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Dynatrace Teams With Lloyds Banking Group to Reduce IT Carbon Emissions
Businesswire· 2024-01-31 11:00
WALTHAM, Mass.--(BUSINESS WIRE)--Dynatrace (NYSE: DT), the leader in unified observability and security, today announced that it is working with Lloyds Banking Group, one of the UK’s largest financial services providers, to measure the environmental carbon impact of its IT ecosystem, contributing to the organization’s sustainability goals. To help address this need, Dynatrace is using insights and feedback from Lloyds Banking Group to further develop Dynatrace® Carbon Impact. The app translates utilizati ...
Dynatrace (DT) Falls More Steeply Than Broader Market: What Investors Need to Know
Zacks Investment Research· 2024-01-31 00:21
In the latest trading session, Dynatrace (DT) closed at $59.35, marking a -0.8% move from the previous day. This change lagged the S&P 500's 0.06% loss on the day. Meanwhile, the Dow gained 0.35%, and the Nasdaq, a tech-heavy index, lost 0.76%.Prior to today's trading, shares of the software intellegence company had gained 9.4% over the past month. This has outpaced the Computer and Technology sector's gain of 6.36% and the S&P 500's gain of 3.36% in that time.Investors will be eagerly watching for the perf ...
Dynatrace to Acquire Runecast to Enhance Cloud-Native Security and Compliance
Businesswire· 2024-01-29 13:00
WALTHAM, Mass.--(BUSINESS WIRE)--Dynatrace (NYSE: DT), the leader in unified observability and security, today announced it signed a definitive agreement to acquire Runecast, a provider of AI-powered security and compliance solutions. Adding Runecast to the Dynatrace® platform will extend Dynatrace contextual security protection and analytics with Runecast security posture management. This will enable customers to address the risks of misconfigurations and compliance violations in hybrid and multicloud ecos ...
Dynatrace Stock Is Actionable As It Bounces From Key Support Level
Among top stocks to buy and watch on the IBD Sector Leaders list, Dynatrace stock is potentially actionable as the software developer bounces from support at a key level.X Waltham, Mass.-based Dynatrace (DT) offers customers a customizable enterprise cloud platform designed to integrate security, analytics and automation, using three types of artificial intelligence.Dynatrace's Davis AI is based on predictive, causal and generative AI models. It also allows for forecasting, machine learning, anomaly detecti ...
Dynatrace(DT) - 2023 Q2 - Earnings Call Presentation
2023-11-07 15:55
v This presentation consists of these slides and the associated remarks and comments, which are related and intended to be presented and understood together. Non-GAAP Financial Measures Dynatrace presents constant currency amounts for Revenue and Annual Recurring Revenue to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency rate fluctuations. Dynatrace provides this non-GAAP financial information to aid investors in better understanding our per ...
Dynatrace(DT) - 2024 Q2 - Earnings Call Transcript
2023-11-02 17:09
Financial Data and Key Metrics Changes - Total Annual Recurring Revenue (ARR) for Q2 was $1.34 billion, an increase of $279 million year-over-year, representing 24% growth [21] - Total revenue for Q2 was $352 million, up 24% year-over-year, with subscription revenue at $334 million, up 26% year-over-year [30] - Non-GAAP operating income for Q2 was $106 million, or 30% of revenue, exceeding guidance by $13 million [31][32] - Non-GAAP net income was $93 million, or $0.31 per diluted share, also above guidance [33] - Free cash flow for Q2 was $34 million, with a trailing 12-month free cash flow of $330 million, or 25% of revenue [34] Business Line Data and Key Metrics Changes - Customer platform adoption remains strong, with 64% of customers using three or more modules, up from 55% year-over-year [26] - The average ARR per new logo land size was approximately $140,000, up 18% year-over-year [23] - The gross retention rate remained in the mid-90s, contributing to a net retention rate of 114% for Q2 [25] Market Data and Key Metrics Changes - The observability and application security market is large and growing, with Dynatrace positioned strongly due to its unified platform and AI leadership [17] - The company added 160 new logos in Q2, consistent with the previous year [22] - There is a growing interest in newer product offerings, including logs on Grail and application security [27] Company Strategy and Development Direction - The company plans to increase investments in R&D innovation and go-to-market strategies, particularly with global system integrators and hyperscalers [43][75] - Dynatrace aims to enhance its partnerships with major players like Kyndryl and Accenture to accelerate digital transformation for customers [78] - The introduction of the new Dynatrace Platform Subscription (DPS) is expected to drive future expansion opportunities [28] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the strong pipeline and visibility into the second half of FY 2024, despite ongoing macroeconomic volatility [46] - The company is raising its full-year guidance across all top-line and profitability metrics, reflecting the strength of Q2 performance [36] - Management noted that customers are increasingly prioritizing observability and application security as critical components of their business strategies [67][74] Other Important Information - The company released its inaugural global impact report, detailing progress on ESG initiatives [14][15] - The report includes baseline greenhouse gas emissions data and expanded information on diversity and inclusion efforts [15] Q&A Session All Questions and Answers Question: What gave the company confidence to reinvest in the business now? - Management noted good visibility and pipeline into the second half, along with the belief that macro conditions will improve in the future [86] Question: What is driving the net retention rates? - Management clarified that renewals remain strong, and the cautious approach of customers is leading to moderated expansions [102] Question: What is the customer demand around hypermodal AI capabilities? - Customers appreciate the integration of causal, predictive, and generative AI techniques, indicating strong interest in the upcoming Davis CoPilot [99] Question: How does the company measure return on investment for go-to-market and R&D? - The company is focused on the quality of new logo lands and the resulting expansion opportunities, which are seen as key indicators of ROI [121]
Dynatrace(DT) - 2024 Q2 - Quarterly Report
2023-11-01 16:00
[PART I - FINANCIAL INFORMATION](index=5&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) This section presents the unaudited condensed consolidated financial statements and management's analysis of financial condition and results of operations [Condensed Consolidated Financial Statements (Unaudited)](index=6&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements for the three and six months ended September 30, 2023, and 2022, including balance sheets, statements of operations, comprehensive income, shareholders' equity, cash flows, and accompanying notes [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section presents the unaudited condensed consolidated balance sheets as of September 30, 2023, and March 31, 2023 Key Balance Sheet Items (in thousands) | Account | September 30, 2023 | March 31, 2023 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $701,524 | $555,348 | | Accounts receivable, net | $262,733 | $442,518 | | Goodwill | $1,309,549 | $1,281,812 | | **Total assets** | **$2,782,160** | **$2,765,347** | | **Liabilities & Equity** | | | | Deferred revenue, current | $677,837 | $811,058 | | **Total liabilities** | **$980,506** | **$1,160,478** | | **Total shareholders' equity** | **$1,801,654** | **$1,604,869** | [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section details the unaudited condensed consolidated statements of operations for the three and six months ended September 30, 2023, and 2022 Key Operating Results (in thousands, except per share data) | Metric | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Six Months Ended Sep 30, 2023 | Six Months Ended Sep 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | Subscription Revenue | $334,497 | $261,306 | $650,951 | $510,864 | | **Total Revenue** | **$351,700** | **$279,326** | **$684,586** | **$546,599** | | Gross Profit | $287,333 | $223,622 | $557,875 | $439,097 | | Income from Operations | $35,269 | $20,399 | $69,557 | $39,493 | | **Net Income** | **$35,809** | **$10,526** | **$73,997** | **$12,640** | | Diluted EPS | $0.12 | $0.04 | $0.25 | $0.04 | [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section presents the unaudited condensed consolidated statements of cash flows for the six months ended September 30, 2023, and 2022 Summary of Cash Flows (in thousands) | Activity | Six Months Ended Sep 30, 2023 | Six Months Ended Sep 30, 2022 | | :--- | :--- | :--- | | Net cash provided by operating activities | $170,780 | $172,496 | | Net cash used in investing activities | ($45,408) | ($11,237) | | Net cash provided by (used in) financing activities | $26,203 | ($47,056) | | **Net increase in cash and cash equivalents** | **$146,176** | **$100,463** | [Notes to Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Condensed%20Financial%20Statements) This section provides detailed disclosures supporting the financial statements, covering significant accounting policies, revenue recognition, acquisitions, goodwill, income taxes, debt, leases, and share-based compensation Revenue by Geographic Region (Six Months Ended Sep 30) | Region | 2023 Revenue (in thousands) | 2023 % of Total | 2022 Revenue (in thousands) | 2022 % of Total | | :--- | :--- | :--- | :--- | :--- | | North America | $407,505 | 59% | $324,504 | 59% | | Europe, Middle East and Africa | $170,913 | 25% | $139,745 | 26% | | Asia Pacific | $60,997 | 9% | $53,541 | 10% | | Latin America | $45,171 | 7% | $28,809 | 5% | | **Total Revenue** | **$684,586** | | **$546,599** | | - On August 31, 2023, the Company acquired 100% of Rookout, Ltd., a provider of solutions for troubleshooting and debugging cloud-native applications, for a preliminary purchase consideration of **$33.5 million**[40](index=40&type=chunk)[41](index=41&type=chunk) - As of September 30, 2023, the aggregate amount of remaining performance obligations was **$1,793.9 million**, of which the company expects to recognize **61%** as revenue over the next twelve months[38](index=38&type=chunk) - Total share-based compensation expense was **$58.0 million** for the three months and **$98.5 million** for the six months ended September 30, 2023, an increase from **$40.7 million** and **$69.3 million** in the respective prior-year periods[68](index=68&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management provides an overview of the business, key performance metrics, and a detailed analysis of financial results for the three and six months ended September 30, 2023, compared to the prior year periods, covering revenue, costs, profitability, liquidity, capital resources, and critical accounting policies, noting strong growth amidst a cautious macroeconomic environment [Overview and Key Metrics](index=21&type=section&id=Overview%20and%20Key%20Metrics) Dynatrace delivered strong financial results in a dynamic macroeconomic environment, highlighted by significant growth in Annual Recurring Revenue (ARR), though customers remain cautious in their spending, leading to elongated sales cycles expected to persist through fiscal 2024 Key Performance Metrics | Metric | As of September 30, 2023 | As of September 30, 2022 | | :--- | :--- | :--- | | Total ARR (in thousands) | $1,343,530 | $1,064,951 | | Dollar-based Net Retention Rate | 114% | 120% | - For the three months ended September 30, 2023, Annual Recurring Revenue (ARR) grew **26%** year-over-year to **$1.344 billion**[82](index=82&type=chunk) - Management expects the elongation of sales cycles experienced in recent quarters to persist throughout fiscal 2024 due to continued macroeconomic uncertainty and tighter customer budget scrutiny[84](index=84&type=chunk) [Results of Operations](index=25&type=section&id=Results%20of%20Operations) The company provides a detailed comparison of its operational results for the three and six-month periods ending September 30, 2023, versus the same periods in 2022, with subscription revenue as the primary driver of growth, and operating expenses rising due to increased personnel costs in R&D and Sales & Marketing to support growth Revenue Comparison (Three Months Ended Sep 30) | Revenue Type | 2023 (in thousands) | 2022 (in thousands) | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Subscription | $334,497 | $261,306 | $73,191 | 28% | | Service | $17,203 | $18,020 | ($817) | -5% | | **Total Revenue** | **$351,700** | **$279,326** | **$72,374** | **26%** | Revenue Comparison (Six Months Ended Sep 30) | Revenue Type | 2023 (in thousands) | 2022 (in thousands) | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Subscription | $650,951 | $510,864 | $140,087 | 27% | | Service | $33,635 | $35,735 | ($2,100) | -6% | | **Total Revenue** | **$684,586** | **$546,599** | **$137,987** | **25%** | - For the three months ended Sep 30, 2023, Research and development expenses increased by **$21.2 million** (**40%**) due to higher personnel costs and share-based compensation Sales and marketing expenses increased by **$22.3 million** (**21%**) due to higher personnel costs, commissions, and advertising[121](index=121&type=chunk)[122](index=122&type=chunk) [Liquidity and Capital Resources](index=35&type=section&id=Liquidity%20and%20Capital%20Resources) As of September 30, 2023, Dynatrace had a strong liquidity position with **$701.5 million** in cash and cash equivalents and **$387.9 million** available under its revolving credit facility, with cash from operations for the first six months at **$170.8 million**, slightly down from **$172.5 million** in the prior year period, mainly due to changes in working capital - The company's cash and cash equivalents increased to **$701.5 million** as of September 30, 2023, from **$555.3 million** at March 31, 2023[150](index=150&type=chunk) - Net cash provided by operating activities was **$170.8 million** for the six months ended September 30, 2023, compared to **$172.5 million** for the same period in 2022[156](index=156&type=chunk)[158](index=158&type=chunk)[159](index=159&type=chunk) - Cash used in investing activities was **$45.4 million**, primarily for the **$32.4 million** acquisition of Rookout and **$13.0 million** in property and equipment purchases[160](index=160&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=37&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk exposures are related to foreign currency exchange rate fluctuations and interest rate changes, with a significant portion of revenue and expenses from international operations creating both translation and transaction exposure, and interest rate risk associated with cash equivalents and the variable-rate credit facility - The company is exposed to foreign currency risk as a significant portion of its revenues and expenses are from international operations[170](index=170&type=chunk) Fluctuations in the U.S. dollar against other currencies, particularly the Euro, affect reported financial results[171](index=171&type=chunk) - Interest rate risk exists from cash and cash equivalents of **$701.5 million** and the **$400.0 million** revolving credit facility, which bears interest at variable rates[173](index=173&type=chunk) However, a hypothetical **10%** change in interest rates is not expected to have a material impact[174](index=174&type=chunk) [Controls and Procedures](index=37&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of September 30, 2023, with no material changes to the internal control over financial reporting during the quarter - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were **effective** as of September 30, 2023[175](index=175&type=chunk) - No changes in internal control over financial reporting occurred during the quarter ended September 30, 2023, that have materially affected, or are reasonably likely to materially affect, internal controls[177](index=177&type=chunk) [PART II - OTHER INFORMATION](index=39&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, and other information, including officer trading plans and exhibits [Legal Proceedings](index=39&type=section&id=Item%201.%20Legal%20Proceedings) The company states that it is party to legal proceedings from time to time in the ordinary course of business but does not currently believe that the resolution of any such matters will have a material adverse effect on its business or financial condition - The company is not currently involved in any legal proceedings that are expected to have a **material adverse effect** on its business, operating results, or financial condition[180](index=180&type=chunk) [Risk Factors](index=39&type=section&id=Item%201A.%20Risk%20Factors) This section details numerous risks and uncertainties that could materially affect the company's business, including dependency on demand for observability solutions amid economic uncertainty, intense competition, the need for continuous innovation, potential security breaches, reliance on key personnel, and risks associated with international operations and data privacy regulations [Risks Related to Our Business and Industry](index=39&type=section&id=Risks%20Related%20to%20Our%20Business%20and%20Industry) This subsection outlines risks including that rapid revenue growth may not be indicative of future performance, the business is dependent on demand for observability solutions which can be affected by adverse economic conditions leading to longer sales cycles, and significant competition exists from a variety of vendors - The company's business depends on overall demand for observability and security solutions, and adverse economic conditions have led to **lengthening sales cycles** and may negatively affect purchasing decisions[191](index=191&type=chunk) - The markets in which the company competes are **highly competitive and fragmented**, with competition from APM, infrastructure, security, and open-source vendors, some of whom have greater resources[206](index=206&type=chunk)[207](index=207&type=chunk) - Failure to innovate and develop solutions that respond to the rapidly changing needs of customers could harm the company's competitive position and business prospects[193](index=193&type=chunk) [Risks Related to Information Technology, Intellectual Property, and Data Security and Privacy](index=50&type=section&id=Risks%20Related%20to%20Information%20Technology%2C%20Intellectual%20Property%2C%20and%20Data%20Security%20and%20Privacy) This subsection details risks related to technology and data, including the potential for security breaches and cyberattacks, interruptions in SaaS solution delivery, real or perceived errors in the company's complex solutions, and potential infringement of third-party intellectual property rights - The company is a target for cybersecurity attacks, and a security incident could lead to **unauthorized access to data**, **loss of intellectual property**, and harm to its business and reputation[227](index=227&type=chunk)[228](index=228&type=chunk) - The business depends on the continuous availability of its SaaS solutions, which are hosted on third-party cloud infrastructure (AWS, Azure, GCP)[236](index=236&type=chunk) Any disruption from these providers could negatively impact service delivery[238](index=238&type=chunk) - The company is subject to evolving and stringent privacy laws globally, such as GDPR and CCPA[253](index=253&type=chunk) Failure to comply could result in **significant proceedings, penalties**, and damage to its reputation[254](index=254&type=chunk) [Risks Related to Legal, Regulatory, Accounting, and Tax Matters](index=61&type=section&id=Risks%20Related%20to%20Legal%2C%20Regulatory%2C%20Accounting%2C%20and%20Tax%20Matters) This subsection covers risks associated with legal, tax, and regulatory compliance, including potential changes in tax laws that could impact the effective tax rate, risks from global operations such as foreign currency fluctuations and geopolitical instability, and compliance with various international laws like export controls and anti-bribery statutes - As a multinational corporation, the company is subject to complex tax laws in numerous jurisdictions, and changes in these laws or their interpretation could **adversely affect its effective tax rate and financial results**[259](index=259&type=chunk)[260](index=260&type=chunk)[261](index=261&type=chunk) - Global sales and operations expose the company to risks including foreign currency fluctuations, geopolitical instability (such as conflicts in Ukraine and Israel), and compliance with trade restrictions and anti-bribery laws like the FCPA[269](index=269&type=chunk)[270](index=270&type=chunk)[271](index=271&type=chunk) - Because revenue from SaaS and term licenses is recognized ratably over the contract term, downturns in new sales may not be immediately reflected in operating results, making trends difficult to discern[273](index=273&type=chunk) [Risks Related to Our Common Stock](index=70&type=section&id=Risks%20Related%20to%20Our%20Common%20Stock) This subsection discusses risks for investors in the company's common stock, including stock price volatility, the significant influence of its largest shareholder (Thoma Bravo), the dilutive effect of future stock issuances, and anti-takeover provisions in the company's charter and bylaws - The trading price of the company's common stock has been and may continue to be **volatile**[293](index=293&type=chunk) - As of October 31, 2023, Thoma Bravo beneficially owned approximately **17.6%** of the common stock, giving it **significant influence** over matters requiring stockholder approval[297](index=297&type=chunk)[299](index=299&type=chunk) - The company does not intend to pay dividends, so a return on investment depends on the appreciation of the stock price[303](index=303&type=chunk) [Other Information](index=75&type=section&id=Item%205.%20Other%20Information) This section discloses the adoption of Rule 10b5-1 trading arrangements by two company officers: Jim Benson (CFO) and Dan Zugelder (CRO), with these plans for the sale of shares to cover taxes upon the vesting of restricted stock units (RSUs) - On August 16, 2023, CFO Jim Benson adopted a Rule 10b5-1 trading plan to sell shares to cover taxes upon RSU vesting between December 2023 and September 2024[318](index=318&type=chunk) - On September 12, 2023, CRO Dan Zugelder adopted a Rule 10b5-1 trading plan to sell the net shares from **32,771 RSUs** vesting in December 2023[319](index=319&type=chunk) [Exhibits](index=76&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with or incorporated by reference into the Form 10-Q, including the company's certificate of incorporation, bylaws, and officer certifications
Dynatrace(DT) - 2024 Q1 - Earnings Call Presentation
2023-08-02 17:10
1) 2 Non-GAAP Financial Measures | --- | --- | --- | |-------|---------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------| | | Rapid ARR growth | $1,294 M Q1-24 ARR 1 , up 25% YoY CC 2 | | | Predictable model | 95% Q1-24 subscription revenue mix, up 27% YoY CC 2 $333M Q1-24 total revenue, up 25% YoY CC 2 Mid-90s % Dollar-based Gross Retention Rate 1 | | | Healthy growt ...
Dynatrace(DT) - 2024 Q1 - Earnings Call Transcript
2023-08-02 17:09
Start Time: 08:00 January 1, 0000 9:03 AM ET Dynatrace, Inc. (NYSE:DT) Q1 2024 Earnings Conference Call August 02, 2023, 08:00 AM ET Company Participants Rick McConnell - CEO Jim Benson - CFO Noelle Faris - VP, IR Conference Call Participants Pinjalim Bora - JPMorgan Mike Cikos - Needham & Company Sterling Auty - MoffettNathanson Adam Tindle - Raymond James Andrew Nowinski - Wells Fargo Matt Hedberg - RBC Capital Markets Koji Ikeda - Bank of America Kash Rangan - Goldman Sachs Keith Bachman - BMO Capital Ma ...
Dynatrace(DT) - 2024 Q1 - Quarterly Report
2023-08-01 16:00
OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 FOR THE TRANSITION PERIOD FROM TO Commission File Number: 001-39010 Dynatrace, Inc. (Exact name of Registrant as specified in its charter) Delaware 47-2386428 (State or other jurisdiction of ...