Exceeds high end of guidance across all Q2
metrics; raises FY'24 guidance
Delivers ARR growth of 24% year-over-year on
a constant currency basis
Achieves GAAP Operating Margin of 10% and
Non-GAAP Operating Margin of 30%
Dynatrace (NYSE: DT), the leader in unified observability and
security, today announced financial results for the second quarter
of fiscal 2024 ended September 30, 2023.
“Dynatrace’s second quarter results exceeded the high end of
guidance across all of our key metrics, demonstrating strong top
and bottom-line performance," said Rick McConnell, Chief Executive
Officer. “These results are a testament to the ongoing durability
of demand for observability and application security. Our unified
platform, AI leadership, and automation differentiate us from our
competitors and position us well for continued growth and success.
Given the strength of these results, and our visibility into the
second half of the year, we are raising fiscal 2024 guidance across
the board."
Second Quarter Fiscal 2024 and Other Recent Business
Highlights:
All growth rates are compared to the second quarter of fiscal
2023, unless otherwise noted.
Financial Highlights:
- Total ARR of $1,344 million, up 24% on a constant currency
basis
- Total Revenue of $352 million, up 24% on a constant currency
basis
- Subscription Revenue of $334 million, up 26% on a constant
currency basis
- GAAP Income from Operations of $35 million and Non-GAAP Income
from Operations of $106 million
- GAAP EPS of $0.12 and Non-GAAP EPS of $0.31, both on a dilutive
basis
Business Highlights:
- Platform innovation: We added Dynatrace® Security
Analytics to our existing application security capabilities,
enabling customers to identify cyber-attacks, assess their impact,
find the indicators of compromise (IOCs) and automatically trigger
a response. We also closed the acquisition of Rookout and are
working to integrate their live debugging technology into the
Dynatrace platform to enable development teams to improve the
quality and security of their releases.
- GSI partnerships evolution: We continue to build
momentum with key strategic global system integrators (GSIs). We
signed a global strategic alliance agreement with Kyndryl to
enhance our joint capabilities for cloud, application
modernization, and AIOps offerings. We have also entered into a
strategic partnership with Accenture bringing together Dynatrace’s
unified platform with advanced AIOps and intelligent automation
with Accenture’s global professional services capabilities and
cloud modernization delivery experience.
- Hyperscalers expansion: We continue to expand our
footprint with the hyperscalers, adding regions in São Paulo,
Sydney, and Zurich, for a total of 13 regions globally. We also
announced the availability of the latest Dynatrace innovations,
including the Grail™ data lakehouse, AppEngine, and
AutomationEngine, for customers running the platform on Microsoft
Azure.
- Go-to-market momentum: We hosted our annual Innovate
event series in LATAM, APAC, and EMEA, with more than 1,200
customers, prospects, and partners attending in person and more
than 1,300 attending virtually. These events complement our annual
Perform customer conference being held in Las Vegas in January, and
they aim to build pipeline as well as customer success as we head
into the second half of fiscal 2024.
- ESG progress: We published our inaugural Global Impact
Report, which underscores the company’s commitment to
understanding, measuring, and communicating progress on
environmental, social, and governance (ESG) topics that are
important to Dynatrace stakeholders. The report details progress
related to Dynatrace’s three ESG pillars - sustaining the
environment; people, culture, and community; and governance and
ethics. As part of the report, we disclosed our baseline greenhouse
gas emissions data for the first time and provided an expanded
scope of data on Diversity, Equity, Inclusion and Belonging
(DEIB).
Second Quarter 2024 Financial
Highlights
(Unaudited – In thousands,
except per share data)
Three Months Ended September
30,
2023
2022
Key Operating Metric:
Annual recurring revenue
$
1,343,530
$
1,064,951
Year-over-Year Increase
26
%
Year-over-Year Increase - constant
currency (*)
24
%
Revenue:
Total revenue
$
351,700
$
279,326
Year-over-Year Increase
26
%
Year-over-Year Increase - constant
currency (*)
24
%
Subscription revenue
$
334,497
$
261,306
Year-over-Year Increase
28
%
Year-over-Year Increase - constant
currency (*)
26
%
GAAP Financial Measures:
GAAP income from operations
$
35,269
$
20,399
GAAP operating margin
10
%
7
%
GAAP net income
$
35,809
$
10,526
GAAP net income per share - diluted
$
0.12
$
0.04
GAAP shares outstanding - diluted
297,794
290,601
Net cash provided by operating
activities
$
36,877
$
29,398
Non-GAAP Financial Measures:
Non-GAAP income from operations (*)
$
106,435
$
72,888
Non-GAAP operating margin (*)
30
%
26
%
Non-GAAP net income (*)
$
93,487
$
64,454
Non-GAAP net income per share - diluted
(*)
$
0.31
$
0.22
Non-GAAP shares outstanding - diluted
(*)
297,794
290,601
Free Cash Flow (*)
$
34,127
$
25,067
* Use of Non-GAAP Financial Measures
In our earnings press releases, conference calls, slide
presentations, and webcasts, we may use or discuss non-GAAP
financial measures, as defined by Regulation G. The GAAP financial
measure most directly comparable to each non-GAAP financial measure
used or discussed, and a reconciliation of the differences between
each non-GAAP financial measure and the comparable GAAP financial
measure, are included in this press release after the consolidated
financial statements. Our earnings press releases containing such
non-GAAP reconciliations can be found in the Investor Relations
section of our website at ir.dynatrace.com.
Financial Outlook
Based on information available as of November 2, 2023, Dynatrace
is issuing guidance for the third quarter and updating guidance for
full year fiscal 2024 in the table below.
This guidance reflects foreign exchange rates as of September
30, 2023. We now expect foreign exchange to be a headwind of
approximately $5 million on ARR and a tailwind of approximately $7
million on revenue for fiscal 2024. Given recent strengthening in
the U.S. dollar, this represents an incremental headwind of
approximately $16 million to ARR and $8 million to revenue for the
full year when compared to our prior guidance.
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 2023.
(In millions, except per share data)
Q3 Fiscal 2024
Guidance
Total revenue
$356 - $359
As reported
20% - 21%
Constant currency
19% - 20%
Subscription revenue
$337 - $340
As reported
21% - 22%
Constant currency
20% - 21%
Non-GAAP income from operations
$94 - $97
Non-GAAP operating margin
26.5% - 27%
Non-GAAP net income
$82 - $85
Non-GAAP net income per diluted share
$0.27 - $0.28
Diluted weighted average shares
outstanding
299 - 300
(In millions, except per share data)
Current Guidance
Fiscal 2024
Prior Guidance
Fiscal 2024*
Guidance Change
at Midpoint
Total ARR
$1,480 - $1,490
$1,475 - $1,490
$3
As reported
19% - 20%
18% - 20%
50 bps
Constant currency
19% - 20%
18% - 19%
100 bps
Total revenue
$1,409 - $1,419
$1,400 - $1,415
$7
As reported
22%
21% - 22%
50 bps
Constant currency
21% - 22%
20% - 21%
100 bps
Subscription revenue
$1,334 - $1,344
$1,326 - $1,341
$6
As reported
23% - 24%
22% - 24%
50 bps
Constant currency
22% - 23%
21% - 22%
100 bps
Non-GAAP income from operations
$377 - $386
$357 - $367
$20
Non-GAAP operating margin
27%
25.5% - 26%
125 bps
Non-GAAP net income
$328 - $337
$309 - $320
$18
Non-GAAP net income per diluted share
$1.09 - $1.12
$1.03 - $1.06
$0.06
Diluted weighted average shares
outstanding
300 - 301
300 - 301
—
Free cash flow
$313 - $320
$303 - $312
$9
Free cash flow margin
22% - 23%
22%
50 bps
*Prior guidance was issued on August 2, 2023.
Reconciliations of 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 on a forward-looking basis
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.
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 2, 2023. To access the
conference call from the U.S. and Canada, dial (866) 405-1247, or
internationally, dial (201) 689-8045 with conference ID# 13741555.
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 November 16, 2023, by dialing (877) 660-6853
from the U.S. or Canada, or for international callers by dialing
(201) 612-7415 and entering conference ID# 13741555. 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 & Key Metrics
In addition to disclosing financial measures prepared in
accordance with GAAP, this press release and the accompanying
tables contain certain non-GAAP financial measures.
Non-GAAP financial measures do not have any standardized meaning
and are therefore unlikely to be comparable to similarly titled
measures presented by other companies. Dynatrace considers these
non-GAAP financial measures to be important because they provide
useful indicators of its performance and liquidity measures. These
are key measures used by our management and board of directors to
understand and evaluate our core operating performance and trends,
to prepare and approve our annual budget and to develop short and
long-term operational plans. In addition, investors often use
similar measures to evaluate the performance of a company. Non-GAAP
financial measures are presented for supplemental informational
purposes only for understanding the company’s operating
performance. The non-GAAP financial measures should not be
considered a substitute for financial information presented in
accordance with GAAP, and may be different from non-GAAP financial
measures presented by other companies. The GAAP financial measure
most directly comparable to each non-GAAP financial measure used or
discussed, and a reconciliation of the differences between each
non-GAAP financial measure and the comparable GAAP financial
measure, are included in this press release after the consolidated
financial statements.
Dynatrace presents constant currency amounts for Revenue and
Annual Recurring Revenue to provide a framework for assessing how
our underlying businesses performed excluding the effect of foreign
currency rate fluctuations. Dynatrace provides this non-GAAP
financial information to aid investors in better understanding our
performance.
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 Total 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.
Dollar-Based Gross Retention Rate is defined as the ARR
from all customers as of one year prior, less contraction and
customer churn, divided by the total ARR from one year prior. This
metric reflects the percentage of ARR from all customers as of the
year prior that has been retained.
Dollar-Based Net Retention Rate (NRR) is defined as the
Dynatrace ARR at the end of a reporting period for the cohort of
Dynatrace accounts as of one year prior to the date of calculation,
divided by the Dynatrace ARR one year prior to the date of
calculation for that same cohort. Our dollar-based net retention
rate reflects customer renewals, expansion, contraction and churn,
and excludes the benefit of Dynatrace ARR resulting from the
conversion of Classic products to the Dynatrace platform. Effective
the first quarter of fiscal year 2023, we began to exclude the
headwind associated with the Dynatrace perpetual license ARR given
diminishing impact of perpetual license ARR. We believe that
eliminating the perpetual license headwind results in a
dollar-based net retention rate metric that better reflects
Dynatrace’s ability to expand existing customer relationships.
Dollar-based net retention rate is presented on a constant currency
basis.
Dynatrace Customers are defined as accounts, as
identified by a unique account identifier, that generate at least
$10,000 of Dynatrace ARR as of the reporting date. In infrequent
cases, a single large organization may comprise multiple customer
accounts when there are distinct divisions, departments or
subsidiaries that operate and make purchasing decisions
independently from the parent organization. In cases where multiple
customer accounts exist under a single organization, each customer
account is counted separately based on a mutually exclusive
accounting of ARR.
Free Cash Flow is defined as net cash provided by (used
in) operating activities less capital expenditures (reflected as
"purchase of property and equipment" in our financial
statements).
About Dynatrace
Dynatrace exists to make the world's software work perfectly.
Our unified platform combines broad and deep observability and
continuous runtime application security with the most advanced
AIOps 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 regarding the ongoing durability of demand for
observability and application security, the company's positioning
for growth and success, the integration of Rookout's technology,
and statements regarding management’s expectations related to
partnerships, strategic alliances, the impact of go-to-market
events, and business outlook, including our financial guidance for
the third quarter and full year of fiscal 2024. 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 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 Form 10-Q filed on November 2, 2023 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.
DYNATRACE, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(Unaudited – In thousands,
except per share data)
Three Months Ended
September 30,
Six Months Ended September
30,
2023
2022
2023
2022
Revenue:
Subscription
$
334,497
$
261,306
$
650,951
$
510,864
Service
17,203
18,020
33,635
35,735
Total revenue
351,700
279,326
684,586
546,599
Cost of revenue:
Cost of subscription
44,792
35,764
87,696
68,502
Cost of service
15,675
16,052
31,217
31,220
Amortization of acquired technology
3,900
3,888
7,798
7,780
Total cost of revenue
64,367
55,704
126,711
107,502
Gross profit
287,333
223,622
557,875
439,097
Operating expenses:
Research and development (1)
74,084
52,905
140,366
102,316
Sales and marketing (1)
127,605
105,348
252,722
211,021
General and administrative (1)
44,749
38,397
83,843
73,131
Amortization of other intangibles
5,627
6,573
11,387
13,146
Restructuring and other
(1
)
—
—
(10
)
Total operating expenses
252,064
203,223
488,318
399,604
Income from operations
35,269
20,399
69,557
39,493
Interest income (expense), net
8,509
(513
)
15,655
(2,688
)
Other expense, net
(3,075
)
(1,214
)
(2,823
)
(3,464
)
Income before income taxes
40,703
18,672
82,389
33,341
Income tax expense
(4,894
)
(8,146
)
(8,392
)
(20,701
)
Net income
$
35,809
$
10,526
$
73,997
$
12,640
Net income per share:
Basic
$
0.12
$
0.04
$
0.25
$
0.04
Diluted
$
0.12
$
0.04
$
0.25
$
0.04
Weighted average shares outstanding:
Basic
293,654
287,190
292,504
286,699
Diluted
297,794
290,601
297,492
290,433
(1) Prior period results have been updated
to allocate depreciation expense to operating expenses based upon
location and headcount.
UNAUDITED SHARE-BASED
COMPENSATION
Three Months Ended
September 30,
Six Months Ended September
30,
2023
2022
2023
2022
Cost of revenue
$
7,197
$
5,235
$
12,685
$
9,125
Research and development
18,177
10,997
31,441
18,282
Sales and marketing
18,877
13,938
32,876
24,014
General and administrative
13,707
10,484
21,474
17,928
Total share-based compensation
$
57,958
$
40,654
$
98,476
$
69,349
DYNATRACE, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands, except share
and per share data)
September 30, 2023
March 31, 2023
(unaudited)
Assets
Current assets:
Cash and cash equivalents
$
701,524
$
555,348
Accounts receivable, net
262,733
442,518
Deferred commissions, current
84,181
83,029
Prepaid expenses and other current
assets
53,148
37,289
Total current assets
1,101,586
1,118,184
Property and equipment, net
46,946
53,576
Operating lease right-of-use assets,
net
67,367
68,074
Goodwill
1,309,549
1,281,812
Other intangible assets, net
52,144
63,599
Deferred tax assets, net
113,827
79,822
Deferred commissions, non-current
74,580
86,232
Other assets
16,161
14,048
Total assets
$
2,782,160
$
2,765,347
Liabilities and shareholders'
equity
Current liabilities:
Accounts payable
$
15,842
$
21,953
Accrued expenses, current
146,775
188,380
Deferred revenue, current
677,837
811,058
Operating lease liabilities, current
15,912
15,652
Total current liabilities
856,366
1,037,043
Deferred revenue, non-current
33,586
34,423
Accrued expenses, non-current
30,392
29,212
Operating lease liabilities,
non-current
59,857
59,520
Deferred tax liabilities
305
280
Total liabilities
980,506
1,160,478
Shareholders' equity:
Common shares, $0.001 par value,
600,000,000 shares authorized, 294,293,922 and 290,411,108 shares
issued and outstanding at September 30, 2023 and March 31, 2023,
respectively
294
290
Additional paid-in capital
2,114,472
1,989,797
Accumulated deficit
(279,392
)
(353,389
)
Accumulated other comprehensive loss
(33,720
)
(31,829
)
Total shareholders' equity
1,801,654
1,604,869
Total liabilities and shareholders'
equity
$
2,782,160
$
2,765,347
DYNATRACE, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited – In
thousands)
Six Months Ended
September 30,
2023
2022
Cash flows from operating
activities:
Net income
$
73,997
$
12,640
Adjustments to reconcile net income to
cash provided by operations:
Depreciation
7,890
5,746
Amortization
19,207
21,068
Share-based compensation
98,476
69,349
Deferred income taxes
(35,166
)
—
Other
3,019
4,484
Net change in operating assets and
liabilities:
Accounts receivable
177,689
153,512
Deferred commissions
8,978
(3,618
)
Prepaid expenses and other assets
(22,909
)
25,128
Accounts payable and accrued expenses
(33,246
)
(14,428
)
Operating leases, net
1,333
44
Deferred revenue
(128,488
)
(101,429
)
Net cash provided by operating
activities
170,780
172,496
Cash flows from investing
activities:
Purchase of property and equipment
(13,017
)
(11,237
)
Acquisition of a business, net of cash
acquired
(32,391
)
—
Net cash used in investing activities
(45,408
)
(11,237
)
Cash flows from financing
activities:
Repayment of term loans
—
(60,000
)
Proceeds from employee stock purchase
plan
9,584
8,627
Proceeds from exercise of stock
options
16,619
4,332
Equity repurchases
—
(15
)
Net cash provided by (used in) financing
activities
26,203
(47,056
)
Effect of exchange rates on cash and cash
equivalents
(5,399
)
(13,740
)
Net increase in cash and cash
equivalents
146,176
100,463
Cash and cash equivalents, beginning of
period
555,348
462,967
Cash and cash equivalents, end of
period
$
701,524
$
563,430
DYNATRACE, INC.
GAAP to Non-GAAP
Reconciliations
(Unaudited - In thousands,
except percentages)
Three Months Ended September
30, 2023
GAAP
Share-based
compensation
Employer payroll taxes on
employee stock transactions
Amortization of other
intangibles
Restructuring &
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
44,749
(13,707
)
(299
)
—
(1,579
)
29,164
Amortization of other intangibles
5,627
—
—
(5,627
)
—
—
Restructuring and other
(1
)
—
—
—
1
—
Income from operations
$
35,269
$
57,958
$
2,301
$
9,527
$
1,380
$
106,435
Operating margin
10
%
30
%
Three Months Ended September
30, 2022
GAAP
Share-based
compensation
Employer payroll taxes on
employee stock transactions
Amortization of other
intangibles
Restructuring &
other
Non-GAAP
Non-GAAP income from
operations:
Cost of revenue
$
55,704
$
(5,235
)
$
(128
)
$
(3,888
)
$
(30
)
$
46,423
Gross profit
223,622
5,235
128
3,888
30
232,903
Gross margin
80
%
83
%
Research and development (1)
52,905
(10,997
)
(381
)
—
—
41,527
Sales and marketing (1)
105,348
(13,938
)
(300
)
—
—
91,110
General and administrative (1)
38,397
(10,484
)
(231
)
—
(304
)
27,378
Amortization of other intangibles
6,573
—
—
(6,573
)
—
—
Restructuring and other
—
—
—
—
—
—
Income from operations
$
20,399
$
40,654
$
1,040
$
10,461
$
334
$
72,888
Operating margin
7
%
26
%
(1) Prior period results have been updated
to allocate depreciation expense to operating expenses based upon
location and headcount.
DYNATRACE, INC.
GAAP to Non-GAAP
Reconciliations
(Unaudited - In thousands,
except per share data)
Three Months Ended September
30,
2023
2022
Non-GAAP net income:
Net income
$
35,809
$
10,526
Income tax expense
4,894
8,146
Non-GAAP effective cash tax
(21,928
)
(7,967
)
Interest (income) expense, net
(8,509
)
513
Cash received from (paid for) interest,
net
8,980
(467
)
Share-based compensation
57,958
40,654
Employer payroll taxes on employee stock
transactions
2,301
1,040
Amortization of other intangibles
5,627
6,573
Amortization of acquired technology
3,900
3,888
Transaction, restructuring, and other
1,380
334
Loss on currency translation
3,075
1,214
Non-GAAP net income
$
93,487
$
64,454
Share count:
Weighted-average shares outstanding -
basic
293,654
287,190
Weighted-average shares outstanding -
diluted
297,794
290,601
Shares used in non-GAAP per share
calculations:
Weighted-average shares outstanding -
basic
293,654
287,190
Weighted-average shares outstanding -
diluted
297,794
290,601
Non-GAAP net income per share:
Net income per share - basic
$
0.12
$
0.04
Net income per share - diluted
$
0.12
$
0.04
Non-GAAP net income per share - basic
$
0.32
$
0.22
Non-GAAP net income per share -
diluted
$
0.31
$
0.22
Three Months Ended September
30,
2023
2022
Free Cash Flow:
Net cash provided by operating
activities
$
36,877
$
29,398
Purchase of property and equipment
(2,750
)
(4,331
)
Free Cash Flow
$
34,127
$
25,067
DYNATRACE, INC.
GAAP to Non-GAAP
Reconciliations
(Unaudited - In thousands,
except percentages)
Six Months Ended September 30,
2023
GAAP
Share-based
compensation
Employer payroll taxes on
employee stock transactions
Amortization of other
intangibles
Restructuring &
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
)
—
—
Restructuring and other
—
—
—
—
—
—
Income from operations
$
69,557
$
98,476
$
7,504
$
19,185
$
3,788
$
198,510
Operating margin
10
%
29
%
Six Months Ended September 30,
2022
GAAP
Share-based
compensation
Employer payroll taxes on
employee stock transactions
Amortization of other
intangibles
Restructuring &
other
Non-GAAP
Non-GAAP income from
operations:
Cost of revenue
$
107,502
$
(9,125
)
$
(412
)
$
(7,780
)
$
(380
)
$
89,805
Gross profit
439,097
9,125
412
7,780
380
456,794
Gross margin
80
%
84
%
Research and development (1)
102,316
(18,282
)
(930
)
—
—
83,104
Sales and marketing (1)
211,021
(24,014
)
(898
)
—
—
186,109
General and administrative (1)
73,131
(17,928
)
(442
)
—
(383
)
54,378
Amortization of other intangibles
13,146
—
—
(13,146
)
—
—
Restructuring and other
(10
)
—
—
—
10
—
Income from operations
$
39,493
$
69,349
$
2,682
$
20,926
$
753
$
133,203
Operating margin
7
%
24
%
(1) Prior period results have been updated
to allocate depreciation expense to operating expenses based upon
location and headcount.
DYNATRACE, INC.
GAAP to Non-GAAP
Reconciliations
(Unaudited - In thousands,
except per share data)
Six Months Ended September
30,
2023
2022
Non-GAAP net income:
Net income
$
73,997
$
12,640
Income tax expense
8,392
20,701
Non-GAAP effective cash tax
(40,470
)
(14,374
)
Interest (income) expense, net
(15,655
)
2,688
Cash received from (paid for) interest,
net
14,492
(2,533
)
Share-based compensation
98,476
69,349
Employer payroll taxes on employee stock
transactions
7,504
2,682
Amortization of other intangibles
11,387
13,146
Amortization of acquired technology
7,798
7,780
Transaction, restructuring, and other
3,788
753
Loss on currency translation
2,823
3,464
Non-GAAP net income
$
172,532
$
116,296
Share count:
Weighted-average shares outstanding -
basic
292,504
286,699
Weighted-average shares outstanding -
diluted
297,492
290,433
Shares used in non-GAAP per share
calculations:
Weighted-average shares outstanding -
basic
292,504
286,699
Weighted-average shares outstanding -
diluted
297,492
290,433
Non-GAAP net income per share:
Net income per share - basic
$
0.25
$
0.04
Net income per share - diluted
$
0.25
$
0.04
Non-GAAP net income per share - basic
$
0.59
$
0.41
Non-GAAP net income per share -
diluted
$
0.58
$
0.40
Six Months Ended September
30,
2023
2022
Free Cash Flow:
Net cash provided by operating
activities
$
170,780
$
172,496
Purchase of property and equipment
(13,017
)
(11,237
)
Free Cash Flow
$
157,763
$
161,259
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231102761621/en/
Investor Contact: Noelle Faris VP, Investor Relations
Noelle.Faris@dynatrace.com
Media Relations: Jerome Stewart VP, Marketing
Jerome.Stewart@dynatrace.com
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