Financial Performance - Dynatrace's Q4 2025 subscription revenue retention rate was in the mid-90s percentage range[37] - The company's FY25 annual recurring revenue (ARR) reached $1.73 billion[37] - Dynatrace achieved 14% year-over-year ARR growth in Q4 2025[37] - The company's FY25 net pre-tax free cash flow (FCF) margin was 32%[37] - Dynatrace anticipates FY26 ARR between $1.975 billion and $1.990 billion, representing a 14%-15% increase[59] - The company projects FY26 total revenue between $1.950 billion and $1.965 billion, a 15%-16% increase[59] - Dynatrace forecasts FY26 non-GAAP operating margin of 29%[59] - The company expects FY26 free cash flow between $505 million and $515 million, resulting in a 26% margin[59] Market and Strategy - The total addressable market (TAM) for observability is $14 billion, and for security is $85 billion[27] - Dynatrace has a go-to-market strategy targeting 15,000 customers across strategic enterprise and commercial segments[29]

Executive Summary & Business Overview [Company Performance Highlights (Q4 & FY25)](index=1&type=section&id=Company%20Performance%20Highlights%20(Q4%20%26%20FY25)) Dynatrace concluded fiscal 2025 with strong Q4 results, surpassing guidance across key metrics, driven by platform consumption growth, significant subscription revenue increases, and strong operating margins **Fourth Quarter Fiscal 2025 Financial Highlights:** | Metric | Value | YoY Increase (Constant Currency) | | :-------------------------------- | :---------------- | :------------------------------- | | Total ARR | $1,734 million | 17% | | Total Revenue | $445 million | 19% | | Subscription Revenue | $424 million | 20% | | GAAP Income from Operations | $43 million | - | | Non-GAAP Income from Operations | $118 million | - | | GAAP EPS (diluted) | $0.13 | - | | Non-GAAP EPS (diluted) | $0.33 | - | **Full Year Fiscal 2025 Financial Highlights:** | Metric | Value | YoY Increase (Constant Currency) | | :-------------------------------- | :---------------- | :------------------------------- | | Total Revenue | $1,699 million | 20% | | Subscription Revenue | $1,622 million | 20% | | GAAP Income from Operations | $179 million | - | | Non-GAAP Income from Operations | $494 million | - | | GAAP EPS (diluted) | $1.59 | - | | Non-GAAP EPS (diluted) | $1.39 | - | | GAAP Operating Cash Flow | $459 million | - | | Free Cash Flow | $431 million | - | [Strategic Business Developments](index=1&type=section&id=Strategic%20Business%20Developments) Dynatrace demonstrated strong go-to-market traction with its platform subscription model, expanded strategic partnerships, and received significant industry recognition for its AI-powered observability platform - Go-to-market traction: Closed **15 deals greater than $1 million in ACV** in Q4 FY25, with **14 in collaboration with partners**[4](index=4&type=chunk) - Dynatrace Platform Subscription (DPS) licensing models are gaining traction, with **over 40% of the customer base** and **more than 60% of ARR** leveraging this model[4](index=4&type=chunk) - Consumption growth rates for DPS customers are **twice that of SKU-based customers**[4](index=4&type=chunk) - Partner evolution: Signed a new strategic collaboration agreement with Amazon Web Services (AWS) and announced early access for joint Google Cloud customers to platform innovations powered by Grail™[4](index=4&type=chunk) - Industry and customer recognition: Named a Leader in The Forrester Wave™: AIOps Platforms, Q2 2025 report (highest score in Current Offering category), a Leader and Outperformer in the 2025 GigaOm Radar Report for Cloud Observability, and a Customers' Choice in the 2024 Gartner Peer Insights Voice of the Customer for Observability Platforms report[4](index=4&type=chunk) [Share Repurchase Program](index=2&type=section&id=Share%20Repurchase%20Program) Dynatrace continued its share repurchase program, spending $43 million in Q4 FY25 and a total of $173 million since inception, reflecting a commitment to returning value to shareholders - During the fourth quarter, Dynatrace repurchased **787,000 shares for $43 million** at an average price of **$53.99**[5](index=5&type=chunk) - From the program's inception in May 2024 through March 31, 2025, Dynatrace repurchased **3.4 million shares for $173 million** at an average price of **$50.06**[5](index=5&type=chunk) [Intellectual Property Transfer](index=2&type=section&id=Intellectual%20Property%20Transfer) In fiscal 2025, Dynatrace completed an intra-entity transfer of intellectual property rights to align them more closely with business operations, resulting in a significant income tax benefit - Dynatrace completed an intra-entity asset transfer of global economic rights of intellectual property (IP) from a U.S. subsidiary to a Swiss subsidiary in fiscal 2025[6](index=6&type=chunk) - The IP transfer generated an income tax benefit of **$320.9 million**, or **$1.06 per share** on a dilutive basis[6](index=6&type=chunk) Fourth Quarter Fiscal 2025 Financial Results [Key Financial Metrics (Q4 FY25)](index=3&type=section&id=Key%20Financial%20Metrics%20(Q4%20FY25)) Dynatrace reported robust financial performance for the fourth quarter of fiscal 2025, with significant year-over-year growth in ARR, total revenue, and subscription revenue, alongside improved GAAP and Non-GAAP operating margins and strong cash flow generation **Fourth Quarter Fiscal 2025 Financial Highlights (Unaudited – In thousands, except per share data):** | Metric | Q4 FY25 | Q4 FY24 | YoY Increase | YoY Increase (Constant Currency) | | :------------------------------------------ | :-------- | :-------- | :----------- | :------------------------------- | | Total ARR | $1,734,164 | $1,503,819 | 15% | 17% | | Total Revenue | $445,165 | $380,848 | 17% | 19% | | Subscription Revenue | $423,570 | $360,109 | 18% | 20% | | GAAP Income from Operations | $42,914 | $23,123 | 86% | - | | GAAP Operating Margin | 10% | 6% | +4 pp | - | | GAAP Net Income | $39,304 | $37,944 | 4% | - | | GAAP Net Income per Share - Diluted | $0.13 | $0.13 | 0% | - | | Non-GAAP Income from Operations | $117,887 | $95,093 | 24% | - | | Non-GAAP Operating Margin | 26% | 25% | +1 pp | - | | Non-GAAP Net Income | $99,047 | $89,401 | 11% | - | | Non-GAAP Net Income per Share - Diluted | $0.33 | $0.30 | 10% | - | | Net Cash Provided by Operating Activities | $162,790 | $131,672 | 24% | - | | Net Cash Provided by Operating Activities as % of Revenue | 37% | 35% | +2 pp | - | | Free Cash Flow | $145,528 | $121,262 | 20% | - | | Free Cash Flow Margin | 33% | 32% | +1 pp | - | [GAAP to Non-GAAP Reconciliation (Q4)](index=11&type=section&id=GAAP%20to%20Non-GAAP%20Reconciliation%20(Q4)) The company provides reconciliations from GAAP to Non-GAAP financial measures for the fourth quarter of fiscal 2025, adjusting for items such as share-based compensation, employer payroll taxes on employee stock transactions, amortization of intangibles, and restructuring costs to offer a clearer view of operational performance **Non-GAAP Income from Operations Reconciliation (Q4 FY25 vs Q4 FY24):** | Adjustment Category | Q4 FY25 (Thousands) | Q4 FY24 (Thousands) | | :------------------------------------ | :------------------ | :------------------ | | GAAP Income from Operations | $42,914 | $23,123 | | Share-based compensation | $70,204 | $55,598 | | Employer payroll taxes on employee stock transactions | $3,970 | $3,615 | | Amortization of intangibles | $747 | $9,685 | | Restructuring & other | $52 | $3,072 | | **Non-GAAP Income from Operations** | **$117,887** | **$95,093** | | GAAP Operating Margin | 10% | 6% | | Non-GAAP Operating Margin | 26% | 25% | **Non-GAAP Net Income Reconciliation (Q4 FY25 vs Q4 FY24):** | Adjustment Category | Q4 FY25 (Thousands) | Q4 FY24 (Thousands) | | :------------------------------------ | :------------------ | :------------------ | | GAAP Net Income | $39,304 | $37,944 | | Income tax expense (benefit) | $16,400 | $(7,842) | | Non-GAAP effective cash tax | $(29,616) | $(16,618) | | Interest income, net | $(10,930) | $(11,024) | | Cash received from interest, net | $10,776 | $10,926 | | Share-based compensation | $70,204 | $55,598 | | Employer payroll taxes on employee stock transactions | $3,970 | $3,615 | | Amortization of intangibles | $747 | $9,685 | | Transaction, restructuring, and other | $52 | $3,072 | | (Gain) loss on currency translation | $(1,860) | $4,045 | | **Non-GAAP Net Income** | **$99,047** | **$89,401** | | Non-GAAP Net Income per Share - Diluted | $0.33 | $0.30 | **Free Cash Flow Reconciliation (Q4 FY25 vs Q4 FY24):** | Metric | Q4 FY25 (Thousands) | Q4 FY24 (Thousands) | | :------------------------------------ | :------------------ | :------------------ | | Net cash provided by operating activities | $162,790 | $131,672 | | Purchase of property and equipment | $(14,566) | $(9,797) | | Capitalized software additions | $(2,696) | $(613) | | **Free Cash Flow** | **$145,528** | **$121,262** | Full Year Fiscal 2025 Financial Results [

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Dynatrace, Inc. DT will release earnings results for the fourth quarter, before the opening bell on Wednesday, May 14. Analysts expect the Waltham, Massachusetts-based company to report quarterly earnings at 30 cents per share, compared to 30 cents per share in the year-ago period. Dynatrace projects to report quarterly revenue at $435.14 million, compared to $380.85 million a year earlier, according to data from Benzinga Pro. On April 22, Dynatrace announced that Steve McMahon will join Dynatrace as its ne ...

Core Viewpoint - Analysts forecast Dynatrace (DT) will report quarterly earnings of $0.30 per share, indicating no change from the previous year, with revenues expected to reach $434.56 million, reflecting a 14.1% increase year-over-year [1]. Earnings Estimates - Over the last 30 days, there has been a downward revision of 1.1% in the consensus EPS estimate for the quarter, indicating a collective reconsideration by analysts [2]. - Changes in earnings estimates are crucial for predicting investor reactions, as empirical studies show a strong relationship between earnings estimate revisions and short-term stock price performance [3]. Revenue Projections - Analysts estimate 'Revenues- Services' at $21.78 million, representing a year-over-year change of +5% [5]. - 'Revenues- Subscriptions' are forecasted to reach $412.89 million, indicating a +14.7% change from the previous year [5]. - The 'Annual Recurring Revenue (ARR)- Total' is projected to be $1.71 billion, compared to $1.50 billion from the previous year [5]. Profit Estimates - The 'Gross profit- Services' is expected to be $3.05 million, down from $3.28 million reported in the same quarter last year [6]. - Analysts project 'Gross profit- Subscriptions' to be $361.62 million, an increase from $309.93 million reported in the same quarter of the previous year [6]. Stock Performance - Shares of Dynatrace have increased by +11.9% over the past month, compared to a +13.7% increase in the Zacks S&P 500 composite [7]. - With a Zacks Rank 3 (Hold), Dynatrace is expected to perform in line with the overall market in the near future [7].

In the latest market close, Dynatrace (DT) reached $47.35, with a +1.92% movement compared to the previous day. The stock exceeded the S&P 500, which registered a gain of 0.58% for the day. Elsewhere, the Dow saw an upswing of 0.75%, while the tech-heavy Nasdaq appreciated by 0.55%.Coming into today, shares of the software intellegence company had lost 1.46% in the past month. In that same time, the Computer and Technology sector gained 0.6%, while the S&P 500 lost 0.84%.The upcoming earnings release of Dyn ...

Group 1 - Dynatrace's stock closed at $42.90, with a daily increase of +1.73%, underperforming the S&P 500's gain of 2.51% [1] - Over the past month, Dynatrace shares have decreased by 16.78%, while the Computer and Technology sector and the S&P 500 have lost 12.18% and 8.86%, respectively [1] Group 2 - Dynatrace is expected to report an EPS of $0.30, unchanged from the same quarter last year, with a revenue forecast of $434.56 million, reflecting a 14.1% year-over-year increase [2] - Recent analyst estimate revisions indicate optimism regarding Dynatrace's business and profitability [3] Group 3 - The Zacks Rank system, which assesses estimate changes, currently ranks Dynatrace at 3 (Hold), with a recent 1.48% decrease in the consensus EPS estimate [5] - Dynatrace has a Forward P/E ratio of 27.55, which is higher than the industry average of 15.51 [5] Group 4 - The company has a PEG ratio of 2.16, compared to the industry average of 1.72, indicating a premium valuation relative to expected earnings growth [6] - The Computers - IT Services industry, which includes Dynatrace, holds a Zacks Industry Rank of 89, placing it in the top 36% of over 250 industries [6][7]

Core Insights - Dynatrace is positioned as an attractive service provider in the emerging observability market, enabling customers to optimize cloud spending and enhance negotiating power in multi-cloud environments [1] Company Summary - Dynatrace allows customers to reduce their cloud expenditure and mitigate vendor lock-in, which is crucial for maintaining flexibility in multi-cloud setups [1] - The stock is currently trading at a reasonable premium, indicating a balanced valuation in relation to its growth potential [1] Industry Context - The observability market is emerging, suggesting significant growth opportunities for service providers like Dynatrace [1] - The focus on intrinsic value in equity research highlights a trend towards identifying undervalued and growing companies, particularly those in early development stages [1]

Software stocks are facing heightened volatility this week, with Adobe Inc (NASDAQ:ADBE), Datadog Inc (NASDAQ:DDOG), and Dynatrace Inc (NYSE:DT) all struggling due to disappointing earnings guidance, market-wide headwinds, and sector-specific pressures.Adobe stock was last seen down 12.3% at $384.52 after issuing lackluster fiscal second-quarter guidance, projecting earnings of $4.98 on revenue of $5.8 billion, but the forecast failed to inspire confidence, dragging the stock 13% lower in 2025 and 32.6% low ...

Core Viewpoint - The article discusses the reliability of brokerage recommendations, particularly focusing on Dynatrace (DT), and emphasizes the importance of using these recommendations in conjunction with other analytical tools like the Zacks Rank for making informed investment decisions [1][4]. Brokerage Recommendations for Dynatrace - Dynatrace has an average brokerage recommendation (ABR) of 1.64, indicating a consensus between Strong Buy and Buy, based on recommendations from 33 brokerage firms [2]. - Out of the 33 recommendations, 22 are Strong Buy and 1 is Buy, which accounts for 66.7% and 3% of all recommendations respectively [2]. Limitations of Brokerage Recommendations - The article highlights that brokerage recommendations may not be reliable indicators of stock performance due to potential biases stemming from the vested interests of brokerage firms [5][9]. - Research indicates that for every "Strong Sell" recommendation, there are five "Strong Buy" recommendations, suggesting a tendency for analysts to be overly optimistic [5]. Zacks Rank as an Alternative - The Zacks Rank categorizes stocks into five groups based on earnings estimate revisions, which are more effective indicators of near-term stock price movements compared to brokerage recommendations [7][10]. - The Zacks Rank is timely and reflects changes in earnings estimates quickly, unlike the ABR which may not be up-to-date [11]. Current Earnings Estimates for Dynatrace - The Zacks Consensus Estimate for Dynatrace remains unchanged at $1.37 for the current year, indicating steady analyst views on the company's earnings prospects [12]. - Due to the unchanged consensus estimate and other factors, Dynatrace holds a Zacks Rank of 3 (Hold), suggesting caution despite the Buy-equivalent ABR [13].