
Dynatrace (NYSE: DT) is advancing observability for today’s digital businesses, helping to transform the complexity of modern digital ecosystems into powerful business assets. By leveraging AI-powered insights, Dynatrace enables organizations to analyze, automate, and innovate faster to drive their business forward. To learn more about Dynatrace, visit www.dynatrace.com, visit our blog and follow us on LinkedIn and X @dynatrace.
Dynatrace and the Dynatrace logo are trademarks of the Dynatrace, Inc. group of companies. All other trademarks are the property of their respective owners. © 2026 Dynatrace LLC.
Cautionary Language Concerning Forward-Looking Statements
This press release includes certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our future growth prospects, industry trends related to cloud, AI, and software, the expected and current benefits that we believe organizations receive from using the Dynatrace platform, Mr. Benson’s planned resignation as CFO and the timing thereof, and our financial and business outlook, including our financial guidance for the full year and second quarter of fiscal 2027. These forward-looking statements include, but are not limited to, plans, objectives, expectations, and intentions and other statements contained in this press release that are not historical facts and statements identified by words such as “will,” “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates” or words of similar meaning. 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. Although we believe that our plans, intentions, expectations, strategies, and prospects as reflected in or suggested by those forward-looking statements are reasonable, we can give no assurance that the plans, intentions, expectations, or strategies will be attained or achieved. Furthermore, actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of risks and factors that are beyond our control including, without limitation, our ability to maintain our revenue growth rates in future periods; overall demand for and market adoption of our solutions; our ability to compete; our ability to innovate and develop and effectively market solutions that meet customer needs, including with AI capabilities and functionalities; our ability to acquire new customers and retain and expand our relationships with existing customers; our ability to expand our sales and marketing capabilities; our ability to maintain successful relationships with partners; the ability of our platform and solutions to effectively interoperate with customers’ IT infrastructures; our ability to hire and retain necessary qualified employees to grow our business and expand our operations; our ability to successfully complete acquisitions and integrate newly acquired businesses and offerings; our use of new and evolving technologies, including AI, in our offerings and business; security breaches, computer malware, computer hacking attacks, and other security incidents or compromises; real or perceived errors, failures, defects, or vulnerabilities in our solutions; our ability to protect and enforce our proprietary technology and intellectual property rights; the effect on our business of uncertainty in the U.S. and global economies, along with uncertain geopolitical conditions; and other risks set forth under the caption “Risk Factors” in our most recent Annual Report on Form 10-K, subsequent Quarterly Reports on Form 10-Q, and our other SEC filings. We assume no obligation to update any forward-looking statements contained in this document as a result of new information, future events or otherwise.
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The Gartner content described herein (the “Gartner Content”) represents research opinion or viewpoints published, as part of a syndicated subscription service, by Gartner, Inc. (“Gartner”), and is not a representation of fact. Gartner Content speaks as of its original publication date (and not as of the date of this earnings press release), and the opinions expressed in the Gartner Content are subject to change without notice.
|
DYNATRACE, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited – In thousands, except per share data) |
|||||||
|
|
Three Months Ended June 30, |
||||||
|
|
2026 |
|
2025 |
||||
|
Revenue: |
|
|
|
||||
|
Subscription |
$ |
530,255 |
|
|
$ |
457,507 |
|
|
Service |
|
24,293 |
|
|
|
19,842 |
|
|
Total revenue |
|
554,548 |
|
|
|
477,349 |
|
|
Cost of revenue: |
|
|
|
||||
|
Cost of subscription |
|
80,260 |
|
|
|
65,018 |
|
|
Cost of service |
|
21,058 |
|
|
|
19,355 |
|
|
Amortization of acquired technology |
|
2,135 |
|
|
|
836 |
|
|
Total cost of revenue |
|
103,453 |
|
|
|
85,209 |
|
|
Gross profit |
|
451,095 |
|
|
|
392,140 |
|
|
|
|
|
|
||||
|
Operating expenses: |
|
|
|
||||
|
Research and development |
|
135,990 |
|
|
|
108,172 |
|
|
Sales and marketing |
|
181,631 |
|
|
|
165,314 |
|
|
General and administrative |
|
61,736 |
|
|
|
56,304 |
|
|
Amortization of other intangibles |
|
262 |
|
|
|
12 |
|
|
Total operating expenses |
|
379,619 |
|
|
|
329,802 |
|
|
Income from operations |
|
71,476 |
|
|
|
62,338 |
|
|
Interest income, net |
|
8,893 |
|
|
|
12,295 |
|
|
Other income, net |
|
432 |
|
|
|
6,757 |
|
|
Income before income taxes |
|
80,801 |
|
|
|
81,390 |
|
|
Income tax expense |
|
(44,150 |
) |
|
|
(33,435 |
) |
|
Net income |
$ |
36,651 |
|
|
$ |
47,955 |
|
|
Net income per share: |
|
|
|
||||
|
Basic |
$ |
0.13 |
|
|
$ |
0.16 |
|
|
Diluted |
$ |
0.12 |
|
|
$ |
0.16 |
|
|
Weighted average shares outstanding: |
|
|
|
||||
|
Basic |
|
292,202 |
|
|
|
300,153 |
|
|
Diluted |
|
293,744 |
|
|
|
304,160 |
|
|
UNAUDITED SHARE-BASED COMPENSATION |
|||||
|
|
Three Months Ended June 30, |
||||
|
|
2026 |
|
2025 |
||
|
Cost of revenue |
$ |
9,366 |
|
$ |
9,850 |
|
Research and development |
|
29,516 |
|
|
26,861 |
|
Sales and marketing |
|
19,887 |
|
|
20,034 |
|
General and administrative |
|
14,807 |
|
|
15,150 |
|
Total share-based compensation |
$ |
73,576 |
|
$ |
71,895 |
|
DYNATRACE, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share data) |
|||||||
|
|
June 30, 2026 |
|
March 31, 2026 |
||||
|
|
(unaudited) |
|
|
||||
|
Assets |
|
|
|
||||
|
Current assets: |
|
|
|
||||
|
Cash and cash equivalents |
$ |
1,057,780 |
|
|
$ |
1,097,220 |
|
|
Short-term marketable securities |
|
51,084 |
|
|
|
74,881 |
|
|
Accounts receivable, net |
|
379,975 |
|
|
|
710,200 |
|
|
Deferred contract costs, current |
|
130,287 |
|
|
|
127,495 |
|
|
Prepaid expenses and other current assets |
|
104,575 |
|
|
|
113,651 |
|
|
Total current assets |
|
1,723,701 |
|
|
|
2,123,447 |
|
|
Long-term marketable securities |
|
47,079 |
|
|
|
51,908 |
|
|
Property and equipment, net |
|
71,631 |
|
|
|
72,993 |
|
|
Operating lease right-of-use assets, net |
|
134,360 |
|
|
|
139,285 |
|
|
Goodwill |
|
1,413,246 |
|
|
|
1,350,256 |
|
|
Intangible assets, net |
|
65,264 |
|
|
|
22,850 |
|
|
Deferred tax assets, net |
|
498,149 |
|
|
|
508,742 |
|
|
Deferred contract costs, non-current |
|
113,692 |
|
|
|
113,111 |
|
|
Other assets |
|
42,372 |
|
|
|
33,133 |
|
|
Total assets |
$ |
4,109,494 |
|
|
$ |
4,415,725 |
|
|
|
|
|
|
||||
|
Liabilities and shareholders’ equity |
|
|
|
||||
|
Current liabilities: |
|
|
|
||||
|
Accounts payable |
$ |
7,919 |
|
|
$ |
2,728 |
|
|
Accrued expenses, current |
|
287,489 |
|
|
|
302,260 |
|
|
Deferred revenue, current |
|
1,108,856 |
|
|
|
1,241,488 |
|
|
Operating lease liabilities, current |
|
23,057 |
|
|
|
22,588 |
|
|
Total current liabilities |
|
1,427,321 |
|
|
|
1,569,064 |
|
|
Deferred revenue, non-current |
|
49,791 |
|
|
|
53,387 |
|
|
Accrued expenses, non-current |
|
43,331 |
|
|
|
38,205 |
|
|
Operating lease liabilities, non-current |
|
136,216 |
|
|
|
141,736 |
|
|
Deferred tax liabilities |
|
2,082 |
|
|
|
1,943 |
|
|
Total liabilities |
|
1,658,741 |
|
|
|
1,804,335 |
|
|
|
|
|
|
||||
|
Shareholders’ equity: |
|
|
|
||||
|
Common shares, $0.001 par value, 600,000,000 shares authorized, 290,346,577 and 294,652,951 shares issued and outstanding at June 30, 2026 and March 31, 2026, respectively |
|
290 |
|
|
|
295 |
|
|
Additional paid-in capital |
|
2,001,910 |
|
|
|
2,199,494 |
|
|
Retained earnings |
|
484,247 |
|
|
|
447,596 |
|
|
Accumulated other comprehensive loss |
|
(35,694 |
) |
|
|
(35,995 |
) |
|
Total shareholders’ equity |
|
2,450,753 |
|
|
|
2,611,390 |
|
|
Total liabilities and shareholders’ equity |
$ |
4,109,494 |
|
|
$ |
4,415,725 |
|
|
DYNATRACE, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited – In thousands) |
|||||||
|
|
Three Months Ended June 30, |
||||||
|
|
2026 |
|
2025 |
||||
|
Cash flows from operating activities: |
|
|
|
||||
|
Net income |
$ |
36,651 |
|
|
$ |
47,955 |
|
|
Adjustments to reconcile net income to cash provided by operations: |
|
|
|
||||
|
Depreciation |
|
4,740 |
|
|
|
5,095 |
|
|
Amortization |
|
2,914 |
|
|
|
1,366 |
|
|
Share-based compensation |
|
73,576 |
|
|
|
71,895 |
|
|
Deferred income taxes |
|
2,604 |
|
|
|
3,750 |
|
|
Other |
|
(281 |
) |
|
|
(7,051 |
) |
|
Net change in operating assets and liabilities: |
|
|
|
||||
|
Accounts receivable |
|
335,226 |
|
|
|
343,732 |
|
|
Deferred contract costs |
|
(3,505 |
) |
|
|
2,727 |
|
|
Prepaid expenses and other assets |
|
135 |
|
|
|
(8,840 |
) |
|
Accounts payable and accrued expenses |
|
(9,024 |
) |
|
|
(73,110 |
) |
|
Operating leases, net |
|
(49 |
) |
|
|
605 |
|
|
Deferred revenue |
|
(136,747 |
) |
|
|
(118,432 |
) |
|
Net cash provided by operating activities |
|
306,240 |
|
|
|
269,692 |
|
|
|
|
|
|
||||
|
Cash flows from investing activities: |
|
|
|
||||
|
Purchase of property and equipment |
|
(3,151 |
) |
|
|
(7,482 |
) |
|
Capitalized software additions |
|
— |
|
|
|
(194 |
) |
|
Acquisition of a business, net of cash acquired |
|
(99,481 |
) |
|
|
— |
|
|
Purchases of marketable securities |
|
(3,713 |
) |
|
|
(28,824 |
) |
|
Proceeds from sales and maturities of marketable securities |
|
33,436 |
|
|
|
28,052 |
|
|
Net cash used in investing activities |
|
(72,909 |
) |
|
|
(8,448 |
) |
|
|
|
|
|
||||
|
Cash flows from financing activities: |
|
|
|
||||
|
Proceeds from employee stock purchase plan |
|
12,636 |
|
|
|
11,871 |
|
|
Proceeds from exercise of stock options |
|
1,591 |
|
|
|
2,415 |
|
|
Repurchases of common stock |
|
(275,478 |
) |
|
|
(45,031 |
) |
|
Taxes paid related to net share settlement of equity awards |
|
(7,627 |
) |
|
|
(10,347 |
) |
|
Other |
|
(1,104 |
) |
|
|
(2,762 |
) |
|
Net cash used in financing activities |
|
(269,982 |
) |
|
|
(43,854 |
) |
|
|
|
|
|
||||
|
Effect of exchange rates on cash and cash equivalents |
|
(2,789 |
) |
|
|
12,952 |
|
|
|
|
|
|
||||
|
Net (decrease) increase in cash and cash equivalents |
|
(39,440 |
) |
|
|
230,342 |
|
|
|
|
|
|
||||
|
Cash and cash equivalents, beginning of period |
|
1,097,220 |
|
|
|
1,017,039 |
|
|
Cash and cash equivalents, end of period |
$ |
1,057,780 |
|
|
$ |
1,247,381 |
|
|
DYNATRACE, INC. GAAP to Non-GAAP Reconciliations (Unaudited – In thousands, except percentages) |
|||||||
|
|
Three Months Ended June 30, |
||||||
|
|
2026 |
|
2025 |
||||
|
Non-GAAP cost of revenue: |
|
|
|
||||
|
Cost of revenue |
$ |
103,453 |
|
|
$ |
85,209 |
|
|
Share-based compensation |
|
(9,366 |
) |
|
|
(9,850 |
) |
|
Employer payroll taxes on employee stock transactions |
|
(954 |
) |
|
|
(1,416 |
) |
|
Amortization of intangibles |
|
(2,135 |
) |
|
|
(836 |
) |
|
Non-GAAP cost of revenue |
$ |
90,998 |
|
|
$ |
73,107 |
|
|
|
|
|
|
||||
|
Non-GAAP gross profit: |
|
|
|
||||
|
Gross profit |
$ |
451,095 |
|
|
$ |
392,140 |
|
|
Share-based compensation |
|
9,366 |
|
|
|
9,850 |
|
|
Employer payroll taxes on employee stock transactions |
|
954 |
|
|
|
1,416 |
|
|
Amortization of intangibles |
|
2,135 |
|
|
|
836 |
|
|
Non-GAAP gross profit |
$ |
463,550 |
|
|
$ |
404,242 |
|
|
|
|
|
|
||||
|
GAAP gross margin |
|
81 |
% |
|
|
82 |
% |
|
Non-GAAP gross margin |
|
84 |
% |
|
|
85 |
% |
|
|
|
|
|
||||
|
Non-GAAP operating expenses: |
|
|
|
||||
|
Operating expenses |
$ |
379,619 |
|
|
$ |
329,802 |
|
|
Share-based compensation |
|
(64,210 |
) |
|
|
(62,045 |
) |
|
Employer payroll taxes on employee stock transactions |
|
(5,504 |
) |
|
|
(6,609 |
) |
|
Amortization of intangibles |
|
(262 |
) |
|
|
(12 |
) |
|
Acquisition-related, restructuring, and other |
|
(7,693 |
) |
|
|
— |
|
|
Non-GAAP operating expenses |
$ |
301,950 |
|
|
$ |
261,136 |
|
|
|
|
|
|
||||
|
Non-GAAP income from operations: |
|
|
|
||||
|
Income from operations |
$ |
71,476 |
|
|
$ |
62,338 |
|
|
Share-based compensation |
|
73,576 |
|
|
|
71,895 |
|
|
Employer payroll taxes on employee stock transactions |
|
6,458 |
|
|
|
8,025 |
|
|
Amortization of intangibles |
|
2,397 |
|
|
|
848 |
|
|
Acquisition-related, restructuring, and other |
|
7,693 |
|
|
|
— |
|
|
Non-GAAP income from operations |
$ |
161,600 |
|
|
$ |
143,106 |
|
|
|
|
|
|
||||
|
GAAP operating margin |
|
13 |
% |
|
|
13 |
% |
|
Non-GAAP operating margin |
|
29 |
% |
|
|
30 |
% |
|
DYNATRACE, INC. GAAP to Non-GAAP Reconciliations (Unaudited – In thousands, except per share data) |
|||||||
|
|
Three Months Ended June 30, |
||||||
|
|
2026 |
|
2025 |
||||
|
Non-GAAP net income: |
|
|
|
||||
|
Net income |
$ |
36,651 |
|
|
$ |
47,955 |
|
|
Income tax expense |
|
44,150 |
|
|
|
33,435 |
|
|
Non-GAAP effective cash tax |
|
(30,670 |
) |
|
|
(28,664 |
) |
|
Interest income, net |
|
(8,893 |
) |
|
|
(12,295 |
) |
|
Cash received from interest, net |
|
8,791 |
|
|
|
11,835 |
|
|
Share-based compensation |
|
73,576 |
|
|
|
71,895 |
|
|
Employer payroll taxes on employee stock transactions |
|
6,458 |
|
|
|
8,025 |
|
|
Amortization of intangibles |
|
2,397 |
|
|
|
848 |
|
|
Acquisition-related, restructuring, and other |
|
7,693 |
|
|
|
— |
|
|
Gain on currency translation |
|
(432 |
) |
|
|
(6,757 |
) |
|
Non-GAAP net income |
$ |
139,721 |
|
|
$ |
126,277 |
|
|
|
|
|
|
||||
|
Share count: |
|
|
|
||||
|
Weighted-average shares outstanding – basic |
|
292,202 |
|
|
|
300,153 |
|
|
Weighted-average shares outstanding – diluted |
|
293,744 |
|
|
|
304,160 |
|
|
|
|
|
|
||||
|
Shares used in non-GAAP per share calculations: |
|
|
|
||||
|
Weighted-average shares outstanding – basic |
|
292,202 |
|
|
|
300,153 |
|
|
Weighted-average shares outstanding – diluted |
|
293,744 |
|
|
|
304,160 |
|
|
|
|
|
|
||||
|
Non-GAAP net income per share: |
|
|
|
||||
|
Net income per share – basic |
$ |
0.13 |
|
|
$ |
0.16 |
|
|
Net income per share – diluted |
$ |
0.12 |
|
|
$ |
0.16 |
|
|
Non-GAAP net income per share – basic |
$ |
0.48 |
|
|
$ |
0.42 |
|
|
Non-GAAP net income per share – diluted |
$ |
0.48 |
|
|
$ |
0.42 |
|
|
|
Three Months Ended June 30, |
||||||
|
|
2026 |
|
2025 |
||||
|
Adjusted free cash flow: |
|
|
|
||||
|
Net cash provided by operating activities |
$ |
306,240 |
|
|
$ |
269,692 |
|
|
Purchase of property and equipment |
|
(3,151 |
) |
|
|
(7,482 |
) |
|
Capitalized software additions |
|
— |
|
|
|
(194 |
) |
|
Cash paid for acquisition-related, restructuring, and other costs |
$ |
6,088 |
|
|
$ |
141 |
|
|
Adjusted free cash flow |
$ |
309,177 |
|
|
$ |
262,157 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20260805401384/en/
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