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 December 31, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 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 jurisdictio ...

Financial Performance - Dynatrace reported an Annual Recurring Revenue (ARR) of $1,647 million, reflecting a year-over-year increase of 16%, or 18% on a constant currency basis[7]. - Total revenue reached $436 million, marking a 19% increase year-over-year, or 20% on a constant currency basis[7]. - Subscription revenue was $417 million, up 20% year-over-year, or 21% on a constant currency basis[7]. - The company achieved a GAAP net income of $361.8 million, or $1.19 per diluted share, for the third quarter[7]. - Total revenue for the three months ended December 31, 2024, was $436,169,000, representing a 19.4% increase from $365,096,000 in the same period of 2023[32]. - Subscription revenue increased to $417,207,000 for the three months ended December 31, 2024, up 19.8% from $348,294,000 year-over-year[32]. - Net income for the nine months ended December 31, 2024, was $444,380,000, compared to $116,688,000 for the same period in 2023, marking a significant increase of 280.5%[32]. - Total revenue for the nine months ended December 31, 2024, reached $1,059,999, up from $888,313 in 2023, which is a growth of 19.3%[45]. Guidance and Expectations - Dynatrace expects fourth quarter total revenue guidance of $432 - $437 million, representing a year-over-year growth of 13% - 15%[14]. - For fiscal year 2025, ARR guidance is set at $1,705 - $1,715 million, with a reported growth of 13% - 14%[14]. - Non-GAAP net income for the fourth quarter is projected to be between $88 - $93 million, with Non-GAAP net income per diluted share expected to be $0.29 - $0.31[14]. - The company expects to maintain revenue growth rates and continue to innovate with new solutions, including through Davis AI, as part of its future strategy[29]. Operating Metrics - GAAP operating margin was 11%, while Non-GAAP operating margin stood at 30%[5]. - Operating cash flow for the nine months ended December 31, 2024, was $296,629,000, compared to $246,437,000 for the same period in 2023, indicating a 20.4% increase[38]. - Non-GAAP income from operations for the nine months ended December 31, 2024, was $375,653, compared to $303,146 for the same period in 2023, marking a 23.9% increase[45]. - Free cash flow for the three months ended December 31, 2024, was $37,569, down from $67,357 in 2023, indicating a decrease of 44.2%[43]. Research and Development - Research and development expenses for the three months ended December 31, 2024, were $98,343,000, up 22.7% from $80,102,000 in the same period of 2023[32]. - The company is investing $50 million in R&D for new technologies aimed at enhancing user experience and operational efficiency[48]. Market Position and Strategy - Dynatrace received recognition as a leader in both Cloud-Native Observability and Security Quadrants in the 2024 ISG Provider Lens report[5]. - The company is exploring potential acquisitions to strengthen its market position, with a focus on companies in the AI sector[48]. - Market expansion efforts have led to a 20% increase in international sales, particularly in Europe and Asia[48]. Customer Engagement and Retention - Customer retention rate improved to 90%, reflecting the effectiveness of new customer engagement strategies[48]. - New product launches contributed to a 30% increase in customer acquisition, with three major products introduced in the last quarter[48]. Cash and Assets - Cash and cash equivalents at the end of the period were $907,482,000, an increase from $778,983,000 at the end of March 31, 2024[36]. - Total assets as of December 31, 2024, were $3,735,105,000, compared to $3,409,779,000 as of March 31, 2024, reflecting a growth of 9.5%[36]. Marketing and Brand Awareness - The company plans to increase its marketing budget by 15% to support brand awareness and product visibility[48]. - Overall, the company remains optimistic about future growth, driven by innovation and market demand[48].

ATLANTA, Jan. 20, 2025 /PRNewswire/ -- Pyramid Consulting, Inc., a global leader in workforce and technology solutions, announces a transformative partnership with Dynatrace (NYSE: DT). The partnership establishes Pyramid Consulting, Inc., and its technology division, Celsior, as a premier Global Systems Integrator (GSI) for Dynatrace and enhances our capabilities to drive digital transformation and superior IT performance management for our clients worldwide. "Our partnership with Dynatrace is all about in ...

Dynatrace’s (DT) shares have appreciated 16.5% in the trailing six months, outperforming the Zacks Computer & Technology sector’s return of 1.1% and the Zacks Computers - IT Services industry’s growth of 12.5%.The company has also outperformed industry peers like Clarivate (CLVT) , which has lost 11.7% during the same period.The rise in DT's shares is driven by strong performance across key metrics, robust AI-powered platforms and continuous product innovation, leading to consistently impressive quarterly r ...

The latest trading session saw Dynatrace (DT) ending at $54.38, denoting a -0.48% adjustment from its last day's close. The stock's change was less than the S&P 500's daily gain of 0.73%. Elsewhere, the Dow saw an upswing of 0.16%, while the tech-heavy Nasdaq appreciated by 0.98%.The the stock of software intellegence company has fallen by 1.48% in the past month, lagging the Computer and Technology sector's gain of 3.28% and the S&P 500's gain of 0.34%.The upcoming earnings release of Dynatrace will be of ...

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Dynatrace’s (DT) shares have gained 16.3% over the past three months, outperforming the Zacks Computer & Technology sector’s return of 11.5% and the Zacks Computers - IT Services industry’s growth of 12.1%.DT’s positive share price movement has been driven by revenue growth, which increased 19% year over year to $418.1 million in the second quarter of fiscal 2025. The top-line growth reflects the success of its enhanced go-to-market strategy, strong bookings performance and product advancements.Factors Favo ...

Core Insights - The individual has retired after over 43 years in investment research, now operating independently to provide actionable investment insights [1] - The focus is on rules and factor-based equity investing strategies, emphasizing the use of numbers to inspire human intelligence-driven investment stories rather than solely relying on statistical studies [1] - The individual combines factor analysis with classic fundamental analysis to uncover the true story of companies and their stocks, highlighting the importance of future potential over past performance [1] Experience and Background - The individual has extensive experience covering a wide range of stocks, including large cap, small cap, micro cap, value, growth, and income [1] - Previous roles include managing a high-yield fixed-income fund and conducting research on quantitative asset allocation strategies, contributing to the development of Robo Advising [1] - The individual has authored two books on stock selection and analysis and has a passion for investor education, having conducted numerous seminars [1]

Investment Thesis - The analyst previously assigned a buy rating to Dynatrace (NYSE: DT) on 21st August, citing expectations of accelerated growth in the coming years [1] - The investment approach focuses on long-term investments while incorporating short-term strategies to uncover alpha opportunities [1] - The analysis is based on bottom-up research, emphasizing the fundamental strengths and weaknesses of individual companies [1] - The investment horizon is medium to long-term, targeting companies with solid fundamentals, sustainable competitive advantages, and growth potential [1] Analyst's Perspective - The analyst has no stock, option, or derivative positions in any mentioned companies and no plans to initiate such positions within the next 72 hours [2] - The article reflects the analyst's personal opinions and is not influenced by compensation or business relationships with the mentioned companies [2] Platform Disclosure - Seeking Alpha emphasizes that past performance does not guarantee future results and does not provide specific investment recommendations [3] - The views expressed in the article may not represent those of Seeking Alpha as a whole [3] - Seeking Alpha's analysts include both professional and individual investors who may not be licensed or certified by any regulatory body [3]

Financial Data and Key Metrics Changes - Annual recurring revenue (ARR) grew 19% year-over-year to $1.62 billion, an increase of $273 million compared to the same period last year [39] - Total revenue for Q2 was $418 million, up 19% year-over-year, exceeding guidance by $11 million [45] - Subscription revenue for the quarter was $400 million, up 20% year-over-year, exceeding guidance by $10 million [45] - Non-GAAP gross margin for Q2 was 85%, consistent with prior quarters [46] - Non-GAAP net income was $113 million or $0.37 per diluted share, $0.04 above guidance [47] - Free cash flow for the trailing 12 months was $436 million, representing a margin of 28% of revenue [47] Business Line Data and Key Metrics Changes - Net new ARR for Q2 was $61 million, up 3% year-over-year, bringing total net new ARR for the first half of fiscal 2025 to $106 million, up 10% year-over-year [40] - The gross retention rate remained stable in the mid-90s, while the net retention rate was 112%, slightly above expectations [42] - The DPS licensing model gained traction, with approximately 30% of customers and 15% of ARR now on DPS [43] Market Data and Key Metrics Changes - The company closed several significant deals, including an eight-figure expansion with a top UK bank and a seven-figure expansion with a major US airline [23][24] - The average ARR per new logo was approximately $130,000, aligning with the target size for new customers [40] Company Strategy and Development Direction - The company is focused on AI-driven observability, emphasizing the need for organizations to analyze vast amounts of data efficiently [12][13] - Dynatrace aims to enhance its go-to-market strategy by adjusting customer segmentation and increasing focus on IT 500 and strategic accounts [28] - The company is committed to ongoing innovation, particularly in AI capabilities, to provide actionable insights and improve customer experiences [18][20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the market's shift towards fewer solutions and the growing need for actionable insights [37] - The company remains cautious about the second half of the fiscal year due to the transition of sales reps and the maturation of the new sales model [49][53] - Management highlighted the importance of allowing time for the new sales strategies to take effect before making aggressive forecasts [66][90] Other Important Information - The company repurchased 835,000 shares for $40 million during Q2, part of a $500 million share repurchase program [48] - The company raised its full-year revenue guidance by approximately $19 million, now expecting total revenue between $1.67 billion and $1.68 billion [55] Q&A Session Summary Question: Insights on ARR guidance maintenance despite strong Q2 - Management maintained ARR guidance prudently due to the presence of many new sales reps and the need for time to establish relationships [62][66] Question: Adoption curve of DPS customers - Consumption on the platform is growing significantly faster than ARR growth, with DPS customers leveraging more capabilities [69][70] Question: Changes in go-to-market strategy for accounts below IT 500 - The number of accounts per rep in the top segment has decreased to four to five, allowing for deeper penetration [73] Question: Customer feedback on DPS and its impact on new logos - DPS customers are expanding at a higher rate than non-DPS customers, and about 70% of new logos land with DPS [76][77] Question: Sales pipeline health and impact of six-month comp plans - The demand environment remains healthy, and pipeline coverage ratios are consistent between halves [86][90] Question: Log momentum and customer dissatisfaction with existing vendors - The log market is seen as ripe for disruption, with a significant increase in customer interest due to cost concerns with existing vendors [99][102] Question: New logo momentum in Q2 - New logos were characterized as slightly light, which is expected during the transition phase of the sales model [104] Question: Stability of tenured reps and sales/marketing expenses - The churn of tenured reps has been stable, and the decrease in sales and marketing expenses is seasonal [108][110]