Delivers Adjusted ARR growth of 29%
year-over-year
Software intelligence company Dynatrace (NYSE: DT) today
released financial results for the third quarter of its fiscal 2023
ended December 31, 2022.
“Dynatrace delivered another strong quarter, beating
expectations across the board and demonstrating the durability of
our business model that supports a balance of growth and
profitability,” said Rick McConnell, Chief Executive Officer. “The
secular tailwinds of digital transformation and particularly cloud
modernization are driving an explosion in data, making
observability increasingly mandatory across all industries as
companies look to realize greater value from their IT spend. We
remain focused on driving innovation to meet customers' evolving
needs, managing the business prudently, and investing thoughtfully
in strategic priorities.”
Third Quarter Fiscal 2023 and Other Recent Business
Highlights: All growth rates are compared to the third quarter
of fiscal 2022, unless otherwise noted.
Financial Highlights:
- Total ARR of $1,163 million, Adjusted ARR growth of 29%
year-over-year
- Total Revenue of $297 million, up 29% on a constant currency
basis
- Subscription Revenue of $279 million, up 29% on a constant
currency basis
- Operating Income of $34 million and Non-GAAP Operating Income
of $81 million
- EPS of $0.05 and Non-GAAP EPS of $0.25, both on a dilutive
basis
Business Highlights:
- Analyst and Customer recognition: Dynatrace was named a
Leader in The Forrester Wave™: Artificial Intelligence for IT
Operations (AIOps), Q4 2022 report with the top scores in both the
Current Offering and Strategy categories. In addition, Dynatrace is
a Leader in the Gartner® 2022 Magic Quadrant™ for Application
Performance Monitoring and Observability1. In the last quarter, we
were also named a Customers’ Choice in the 2022 Gartner Peer
Insights™ ‘Voice of the Customer’: Application Performance
Monitoring and Observability2. We are the only provider with
Industry and Customer recognition in this market.
- Expanded partnerships: Dynatrace is working closely with
ten strategic Global System Integrators (GSIs) to help customers
digitally transform their businesses and reduce cloud complexity.
We continue to see a robust technical readiness investment from our
key strategic GSIs resulting in over 500 individuals trained or
certified on the Dynatrace platform. We are beginning to see early
traction with these partnerships, including a recent seven-figure
deal in Latin America. And as more workloads move to the cloud, we
continue to gain leverage from the frictionless go-to-market motion
of our hyperscaler relationships. On a trailing-twelve-month basis,
business transacted through these partners, including AWS, Google
Cloud, and Microsoft, is more than 1.6x compared to the same period
last year.
- Ongoing platform expansion: We expanded the Dynatrace
Grail data lakehouse to power business analytics. This builds on
existing support for log analytics and management and is designed
to drive accurate, reliable, and cost-effective automation and
analytics covering a wide range of business use cases, including
order fulfillment, customer service activation, and the impact on
revenue from new digital services.
Third Quarter 2023 Financial
Highlights
(Unaudited – In thousands,
except per share data)
Three Months Ended
December 31,
2022
2021
Key Operating Metric:
Annualized recurring revenue
$
1,162,591
$
929,906
Year-over-Year Increase
25
%
Year-over-Year Increase - constant
currency
28
%
Adjusted ARR Growth
29
%
Revenue:
Total revenue
$
297,456
$
240,766
Year-over-Year Increase
24
%
Year-over-Year Increase - constant
currency (*)
29
%
Subscription revenue
$
279,152
$
226,290
Year-over-Year Increase
23
%
Year-over-Year Increase - constant
currency (*)
29
%
GAAP Financial Measures:
GAAP operating income
$
33,887
$
21,215
GAAP operating margin
11
%
9
%
GAAP net income
$
15,026
$
14,587
GAAP net income per share - diluted
$
0.05
$
0.05
GAAP share outstanding - diluted
291,228
291,845
Net cash provided by operating
activities
$
61,962
$
60,844
Non-GAAP Financial Measures:
Non-GAAP operating income (*)
$
80,653
$
61,102
Non-GAAP operating margin (*)
27
%
25
%
Non-GAAP net income (*)
$
73,469
$
52,020
Non-GAAP net income per share -
diluted
$
0.25
$
0.18
Non-GAAP shares outstanding - diluted
291,228
291,845
Free Cash Flow (*)
$
57,574
$
56,688
* 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 Investors section of
our website https://ir.dynatrace.com/.
Financial Outlook Since
March 31, 2022, Dynatrace has seen an incremental strengthening of
the U.S. dollar resulting in a foreign exchange ("FX") headwind in
fiscal 2023. Total FY23 FX impact on a constant currency basis is
expected to be approximately $30 million on ARR, down from prior
quarter expectations of approximately $60 million. Total FY23 FX
impact is expected to be approximately $45 million on Revenue, down
from prior quarter expectations of approximately $60 million.
Growth rates for Adjusted ARR, Total revenue, and Subscription
revenue are presented in constant currency in the table below to
provide better visibility into the underlying growth of the
business.
Based on information available, as of February 1, 2023,
Dynatrace is issuing guidance for the fourth quarter and updating
guidance for full year fiscal 2023 as follows:
(In millions, except per share data)
Q4 Fiscal 2023
Guidance
Total revenue
$304 - $307
As reported
20% - 22%
Constant currency
24% - 25%
Subscription revenue
$285 - $287
As reported
21% - 22%
Constant currency
24% - 25%
Non-GAAP operating income
$71.5 - $73.5
Non-GAAP operating margin
24%
Non-GAAP net income
$65 - $67
Non-GAAP net income per diluted share
$0.22 - $0.23
Diluted weighted average shares
outstanding
293 - 294
(In millions, except per share data)
Current Guidance
Fiscal 2023
Prior Guidance
Fiscal 2023
Guidance Change
at Midpoint*
Total ARR
$1,216 - $1,221
$1,164 - $1,172
$51
As reported
22% - 23%
17% - 18%
500 bps
Constant currency
25%
23% - 24%
200 bps
Adjusted ARR growth
26%
24%
200 bps
Total revenue
$1,148 - $1,151
$1,119 - $1,126
$27
As reported
24%
20% - 21%
300 bps
Constant currency
28% - 28.5%
27%
150 bps
Subscription revenue
$1,075 - $1,077
$1,047 - $1,052
$27
As reported
24%
20% - 21%
300 bps
Constant currency
28% - 28.5%
27%
150 bps
Non-GAAP operating income
$285 - $287
$273 - $279
$10
Non-GAAP operating margin
25%
24.5%
50 bps
Non-GAAP net income
$255 - $257
$237.5 - $242.5
$16
Non-GAAP net income per diluted share
$0.87 - $0.88
$0.81 - $0.83
$0.06
Diluted weighted average shares
outstanding
292 - 293
292 - 293
0
Free cash flow
$315 - $321
$308 - $321
$4
Free cash flow margin
27.5% - 28%
27.5%- 28.5%
-25 bps
*Changes in our guidance for ARR and
Revenue metrics are rounded to the nearest 50 bps
Our guidance is based on foreign exchange rates as of the end of
December.
Reconciliation of non-GAAP operating income, non-GAAP net
income, non-GAAP net income per diluted share and free cash flow
guidance to the most directly comparable GAAP measures is 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 1, 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# 13735452.
The call will also be available live via webcast on the company’s
website, https://ir.dynatrace.com/.
An audio replay of the call will also be available until 11:59
p.m. Eastern Time on February 15, 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# 13735452. In addition,
an archived webcast will be available at
https://ir.dynatrace.com/.
The company has used, and intends to continue to use, the
investor relations portion of its website, its Twitter account and
LinkedIn page as means of disclosing material non-public
information and for complying with 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. 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. 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.
Adjusted ARR is defined as ARR excluding the impact of
foreign exchange rate fluctuations that occurred over the trailing
twelve month period. This calculation also excludes the headwind
associated with the Dynatrace® perpetual license ARR that rolled
off in the trailing twelve month period.
Adjusted ARR Growth is defined as year-over-year growth
in Adjusted ARR divided by ARR as reported.
Dynatrace® Net Expansion Rate 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. This calculation 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 will result in a Net
Expansion Rate metric that better reflects Dynatrace’s ability to
expand existing customer relationships. We present Dynatrace® net
expansion rate on a constant currency basis to provide a framework
for assessing how our business performed excluding the effects of
foreign currency rate fluctuations.
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.
About Dynatrace
Dynatrace exists to make the world's software work perfectly.
Our unified software intelligence 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 is
why the world's largest organizations trust Dynatrace® 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
of future financial and operational performance and operational
expenditures, expected growth, and business outlook, including our
financial guidance for the fourth fiscal quarter and full year
2023, and statements regarding future customer requirements,
product innovation, the size of our market and our positioning for
capturing a larger share of our market. 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 “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, the effect on our business of
general economic and financial market conditions, a potential
downturn in or instability of general economic conditions including
currency fluctuations, our ability to maintain our subscription
revenue growth rates in future periods, our ability to service our
indebtedness, market adoption of software intelligence solutions
for application performance monitoring, digital experience
monitoring, infrastructure monitoring, AIOps, business intelligence
and analytics and application security, continued spending on and
demand for software intelligence solutions, our ability to maintain
and acquire new customers, our ability to differentiate our
platform from competing products and technologies, our ability to
successfully recruit and retain highly-qualified personnel, the
price volatility of our common stock, and other risks set forth
under the caption “Risk Factors” in our Form 10-K filed on May 26,
2022 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.
___________________________ 1 Gartner, Magic Quadrant for
Application Performance Monitoring and Observability, June 2022. 2
Gartner, Peer Insights ‘Voice of the Customer’: Application
Performance Monitoring and Observability, 30 November 2022.
Gartner, Magic Quadrant and Peer Insights are trademarks of
Gartner, Inc. and/or its affiliates and is used herein with
permission. All rights reserved. Gartner Peer Insights Customers’
Choice constitute the subjective opinions of individual end-user
reviews, ratings, and data applied against a documented
methodology; they neither represent the views of, nor constitute an
endorsement by, Gartner or its affiliates.
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.
DYNATRACE, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(Unaudited – In thousands,
except per share data)
Three Months Ended
December 31,
Nine Months Ended
December 31,
2022
2021
2022
2021
Revenue:
Subscription
$
279,152
$
226,290
$
790,016
$
635,411
License
—
2
—
52
Service
18,304
14,474
54,039
41,397
Total revenue
297,456
240,766
844,055
676,860
Cost of revenue:
Cost of subscription
36,891
28,284
105,393
80,401
Cost of service
15,044
12,232
46,264
32,921
Amortization of acquired technology
3,889
3,944
11,669
11,638
Total cost of revenue
55,824
44,460
163,326
124,960
Gross profit
241,632
196,306
680,729
551,900
Operating expenses:
Research and development
53,411
40,876
153,800
113,509
Sales and marketing
111,524
94,033
321,208
260,816
General and administrative
36,242
32,643
112,637
91,254
Amortization of other intangibles
6,573
7,539
19,719
22,618
Restructuring and other
(5
)
—
(15
)
25
Total operating expenses
207,745
175,091
607,349
488,222
Income from operations
33,887
21,215
73,380
63,678
Interest expense, net
(4,787
)
(2,450
)
(7,475
)
(7,958
)
Other income (expense), net
1,617
(1,357
)
(1,847
)
(1,345
)
Income before income taxes
30,717
17,408
64,058
54,375
Income tax expense
(15,691
)
(2,821
)
(36,392
)
(2,853
)
Net income
$
15,026
$
14,587
$
27,666
$
51,522
Net income per share:
Basic
$
0.05
$
0.05
$
0.10
$
0.18
Diluted
$
0.05
$
0.05
$
0.10
$
0.18
Weighted average shares outstanding:
Basic
287,957
284,722
287,120
283,773
Diluted
291,228
291,845
290,803
290,895
UNAUDITED SHARE-BASED
COMPENSATION
Three Months Ended
December 31,
Nine Months Ended
December 31,
2022
2021
2022
2021
Cost of revenue
$
4,285
$
3,405
$
13,410
$
9,542
Research and development
11,057
5,908
29,339
15,331
Sales and marketing
13,385
9,267
37,399
26,487
General and administrative
6,777
8,543
24,705
20,590
Total share-based compensation
$
35,504
$
27,123
$
104,853
$
71,950
DYNATRACE, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands, except share
data)
December 31,
2022
March 31,
2022
(unaudited)
Assets
Current assets:
Cash and cash equivalents
$
422,451
$
462,967
Accounts receivable, net
304,411
350,666
Deferred commissions, current
71,001
62,601
Prepaid expenses and other current
assets
33,034
72,188
Total current assets
830,897
948,422
Property and equipment, net
50,528
45,271
Operating lease right-of-use assets,
net
68,730
58,849
Goodwill
1,281,507
1,281,876
Other intangible assets, net
74,073
105,736
Deferred tax assets, net
23,726
28,106
Deferred commissions, non-current
69,150
63,435
Other assets
15,268
9,615
Total assets
$
2,413,879
$
2,541,310
Liabilities and shareholders'
equity
Current liabilities:
Accounts payable
$
14,687
$
22,715
Accrued expenses, current
154,081
141,556
Deferred revenue, current
647,259
688,554
Operating lease liabilities, current
14,990
12,774
Total current liabilities
831,017
865,599
Deferred revenue, non-current
25,778
25,783
Accrued expenses, non-current
30,449
19,409
Operating lease liabilities,
non-current
59,589
52,070
Deferred tax liabilities
23
85
Long-term debt, net
—
273,918
Total liabilities
946,856
1,236,864
Shareholders' equity:
Common shares, $0.001 par value,
600,000,000 shares authorized, 288,961,064 and 286,053,276 shares
issued and outstanding at December 31, 2022 and March 31, 2022,
respectively
289
286
Additional paid-in capital
1,929,940
1,792,197
Accumulated deficit
(433,682
)
(461,348
)
Accumulated other comprehensive loss
(29,524
)
(26,689
)
Total shareholders' equity
1,467,023
1,304,446
Total liabilities and shareholders'
equity
$
2,413,879
$
2,541,310
DYNATRACE, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited – In
thousands)
Nine Months Ended
December 31,
2022
2021
Cash flows from operating
activities:
Net income
$
27,666
$
51,522
Adjustments to reconcile net income to
cash provided by operations:
Depreciation
9,012
7,788
Amortization
31,566
34,682
Share-based compensation
104,853
71,950
Loss on extinguishment of debt
5,925
—
Other
5,171
2,906
Net change in operating assets and
liabilities:
Accounts receivable
40,314
(22,362
)
Deferred commissions
(17,198
)
(19,581
)
Prepaid expenses and other assets
29,616
(17,508
)
Accounts payable and accrued expenses
19,365
10,987
Operating leases, net
(36
)
683
Deferred revenue
(21,796
)
41,545
Net cash provided by operating
activities
234,458
162,612
Cash flows from investing
activities:
Purchase of property and equipment
(15,625
)
(11,768
)
Acquisition of businesses, net of cash
acquired
—
(13,195
)
Net cash used in investing activities
(15,625
)
(24,963
)
Cash flows from financing
activities:
Repayment of term loans
(281,125
)
(90,000
)
Debt issuance costs
(1,949
)
—
Proceeds from employee stock purchase
plan
17,806
13,913
Proceeds from exercise of stock
options
15,102
23,650
Equity repurchases
(15
)
(51
)
Net cash used in financing activities
(250,181
)
(52,488
)
Effect of exchange rates on cash and cash
equivalents
(9,168
)
(1,400
)
Net (decrease) increase in cash and cash
equivalents
(40,516
)
83,761
Cash and cash equivalents, beginning of
period
462,967
324,962
Cash and cash equivalents, end of
period
$
422,451
$
408,723
DYNATRACE, INC.
GAAP to Non-GAAP
Reconciliations
(Unaudited - In thousands,
except percentages)
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 operating income:
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
53,411
(11,057
)
(329
)
—
—
42,025
Sales and marketing
111,524
(13,385
)
(297
)
—
—
97,842
General and administrative
36,242
(6,777
)
(68
)
—
3
29,400
Amortization of other intangibles
6,573
—
—
(6,573
)
—
—
Restructuring and other
(5
)
—
—
—
5
—
Operating income
$
33,887
$
35,504
$
808
$
10,462
$
(8
)
$
80,653
Operating margin
11
%
27
%
Three Months Ended December
31, 2021
GAAP
Share-based
compensation
Employer
payroll taxes
on employee
stock
transactions
Amortization
of other
intangibles
Restructuring
& other
Non-GAAP
Non-GAAP operating income:
Cost of revenue
$
44,460
$
(3,405
)
$
(149
)
$
(3,944
)
$
—
$
36,962
Gross profit
196,306
3,405
149
3,944
—
203,804
Gross margin
82
%
85
%
Research and development
40,876
(5,908
)
(493
)
—
—
34,475
Sales and marketing
94,033
(9,267
)
(511
)
—
—
84,255
General and administrative
32,643
(8,543
)
(124
)
—
(4
)
23,972
Amortization of other intangibles
7,539
—
—
(7,539
)
—
—
Restructuring and other
—
—
—
—
—
—
Operating income
$
21,215
$
27,123
$
1,277
$
11,483
$
4
$
61,102
Operating margin
9
%
25
%
DYNATRACE, INC.
GAAP to Non-GAAP
Reconciliations
(Unaudited - In thousands,
except per share data)
Three Months Ended
December 31,
2022
2021
Non-GAAP net income:
Net income
$
15,026
$
14,587
Income tax expense
15,691
2,821
Non-GAAP effective cash tax
(9,080
)
(7,093
)
Interest expense, net
4,787
2,450
Cash received from (paid for) interest,
net
1,896
(1,989
)
Share-based compensation
35,504
27,123
Employer payroll taxes on employee stock
transactions
808
1,277
Amortization of other intangibles
6,573
7,539
Amortization of acquired technology
3,889
3,944
Transaction, restructuring, and other
(8
)
4
(Gain) loss on currency translation
(1,617
)
1,357
Non-GAAP net income
$
73,469
$
52,020
Share count:
Weighted-average shares outstanding -
basic
287,957
284,722
Weighted-average shares outstanding -
diluted
291,228
291,845
Shares used in non-GAAP per share
calculations:
Weighted-average shares outstanding -
basic
287,957
284,722
Weighted-average shares outstanding -
diluted
291,228
291,845
Net income per share:
Net income per share - basic
$
0.05
$
0.05
Net income per share - diluted
$
0.05
$
0.05
Non-GAAP net income per share - basic
$
0.26
$
0.18
Non-GAAP net income per share -
diluted
$
0.25
$
0.18
Three Months Ended
December 31,
2022
2021
Free Cash Flow ("FCF"):
Net cash provided by operating
activities
$
61,962
$
60,844
Purchase of property and equipment
(4,388
)
(4,156
)
FCF
$
57,574
$
56,688
DYNATRACE, INC.
GAAP to Non-GAAP
Reconciliations
(Unaudited - In thousands,
except percentages)
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 operating income:
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
153,800
(29,339
)
(1,259
)
—
—
123,202
Sales and marketing
321,208
(37,399
)
(1,195
)
—
—
282,614
General and administrative
112,637
(24,705
)
(510
)
—
(380
)
87,042
Amortization of other intangibles
19,719
—
—
(19,719
)
—
—
Restructuring and other
(15
)
—
—
—
15
—
Operating income
$
73,380
$
104,853
$
3,490
$
31,388
$
745
$
213,856
Operating margin
9
%
25
%
Nine Months Ended December 31,
2021
GAAP
Share-based
compensation
Employer
payroll taxes
on employee
stock
transactions
Amortization
of other
intangibles
Restructuring
& other
Non-GAAP
Non-GAAP operating income:
Cost of revenue
$
124,960
$
(9,542
)
$
(916
)
$
(11,638
)
$
—
$
102,864
Gross profit
551,900
9,542
916
11,638
—
573,996
Gross margin
82
%
85
%
Research and development
113,509
(15,331
)
(1,620
)
—
—
96,558
Sales and marketing
260,816
(26,487
)
(1,881
)
—
—
232,448
General and administrative
91,254
(20,590
)
(578
)
—
(1,206
)
68,880
Amortization of other intangibles
22,618
—
—
(22,618
)
—
—
Restructuring and other
25
—
—
—
(25
)
—
Operating income
$
63,678
$
71,950
$
4,995
$
34,256
$
1,231
$
176,110
Operating margin
9
%
26
%
DYNATRACE, INC.
GAAP to Non-GAAP
Reconciliations
(Unaudited - In thousands,
except per share data)
Nine Months Ended
December 31,
2022
2021
Non-GAAP net income:
Net income
$
27,666
$
51,522
Income tax expense
36,392
2,853
Non-GAAP effective cash tax
(23,454
)
(20,346
)
Interest expense, net
7,475
7,958
Cash paid for interest, net
(637
)
(6,549
)
Share-based compensation
104,853
71,950
Employer payroll taxes on employee stock
transactions
3,490
4,995
Amortization of other intangibles
19,719
22,618
Amortization of acquired technology
11,669
11,638
Transaction, restructuring, and other
745
1,231
Loss on currency translation
1,847
1,345
Non-GAAP net income
$
189,765
$
149,215
Share count:
Weighted-average shares outstanding -
basic
287,120
283,773
Weighted-average shares outstanding -
diluted
290,803
290,895
Shares used in non-GAAP per share
calculations:
Weighted-average shares outstanding -
basic
287,120
283,773
Weighted-average shares outstanding -
diluted
290,803
290,895
Net income per share:
Net income per share - basic
$
0.10
$
0.18
Net income per share - diluted
$
0.10
$
0.18
Non-GAAP net income per share - basic
$
0.66
$
0.53
Non-GAAP net income per share -
diluted
$
0.65
$
0.51
Nine Months Ended
December 31,
2022
2021
Free Cash Flow ("FCF"):
Net cash provided by operating
activities
$
234,458
$
162,612
Purchase of property and equipment
(15,625
)
(11,768
)
FCF
$
218,833
$
150,844
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230201005080/en/
Investor Contact: Noelle Faris VP, Investor Relations
Noelle.Faris@dynatrace.com
Media Relations: Jerome Stewart VP, Communications
Jerome.Stewart@dynatrace.com
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