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%
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 the strength of our platform and ability to execute effectively in a dynamic market," said Rick McConnell, Chief Executive Officer of Dynatrace. "The world relies on software, and the largest and most complex global enterprises come to Dynatrace to make their businesses more reliable and resilient. By leveraging our AI-powered observability platform, these organizations gain deep insights, automate operations, and optimize performance at scale."
Second Quarter Fiscal 2025 Financial and Other Recent Business Highlights:
All growth rates are compared to the second quarter of fiscal 2024, unless otherwise noted.
Financial Highlights:
- ARR of $1,617 million, an increase of 20%, or 19% on a constant currency basis
- Total Revenue of $418 million, an increase of 19% on both an as reported and constant currency basis
- Subscription Revenue of $400 million, an increase of 20% on both an as reported and constant currency basis
- GAAP Income from Operations of $47 million and Non-GAAP Income from Operations of $131 million
- GAAP EPS of $0.15 and Non-GAAP EPS of $0.37, both on a dilutive basis
Business Highlights:
-
Industry recognition: Dynatrace received the following recognitions by third-party industry analysts:
- Positioned furthest for Completeness of Vision and highest in Ability to Execute in the 2024 Gartner® Magic Quadrant™ for Observability Platforms. This is the 14th consecutive time that Gartner has named Dynatrace a Leader in this report.1
- Ranked #1 across 3 of 5 use cases in the 2024 Gartner Critical Capabilities for Observability Platforms Report.2
- Named a Leader in the Inaugural 2024 Gartner Magic Quadrant for Digital Experience Monitoring for Completeness of Vision and Ability to Execute.3
- Recognized in the 2024 Constellation Research ShortLists™ for Observability, AIOPs, and Digital Performance Management.4
- Product advancements: Dynatrace announced improved user experience, advanced log management and analytics, and extended cloud-native capabilities that enable customers to gain deeper visibility, boost operational efficiency, and drive productivity across their business.
- Go-to-market engagement: Dynatrace increased customer engagement with several events in the quarter, including more than 2,000 customers and partners attending the company's global Innovate sessions and more than 400 partners at the company's inaugural PowerUp program. In addition, Dynatrace hosted its most successful streaming event to date, "Power of Possible," showcasing how the company is extending customer value to more use cases and teams.
Share Repurchase Program
- During the second quarter, Dynatrace spent $40 million to repurchase 835,000 shares at an average price of $47.90 under its $500 million share repurchase program. From the inception of the program in May 2024 through September 30, 2024, Dynatrace has repurchased 1.9 million shares for $90 million at an average price of $46.71.
Second Quarter 2025 Financial Highlights (Unaudited – In thousands, except per share data) |
|||||||
|
Three Months Ended September 30, |
||||||
|
|
2024 |
|
|
|
2023 |
|
Key Operating Metric: |
|
|
|
||||
Annual recurring revenue (ARR) |
$ |
1,616,531 |
|
|
$ |
1,343,530 |
|
Year-over-Year Increase |
|
20 |
% |
|
|
||
Year-over-Year Increase - constant currency (*) |
|
19 |
% |
|
|
||
|
|
|
|
||||
Revenue: |
|
|
|
||||
Total revenue |
$ |
418,129 |
|
|
$ |
351,700 |
|
Year-over-Year Increase |
|
19 |
% |
|
|
||
Year-over-Year Increase - constant currency (*) |
|
19 |
% |
|
|
||
|
|
|
|
||||
Subscription revenue |
$ |
399,810 |
|
|
$ |
334,497 |
|
Year-over-Year Increase |
|
20 |
% |
|
|
||
Year-over-Year Increase - constant currency (*) |
|
20 |
% |
|
|
||
|
|
|
|
||||
GAAP Financial Measures: |
|
|
|
||||
GAAP income from operations |
$ |
47,026 |
|
|
$ |
35,269 |
|
GAAP operating margin |
|
11 |
% |
|
|
10 |
% |
|
|
|
|
||||
GAAP net income |
$ |
44,008 |
|
|
$ |
35,809 |
|
|
|
|
|
||||
GAAP net income per share - diluted |
$ |
0.15 |
|
|
$ |
0.12 |
|
|
|
|
|
||||
GAAP shares outstanding - diluted |
|
301,373 |
|
|
|
297,794 |
|
|
|
|
|
||||
Net cash provided by operating activities |
$ |
23,650 |
|
|
$ |
36,877 |
|
|
|
|
|
||||
Non-GAAP Financial Measures (*): |
|
|
|
||||
Non-GAAP income from operations |
$ |
130,669 |
|
|
$ |
106,435 |
|
Non-GAAP operating margin |
|
31 |
% |
|
|
30 |
% |
|
|
|
|
||||
Non-GAAP net income |
$ |
112,661 |
|
|
$ |
93,487 |
|
|
|
|
|
||||
Non-GAAP net income per share - diluted |
$ |
0.37 |
|
|
$ |
0.31 |
|
|
|
|
|
||||
Non-GAAP shares outstanding - diluted |
|
301,373 |
|
|
|
297,794 |
|
|
|
|
|
||||
Free cash flow |
$ |
20,138 |
|
|
$ |
34,127 |
|
* For additional information, please see the "Non-GAAP Financial Measures" and "Definitions - Non-GAAP and Other Metrics" sections of this press release. |
|||||||
Financial Outlook
Based on information available as of November 7, 2024, Dynatrace is issuing guidance for the third quarter and increasing its previous guidance for full year fiscal 2025 in the table below.
This guidance reflects foreign exchange rates as of October 31, 2024. We now expect foreign exchange to be a headwind of approximately $11 million on ARR and approximately $7 million on revenue for fiscal 2025 compared to ARR and revenue at constant currency. This guidance also excludes the impact of any share repurchases during the third and fourth quarter of fiscal 2025.
Growth rates for ARR, Total revenue, and Subscription revenue are presented in constant currency to provide better visibility into the underlying growth of the business.
All growth rates below are compared to the third quarter and full year of fiscal 2024.
(In millions, except per share data) |
Q3 Fiscal 2025 Guidance |
||||
Total revenue |
$425 - $428 |
||||
As reported |
16% - 17% |
||||
Constant currency |
17% - 18% |
||||
Subscription revenue |
$407 - $410 |
||||
As reported |
17% - 18% |
||||
Constant currency |
17% - 18% |
||||
Non-GAAP income from operations |
$117 - $120 |
||||
Non-GAAP operating margin |
27.5% - 28% |
||||
Non-GAAP net income |
$98 - $101 |
||||
Non-GAAP net income per diluted share |
$0.32 - $0.33 |
||||
Diluted weighted average shares outstanding |
303 - 304 |
(In millions, except per share data) |
Current Guidance Fiscal 2025 |
|
Prior Guidance Fiscal 2025* |
|
Guidance Change at Midpoint |
ARR |
$1,720 - $1,735 |
|
$1,720 - $1,735 |
|
$— |
As reported |
14% - 15% |
|
14% - 15% |
|
— |
Constant currency |
15% - 16% |
|
15% - 16% |
|
— |
Total revenue |
$1,665 - $1,675 |
|
$1,644 - $1,658 |
|
$19 |
As reported |
16% - 17% |
|
15% - 16% |
|
100 bps |
Constant currency |
17% - 18% |
|
16% - 17% |
|
100 bps |
Subscription revenue |
$1,590 - $1,600 |
|
$1,571 - $1,585 |
|
$17 |
As reported |
17% - 18% |
|
16% - 17% |
|
100 bps |
Constant currency |
17% - 18% |
|
16% - 17% |
|
100 bps |
Non-GAAP income from operations |
$466 - $474 |
|
$459 - $467 |
|
$7 |
Non-GAAP operating margin |
28% - 28.25% |
|
28% |
|
12 bps |
Non-GAAP net income |
$396 - $404 |
|
$383 - $392 |
|
$13 |
Non-GAAP net income per diluted share |
$1.31 - $1.33 |
|
$1.26 - $1.29 |
|
$0.04 |
Diluted weighted average shares outstanding |
303 - 305 |
|
303 - 305 |
|
— |
Free cash flow |
$393 - $404 |
|
$386 - $398 |
|
$7 |
Free cash flow margin |
23.5% - 24% |
|
23.5% - 24% |
|
— |
*Prior guidance was issued on August 7, 2024. |
Conference Call and Webcast Information
Dynatrace will host a conference call and live webcast to discuss its results and business outlook for investors and analysts at 8:00 a.m. Eastern Time today, November 7, 2024. To access the conference call from the U.S. and Canada, dial (866) 405-1247, or internationally, dial (201) 689-8045 with conference ID# 13749514. The call will also be available live via webcast on the company's website, ir.dynatrace.com.
An audio replay of the call will also be available until 11:59 p.m. Eastern Time on February 5, 2025, by dialing (877) 660-6853 from the U.S. and Canada, or for international callers by dialing (201) 612-7415 and entering conference ID# 13749514. In addition, an archived webcast will be available at ir.dynatrace.com.
We announce material financial information to our investors using our Investor Relations website, press releases, SEC filings and public conference calls and webcasts. We also use these channels to disclose information about the company, our planned financial and other announcements, attendance at upcoming investor and industry conferences, and for complying with our disclosure obligations under Regulation FD.
Non-GAAP Financial Measures
In addition to disclosing financial measures prepared in accordance with GAAP, this press release and the accompanying tables contain certain non-GAAP financial measures as defined by Regulation G, including non-GAAP income from operations, non-GAAP operating margin, non-GAAP net income, non-GAAP net income per diluted share, and free cash flow. We also use or discuss non-GAAP financial measures in conference calls, slide presentations and webcasts.
We use these non-GAAP financial measures for financial and operational decision-making purposes, and as a means to evaluate period-to-period comparisons and liquidity. We believe that these non-GAAP financial measures provide useful information about our operating results, enhance the overall understanding of past financial performance and allow for greater transparency with respect to metrics used by our management in its financial and operational decision-making.
The presentation of the non-GAAP financial measures is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. Our non-GAAP financial measures may not provide information that is directly comparable to similarly titled metrics provided by other companies.
Non-GAAP financial measures are defined in this press release and the tables included in this press release include reconciliations of historical non-GAAP financial measures to their most directly comparable GAAP measures.
We also include non-GAAP financial measures in our financial outlook included in this press release. Reconciliations of forward-looking non-GAAP income from operations, non-GAAP net income, non-GAAP net income per diluted share, and free cash flow guidance to the most directly comparable GAAP measures are not available without unreasonable efforts due to the high variability, complexity, and low visibility with respect to the charges excluded from these non-GAAP measures; in particular, the measures and effects of share-based compensation expense, employer taxes and tax deductions specific to equity compensation awards that are directly impacted by future hiring, turnover and retention needs, as well as unpredictable fluctuations in our stock price. We expect the variability of the above charges to have a significant, and potentially unpredictable, impact on our future GAAP financial results.
Definitions - Non-GAAP and Other Metrics
Annual Recurring Revenue (ARR) is defined as the daily revenue of all subscription agreements that are actively generating revenue as of the last day of the reporting period multiplied by 365. We exclude from our calculation of ARR any revenues derived from month-to-month agreements and/or product usage overage billings.
Constant Currency amounts for ARR, Total Revenue and Subscription Revenue are presented to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign exchange rate fluctuations. To present this information, current and comparative prior period results for entities reporting in currencies other than United States dollars are converted into United States dollars using the average exchange rates from the comparative period rather than the actual exchange rates in effect during the respective periods. All growth comparisons relate to the corresponding period in the last fiscal year.
Non-GAAP Income from Operations is defined as GAAP income from operations adjusted for the following items: share-based compensation; employer payroll taxes on employee stock transactions; amortization of intangibles; transaction, restructuring and other non-recurring or unusual items that may arise from time to time. The related margin is non-GAAP income from operations expressed as a percentage of total revenue.
Non-GAAP Net Income is defined as GAAP net income adjusted for the following items: income tax expense/benefit; non-GAAP effective cash taxes; net interest expense and income; net cash received from and paid for interest; share-based compensation; employer payroll taxes on employee stock transactions, amortization of intangibles; gains and losses on currency translation; and transaction, restructuring and other non-recurring or unusual items that may arise from time to time. Non-GAAP net income per diluted share is calculated as non-GAAP net income divided by the diluted weighted average shares outstanding used to compute GAAP net income per diluted share.
Free Cash Flow is defined as the net cash provided by or used in operating activities less capital expenditures, reflected as purchase of property and equipment and capitalized software additions in our financial statements. The related margin is free cash flow expressed as a percentage of total revenue.
About Dynatrace
Dynatrace exists to make the world's software work perfectly. Our end-to-end platform combines broad and deep observability and continuous runtime application security with Davis® hypermodal AI to provide answers and intelligent automation from data at an enormous scale. This enables innovators to modernize and automate cloud operations, deliver software faster and more securely, and ensure flawless digital experiences. That's why the world's largest organizations trust the Dynatrace® platform to accelerate digital transformation.
Cautionary Language Concerning Forward-Looking Statements
This press release includes certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including statements related to benefits that we believe organizations receive from using Dynatrace and our financial and business outlook, including our financial guidance for the third quarter and full year of fiscal 2025. These forward-looking statements include, but are not limited to, plans, objectives, expectations and intentions and other statements contained in this press release that are not historical facts and statements identified by words such as "will," "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates" or words of similar meaning. These forward-looking statements reflect our current views about our plans, intentions, expectations, strategies and prospects, which are based on the information currently available to us and on assumptions we have made. Although we believe that our plans, intentions, expectations, strategies and prospects as reflected in or suggested by those forward-looking statements are reasonable, we can give no assurance that the plans, intentions, expectations or strategies will be attained or achieved. Furthermore, actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of risks and factors that are beyond our control including, without limitation, our ability to maintain our revenue growth rates in future periods; market adoption of our product offerings; continued demand for, and spending on, our solutions; our ability to innovate and develop solutions that meet customer needs, including through Davis AI; the ability of our platform and solutions to effectively interoperate with customers' IT infrastructures; our ability to acquire new customers and retain and expand our relationships with existing customers; our ability to expand our sales and marketing capabilities; our ability to compete; our ability to maintain successful relationships with partners; security breaches, other security incidents and any real or perceived errors, failures, defects or vulnerabilities in our solutions; our ability to protect our intellectual property; our ability to hire and retain necessary qualified employees to grow our business and expand our operations; our ability to successfully complete acquisitions and to integrate newly acquired businesses and offerings; the effect on our business of the macroeconomic environment, associated global economic conditions and geopolitical disruption; and other risks set forth under the caption "Risk Factors" in our Annual Report on Form 10-K, subsequent Quarterly Reports on Form 10-Q, and our other SEC filings. We assume no obligation to update any forward-looking statements contained in this document as a result of new information, future events or otherwise.
Gartner Disclaimers and Constellation Disclosures
1) Gartner, Magic Quadrant for Observability Platforms, Gregg Siegfried, Mrudula Bangera, Matt Crossley, Padraig Byrne, 12 August 2024. Dynatrace was recognized as Compuware from 2010-2014. |
|
2) Gartner, Critical Capabilities for Observability Platforms, Mrudula Bangera, Padraig Byrne, Matt Crossley, Gregg Siegfried, 12 August 2024. |
|
3) Gartner, Magic Quadrant for Digital Experience Monitoring, Padraig Byrne, Matt Crossley, DB Cummings, Martin Caren, Pankaj Prasad, 21 October 2024. |
|
The Gartner content described herein (the "Gartner Content") represents research opinion or viewpoints published, as part of a syndicated subscription service, by Gartner, Inc. ("Gartner"), and is not a representation of fact. Gartner Content speaks as of its original publication date (and not as of the date of this earnings press release), and the opinions expressed in the Gartner Content are subject to change without notice. |
|
Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner's research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose. GARTNER is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally, and MAGIC QUADRANT is a registered trademark of Gartner, Inc. and/or its affiliates and are used herein with permission. All rights reserved. |
|
4) 2024 Constellation Research ShortLists™ for Observability (Andy Thurai), AIOPs (Andy Thurai), and Digital Performance Management (R "Ray" Wang). |
DYNATRACE, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited – In thousands, except per share data) |
||||||||||||||
|
Three Months Ended
|
Six Months Ended
|
||||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
2024 |
|
|
|
2023 |
|
Revenue: |
|
|
|
|
|
|
||||||||
Subscription |
$ |
399,810 |
|
|
$ |
334,497 |
|
$ |
781,386 |
|
|
$ |
650,951 |
|
Service |
|
18,319 |
|
|
|
17,203 |
|
|
35,963 |
|
|
|
33,635 |
|
Total revenue |
|
418,129 |
|
|
|
351,700 |
|
|
817,349 |
|
|
|
684,586 |
|
Cost of revenue: |
|
|
|
|
|
|
||||||||
Cost of subscription |
|
55,796 |
|
|
|
44,792 |
|
|
109,368 |
|
|
|
87,696 |
|
Cost of service |
|
17,595 |
|
|
|
15,675 |
|
|
34,397 |
|
|
|
31,217 |
|
Amortization of acquired technology |
|
4,393 |
|
|
|
3,900 |
|
|
8,772 |
|
|
|
7,798 |
|
Total cost of revenue |
|
77,784 |
|
|
|
64,367 |
|
|
152,537 |
|
|
|
126,711 |
|
Gross profit |
|
340,345 |
|
|
|
287,333 |
|
|
664,812 |
|
|
|
557,875 |
|
|
|
|
|
|
|
|
||||||||
Operating expenses: |
|
|
|
|
|
|
||||||||
Research and development |
|
95,366 |
|
|
|
74,084 |
|
|
182,944 |
|
|
|
140,366 |
|
Sales and marketing |
|
144,224 |
|
|
|
127,605 |
|
|
289,330 |
|
|
|
252,722 |
|
General and administrative |
|
48,953 |
|
|
|
44,748 |
|
|
93,931 |
|
|
|
83,843 |
|
Amortization of other intangibles |
|
4,776 |
|
|
|
5,627 |
|
|
9,552 |
|
|
|
11,387 |
|
Total operating expenses |
|
293,319 |
|
|
|
252,064 |
|
|
575,757 |
|
|
|
488,318 |
|
Income from operations |
|
47,026 |
|
|
|
35,269 |
|
|
89,055 |
|
|
|
69,557 |
|
Interest income, net |
|
12,850 |
|
|
|
8,509 |
|
|
25,625 |
|
|
|
15,655 |
|
Other expense, net |
|
(2,038 |
) |
|
|
(3,075 |
) |
|
(4,073 |
) |
|
|
(2,823 |
) |
Income before income taxes |
|
57,838 |
|
|
|
40,703 |
|
|
110,607 |
|
|
|
82,389 |
|
Income tax expense |
|
(13,830 |
) |
|
|
(4,894 |
) |
|
(27,979 |
) |
|
|
(8,392 |
) |
Net income |
$ |
44,008 |
|
|
$ |
35,809 |
|
$ |
82,628 |
|
|
$ |
73,997 |
|
Net income per share: |
|
|
|
|
|
|
||||||||
Basic |
$ |
0.15 |
|
|
$ |
0.12 |
|
$ |
0.28 |
|
|
$ |
0.25 |
|
Diluted |
$ |
0.15 |
|
|
$ |
0.12 |
|
$ |
0.27 |
|
|
$ |
0.25 |
|
Weighted average shares outstanding: |
|
|
|
|
|
|
||||||||
Basic |
|
298,089 |
|
|
|
293,654 |
|
|
297,736 |
|
|
|
292,504 |
|
Diluted |
|
301,373 |
|
|
|
297,794 |
|
|
301,714 |
|
|
|
297,492 |
|
UNAUDITED SHARE-BASED COMPENSATION |
||||||||||||||
|
Three Months Ended
|
Six Months Ended
|
||||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
2024 |
|
|
|
2023 |
|
Cost of revenue |
$ |
9,714 |
|
|
$ |
7,197 |
|
$ |
17,444 |
|
|
$ |
12,685 |
|
Research and development |
|
26,607 |
|
|
|
18,177 |
|
|
48,187 |
|
|
|
31,441 |
|
Sales and marketing |
|
20,750 |
|
|
|
18,877 |
|
|
36,772 |
|
|
|
32,876 |
|
General and administrative |
|
14,632 |
|
|
|
13,707 |
|
|
26,957 |
|
|
|
21,474 |
|
Total share-based compensation |
$ |
71,703 |
|
|
$ |
57,958 |
|
$ |
129,360 |
|
|
$ |
98,476 |
|
DYNATRACE, INC.
|
|||||||
|
September 30,
|
|
March 31,
|
||||
|
(unaudited) |
|
|
||||
Assets |
|
|
|
||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
907,177 |
|
|
$ |
778,983 |
|
Short-term investments |
|
97,834 |
|
|
|
57,891 |
|
Accounts receivable, net |
|
303,341 |
|
|
|
602,739 |
|
Deferred commissions, current |
|
106,554 |
|
|
|
98,935 |
|
Prepaid expenses and other current assets |
|
68,672 |
|
|
|
66,749 |
|
Total current assets |
|
1,483,578 |
|
|
|
1,605,297 |
|
Long-term investments |
|
48,312 |
|
|
|
46,350 |
|
Property and equipment, net |
|
52,649 |
|
|
|
53,325 |
|
Operating lease right-of-use assets, net |
|
70,957 |
|
|
|
61,390 |
|
Goodwill |
|
1,337,205 |
|
|
|
1,335,494 |
|
Intangible assets, net |
|
31,701 |
|
|
|
50,995 |
|
Deferred tax assets, net |
|
177,714 |
|
|
|
138,836 |
|
Deferred commissions, non-current |
|
95,187 |
|
|
|
93,310 |
|
Other assets |
|
32,350 |
|
|
|
24,782 |
|
Total assets |
$ |
3,329,653 |
|
$ |
3,409,779 |
|
|
|
|
|
|
||||
Liabilities and shareholders' equity |
|
|
|
||||
Current liabilities: |
|
|
|
||||
Accounts payable |
$ |
17,298 |
|
|
$ |
21,410 |
|
Accrued expenses, current |
|
208,825 |
|
|
|
233,675 |
|
Deferred revenue, current |
|
806,171 |
|
|
|
987,953 |
|
Operating lease liabilities, current |
|
15,606 |
|
|
|
15,513 |
|
Total current liabilities |
|
1,047,900 |
|
|
|
1,258,551 |
|
Deferred revenue, non-current |
|
54,878 |
|
|
|
62,308 |
|
Accrued expenses, non-current |
|
16,926 |
|
|
|
18,404 |
|
Operating lease liabilities, non-current |
|
64,997 |
|
|
|
54,013 |
|
Deferred tax liabilities |
|
996 |
|
|
|
1,013 |
|
Total liabilities |
|
1,185,697 |
|
|
|
1,394,289 |
|
|
|
|
|
||||
Shareholders' equity: |
|
|
|
||||
Common shares, $0.001 par value, 600,000,000 shares authorized, 298,519,163 and 296,962,547 shares issued and outstanding at September 30, 2024 and March 31, 2024, respectively |
|
299 |
|
|
|
297 |
|
Additional paid-in capital |
|
2,295,796 |
|
|
|
2,249,349 |
|
Accumulated deficit |
|
(116,129 |
) |
|
|
(198,757 |
) |
Accumulated other comprehensive loss |
|
(36,010 |
) |
|
|
(35,399 |
) |
Total shareholders' equity |
|
2,143,956 |
|
|
|
2,015,490 |
|
Total liabilities and shareholders' equity |
$ |
3,329,653 |
$ |
3,409,779 |
|
||
DYNATRACE, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited – In thousands) |
|||||||
|
Six Months Ended September 30, |
||||||
|
|
2024 |
|
|
|
2023 |
|
Cash flows from operating activities: |
|
|
|
||||
Net income |
$ |
82,628 |
|
|
$ |
73,997 |
|
Adjustments to reconcile net income to cash provided by operations: |
|
|
|
||||
Depreciation |
|
8,635 |
|
|
|
7,890 |
|
Amortization |
|
19,356 |
|
|
|
19,207 |
|
Share-based compensation |
|
129,360 |
|
|
|
98,476 |
|
Deferred income taxes |
|
(39,059 |
) |
|
|
(35,166 |
) |
Other |
|
3,133 |
|
|
|
3,019 |
|
Net change in operating assets and liabilities: |
|
|
|
||||
Accounts receivable |
|
300,077 |
|
|
|
177,689 |
|
Deferred commissions |
|
(7,166 |
) |
|
|
8,978 |
|
Prepaid expenses and other assets |
|
(14,073 |
) |
|
|
(22,909 |
) |
Accounts payable and accrued expenses |
|
(30,479 |
) |
|
|
(33,246 |
) |
Operating leases, net |
|
1,465 |
|
|
|
1,333 |
|
Deferred revenue |
|
(199,486 |
) |
|
|
(128,488 |
) |
Net cash provided by operating activities |
|
254,391 |
|
|
|
170,780 |
|
|
|
|
|
||||
Cash flows from investing activities: |
|
|
|
||||
Purchase of property and equipment |
|
(6,871 |
) |
|
|
(13,017 |
) |
Acquisition of a business, net of cash acquired |
|
(100 |
) |
|
|
(32,391 |
) |
Purchases of investments |
|
(80,024 |
) |
|
|
— |
|
Proceeds from sales and maturities of investments |
|
40,375 |
|
|
|
— |
|
Net cash used in investing activities |
|
(46,620 |
) |
|
|
(45,408 |
) |
|
|
|
|
||||
Cash flows from financing activities: |
|
|
|
||||
Payments of deferred consideration related to capitalized software additions |
|
(1,656 |
) |
|
|
— |
|
Proceeds from employee stock purchase plan |
|
10,389 |
|
|
|
9,584 |
|
Proceeds from exercise of stock options |
|
8,773 |
|
|
|
16,619 |
|
Repurchases of common stock |
|
(90,107 |
) |
|
|
— |
|
Taxes paid related to net share settlement of equity awards |
|
(11,966 |
) |
|
|
— |
|
Net cash (used in) provided by financing activities |
|
(84,567 |
) |
|
|
26,203 |
|
|
|
|
|
||||
Effect of exchange rates on cash and cash equivalents |
|
4,990 |
|
|
|
(5,399 |
) |
|
|
|
|
||||
Net increase in cash and cash equivalents |
|
128,194 |
|
|
|
146,176 |
|
|
|
|
|
||||
Cash and cash equivalents, beginning of period |
|
778,983 |
|
|
|
555,348 |
|
Cash and cash equivalents, end of period |
$ |
907,177 |
|
|
$ |
701,524 |
|
DYNATRACE, INC. GAAP to Non-GAAP Reconciliations (Unaudited - In thousands, except percentages) |
|||||||||||||||||||||||
|
Three Months Ended September 30, 2024 |
||||||||||||||||||||||
|
GAAP |
|
Share-based compensation |
|
Employer payroll taxes on employee stock transactions |
|
Amortization of intangibles |
|
Transaction, restructuring, and other |
|
Non-GAAP |
||||||||||||
Non-GAAP income from operations: |
|||||||||||||||||||||||
Cost of revenue |
$ |
77,784 |
|
|
$ |
(9,714 |
) |
|
$ |
(431 |
) |
|
$ |
(4,393 |
) |
|
$ |
— |
|
|
$ |
63,246 |
|
Gross profit |
|
340,345 |
|
|
|
9,714 |
|
|
|
431 |
|
|
|
4,393 |
|
|
|
— |
|
|
354,883 |
|
|
Gross margin |
|
81 |
% |
|
|
|
|
|
|
|
|
|
|
85 |
% |
||||||||
Research and development |
|
95,366 |
|
|
|
(26,607 |
) |
|
|
(1,305 |
) |
|
|
— |
|
|
|
— |
|
|
|
67,454 |
|
Sales and marketing |
|
144,224 |
|
|
|
(20,750 |
) |
|
|
(729 |
) |
|
|
— |
|
|
|
— |
|
|
|
122,745 |
|
General and administrative |
|
48,953 |
|
|
|
(14,632 |
) |
|
|
(306 |
) |
|
|
— |
|
|
|
— |
|
|
|
34,015 |
|
Amortization of other intangibles |
|
4,776 |
|
|
|
— |
|
|
|
— |
|
|
|
(4,776 |
) |
|
|
— |
|
|
|
— |
|
Income from operations |
$ |
47,026 |
|
|
$ |
71,703 |
|
|
$ |
2,771 |
|
|
$ |
9,169 |
|
|
$ |
— |
|
|
$ |
130,669 |
|
Operating margin |
|
11 |
% |
|
|
|
|
|
|
|
|
|
|
31 |
% |
||||||||
|
Three Months Ended September 30, 2023 |
||||||||||||||||||||||
|
GAAP |
|
Share-based compensation |
|
Employer payroll taxes on employee stock transactions |
|
Amortization of intangibles |
|
Transaction, restructuring, and other |
|
Non-GAAP |
||||||||||||
Non-GAAP income from operations: |
|||||||||||||||||||||||
Cost of revenue |
$ |
64,367 |
|
|
$ |
(7,197 |
) |
|
$ |
(309 |
) |
|
$ |
(3,900 |
) |
|
$ |
— |
|
|
$ |
52,961 |
|
Gross profit |
|
287,333 |
|
|
|
7,197 |
|
|
|
309 |
|
|
|
3,900 |
|
|
|
— |
|
|
|
298,739 |
|
Gross margin |
|
82 |
% |
|
|
|
|
|
|
|
|
|
|
85 |
% |
||||||||
Research and development |
|
74,084 |
|
|
|
(18,177 |
) |
|
|
(933 |
) |
|
|
— |
|
|
|
— |
|
|
|
54,974 |
|
Sales and marketing |
|
127,605 |
|
|
|
(18,877 |
) |
|
|
(760 |
) |
|
|
— |
|
|
|
198 |
|
|
|
108,166 |
|
General and administrative |
|
44,748 |
|
|
|
(13,707 |
) |
|
|
(299 |
) |
|
|
— |
|
|
|
(1,578 |
) |
|
|
29,164 |
|
Amortization of other intangibles |
|
5,627 |
|
|
|
— |
|
|
|
— |
|
|
|
(5,627 |
) |
|
|
— |
|
|
|
— |
|
Income from operations |
$ |
35,269 |
|
|
$ |
57,958 |
|
|
$ |
2,301 |
|
|
$ |
9,527 |
|
|
$ |
1,380 |
|
|
$ |
106,435 |
|
Operating margin |
|
10 |
% |
|
|
|
|
|
|
|
|
|
|
30 |
% |
||||||||
DYNATRACE, INC. GAAP to Non-GAAP Reconciliations (Unaudited - In thousands, except per share data) |
|||||||
|
Three Months Ended September 30, |
||||||
|
|
2024 |
|
|
|
2023 |
|
Non-GAAP net income: |
|
|
|
||||
Net income |
$ |
44,008 |
|
|
$ |
35,809 |
|
Income tax expense |
|
13,830 |
|
|
|
4,894 |
|
Non-GAAP effective cash tax |
|
(30,856 |
) |
|
|
(21,928 |
) |
Interest income, net |
|
(12,850 |
) |
|
|
(8,509 |
) |
Cash received from interest, net |
|
12,848 |
|
|
|
8,980 |
|
Share-based compensation |
|
71,703 |
|
|
|
57,958 |
|
Employer payroll taxes on employee stock transactions |
|
2,771 |
|
|
|
2,301 |
|
Amortization of intangibles |
|
9,169 |
|
|
|
9,527 |
|
Transaction, restructuring, and other |
|
— |
|
|
|
1,380 |
|
Loss on currency translation |
|
2,038 |
|
|
|
3,075 |
|
Non-GAAP net income |
$ |
112,661 |
|
|
$ |
93,487 |
|
|
|
|
|
||||
Share count: |
|
|
|
||||
Weighted-average shares outstanding - basic |
|
298,089 |
|
|
|
293,654 |
|
Weighted-average shares outstanding - diluted |
|
301,373 |
|
|
|
297,794 |
|
|
|
|
|
||||
Shares used in non-GAAP per share calculations: |
|
|
|
||||
Weighted-average shares outstanding - basic |
|
298,089 |
|
|
|
293,654 |
|
Weighted-average shares outstanding - diluted |
|
301,373 |
|
|
|
297,794 |
|
|
|
|
|
||||
Non-GAAP net income per share: |
|
|
|
||||
Net income per share - basic |
$ |
0.15 |
|
|
$ |
0.12 |
|
Net income per share - diluted |
$ |
0.15 |
|
|
$ |
0.12 |
|
Non-GAAP net income per share - basic |
$ |
0.38 |
|
|
$ |
0.32 |
|
Non-GAAP net income per share - diluted |
$ |
0.37 |
|
|
$ |
0.31 |
|
|
Three Months Ended September 30, |
||||||
|
|
2024 |
|
|
|
2023 |
|
Free cash flow: |
|
|
|
||||
Net cash provided by operating activities |
$ |
23,650 |
|
|
$ |
36,877 |
|
Purchase of property and equipment |
|
(3,512 |
) |
|
|
(2,750 |
) |
Capitalized software additions |
|
— |
|
|
|
— |
|
Free cash flow |
$ |
20,138 |
|
|
$ |
34,127 |
|
DYNATRACE, INC. GAAP to Non-GAAP Reconciliations (Unaudited - In thousands, except percentages) |
|||||||||||||||||||||||
|
Six Months Ended September 30, 2024 |
||||||||||||||||||||||
|
GAAP |
|
Share-based compensation |
|
Employer payroll taxes on employee stock transactions |
|
Amortization of intangibles |
|
Transaction, restructuring, and other |
|
Non-GAAP |
||||||||||||
Non-GAAP income from operations: |
|||||||||||||||||||||||
Cost of revenue |
$ |
152,537 |
|
$ |
(17,444 |
) |
|
$ |
(1,317 |
) |
$ |
(8,772 |
) |
|
$ |
— |
|
$ |
125,004 |
|
|||
Gross profit |
|
664,812 |
|
|
|
17,444 |
|
|
|
1,317 |
|
|
|
8,772 |
|
|
|
— |
|
|
|
692,345 |
|
Gross margin |
|
81 |
% |
|
|
|
|
|
|
|
|
|
|
85 |
% |
||||||||
Research and development |
|
182,944 |
|
|
|
(48,187 |
) |
|
|
(3,714 |
) |
|
|
— |
|
|
|
(3 |
) |
|
|
131,040 |
|
Sales and marketing |
|
289,330 |
|
|
|
(36,772 |
) |
|
|
(2,233 |
) |
|
|
— |
|
|
|
|
|
250,325 |
|
||
General and administrative |
|
93,931 |
|
|
|
(26,957 |
) |
|
|
(916 |
) |
|
|
— |
|
|
|
3 |
|
|
|
66,061 |
|
Amortization of other intangibles |
|
9,552 |
|
|
|
— |
|
|
|
— |
|
|
|
(9,552 |
) |
|
|
— |
|
|
|
— |
|
Income from operations |
$ |
89,055 |
|
|
$ |
129,360 |
|
|
$ |
8,180 |
|
|
$ |
18,324 |
|
|
$ |
— |
|
|
$ |
244,919 |
|
Operating margin |
|
11 |
% |
|
|
|
|
|
|
|
|
|
|
30 |
% |
||||||||
|
Six Months Ended September 30, 2023 |
||||||||||||||||||||||
|
GAAP |
|
Share-based compensation |
|
Employer payroll taxes on employee stock transactions |
|
Amortization of intangibles |
|
Transaction, restructuring, and other |
|
Non-GAAP |
||||||||||||
Non-GAAP income from operations: |
|||||||||||||||||||||||
Cost of revenue |
$ |
126,711 |
|
|
$ |
(12,685 |
) |
|
$ |
(1,232 |
) |
|
$ |
(7,798 |
) |
|
$ |
— |
|
|
$ |
104,996 |
|
Gross profit |
|
557,875 |
|
|
|
12,685 |
|
|
|
1,232 |
|
|
|
7,798 |
|
|
|
— |
|
|
|
579,590 |
|
Gross margin |
|
81 |
% |
|
|
|
|
|
|
|
|
|
|
85 |
% |
||||||||
Research and development |
|
140,366 |
|
|
|
(31,441 |
) |
|
|
(3,195 |
) |
|
|
— |
|
|
|
— |
|
|
|
105,730 |
|
Sales and marketing |
|
252,722 |
|
|
|
(32,876 |
) |
|
|
(2,312 |
) |
|
|
— |
|
|
|
198 |
|
|
|
217,732 |
|
General and administrative |
|
83,843 |
|
|
|
(21,474 |
) |
|
|
(765 |
) |
|
|
— |
|
|
|
(3,986 |
) |
|
|
57,618 |
|
Amortization of other intangibles |
|
11,387 |
|
|
|
— |
|
|
|
— |
|
|
|
(11,387 |
) |
|
|
— |
|
|
|
— |
|
Income from operations |
$ |
69,557 |
|
|
$ |
98,476 |
|
|
$ |
7,504 |
|
|
$ |
19,185 |
|
|
$ |
3,788 |
|
|
$ |
198,510 |
|
Operating margin |
|
10 |
% |
|
|
|
|
|
|
|
|
|
|
29 |
% |
||||||||
DYNATRACE, INC. GAAP to Non-GAAP Reconciliations (Unaudited - In thousands, except per share data) |
|||||||
|
Six Months Ended September 30, |
||||||
|
|
2024 |
|
|
|
2023 |
|
Non-GAAP net income: |
|
|
|
||||
Net income |
$ |
82,628 |
|
|
$ |
73,997 |
|
Income tax expense |
|
27,979 |
|
|
|
8,392 |
|
Non-GAAP effective cash tax |
|
(57,950 |
) |
|
|
(40,470 |
) |
Interest income, net |
|
(25,625 |
) |
|
|
(15,655 |
) |
Cash received from interest, net |
|
24,618 |
|
|
|
14,492 |
|
Share-based compensation |
|
129,360 |
|
|
|
98,476 |
|
Employer payroll taxes on employee stock transactions |
|
8,180 |
|
|
|
7,504 |
|
Amortization of intangibles |
|
18,324 |
|
|
|
19,185 |
|
Transaction, restructuring, and other |
|
— |
|
|
|
3,788 |
|
Loss on currency translation |
|
4,073 |
|
|
|
2,823 |
|
Non-GAAP net income |
$ |
211,587 |
|
|
$ |
172,532 |
|
|
|
|
|
||||
Share count: |
|
|
|
||||
Weighted-average shares outstanding - basic |
|
297,736 |
|
|
|
292,504 |
|
Weighted-average shares outstanding - diluted |
|
301,714 |
|
|
|
297,492 |
|
|
|
|
|
||||
Shares used in non-GAAP per share calculations: |
|
|
|
||||
Weighted-average shares outstanding - basic |
|
297,736 |
|
|
|
292,504 |
|
Weighted-average shares outstanding - diluted |
|
301,714 |
|
|
|
297,492 |
|
|
|
|
|
||||
Non-GAAP net income per share: |
|
|
|
||||
Net income per share - basic |
$ |
0.28 |
|
|
$ |
0.25 |
|
Net income per share - diluted |
$ |
0.27 |
|
|
$ |
0.25 |
|
Non-GAAP net income per share - basic |
$ |
0.71 |
|
|
$ |
0.59 |
|
Non-GAAP net income per share - diluted |
$ |
0.70 |
|
|
$ |
0.58 |
|
|
Six Months Ended September 30, |
||||||
|
|
2024 |
|
|
|
2023 |
|
Free cash flow: |
|
|
|
||||
Net cash provided by operating activities |
$ |
254,391 |
|
|
$ |
170,780 |
|
Purchase of property and equipment |
|
(6,871 |
) |
|
|
(13,017 |
) |
Capitalized software additions |
$ |
— |
|
|
|
— |
|
Free cash flow |
$ |
247,520 |
|
|
$ |
157,763 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20241107670760/en/