Yahoo Finance

• Subscription Revenue Growth: 20% increase.

• Annual Recurring Revenue (ARR): $1.73 billion, representing 17% growth.

• Non-GAAP Operating Margin: Expanded by more than 100 basis points.

• Pretax Free Cash Flow Margin: Improved by roughly 250 basis points.

• Customer Base: Surpassed 4,000 customers.

• Employee Count: Surpassed 5,000 employees.

• New Logos Added in Q4: 171 new logos.

• Average New Logo Land Size: $130,000 on a trailing 12-month basis.

• Gross Retention Rate: Mid-90s percentage.

• Net Retention Rate (NRR): 110% in the fourth quarter.

• DPS Licensing Model: Over 40% of customer base and more than 60% of ARR.

• On-Demand Consumption Revenue (ODC): $9 million in Q4, $21 million trailing 12 months.

• Total Revenue for Q4: $445 million, growing 19%.

• Non-GAAP Net Income for Q4: $99 million or $0.33 per diluted share.

• Full Year Total Revenue: $1.7 billion, growing 20%.

• Full Year Non-GAAP Operating Margin: 29%.

• Full Year Free Cash Flow: $431 million or 25% of revenue.

• Cash and Investments: Nearly $1.2 billion as of March 31.

• Share Repurchase Program: 787,000 shares repurchased for $43 million in Q4.

• Fiscal '26 ARR Guidance: $1.975 billion to $1.99 billion, 13% to 14% growth.

• Fiscal '26 Total Revenue Guidance: $1.95 billion to $1.965 billion, 14% to 15% growth.

• Fiscal '26 Non-GAAP Operating Income Guidance: $560 million to $570 million.

• Fiscal '26 Free Cash Flow Guidance: $505 million to $515 million, 26% of revenue.

• Warning! GuruFocus has detected 8 Warning Signs with GAIN.

Release Date: May 14, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Dynatrace Inc (NYSE:DT) achieved a 20% growth in subscription revenue and surpassed $1.7 billion in ARR.

• The company expanded its non-GAAP operating margin by over 100 basis points and pretax free cash flow margin by roughly 250 basis points.

• Dynatrace Inc (NYSE:DT) surpassed 4,000 customers and 5,000 employees, indicating strong market presence and growth.

• The company announced major platform innovations, including AI-powered log management and analytics, enhancing its competitive edge.

• Dynatrace Inc (NYSE:DT) was consistently named a leader in major analyst reports for observability and AI Ops, reinforcing its industry leadership.

Negative Points

• The economic environment remains uncertain, which could impact future growth and customer spending.

• On-demand consumption revenue (ODC) is not captured in ARR or NRR metrics, potentially distorting growth visibility.

• The transition to a consumption-oriented model may lead to variability in revenue recognition and forecasting challenges.

• Despite strong pipeline growth, there is a concern about longer sales cycles, especially for large strategic accounts.

• The company faces competition from peers with broader portfolios, such as Datadog, which may impact market share.