| --- | --- | --- | |-------|-------------------------------|-------------| | | | | | | | g dynatrace | | | | | | | | | | | Q2 2025 Investor Presentation | | | | November 7, 2024 | | Legal Disclaimer This presentation consists of these slides and the associated remarks and comments, which are related and intended to be presented and understood together. Please refer o these slides for definitions of certain terms. Cautionary Language Concerning Forward-Looking Statements This presentation includes certain " ...

Dynatrace (DT) reported $418.13 million in revenue for the quarter ended September 2024, representing a year-over-year increase of 18.9%. EPS of $0.37 for the same period compares to $0.31 a year ago.The reported revenue compares to the Zacks Consensus Estimate of $406.05 million, representing a surprise of +2.98%. The company delivered an EPS surprise of +15.63%, with the consensus EPS estimate being $0.32.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- a ...

Company Performance - Dynatrace reported quarterly earnings of $0.37 per share, exceeding the Zacks Consensus Estimate of $0.32 per share, and up from $0.31 per share a year ago, representing an earnings surprise of 15.63% [1] - The company achieved revenues of $418.13 million for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 2.98%, and an increase from $351.7 million year-over-year [2] - Over the last four quarters, Dynatrace has consistently surpassed consensus EPS and revenue estimates [2] Future Outlook - The sustainability of Dynatrace's stock price movement will largely depend on management's commentary during the earnings call and future earnings expectations [3] - The current consensus EPS estimate for the upcoming quarter is $0.31 on revenues of $415.89 million, and for the current fiscal year, it is $1.28 on revenues of $1.63 billion [7] - The estimate revisions trend for Dynatrace is currently mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market [6] Industry Context - The Computers - IT Services industry, to which Dynatrace belongs, is currently ranked in the top 17% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

[PART I - FINANCIAL INFORMATION](index=5&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) This section details the company's unaudited financial statements, management's analysis, market risks, and internal controls [Condensed Consolidated Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) These unaudited statements detail Dynatrace's financial position, operations, and cash flows, highlighting revenue growth, increased net income, and strong operating cash flow [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased slightly to **$3.33 billion**, while total liabilities decreased to **$1.19 billion**, and shareholders' equity increased to **$2.14 billion** Condensed Consolidated Balance Sheets (in thousands) | Account | September 30, 2024 | March 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$3,329,653** | **$3,409,779** | | Total current assets | $1,483,578 | $1,605,297 | | Goodwill | $1,337,205 | $1,335,494 | | **Total Liabilities** | **$1,185,697** | **$1,394,289** | | Total current liabilities | $1,047,900 | $1,258,551 | | Deferred revenue, current | $806,171 | $987,953 | | **Total Shareholders' Equity** | **$2,143,956** | **$2,015,490** | [Condensed Consolidated Statements of Operations](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Total revenue grew **19%** to **$418.1 million** (three months) and **$817.3 million** (six months), driven by **20%** subscription revenue growth, leading to increased net income Three Months Ended September 30 (in thousands) | Metric | 2024 | 2023 | % Change | | :--- | :--- | :--- | :--- | | Total Revenue | $418,129 | $351,700 | 19% | | Subscription Revenue | $399,810 | $334,497 | 20% | | Gross Profit | $340,345 | $287,333 | 18% | | Income from Operations | $47,026 | $35,269 | 33% | | Net Income | $44,008 | $35,809 | 23% | | Diluted EPS | $0.15 | $0.12 | 25% | Six Months Ended September 30 (in thousands) | Metric | 2024 | 2023 | % Change | | :--- | :--- | :--- | :--- | | Total Revenue | $817,349 | $684,586 | 19% | | Subscription Revenue | $781,386 | $650,951 | 20% | | Gross Profit | $664,812 | $557,875 | 19% | | Income from Operations | $89,055 | $69,557 | 28% | | Net Income | $82,628 | $73,997 | 12% | | Diluted EPS | $0.27 | $0.25 | 8% | [Condensed Consolidated Statements of Cash Flows](index=12&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations significantly increased to **$254.4 million**, while financing activities shifted to a **$84.6 million** cash outflow due to common stock repurchases Six Months Ended September 30 (in thousands) | Cash Flow Activity | 2024 | 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $254,391 | $170,780 | | Net cash used in investing activities | ($46,620) | ($45,408) | | Net cash (used in) provided by financing activities | ($84,567) | $26,203 | | Net increase in cash and cash equivalents | $128,194 | $146,176 | - The significant shift in financing activities from providing cash to using cash was primarily driven by **$90.1 million** in repurchases of common stock during the six months ended September 30, 2024[18](index=18&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes detail key accounting policies, revenue by geography, acquisition specifics, goodwill, share-based compensation, and the share repurchase program status Revenue by Geographic Region (Six Months Ended Sep 30) | Region | 2024 Revenue (in thousands) | 2023 Revenue (in thousands) | | :--- | :--- | :--- | | North America | $493,695 (60%) | $407,505 (59%) | | Europe, Middle East and Africa | $200,126 (25%) | $170,913 (25%) | | Asia Pacific | $73,927 (9%) | $60,997 (9%) | | Latin America | $49,601 (6%) | $45,171 (7%) | - As of September 30, 2024, remaining performance obligations (RPO) totaled **$2.40 billion**, of which the company expects to recognize **55%** as revenue over the next 12 months[30](index=30&type=chunk) - The company acquired Runecast Solutions Limited in March 2024 for a preliminary purchase consideration of **$26.1 million** in cash and **$2.3 million** in deferred payments, resulting in **$25.2 million** of goodwill[35](index=35&type=chunk)[36](index=36&type=chunk)[38](index=38&type=chunk) - In May 2024, the company announced a **$500 million** share repurchase program. As of September 30, 2024, it had repurchased **1.9 million** shares for **$90.1 million**, with **$409.9 million** remaining available[60](index=60&type=chunk)[61](index=61&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=25&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's performance, highlighting **20%** ARR growth to **$1.62 billion**, detailing revenue and expense changes, liquidity, and capital resources [Overview and Key Metrics](index=25&type=section&id=Overview%20and%20Key%20Metrics) Dynatrace provides a unified observability and security platform, with key metrics showing **Annual Recurring Revenue (ARR)** reaching **$1.62 billion**, a **20%** year-over-year increase - The company's strategy focuses on extending technology leadership, expanding relationships with existing customers, growing the customer base among the largest global enterprises, and leveraging its strategic partner ecosystem[89](index=89&type=chunk) Key Performance Metrics as of September 30 | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Total ARR | $1,616,531 thousand | $1,343,530 thousand | | Year-over-year increase | 20% | 26% | | Dollar-based net retention rate | 112% | 114% | [Results of Operations](index=28&type=section&id=Results%20of%20Operations) This section provides a comparative analysis of operations, showing **20%** subscription revenue growth driven by customer expansion, alongside increased operating expenses due to personnel costs - For the three months ended Sep 30, 2024, subscription revenue increased by **$65.3 million (20%)** due to growth of the Dynatrace platform with new and existing customers[127](index=127&type=chunk) - Cost of subscription for the three-month period increased by **$11.0 million (25%)**, primarily due to a **$4.2 million** increase in cloud-hosting costs and a **$5.0 million** increase in personnel costs[130](index=130&type=chunk) - Research and development expenses for the six-month period increased by **$42.6 million (30%)**, mainly from a **$38.2 million** rise in personnel costs (including **$16.7 million** in share-based compensation) to expand platform functionality[157](index=157&type=chunk) - Sales and marketing expenses for the six-month period grew by **$36.6 million (14%)**, driven by a **$23.4 million** increase in personnel costs and a **$5.9 million** increase in partner costs and professional fees[158](index=158&type=chunk) [Liquidity and Capital Resources](index=43&type=section&id=Liquidity%20and%20Capital%20Resources) Dynatrace's liquidity includes **$907.2 million** in cash and **$146.1 million** in investments, with **$254.4 million** net cash from operations and **$90.1 million** used for share repurchases - The company's primary liquidity sources are **$907.2 million** in cash and cash equivalents, **$146.1 million** in investments, and **$399.2 million** available under its Credit Facility[163](index=163&type=chunk) - Net cash provided by operating activities for the six months ended Sep 30, 2024 was **$254.4 million**, an increase from **$170.8 million** in the prior year, driven by higher net income and favorable changes in working capital, particularly accounts receivable[172](index=172&type=chunk)[174](index=174&type=chunk) - Cash used in financing activities was **$84.6 million**, primarily due to **$90.1 million** in common stock repurchases under the new program[178](index=178&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=45&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces market risks from foreign currency fluctuations, especially the Euro, and interest rate changes, with no current hedging strategies - The company's primary market risks are foreign currency exchange rate fluctuations and interest rate changes[183](index=183&type=chunk) - Significant international operations expose the company to foreign currency risk, particularly with the Euro, affecting reported revenues and expenses. The company does not currently hedge this exposure[185](index=185&type=chunk)[186](index=186&type=chunk) - Interest rate risk applies to the company's **$907.2 million** in cash and cash equivalents and **$146.1 million** in investments. A hypothetical **10%** change in interest rates is not expected to have a material impact[188](index=188&type=chunk) [Controls and Procedures](index=46&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of September 30, 2024, with no material changes to internal control over financial reporting - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of September 30, 2024[190](index=190&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[191](index=191&type=chunk) [PART II - OTHER INFORMATION](index=47&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) This section covers other important information, including detailed risk factors and disclosures regarding equity security sales and use of proceeds [Risk Factors](index=47&type=section&id=Item%201A.%20Risk%20Factors) This section outlines significant risks across business, technology, legal, and stock-related areas, including competition, security, regulatory challenges, and stock price volatility [Risks Related to Business and Industry](index=47&type=section&id=Risks%20Related%20to%20Our%20Business%20and%20Industry) The company faces business and industry risks including unpredictable growth, intense competition, the need for continuous innovation, long sales cycles, and reliance on key personnel - Rapid revenue growth in recent periods (**19%** for the six months ended Sep 30, 2024) may not be indicative of future growth[195](index=195&type=chunk)[196](index=196&type=chunk) - The company faces significant competition from a fragmented and evolving market, including infrastructure monitoring vendors, APM vendors, security vendors, and large technology companies like Cisco, which recently acquired Splunk[219](index=219&type=chunk)[220](index=220&type=chunk) - The business depends on attracting new customers and expanding relationships with existing ones, which is influenced by the effectiveness of its sales strategy, partner relationships (including with GSIs and hyperscalers), and the ability to provide quality support[214](index=214&type=chunk)[215](index=215&type=chunk) - Sales cycles can be long and unpredictable, often ranging from several months to over a year, with seasonality peaking in the third and fourth fiscal quarters[230](index=230&type=chunk)[231](index=231&type=chunk) [Risks Related to Information Technology, IP, and Data Security](index=59&type=section&id=Risks%20Related%20to%20Information%20Technology%2C%20Intellectual%20Property%2C%20and%20Data%20Security%20and%20Privacy) Risks include cybersecurity attacks, reliance on third-party cloud providers, software vulnerabilities, intellectual property infringement claims, and challenges in protecting its own IP - The company is a target for cybersecurity attacks; a security breach on its multi-tenant platform could affect a significant number of customers and lead to financial loss, litigation, and reputational damage[240](index=240&type=chunk)[241](index=241&type=chunk) - The business depends on the continuous operation of its SaaS solutions hosted on third-party cloud infrastructure (AWS, Azure, GCP), and any disruption from these providers could negatively impact service delivery and harm the business[248](index=248&type=chunk)[251](index=251&type=chunk) - The company faces risks of intellectual property infringement lawsuits from competitors and others, which could result in substantial costs, royalty payments, or the need to redesign solutions[255](index=255&type=chunk)[256](index=256&type=chunk)[258](index=258&type=chunk) - Use of open-source software could impose limitations on the ability to commercialize solutions, and contributions to open-source projects may limit the ability to enforce its own patent rights[265](index=265&type=chunk)[268](index=268&type=chunk) [Risks Related to Legal, Regulatory, Accounting, and Tax Matters](index=69&type=section&id=Risks%20Related%20to%20Legal%2C%20Regulatory%2C%20Accounting%2C%20and%20Tax%20Matters) Global operations expose the company to complex tax laws, currency fluctuations, and geopolitical risks, while its ratable revenue recognition model can delay the impact of sales downturns - As a multinational corporation, the company is subject to complex and changing tax laws in numerous jurisdictions, which could impact its effective tax rate and results[276](index=276&type=chunk)[280](index=280&type=chunk) - Revenue from customers outside the U.S. represented **43%** of total revenue for the six months ended Sep 30, 2024, exposing the company to risks from currency fluctuations, geopolitical instability, and varying legal requirements[282](index=282&type=chunk) - The company's ratable revenue recognition policy for subscriptions means that a decline in new or renewed contracts in a single quarter will negatively affect revenue in future quarters[288](index=288&type=chunk)[289](index=289&type=chunk) [Risks Related to Our Common Stock](index=76&type=section&id=Risks%20Related%20to%20Our%20Common%20Stock) Risks related to common stock include price volatility, potential dilution from future issuances, the non-guaranteed share repurchase program, and anti-takeover provisions - The trading price of the common stock is volatile and can be influenced by factors such as operating results, competitor announcements, and overall market conditions[311](index=311&type=chunk)[312](index=312&type=chunk) - The share repurchase program of up to **$500 million** is not guaranteed to be completed and could increase stock price volatility while diminishing cash reserves[318](index=318&type=chunk)[319](index=319&type=chunk) - The company has never paid dividends and does not anticipate paying any in the foreseeable future, meaning returns depend on stock price appreciation[320](index=320&type=chunk) - Anti-takeover provisions, such as a classified board and supermajority voting requirements, could delay or prevent a change in control[321](index=321&type=chunk)[322](index=322&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=82&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q2 FY2025, the company repurchased **834,763** shares for **$40.0 million** under its **$500 million** share repurchase program, with **$409.9 million** remaining Issuer Purchases of Equity Securities (Q2 FY2025) | Period | Total Shares Purchased | Average Price Paid per Share | Approx. Value Remaining in Program | | :--- | :--- | :--- | :--- | | Jul 2024 | 291,230 | $43.97 | $437,082 thousand | | Aug 2024 | 205,400 | $47.98 | $427,224 thousand | | Sep 2024 | 338,133 | $51.23 | $409,893 thousand | | **Total** | **834,763** | **$47.90** | **$409,893 thousand** |

EXHIBIT 99.1 atrace Dynatrace Reports Second Quarter Fiscal Year 2025 Financial Results Exceeds high end of guidance across all metrics Delivers ARR growth of 19% year-over-year on a constant currency basis Achieves GAAP Operating Margin of 11% and Non-GAAP Operating Margin of 31% WALTHAM, Mass., November 7, 2024 - Dynatrace (NYSE: DT) today announced financial results for the second quarter of fiscal 2025 ended September 30, 2024. "Our continued out-performance across all of our key metrics is a result of ...

Earnings Expectations for Dynatrace - Dynatrace is expected to report quarterly earnings of $0.32 per share, representing a year-over-year increase of +3.2% [3] - Revenues are anticipated to be $406.05 million, up 15.5% from the year-ago quarter [3] - The consensus EPS estimate has been revised 0.57% lower over the last 30 days [4] Earnings Surprise Potential - The Most Accurate Estimate for Dynatrace is higher than the Zacks Consensus Estimate, resulting in an Earnings ESP of +1.97% [10] - Dynatrace has a Zacks Rank of 3, indicating a likely earnings beat [10] - The company has beaten consensus EPS estimates in each of the last four quarters, with a +13.79% surprise in the last reported quarter [11][12] Industry Comparison - Fair Isaac (FICO), another company in the Zacks Computers - IT Services industry, is expected to report earnings per share of $6.60, a year-over-year increase of +31.7% [16] - Fair Isaac's revenues are expected to be $454.78 million, up 16.7% from the year-ago quarter [16] - The consensus EPS estimate for Fair Isaac has been revised 1.6% lower over the last 30 days, and the company has an Earnings ESP of -0.94% [17] Market Reaction and Strategy - The stock price of Dynatrace may move higher if the actual results exceed expectations, but could decline if they miss [2] - The Zacks Earnings ESP model suggests that stocks with a positive ESP and a Zacks Rank of 1, 2, or 3 have a high likelihood of beating earnings estimates [8] - Investors should consider both Earnings ESP and Zacks Rank when evaluating potential earnings surprises [14]

Have you been searching for a stock that might be well-positioned to maintain its earnings-beat streak in its upcoming report? It is worth considering Dynatrace (DT) , which belongs to the Zacks Computers - IT Services industry.This software intellegence company has seen a nice streak of beating earnings estimates, especially when looking at the previous two reports. The average surprise for the last two quarters was 12.45%.For the last reported quarter, Dynatrace came out with earnings of $0.33 per share v ...

Michael Wiggins De Oliveira is an inflection investor. This means buying into cheap companies at the moment when their narrative is changing and the business is on a path toward becoming significantly more profitable over the next year.With a focus on tech and “the Great Energy Transition (including uranium)”, Michael runs a concentrated portfolio with approximately 15 to 20 stocks and an average holding period of 18 months. Through his 10+ years analyzing countless companies, Michael has accumulated outsta ...

Financial Performance - The company reported a 20% year-over-year revenue growth in the first quarter of fiscal 2025, driven by an expanding unified observability and security portfolio [1] - Total annual recurring revenues (ARR) increased by 20% year over year to $1.54 billion at the end of the first quarter of fiscal 2025 [2] - Net new ARR rose by 23% year over year, reflecting increasing demand for digital transformation and AI initiatives across industries [2] - For the second quarter of fiscal 2025, revenues are projected to be between $404 million and $407 million, suggesting a 15-16% increase year over year [8] - Non-GAAP earnings for the second quarter are anticipated to be between 30 and 33 cents per share [8] - For fiscal 2025, revenues are projected to be between $1.72 billion and $1.73 billion, indicating a 14-15% increase year over year [9] - Non-GAAP earnings per share for fiscal 2025 are anticipated to be between $1.26 and $1.29 [9] Strategic Partnerships and Collaborations - The company partnered with Deutsche Telekom IT to enhance digital services through AI-driven insights and advanced analytics, supporting key applications like OneApp and OneShop [3] - During the UEFA EURO 2024 Championship, the company helped Deutsche Telekom IT handle a surge of more than 600,000 new users for OneApp, ensuring seamless performance and extending its reach to more than 5 million mobile services [4] - The company's robust network of partners, including Deutsche Telekom IT, Google Cloud, Amazon Web Services (AWS), and Lloyds Banking Group, has been a major growth driver [5] - Collaboration with Google Cloud enhances customer access to AI-powered analytics and automation for cloud-native environments, streamlining procurement and optimizing resources [6] - The company announced the native integration of its observability platform with AWS Application Migration Service (MGN), enabling efficient and secure relocation of applications to the AWS Cloud [7] - Collaboration with Lloyds Banking Group led to the development of Dynatrace Carbon Impact, aiding in measuring and reducing the environmental carbon impact of LYG's IT ecosystem [7] Market and Industry Trends - The company's growth is driven by increasing demand for digital transformation and AI initiatives across industries [2] - The strong portfolio and expanding partner base are expected to drive top-line growth, with significant revenue and earnings projections for fiscal 2025 [8][9]

The latest trading session saw Dynatrace (DT) ending at $52.20, denoting a +0.71% adjustment from its last day's close. This move lagged the S&P 500's daily gain of 1.7%. Elsewhere, the Dow gained 1.26%, while the tech-heavy Nasdaq added 2.51%. The software intellegence company's shares have seen an increase of 2.57% over the last month, surpassing the Computer and Technology sector's loss of 1.45% and the S&P 500's gain of 1.27%. The upcoming earnings release of Dynatrace will be of great interest to inves ...