Dynatrace (NYSE:DT) 2025 Conference Transcript

Dynatrace Conference Summary Company Overview - Company: Dynatrace (NYSE:DT) - Event: 2025 Conference held on December 02, 2025 Key Financial Metrics - Annual Recurring Revenue (ARR) Growth: 16-17% - Contracted Remaining Performance Obligations (CRPO) Growth: 20% - Net New ARR: $70 million, showing significant year-over-year growth [6][9][15] Performance Highlights - First Half ARR Growth: 14% - Second Quarter ARR Growth: 16% - Guidance for Back Half of the Year: Increased due to strong performance and de-risking of the second half [9][34] Growth Drivers - Dynatrace Platform Subscription (DPS): Now accounts for 70% of overall ARR, with DPS customers consuming at double the rate of non-DPS customers [15][20] - Log Management Business: Approaching $100 million, growing at over 100% year-over-year [15][22] - Pipeline Growth: Strong pipeline growth in strategic accounts, with a focus on large deals [16][40] Consumption Strength - Customer Engagement: Customers on DPS are leveraging the platform more effectively, leading to increased consumption and expansion opportunities [20][21] - Log Management: Cost reduction and improved outcomes are driving growth in log management, with a focus on end-to-end observability [22][28] Market Environment - Demand Environment: Described as incredibly healthy, with a robust pipeline and large deal sizes [38][40] - Competitive Landscape: Concerns regarding acquisitions in the space, such as Palo Alto's acquisition of Chronosphere, but Dynatrace does not see it as a direct threat due to its broader observability capabilities [61][62] Strategic Focus - Application Security: Fastest-growing segment, with investments in runtime vulnerability analytics and cloud security posture management [75][78] - On-Prem and Cloud Mix: Dynatrace maintains a competitive edge by supporting both on-prem and cloud workloads, particularly in sectors like financial services [80][82] Pricing Strategy - Flexible Pricing Model: DPS model is viewed as the most flexible in the market, with no overage charges, which enhances customer satisfaction and consumption [83][85] AI Integration - AI Workloads: Hundreds of customers are using Dynatrace for AI workloads, with expectations for increased demand as these workloads move into production [92][94] - AI-Enabled Platform: Dynatrace has been developing AI capabilities for over a decade, integrating observability data to provide actionable insights [110][112] Go-to-Market Strategy - Investment in Strategic Accounts: Focus on large accounts has resulted in pipeline growth and deal closures [114][116] - Partner Ecosystem: Expansion in partnerships, particularly with Global System Integrators (GSIs), has enhanced exposure to C-level leaders [116][118] Conclusion - Dynatrace is experiencing strong growth driven by its subscription model, effective consumption strategies, and a robust pipeline. The company is well-positioned in the competitive landscape, leveraging its comprehensive observability platform and strategic focus on both application security and AI integration.