Exceeds high end of guidance across all Q3
metrics
Delivers ARR growth of 21% year-over-year on
a constant currency basis
Achieves GAAP Operating Margin of 10% and
Non-GAAP Operating Margin of 29%
Dynatrace (NYSE: DT), the leader in unified observability and
security, today announced financial results for the third quarter
of fiscal 2024 ended December 31, 2023.
"Our Q3 results of balanced growth, profitability, and free cash
flow reflect our continued ability to execute successfully in a
dynamic market,” said Rick McConnell, Chief Executive Officer. “As
customers look to address the business challenges of modern cloud
environments, they are coming to Dynatrace for a more comprehensive
observability architecture that enables them to drive innovation,
optimize costs, and mitigate risk. Our contextual analytics,
hypermodal AI, and automation differentiate the Dynatrace platform
in the market and provide us with a powerful advantage to capture
the opportunity ahead of us.”
Third Quarter Fiscal 2024 and Other Recent Business
Highlights:
All growth rates are compared to the third quarter of fiscal
2023, unless otherwise noted.
Financial Highlights:
- Total ARR of $1,425 million, an increase of 23%, or 21% on a
constant currency basis
- Total Revenue of $365 million, an increase of 23%, or 21% on a
constant currency basis
- Subscription Revenue of $348 million, an increase of 25%, or
23% on a constant currency basis
- GAAP Income from Operations of $36 million, and Non-GAAP Income
from Operations of $105 million
- GAAP EPS of $0.14, and Non-GAAP EPS of $0.32, both on a
dilutive basis
Business Highlights:
- Platform innovation: Dynatrace recently hosted over
2,000 in-person attendees and over 4,000 virtual attendees for
Perform 2024, the company's annual customer conference. As part of
showcasing the value and innovation of the Dynatrace® platform, the
company announced the following current and planned enhancements:
- Dynatrace AI Observability
provides insights into all layers of AI-powered applications,
including large language models (LLMs) and generative AI solutions,
to manage cost, experience, reliability, and security.
- Dynatrace OpenPipeline empowers
customers with full visibility of data at the point of ingest into
the Dynatrace platform and evaluates data streams five to ten times
faster than legacy technologies, based on our testing.
- Dynatrace Data Observability helps
ensure data collected via external sources, such as OpenTelemetry
and Dynatrace APIs, is reliable and accurate.
- Runecast acquisition: On January 29, 2024, we announced
the signing of a definitive agreement to acquire Runecast, an
AI-powered security and compliance solution provider. This planned
addition to the Dynatrace platform will enable customers to
proactively prevent cloud misconfigurations and compliance issues
with automated, AI-driven, real-time vulnerability
assessments.
- Extended partnerships: Dynatrace achieved the Amazon Web
Services (AWS) Security Competency, reflecting our deep technical
expertise in helping customers proactively remediate
vulnerabilities and defend against threats across their AWS
environments. The AWS Security Competency helps customers select
validated AWS Partner Network members who provide technology that
helps organizations adopt, develop, and deploy security solutions
on AWS.
- Industry and customer recognition: Dynatrace was named a
Leader in both the Cloud-Native Observability and Security
quadrants in the 2023 ISG Provider Lens, Multi-Public Cloud
Solutions Report, highlighting Dynatrace’s innovation and
go-to-market success in the converging spaces of observability and
security. Also, Dynatrace was recognized as a Gartner® Peer
Insights™ Customers’ Choice in the 2023 Voice of the Customer for
Application Performance Monitoring and Observability report for the
fifth consecutive year.1 In addition, Dynatrace won the 2023
Silverlinings Innovation Award for Best Cloud AI Solution, for the
platform’s Davis® AI and its proven ability to boost the
performance and security of software environments.
- Workplace recognition: We were named one of the Best
Places to Work in Boston, San Francisco, and Colorado by BuiltIn; a
Great Place to Work® in 13 of the countries where we operate; one
of the Top 10 Best Workplaces in Tech in Austria by 2024 Great
Place to Work®; and a Top Company in Austria by Kununu.
____________________ 1 Gartner, Voice of the Customer for
Application Performance Monitoring and Observability, 29 December
2023.
Gartner® and Gartner Peer Insights™ are trademarks of Gartner,
Inc. and/or its affiliates. All rights reserved.
Gartner® Peer Insights™ content consists of the opinions of
individual end users based on their own experiences, and should not
be construed as statements of fact, nor do they represent the views
of Gartner or its affiliates. Gartner does not endorse any vendor,
product or service depicted in this content nor makes any
warranties, expressed or implied, with respect to this content,
about its accuracy or completeness, including any warranties of
merchantability or fitness for a particular purpose.
Third Quarter 2024 Financial
Highlights
(Unaudited – In thousands,
except per share data)
Three Months Ended
December 31,
2023
2022
Key Operating Metric:
Annual recurring revenue
$
1,425,284
$
1,162,591
Year-over-Year Increase
23
%
Year-over-Year Increase - constant
currency (*)
21
%
Revenue:
Total revenue
$
365,096
$
297,456
Year-over-Year Increase
23
%
Year-over-Year Increase - constant
currency (*)
21
%
Subscription revenue
$
348,294
$
279,152
Year-over-Year Increase
25
%
Year-over-Year Increase - constant
currency (*)
23
%
GAAP Financial Measures:
GAAP income from operations
$
35,720
$
33,887
GAAP operating margin
10
%
11
%
GAAP net income
$
42,691
$
15,026
GAAP net income per share - diluted
$
0.14
$
0.05
GAAP shares outstanding - diluted
299,246
291,228
Net cash provided by operating
activities
$
75,657
$
61,962
Non-GAAP Financial Measures:
Non-GAAP income from operations (*)
$
104,636
$
80,653
Non-GAAP operating margin (*)
29
%
27
%
Non-GAAP net income (*)
$
96,184
$
73,469
Non-GAAP net income per share - diluted
(*)
$
0.32
$
0.25
Non-GAAP shares outstanding - diluted
(*)
299,246
291,228
Free Cash Flow (*)
$
67,357
$
57,574
* 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 February 8, 2024, Dynatrace
is issuing guidance for the fourth quarter and updating guidance
for full year fiscal 2024 in the table below.
This guidance reflects foreign exchange rates as of January 31,
2024. We now expect foreign exchange to be a tailwind of
approximately $10 million on ARR and approximately $13 million on
revenue for fiscal 2024. Given recent weakening in the U.S. dollar,
this represents an incremental tailwind of approximately $15
million to ARR and $6 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 fourth quarter and
full year of fiscal 2023.
(In millions, except per share data)
Q4 Fiscal 2024
Guidance
Total revenue
$372 - $377
As reported
18% - 20%
Constant currency
18% - 19%
Subscription revenue
$353 - $358
As reported
20% - 22%
Constant currency
20% - 21%
Non-GAAP income from operations
$85 - $90
Non-GAAP operating margin
23% - 24%
Non-GAAP net income
$79 - $84
Non-GAAP net income per diluted share
$0.26 - $0.28
Diluted weighted average shares
outstanding
300 - 301
(In millions, except per share data)
Current Guidance
Fiscal 2024
Prior Guidance
Fiscal 2024*
Guidance Change
at Midpoint**
Total ARR
$1,485 - $1,495
$1,480 - $1,490
$5
As reported
19% - 20%
19% - 20%
— bps
Constant currency
18% - 19%
19% - 20%
(100) bps
Total revenue
$1,422 - $1,427
$1,409 - $1,419
$11
As reported
23%
22%
100 bps
Constant currency
22%
21% - 22%
50 bps
Subscription revenue
$1,352 - $1,357
$1,334 - $1,344
$16
As reported
25%
23% - 24%
150 bps
Constant currency
24%
22% - 23%
150 bps
Non-GAAP income from operations
$388 - $393
$377 - $386
$9
Non-GAAP operating margin
27.25% - 27.5%
27%
50 bps
Non-GAAP net income
$348 - $353
$328 - $337
$18
Non-GAAP net income per diluted share
$1.16 - $1.18
$1.09 - $1.12
$0.06
Diluted weighted average shares
outstanding
299 - 300
300 - 301
(1)
Free cash flow
$330 - $335
$313 - $320
$16
Free cash flow margin
23%
22% - 23%
50 bps
*Prior guidance was issued on November 2,
2023.
**Changes in our guidance metrics are
rounded to the nearest 50 bps.
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, February 8, 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# 13743643.
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 22, 2024, by dialing (877) 660-6853
from the U.S. or Canada, or for international callers by dialing
(201) 612-7415 and entering conference ID# 13743643. 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" and "capitalized software
additions" 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 statements regarding management’s expectations
related to platform innovation, the Runecast acquisition (which is
subject to customary closing conditions and expected to close later
in Dynatrace's fourth quarter which ends on March 31, 2024),
partnerships, and business outlook, including our financial
guidance for the fourth 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 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 Form 10-Q filed on February
8, 2024 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
December 31,
Nine Months Ended
December 31,
2023
2022
2023
2022
Revenue:
Subscription
$
348,294
$
279,152
$
999,245
$
790,016
Service
16,802
18,304
50,437
54,039
Total revenue
365,096
297,456
1,049,682
844,055
Cost of revenue:
Cost of subscription
46,888
36,891
134,584
105,393
Cost of service
16,744
15,044
47,961
46,264
Amortization of acquired technology
4,237
3,889
12,035
11,669
Total cost of revenue
67,869
55,824
194,580
163,326
Gross profit
297,227
241,632
855,102
680,729
Operating expenses:
Research and development (1)
80,102
54,531
220,468
156,847
Sales and marketing (1)
132,723
112,292
385,445
323,313
General and administrative (1)
43,232
34,354
127,075
107,485
Amortization of other intangibles
5,451
6,573
16,838
19,719
Restructuring and other
(1
)
(5
)
(1
)
(15
)
Total operating expenses
261,507
207,745
749,825
607,349
Income from operations
35,720
33,887
105,277
73,380
Interest income (expense), net
10,605
(4,787
)
26,260
(7,475
)
Other (expense) income, net
(3,901
)
1,617
(6,724
)
(1,847
)
Income before income taxes
42,424
30,717
124,813
64,058
Income tax benefit (expense)
267
(15,691
)
(8,125
)
(36,392
)
Net income
$
42,691
$
15,026
$
116,688
$
27,666
Net income per share:
Basic
$
0.14
$
0.05
$
0.40
$
0.10
Diluted
$
0.14
$
0.05
$
0.39
$
0.10
Weighted average shares outstanding:
Basic
294,869
287,957
293,295
287,120
Diluted
299,246
291,228
298,335
290,803
(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
December 31,
Nine Months Ended
December 31,
2023
2022
2023
2022
Cost of revenue
$
6,975
$
4,285
$
19,660
$
13,410
Research and development
18,678
11,057
50,119
29,339
Sales and marketing
15,947
13,385
48,823
37,399
General and administrative
13,222
6,777
34,696
24,705
Total share-based compensation
$
54,822
$
35,504
$
153,298
$
104,853
DYNATRACE, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands, except share
and per share data)
December 31,
2023
March 31,
2023
(unaudited)
Assets
Current assets:
Cash and cash equivalents
$
782,649
$
555,348
Accounts receivable, net
361,653
442,518
Deferred commissions, current
90,059
83,029
Prepaid expenses and other current
assets
52,301
37,289
Total current assets
1,286,662
1,118,184
Property and equipment, net
49,408
53,576
Operating lease right-of-use assets,
net
65,895
68,074
Goodwill
1,312,691
1,281,812
Other intangible assets, net
54,118
63,599
Deferred tax assets, net
129,119
79,822
Deferred commissions, non-current
79,724
86,232
Other assets
21,596
14,048
Total assets
$
2,999,213
$
2,765,347
Liabilities and shareholders'
equity
Current liabilities:
Accounts payable
$
13,230
$
21,953
Accrued expenses, current
171,929
188,380
Deferred revenue, current
757,141
811,058
Operating lease liabilities, current
16,288
15,652
Total current liabilities
958,588
1,037,043
Deferred revenue, non-current
38,508
34,423
Accrued expenses, non-current
29,918
29,212
Operating lease liabilities,
non-current
58,002
59,520
Deferred tax liabilities
321
280
Total liabilities
1,085,337
1,160,478
Shareholders' equity:
Common shares, $0.001 par value,
600,000,000 shares authorized, 295,777,477 and 290,411,108 shares
issued and outstanding at December 31, 2023 and March 31, 2023,
respectively
296
290
Additional paid-in capital
2,186,766
1,989,797
Accumulated deficit
(236,701
)
(353,389
)
Accumulated other comprehensive loss
(36,485
)
(31,829
)
Total shareholders' equity
1,913,876
1,604,869
Total liabilities and shareholders'
equity
$
2,999,213
$
2,765,347
DYNATRACE, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited – In
thousands)
Nine Months Ended
December 31,
2023
2022
Cash flows from operating
activities:
Net income
$
116,688
$
27,666
Adjustments to reconcile net income to
cash provided by operations:
Depreciation
11,781
9,012
Amortization
29,067
31,566
Share-based compensation
153,298
104,853
Deferred income taxes
(49,579
)
2,057
Loss on extinguishment of debt
—
5,925
Other
7,016
3,114
Net change in operating assets and
liabilities:
Accounts receivable
83,444
40,314
Deferred commissions
874
(17,198
)
Prepaid expenses and other assets
(27,437
)
29,616
Accounts payable and accrued expenses
(24,022
)
19,365
Operating leases, net
1,253
(36
)
Deferred revenue
(55,946
)
(21,796
)
Net cash provided by operating
activities
246,437
234,458
Cash flows from investing
activities:
Purchase of property and equipment
(16,662
)
(15,625
)
Capitalized software additions
(4,655
)
—
Acquisition of a business, net of cash
acquired
(32,297
)
—
Net cash used in investing activities
(53,614
)
(15,625
)
Cash flows from financing
activities:
Repayment of term loans
—
(281,125
)
Debt issuance costs
—
(1,949
)
Proceeds from employee stock purchase
plan
19,472
17,806
Proceeds from exercise of stock
options
24,205
15,102
Equity repurchases
—
(15
)
Net cash provided by (used in) financing
activities
43,677
(250,181
)
Effect of exchange rates on cash and cash
equivalents
(9,199
)
(9,168
)
Net increase (decrease) in cash and cash
equivalents
227,301
(40,516
)
Cash and cash equivalents, beginning of
period
555,348
462,967
Cash and cash equivalents, end of
period
$
782,649
$
422,451
DYNATRACE, INC.
GAAP to Non-GAAP
Reconciliations
(Unaudited - In thousands,
except percentages)
Three Months Ended December
31, 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
$
67,869
$
(6,975
)
$
(284
)
$
(4,237
)
$
—
$
56,373
Gross profit
297,227
6,975
284
4,237
—
308,723
Gross margin
81
%
85
%
Research and development
80,102
(18,678
)
(1,196
)
—
—
60,228
Sales and marketing
132,723
(15,947
)
(1,029
)
—
201
115,948
General and administrative
43,232
(13,222
)
(360
)
—
(1,739
)
27,911
Amortization of other intangibles
5,451
—
—
(5,451
)
—
—
Restructuring and other
(1
)
—
—
—
1
—
Income from operations
$
35,720
$
54,822
$
2,869
$
9,688
$
1,537
$
104,636
Operating margin
10
%
29
%
Three Months Ended December
31, 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
$
55,824
$
(4,285
)
$
(114
)
$
(3,889
)
$
—
$
47,536
Gross profit
241,632
4,285
114
3,889
—
249,920
Gross margin
81
%
84
%
Research and development (1)
54,531
(11,057
)
(329
)
—
—
43,145
Sales and marketing (1)
112,292
(13,385
)
(297
)
—
—
98,610
General and administrative (1)
34,354
(6,777
)
(68
)
—
3
27,512
Amortization of other intangibles
6,573
—
—
(6,573
)
—
—
Restructuring and other
(5
)
—
—
—
5
—
Income from operations
$
33,887
$
35,504
$
808
$
10,462
$
(8
)
$
80,653
Operating margin
11
%
27
%
(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
December 31,
2023
2022
Non-GAAP net income:
Net income
$
42,691
$
15,026
Income tax (benefit) expense
(267
)
15,691
Non-GAAP effective cash tax
(18,516
)
(9,080
)
Interest (income) expense, net
(10,605
)
4,787
Cash received from interest, net
10,064
1,896
Share-based compensation
54,822
35,504
Employer payroll taxes on employee stock
transactions
2,869
808
Amortization of other intangibles
5,451
6,573
Amortization of acquired technology
4,237
3,889
Transaction, restructuring, and other
1,537
(8
)
Loss (gain) on currency translation
3,901
(1,617
)
Non-GAAP net income
$
96,184
$
73,469
Share count:
Weighted-average shares outstanding -
basic
294,869
287,957
Weighted-average shares outstanding -
diluted
299,246
291,228
Shares used in non-GAAP per share
calculations:
Weighted-average shares outstanding -
basic
294,869
287,957
Weighted-average shares outstanding -
diluted
299,246
291,228
Non-GAAP net income per share:
Net income per share - basic
$
0.14
$
0.05
Net income per share - diluted
$
0.14
$
0.05
Non-GAAP net income per share - basic
$
0.33
$
0.26
Non-GAAP net income per share -
diluted
$
0.32
$
0.25
Three Months Ended
December 31,
2023
2022
Free Cash Flow:
Net cash provided by operating
activities
$
75,657
$
61,962
Purchase of property and equipment
(3,645
)
(4,388
)
Capitalized software additions
(4,655
)
—
Free Cash Flow
$
67,357
$
57,574
DYNATRACE, INC.
GAAP to Non-GAAP
Reconciliations
(Unaudited - In thousands,
except percentages)
Nine Months Ended December 31,
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
$
194,580
$
(19,660
)
$
(1,516
)
$
(12,035
)
$
—
$
161,369
Gross profit
855,102
19,660
1,516
12,035
—
888,313
Gross margin
81
%
85
%
Research and development
220,468
(50,119
)
(4,391
)
—
165,958
Sales and marketing
385,445
(48,823
)
(3,341
)
—
399
333,680
General and administrative
127,075
(34,696
)
(1,125
)
—
(5,725
)
85,529
Amortization of other intangibles
16,838
—
—
(16,838
)
—
—
Restructuring and other
(1
)
—
—
—
1
—
Income from operations
$
105,277
$
153,298
$
10,373
$
28,873
$
5,325
$
303,146
Operating margin
10
%
29
%
Nine Months Ended December 31,
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
$
163,326
$
(13,410
)
$
(526
)
$
(11,669
)
$
(380
)
$
137,341
Gross profit
680,729
13,410
526
11,669
380
706,714
Gross margin
81
%
84
%
Research and development (1)
156,847
(29,339
)
(1,259
)
—
—
126,249
Sales and marketing (1)
323,313
(37,399
)
(1,195
)
—
—
284,719
General and administrative (1)
107,485
(24,705
)
(510
)
—
(380
)
81,890
Amortization of other intangibles
19,719
—
—
(19,719
)
—
—
Restructuring and other
(15
)
—
—
—
15
—
Income from operations
$
73,380
$
104,853
$
3,490
$
31,388
$
745
$
213,856
Operating margin
9
%
25
%
(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)
Nine Months Ended
December 31,
2023
2022
Non-GAAP net income:
Net income
$
116,688
$
27,666
Income tax expense
8,125
36,392
Non-GAAP effective cash tax
(58,986
)
(23,454
)
Interest (income) expense, net
(26,260
)
7,475
Cash received from (paid for) interest,
net
24,556
(637
)
Share-based compensation
153,298
104,853
Employer payroll taxes on employee stock
transactions
10,373
3,490
Amortization of other intangibles
16,838
19,719
Amortization of acquired technology
12,035
11,669
Transaction, restructuring, and other
5,325
745
Loss on currency translation
6,724
1,847
Non-GAAP net income
$
268,716
$
189,765
Share count:
Weighted-average shares outstanding -
basic
293,295
287,120
Weighted-average shares outstanding -
diluted
298,335
290,803
Shares used in non-GAAP per share
calculations:
Weighted-average shares outstanding -
basic
293,295
287,120
Weighted-average shares outstanding -
diluted
298,335
290,803
Non-GAAP net income per share:
Net income per share - basic
$
0.40
$
0.10
Net income per share - diluted
$
0.39
$
0.10
Non-GAAP net income per share - basic
$
0.92
$
0.66
Non-GAAP net income per share -
diluted
$
0.90
$
0.65
Nine Months Ended
December 31,
2023
2022
Free Cash Flow:
Net cash provided by operating
activities
$
246,437
$
234,458
Purchase of property and equipment
(16,662
)
(15,625
)
Capitalized software additions
$
(4,655
)
—
Free Cash Flow
$
225,120
$
218,833
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240208911929/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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