Dynatrace (DT) 2025 Conference Summary Company Overview - **Company**: Dynatrace (DT) - **Event**: 2025 Conference held on September 4, 2025 Key Highlights Financial Performance - **Net New ARR Growth**: Achieved 13% growth in net new Annual Recurring Revenue (ARR) [6] - **DPS Subscription Model**: Over 65% of the business is now on the DPS (Dynatrace Platform Subscription) model, with 45% of customers actively consuming the platform [6] - **Consumption Ambition**: The company is on track to meet a $100 million consumption target [7] Strategic Changes - **Structural Changes**: Significant changes in the go-to-market strategy have begun to show traction, with a focus on building consistency and maturation in operations [8][10] - **DPS Mechanics**: The DPS model allows customers to commit to a dollar amount for access to the platform, which is recognized ratably over the contract term, facilitating faster consumption and higher renewal rates [14][15] Customer Engagement - **Renewal Cycle**: The company is entering a renewal cycle for customers who signed contracts between one to three years ago, with expectations of increased renewals [12][19] - **Sales Incentives**: Changes in sales incentives have been implemented to encourage the transition from SKU to DPS, aiming for over 80% of customers on the DPS model [25] Market Dynamics - **On-Demand Consumption**: A notable number of customers are opting for on-demand consumption instead of early renewals, contributing to unexpected revenue growth [29][34] - **Net Retention Rates**: Net retention rates improved from 110% to 111%, with DPS customers showing higher retention than non-DPS customers [82] Operational Insights Sales Strategy - **Biannual Quotas**: The introduction of biannual quotas for the sales organization is aimed at improving agility and managing costs, with early signs of success in funnel creation and deal sizes [41][46] - **Quality Over Quantity**: The focus is on acquiring larger, high-quality customers rather than a high volume of smaller accounts, which tend to have lower retention rates [64][66] Future Outlook - **Maturation Year**: Fiscal 2026 is viewed as a maturation year, with expectations for stabilization and potential reacceleration in growth in fiscal 2027 [51][54] - **Investment in R&D**: The company plans to reinvest in research and development while maintaining operating margins around 29% [88][89] Additional Considerations - **Customer Success Focus**: A new consumption mindset is being cultivated within the company, emphasizing the importance of customer success and consumption metrics [37][85] - **Sales Cycle Dynamics**: The sales cycle for new logos has lengthened due to the need for more stakeholder engagement, but larger lands are being achieved [77][81] This summary encapsulates the key points discussed during the Dynatrace conference, highlighting the company's financial performance, strategic changes, customer engagement, operational insights, and future outlook.