Core Insights - The article compares Genpact (G) and Dynatrace (DT) to determine which stock offers better value for investors [1] - Genpact has a stronger Zacks Rank of 2 (Buy) compared to Dynatrace's 3 (Hold), indicating a more favorable earnings outlook for Genpact [3] - Value investors consider various fundamental metrics, including P/E ratio, P/S ratio, earnings yield, and cash flow per share, to identify undervalued stocks [4] Valuation Metrics - Genpact has a forward P/E ratio of 12.89, significantly lower than Dynatrace's forward P/E of 31.59, suggesting better value for Genpact [5] - The PEG ratio for Genpact is 1.40, while Dynatrace's PEG ratio is 2.47, indicating that Genpact is expected to grow earnings at a more attractive rate relative to its price [5] - Genpact's P/B ratio is 3.07, compared to Dynatrace's P/B of 5.66, further supporting the argument that Genpact is undervalued [6] Conclusion - Based on stronger estimate revision activity and more attractive valuation metrics, Genpact is deemed the superior option for value investors at this time [7]

Financial Data and Key Metrics Changes - The company held its annual meeting to discuss various proposals, including the election of directors and the ratification of the independent auditor [1][2][3] - A quorum was present with more than a majority of shares represented at the meeting [6] Business Line Data and Key Metrics Changes - The meeting included proposals for the election of three Class III directors, which were unanimously recommended by the board [11][12] - The company also proposed a nonbinding advisory vote on the compensation of named executive officers [13] Market Data and Key Metrics Changes - The independent auditor, Ernst and Young LLP, was ratified for the fiscal year ending 03/31/2026, indicating confidence in the firm's independence and performance [11][18] Company Strategy and Development Direction - The board of directors recommended stockholders vote in favor of all proposals, reflecting a unified strategy for governance and oversight [11][12] Management's Comments on Operating Environment and Future Outlook - No specific comments on the operating environment or future outlook were provided during the meeting [14][15] Other Important Information - All three proposals presented at the meeting were approved by stockholders, including the election of directors and the ratification of the auditor [19] Q&A Session Summary Question: Were there any questions submitted regarding the proposals? - No questions were submitted during the Q&A portion of the meeting [14]

Financial Data and Key Metrics Changes - The meeting discussed the election of directors and the ratification of Ernst and Young LLP as the independent registered public accounting firm for the fiscal year ending March 31, 2026, indicating a focus on governance and compliance [10][11][17] - The stockholders approved all three proposals presented at the meeting, reflecting a positive reception of the company's governance and executive compensation practices [17] Business Line Data and Key Metrics Changes - No specific business line data or key metrics were provided during the meeting, as the focus was primarily on governance and proposals [12][17] Market Data and Key Metrics Changes - No specific market data or key metrics were discussed in the meeting, as it was centered around the annual meeting procedures and proposals [12][17] Company Strategy and Development Direction and Industry Competition - The company emphasized good corporate governance by appointing an independent auditor and conducting a nonbinding advisory vote on executive compensation, which aligns with best practices in the industry [10][11][12] Management's Comments on Operating Environment and Future Outlook - Management did not provide specific comments on the operating environment or future outlook during this meeting, as the focus was on procedural matters [12][17] Other Important Information - The meeting was conducted virtually to enhance accessibility for all participants, indicating a commitment to inclusivity [1][2] - The inspector of election confirmed that a quorum was present, allowing the meeting to proceed with the business agenda [6] Summary of Q&A Session - No questions were submitted during the Q&A session, indicating a lack of immediate concerns or inquiries from stockholders regarding the proposals [13]

Core Viewpoint - Investors in the Computers - IT Services sector should consider Genpact (G) and Dynatrace (DT) for potential value opportunities, with Genpact currently presenting a more favorable investment case [1] Group 1: Zacks Rank and Valuation Metrics - Genpact has a Zacks Rank of 2 (Buy), indicating a positive earnings outlook, while Dynatrace holds a Zacks Rank of 3 (Hold) [3] - Value investors focus on various valuation metrics, including P/E ratio, P/S ratio, earnings yield, and cash flow per share to identify undervalued companies [4] Group 2: Valuation Comparisons - Genpact's forward P/E ratio is 12.63, significantly lower than Dynatrace's forward P/E of 29.85, suggesting that Genpact is more attractively priced [5] - Genpact has a PEG ratio of 1.37, while Dynatrace's PEG ratio is 2.33, indicating that Genpact offers better value relative to its expected earnings growth [5] - Genpact's P/B ratio is 2.99 compared to Dynatrace's P/B of 5.35, further supporting the argument that Genpact is the superior value option [6]

Group 1 - The investment approach focuses on long-term investments while incorporating short-term shorts to uncover alpha opportunities [1] - The analysis is based on bottom-up evaluation, emphasizing the fundamental strengths and weaknesses of individual companies [1] - The goal is to identify companies with solid fundamentals, sustainable competitive advantages, and growth potential [1]

Core Viewpoint - Growth stocks are appealing due to their potential for above-average financial growth, but identifying strong growth stocks can be challenging due to inherent volatility and risks [1] Group 1: Company Overview - Dynatrace (DT) is recommended as a cutting-edge growth stock based on its favorable Growth Score and top Zacks Rank [2] - The company has a historical EPS growth rate of 15.9%, with projected EPS growth of 14% this year, surpassing the industry average of 9.6% [4] Group 2: Financial Metrics - Dynatrace exhibits a year-over-year cash flow growth of 37.3%, significantly higher than the industry average of 0.2% [5] - The company's annualized cash flow growth rate over the past 3-5 years is 42.3%, compared to the industry average of 8.6% [6] Group 3: Earnings Estimates - There has been a positive trend in earnings estimate revisions for Dynatrace, with the Zacks Consensus Estimate for the current year increasing by 0.3% over the past month [8] - The combination of a Growth Score of A and a Zacks Rank 2 positions Dynatrace favorably for potential outperformance [9][10]

Core Insights - Dynatrace reported Q1 FY2026 results, with revenue of $477 million and Non-GAAP EPS of $0.42, both below Wall Street expectations [1][5] - Despite missing estimates, the company achieved 20% year-over-year GAAP revenue growth and improved Non-GAAP profitability for FY2025 [1][5] - The gap between company guidance and analyst expectations was notable this quarter [1] Financial Performance - Q1 FY26 Non-GAAP EPS was $0.42, slightly below the $0.43 estimate, and up 27.3% from $0.33 in Q1 FY25 [2] - GAAP revenue of $477 million fell short of the $533.78 million estimate, but represented a 19.5% increase from $399.2 million in Q1 FY25 [2] - Subscription revenue reached $457.5 million, growing 19.9% year-over-year [2] - Non-GAAP operating margin improved to 30%, while free cash flow was $262 million, a 15.2% increase from $227.4 million in the previous year [2][6] Business Strategy and Focus Areas - Dynatrace focuses on AI-powered observability and automation tools for IT systems, providing real-time insights into cloud and hybrid environments [3] - Recent efforts include expanding AI capabilities, enhancing cloud integration, and promoting a flexible subscription model [4] - The company emphasizes automation and partnerships with system integrators and cloud providers to drive growth [4] Subscription Model and Customer Adoption - Over 45% of customers and more than 65% of ARR are now utilizing the Dynatrace Platform Subscription (DPS) model [7] - DPS customers consume an average of 12 capabilities compared to 5 for traditional SKU-based customers, leading to higher spending [7] - Dynatrace closed 12 large expansion deals worth over $1 million annually, with significant deployments of its Log Management product [7] AI and Product Development - The company advanced its AI-powered observability tools, including the "Davis AI" engine for analytics and incident response [8] - New agentic AI capabilities were launched to enhance IT teams' control and resource efficiency [8] - Dynatrace expanded integrations with major cloud providers, strengthening its position in the observability market [8] Recognition and Growth Areas - Dynatrace was recognized as a "Leader" in the 2025 Gartner Magic Quadrant™ for Observability Platforms for the 15th consecutive year [9] - Log Management is the fastest-growing segment, with expectations of over 100% growth and projected consumption exceeding $100 million [9] Share Buyback and Financial Guidance - The company repurchased 905,000 shares for $45 million as part of a $500 million buyback program [10] - For fiscal 2026, management raised revenue guidance to $1.97 billion - $1.985 billion and Non-GAAP EPS to $1.58 - $1.61 [11] - Q2 FY2026 revenue is projected to be $484 - $489 million, reflecting a 16-17% increase year-over-year [12]

Financial Data and Key Metrics Changes - Subscription revenue grew 19% year over year, reaching $458 million, while total revenue for Q1 was $477 million, also growing 19% [5][28] - Annual recurring revenue (ARR) ended the quarter at $1.82 billion, representing a 16% growth, with net new ARR of $51 million, up 13% from the previous year [23][24] - Non-GAAP operating margin was 30%, exceeding guidance by 150 basis points, and non-GAAP net income was $126 million, or $0.42 per diluted share, also above guidance [28][30] Business Line Data and Key Metrics Changes - The company reported a strong expansion quarter with a dozen seven-figure expansion deals, particularly in North America and through the GSI channel [22][24] - The average ARR per new logo was over $130,000, while the average ARR per customer reached nearly $450,000, indicating ongoing adoption of the platform [24][25] - The logs consumption increased 36% sequentially and over 100% year over year, with expectations to achieve $100 million in annualized logs consumption by the end of the fiscal year [15][16] Market Data and Key Metrics Changes - The strategic enterprise pipeline grew nearly 50% year over year, with a significant increase in deals greater than $1 million [14][23] - The company added 103 new logos to the Dynatrace platform in Q1, reflecting strong market demand [24] - Dynatrace was named a leader in the 2025 Gartner Magic Quadrant for observability platforms, marking the fifteenth consecutive year in this position [19] Company Strategy and Development Direction - The company is focused on three approaches to unlocking value with observability: end-to-end observability, AI observability, and business observability [6][13] - Dynatrace aims to provide a unified platform that integrates various observability domains, allowing customers to optimize their digital services [7][8] - The company is investing in sales and marketing initiatives to capitalize on growth opportunities in the observability market [13] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the strong start to fiscal 2026, highlighting robust demand and a growing pipeline [22][36] - The company is maintaining a prudent approach to guidance, considering the timing variability of larger deals and the fluid macroeconomic environment [32][41] - Management noted that the observability market opportunity is stronger than ever, with a differentiated AI-powered platform [20][36] Other Important Information - The company repurchased 905,000 shares for $45 million in Q1, part of a $500 million share repurchase program [31] - The guidance for total revenue is now expected to be between $1.97 billion and $1.98 billion, with subscription revenue between $1.88 billion and $1.90 billion, both reflecting a 14% to 15% growth [33][34] Q&A Session Summary Question: Why not raise the constant currency guide? - Management maintained the guidance due to the early stage of the fiscal year and the uncertainty around large deal closures [39][40] Question: Who are you consolidating with in larger deals? - The company is consolidating with traditional log vendors, emphasizing the need for integrated solutions for better outcomes [44][45] Question: Is the expansion activity above the typical trend line? - The expansion activity is indeed above the typical trend line, driven by changes in the go-to-market strategy and a focus on higher propensity to spend customers [50][51] Question: Did the ODC revenue recognition change impact other metrics? - The ODC revenue recognition change did not impact other metrics such as ARR or NRR, only revenue recognition [56][59] Question: How is the competitive landscape evolving? - There has been little to no leakage to open source solutions, and the competitive environment remains stable [106]

Financial Data and Key Metrics Changes - Subscription revenue grew 19% year-over-year, reaching $458 million, while Annual Recurring Revenue (ARR) increased by 16% to $1.82 billion [4][28][23] - Total revenue for Q1 was $477 million, exceeding guidance by approximately 200 basis points, and non-GAAP operating margin was 30%, also exceeding guidance by 150 basis points [28][21] - Free cash flow for Q1 was $262 million, with a trailing twelve-month free cash flow of $465 million, representing 26% of revenue [29][30] Business Line Data and Key Metrics Changes - The company added 103 new logos to the Dynatrace platform, with an average ARR per new logo exceeding $130,000 [24] - The average ARR per customer reached nearly $450,000, indicating ongoing adoption of the platform [24] - The logs consumption increased 36% sequentially and over 100% year-over-year, with expectations to achieve $100 million in annualized logs consumption by the end of the fiscal year [15][16] Market Data and Key Metrics Changes - The strategic enterprise pipeline grew nearly 50% year-over-year, with a significant increase in deals greater than $1 million [14][22] - The company was recognized as a leader in the 2025 Gartner Magic Quadrant for observability platforms, marking the fifteenth consecutive year of such recognition [19] Company Strategy and Development Direction - The company is focused on three key approaches to observability: end-to-end observability, AI observability, and business observability, which are seen as durable drivers of growth in the observability market [5][12] - Dynatrace aims to provide a unified platform that integrates various observability domains, allowing customers to optimize their digital services [7][8] - The company is investing in sales and marketing initiatives to capitalize on growth opportunities in observability [13] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the strong start to fiscal 2026, highlighting robust expansion activity and a healthy pipeline [21][36] - The company is maintaining a prudent approach to guidance due to the early stage of the fiscal year and the variability associated with larger deals [31][40] - Management noted that while demand remains strong, the macroeconomic environment continues to be fluid, impacting outlook considerations [30][36] Other Important Information - The company repurchased 905,000 shares for $45 million during Q1, part of a $500 million share repurchase program [30] - The non-GAAP EPS guidance for the full year was raised to a range of $1.58 to $1.61 per diluted share [34] Q&A Session Summary Question: Why not raise the constant currency guidance? - Management maintained a prudent guide early in the year despite strong Q1 performance due to the uncertainty around large deal closures [39][40] Question: Who are the competitors in the consolidation of log management? - The company is consolidating traditional log vendors, emphasizing the benefits of integrated solutions over isolated log offerings [45][46] Question: How is the expansion activity compared to historical trends? - Expansion activity is significantly above typical trends, driven by changes in go-to-market strategies and a focus on high propensity to spend customers [51][52] Question: What impact has the ODC revenue recognition change had on other metrics? - The ODC revenue recognition change did not impact other metrics such as ARR or NRR, only affecting revenue recognition [60][61] Question: What is the outlook on enterprise AI adoption? - There is an increasing discussion around AI utilization in observability use cases, with the company well-positioned to take advantage of this trend [103][104] Question: How is the competitive landscape evolving? - There has been little to no leakage to open source solutions, and the competitive environment remains stable [109]

Adynatrace Q1 2026 Investor Presentation August 6, 2025 Legal Disclaimer This presentation consists of theses slides and the associated remarks and comments, which are related and intended to be presented and understood together. Pease refer of certain terms. Cautionary Language Concerning Forward-Looking Statements This presentation inducles sertain "forward-lobing statements" within the maning of the Printer Securities Litication Reform At of 1299, induling statements regarding Dyn and current be withs th ...