Adjusted ARR growth of 29%
year-over-year
Dynatrace (NYSE: DT), the leader in unified observability and
security, today announced financial results for the fourth quarter
and full year ended March 31, 2023.
“Dynatrace delivered a great finish to the year with strong
fourth quarter results that exceeded expectations across the board,
demonstrating the durability of our business model,” said Rick
McConnell, Chief Executive Officer. “Observability is quickly
moving from optional to mandatory as customers look to tame the
explosion of data and increased complexity that's driven by their
cloud migration and digital transformation initiatives. As we begin
fiscal 2024, we remain focused on driving innovation to meet
customers' evolving needs, managing the business prudently, and
investing thoughtfully in strategic priorities to capture the
substantial opportunities we see ahead.”
All growth rates are compared to the fourth quarter and full
year of fiscal 2022 unless otherwise noted.
Fourth Quarter Fiscal 2023 Financial Highlights:
- Total ARR of $1,247 million, Adjusted ARR growth of 29%
year-over-year
- Total Revenue of $314 million, up 27% on a constant currency
basis
- Subscription Revenue of $293 million, up 28% on a constant
currency basis
- GAAP Operating Income of $19 million and Non-GAAP Operating
Income of $78 million
- GAAP EPS of $0.27 and non-GAAP EPS of $0.31, on a dilutive
basis
Full Year Fiscal 2023 Financial Highlights:
- Total Revenue of $1,159 million, up 29% on a constant currency
basis
- Subscription Revenue of $1,083 million, up 29% on a constant
currency basis
- GAAP Operating Income of $93 million and Non-GAAP Operating
Income of $292 million
- GAAP EPS of $0.37 and non-GAAP EPS of $0.97, on a dilutive
basis
- GAAP Operating Cash Flow of $355 million and Free Cash Flow of
$333 million
Business Highlights:
- Platform Expansion: Innovations from the last quarter
include an expanded GrailTM data lakehouse and a new user
experience for Dynatrace products, both designed to enable
exploratory analytics and deliver precise answers and intelligent
automation from petabytes of unified observability and security
data. In addition, the new Dynatrace AutomationEngine and AppEngine
allow customers to automate nearly unlimited BizDevSecOps workflows
and easily build custom, compliant, and data-driven apps and
integrations.
- Analyst Recognition: The 2023 GigaOm Radar for Cloud
Observability Solutions recently named Dynatrace a "Leader" and
positioned the company as the closest of all vendors to the center
of the radar. Enterprise Management Associates (EMA) recognized
Dynatrace as one of the top ten leading security visionaries
exhibiting at the 2023 RSA Conference.
- Expanded Partnerships: In fiscal 2023, business
transacted through hyperscaler partners, including AWS, Google
Cloud, and Microsoft Azure, led to several seven-figure deals in
the fourth quarter. New business transacted through our largest
hyperscaler partner grew by more than 80% compared to last year. In
addition, we commenced the rollout of Dynatrace to DXC PlatformX
customers, with many expected to migrate within the next 12 months.
In Q4, we also saw continued expansion of our customer relationship
with a major global system integrator (GSI). In addition to using
the Dynatrace platform to power its observability practice, this
GSI also uses Dynatrace for its internal observability and digital
transformation initiatives.
Fourth Quarter 2023 Financial
Highlights
(Unaudited – In thousands,
except per share data)
Three Months Ended March
31,
2023
2022
Key Operating Metric:
Annualized recurring revenue (ARR)
$
1,246,681
$
995,121
Year-over-Year Increase
25
%
Year-over-Year Increase - constant
currency
28
%
Adjusted ARR Growth
29
%
Revenue:
Total revenue
$
314,475
$
252,585
Year-over-Year Increase
25
%
Year-over-Year Increase - constant
currency (*)
27
%
Subscription revenue
$
293,314
$
234,976
Year-over-Year Increase
25
%
Year-over-Year Increase - constant
currency (*)
28
%
GAAP Financial Measures:
GAAP operating income
$
19,431
$
17,629
GAAP operating margin
6
%
7
%
GAAP net income
$
80,293
$
929
GAAP net income per share - diluted
$
0.27
$
0.00
GAAP shares outstanding - diluted
293,917
290,339
Net cash provided by operating
activities
$
120,427
$
88,305
Non-GAAP Financial Measures:
Non-GAAP operating income (*)
$
77,935
$
57,656
Non-GAAP operating margin (*)
25
%
23
%
Non-GAAP net income (*)
$
92,459
$
48,287
Non-GAAP net income per share - diluted
(*)
$
0.31
$
0.17
Non-GAAP shares outstanding - diluted
(*)
293,917
290,339
Free Cash Flow (*)
$
114,512
$
82,378
Full Year 2023 Financial
Highlights
(Unaudited – In thousands,
except per share data)
Year Ended March 31,
2023
2022
Revenue:
Total revenue
$
1,158,530
$
929,445
Year-over-Year Increase
25
%
Year-over-Year Increase - constant
currency (*)
29
%
Subscription revenue
$
1,083,330
$
870,439
Year-over-Year Increase
24
%
Year-over-Year Increase - constant
currency (*)
29
%
GAAP Financial Measures:
GAAP operating income
$
92,811
$
81,307
GAAP operating margin
8
%
9
%
GAAP net income
$
107,959
$
52,451
GAAP net income per share - diluted
$
0.37
$
0.18
GAAP shares outstanding - diluted
291,617
290,903
Net cash provided by operating
activities
$
354,885
$
250,917
Non-GAAP Financial Measures:
Non-GAAP operating income (*)
$
291,791
$
233,766
Non-GAAP operating margin (*)
25
%
25
%
Non-GAAP net income (*)
$
282,224
$
197,502
Non-GAAP net income per share - diluted
(*)
$
0.97
$
0.68
Non-GAAP shares outstanding - diluted
(*)
291,617
290,903
Free Cash Flow (*)
333,345
233,222
* 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 https://ir.dynatrace.com.
Financial Outlook
Based on information available as of May 17, 2023, Dynatrace is
issuing guidance for the first quarter and full year fiscal 2024 in
the table below. This guidance is based on foreign exchange rates
as of April 28, 2023. The total foreign exchange tailwind for
fiscal 2024 is expected to be approximately $10 million on ARR and
$13 million on revenue. 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 are compared to the first quarter and full year
of fiscal 2023 unless otherwise noted.
(In millions, except per share data)
First Quarter Fiscal
2024
Full Year Fiscal
2024
ARR
-
$1,475 - $1,490
As reported
-
18% - 20%
Constant currency
-
18% - 19%
Total revenue
$325 - $328
$1,388 - $1,406
As reported
22% - 23%
20% - 21%
Constant currency
22% - 23%
19% - 20%
Subscription revenue
$306 - $309
$1,311 - $1,327
As reported
23% - 24%
21% - 22%
Constant currency
23% - 24%
20% - 21%
Non-GAAP operating income
$76.5 - $78.5
$348 - $358
Non-GAAP operating margin
23.5% - 24%
25% - 25.5%
Non-GAAP net income
$64 - $66
$295 - $307
Non-GAAP net income per diluted share
$0.22
$0.98 - $1.02
Diluted weighted average shares
outstanding
296 - 297
300 - 301
Free cash flow
-
$303 - $312
Free cash flow margin
-
22%
Reconciliation of non-GAAP operating income, non-GAAP net
income, non-GAAP net income per 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 at 8:00 a.m. Eastern Time
today, May 17, 2023. To access the conference call from the U.S.
and Canada, dial (866) 405-1247, or internationally, dial (201)
689-8045 with event confirmation #: 13737836. 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 May 31, 2023, by dialing (877) 660-6853 from
the U.S. or Canada, or for international callers by dialing (201)
612-7415 and entering event confirmation #: 13737836. In addition,
an archived webcast will be available at ir.dynatrace.com.
The company has used, and intends to continue to use, the
investor relations portion of its website as a 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. 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.
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 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 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 Mr. McConnell's remarks and statements regarding
management’s expectations of future financial and operational
performance and operational expenditures, expected growth, and
business outlook, including our financial outlook for the first
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 “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; the ability of our platform and solutions to effective
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; 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 most recent Form 10-Q filed on
February 1, 2023 and our other SEC filings, including our Annual
Report on Form 10-K for the fiscal year ended March 31, 2023, which
we plan to file later this month. 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.
CONSOLIDATED STATEMENTS OF
OPERATIONS
(In thousands, except per
share data)
Three Months Ended March
31,
Twelve Months Ended March
31,
2023
2022
2023
2022
(unaudited)
Revenue:
Subscription
$
293,314
$
234,976
$
1,083,330
$
870,439
Service
21,161
17,609
75,200
59,006
Total revenue
314,475
252,585
1,158,530
929,445
Cost of revenue:
Cost of subscription
39,052
31,245
144,445
111,646
Cost of service
16,618
12,796
62,882
45,717
Amortization of acquired technology
3,895
3,875
15,564
15,513
Total cost of revenue
59,565
47,916
222,891
172,876
Gross profit
254,910
204,669
935,639
756,569
Operating expenses:
Research and development (1)
61,502
42,833
218,349
156,342
Sales and marketing (1)
124,702
101,300
448,015
362,116
General and administrative (1)
42,546
35,368
150,031
126,622
Amortization of other intangibles
6,573
7,539
26,292
30,157
Restructuring and other
156
—
141
25
Total operating expenses
235,479
187,040
842,828
675,262
Income from operations
19,431
17,629
92,811
81,307
Interest income (expense), net
4,066
(2,234
)
(3,409
)
(10,192
)
Other income, net
2,412
1,889
565
544
Income before income taxes
25,909
17,284
89,967
71,659
Income tax benefit (expense)
54,384
(16,355
)
17,992
(19,208
)
Net income
$
80,293
$
929
$
107,959
$
52,451
Net income per share:
Basic
$
0.28
$
0.00
$
0.38
$
0.18
Diluted
$
0.27
$
0.00
$
0.37
$
0.18
Weighted average shares outstanding:
Basic
289,751
285,349
287,700
284,161
Diluted
293,917
290,339
291,617
290,903
(1) During the three months ended March 31, 2023, we began
allocating depreciation expense to operating expenses based upon
location and headcount, whereas previously it was included
primarily in general and administrative expense. This has been
retrospectively applied to the twelve months ended March 31,
2023.
SHARE-BASED
COMPENSATION
Three Months Ended March
31,
Twelve Months Ended March
31,
2023
2022
2023
2022
(unaudited)
Cost of revenue
$
4,973
$
3,321
$
18,383
$
12,863
Research and development
12,067
5,985
41,406
21,316
Sales and marketing
13,748
9,470
51,147
35,957
General and administrative
11,233
8,810
35,938
29,400
Total share-based compensation expense
$
42,021
$
27,586
$
146,874
$
99,536
DYNATRACE, INC.
CONSOLIDATED BALANCE
SHEETS
(In thousands, except share
data)
March 31,
2023
2022
Assets
Current assets:
Cash and cash equivalents
$
555,348
$
462,967
Accounts receivable, net
442,518
350,666
Deferred commissions, current
83,029
62,601
Prepaid expenses and other current
assets
37,289
72,188
Total current assets
1,118,184
948,422
Property and equipment, net
53,576
45,271
Operating lease right-of-use asset,
net
68,074
58,849
Goodwill
1,281,812
1,281,876
Other intangible assets, net
63,599
105,736
Deferred tax assets, net
79,822
28,106
Deferred commissions, non-current
86,232
63,435
Other assets
14,048
9,615
Total assets
$
2,765,347
$
2,541,310
Liabilities and shareholders'
equity
Current liabilities:
Accounts payable
$
21,953
$
22,715
Accrued expenses, current
188,380
141,556
Deferred revenue, current
811,058
688,554
Operating lease liabilities, current
15,652
12,774
Total current liabilities
1,037,043
865,599
Deferred revenue, non-current
34,423
25,783
Accrued expenses, non-current
29,212
19,409
Operating lease liabilities,
non-current
59,520
52,070
Deferred tax liabilities
280
85
Long-term debt, net
—
273,918
Total liabilities
1,160,478
1,236,864
Shareholders' equity:
Common shares, $0.001 par value,
600,000,000 shares authorized, 290,411,108 and 286,053,276 shares
issued and outstanding at March 31, 2023 and 2022, respectively
290
286
Additional paid-in capital
1,989,797
1,792,197
Accumulated deficit
(353,389
)
(461,348
)
Accumulated other comprehensive loss
(31,829
)
(26,689
)
Total shareholders' equity
1,604,869
1,304,446
Total liabilities and shareholders'
equity
$
2,765,347
$
2,541,310
DYNATRACE, INC.
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(In thousands)
Year Ended March 31,
2023
2022
Cash flows from operating
activities:
Net income
$
107,959
$
52,451
Adjustments to reconcile net income to
cash provided by operations:
Depreciation
12,541
10,638
Amortization
42,070
46,238
Share-based compensation
146,874
99,536
Loss on extinguishment of debt
5,925
—
Deferred income taxes
(53,534
)
(12,401
)
Other
988
1,486
Net change in operating assets and
liabilities:
Accounts receivable
(94,910
)
(108,848
)
Deferred commissions
(45,191
)
(29,533
)
Prepaid expenses and other assets
26,753
(8,108
)
Accounts payable and accrued expenses
58,680
35,946
Operating leases, net
1,186
1,353
Deferred revenue
145,544
162,159
Net cash provided by operating
activities
354,885
250,917
Cash flows from investing
activities:
Purchase of property and equipment
(21,540
)
(17,695
)
Acquisition of businesses, net of cash
acquired
—
(13,195
)
Net cash used in investing activities
(21,540
)
(30,890
)
Cash flows from financing
activities:
Repayment of term loans
(281,125
)
(120,000
)
Debt issuance costs
(1,949
)
—
Proceeds from employee stock purchase
plan
17,806
13,913
Proceeds from exercise of stock
options
32,939
25,489
Equity repurchases
(15
)
(66
)
Net cash used in financing activities
(232,344
)
(80,664
)
Effect of exchange rates on cash and cash
equivalents
(8,620
)
(1,358
)
Net increase in cash and cash
equivalents
92,381
138,005
Cash and cash equivalents, beginning of
year
462,967
324,962
Cash and cash equivalents, end of year
$
555,348
$
462,967
DYNATRACE, INC.
GAAP to Non-GAAP
Reconciliations
(Unaudited - In
thousands)
Three Months Ended March 31,
2023
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
$
59,565
$
(4,973
)
$
(272
)
$
(3,895
)
$
—
$
50,425
Gross profit
254,910
4,973
272
3,895
—
264,050
Gross margin
81
%
84
%
Research and development
61,502
(12,067
)
(445
)
—
—
48,990
Sales and marketing
124,702
(13,748
)
(1,143
)
—
(1,332
)
108,479
General and administrative
42,546
(11,233
)
(841
)
—
(1,826
)
28,646
Amortization of other intangibles
6,573
—
—
(6,573
)
—
—
Restructuring and other
156
—
—
—
(156
)
—
Operating income
$
19,431
$
42,021
$
2,701
$
10,468
$
3,314
$
77,935
Operating margin
6
%
25
%
Three Months Ended March 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
$
47,916
$
(3,321
)
$
(143
)
$
(3,875
)
$
—
$
40,577
Gross profit
204,669
3,321
143
3,875
—
212,008
Gross margin
81
%
84
%
Research and development
42,833
(5,985
)
(259
)
—
—
36,589
Sales and marketing
101,300
(9,470
)
(424
)
—
—
91,406
General and administrative
35,368
(8,810
)
(123
)
—
(78
)
26,357
Amortization of other intangibles
7,539
—
—
(7,539
)
—
—
Restructuring and other
—
—
—
—
—
—
Operating income
$
17,629
$
27,586
$
949
$
11,414
$
78
$
57,656
Operating margin
7
%
23
%
DYNATRACE, INC.
GAAP to Non-GAAP
Reconciliations
(Unaudited - In thousands,
except per share data)
Three Months Ended March
31,
2023
2022
Non-GAAP net income:
Net income
$
80,293
$
929
Income tax (benefit) expense
(54,384
)
16,355
Non-GAAP effective cash tax
10,084
(7,543
)
Interest (income) expense, net
(4,066
)
2,234
Cash received from (paid for) interest,
net
4,440
(1,826
)
Share-based compensation
42,021
27,586
Employer payroll taxes on employee stock
transactions
2,701
949
Amortization of other intangibles
6,573
7,539
Amortization of acquired technology
3,895
3,875
Transaction, restructuring, and other
3,314
78
Gain on currency translation
(2,412
)
(1,889
)
Non-GAAP net income
$
92,459
$
48,287
Share count:
Weighted-average shares outstanding -
basic
289,751
285,349
Weighted-average shares outstanding -
diluted
293,917
290,339
Shares used in non-GAAP per share
calculations:
Weighted-average shares outstanding -
basic
289,751
285,349
Weighted-average shares outstanding -
diluted
293,917
290,339
Net income per share:
Net income per share - basic
$
0.28
$
0.00
Net income per share - diluted
$
0.27
$
0.00
Non-GAAP net income per share - basic
$
0.32
$
0.17
Non-GAAP net income per share -
diluted
$
0.31
$
0.17
Three Months Ended March
31,
2023
2022
Free Cash Flow ("FCF"):
Net cash provided by operating
activities
$
120,427
$
88,305
Purchase of property and equipment
(5,915
)
(5,927
)
FCF
$
114,512
$
82,378
DYNATRACE, INC.
GAAP to Non-GAAP
Reconciliations
(Unaudited - In
thousands)
Year Ended March 31,
2023
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
$
222,891
$
(18,383
)
$
(798
)
$
(15,564
)
$
(380
)
$
187,766
Gross profit
935,639
18,383
798
15,564
380
970,764
Gross margin
81
%
84
%
Research and development (1)
218,349
(41,406
)
(1,704
)
—
—
175,239
Sales and marketing (1)
448,015
(51,147
)
(2,338
)
—
(1,332
)
393,198
General and administrative (1)
150,031
(35,938
)
(1,351
)
—
(2,206
)
110,536
Amortization of other intangibles
26,292
—
—
(26,292
)
—
—
Restructuring and other
141
—
—
—
(141
)
—
Operating income
$
92,811
$
146,874
$
6,191
$
41,856
$
4,059
$
291,791
Operating margin
8
%
25
%
(1) During the three months ended March 31, 2023, we began
allocating depreciation expense to operating expenses based upon
location and headcount, whereas previously it was included
primarily in general and administrative expense. This has been
retrospectively applied to the year ended March 31, 2023.
Year Ended March 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
$
172,876
$
(12,863
)
$
(1,059
)
$
(15,513
)
$
—
$
143,441
Gross profit
756,569
12,863
1,059
15,513
—
786,004
Gross margin
81
%
85
%
Research and development
156,342
(21,316
)
(1,879
)
—
—
133,147
Sales and marketing
362,116
(35,957
)
(2,305
)
—
—
323,854
General and administrative
126,622
(29,400
)
(701
)
—
(1,284
)
95,237
Amortization of other intangibles
30,157
—
—
(30,157
)
—
—
Restructuring and other
25
—
—
—
(25
)
—
Operating income
$
81,307
$
99,536
$
5,944
$
45,670
$
1,309
$
233,766
Operating margin
9
%
25
%
DYNATRACE, INC. GAAP to
Non-GAAP Reconciliations (Unaudited - In thousands, except per
share data)
Year Ended March 31,
2023
2022
Non-GAAP net income:
Net income
$
107,959
$
52,451
Income tax (benefit) expense
(17,992
)
19,208
Non-GAAP effective cash tax
(13,370
)
(27,889
)
Interest expense, net
3,409
10,192
Cash received from (paid for) interest,
net
3,803
(8,375
)
Share-based compensation
146,874
99,536
Employer payroll taxes on employee stock
transactions
6,191
5,944
Amortization of other intangibles
26,292
30,157
Amortization of acquired technology
15,564
15,513
Transaction, restructuring, and other
4,059
1,309
Gain on currency translation
(565
)
(544
)
Non-GAAP net income
$
282,224
$
197,502
Share count:
Weighted-average shares outstanding -
basic
287,700
284,161
Weighted-average shares outstanding -
diluted
291,617
290,903
Shares used in non-GAAP per share
calculations:
Weighted-average shares outstanding -
basic
287,700
284,161
Weighted-average shares outstanding -
diluted
291,617
290,903
Net income per share:
Net income per share - basic
$
0.38
$
0.18
Net income per share - diluted
$
0.37
$
0.18
Non-GAAP net income per share - basic
$
0.98
$
0.70
Non-GAAP net income per share -
diluted
$
0.97
$
0.68
Year Ended March 31,
2023
2022
Free Cash Flow ("FCF"):
Net cash provided by operating
activities
$
354,885
$
250,917
Purchase of property and equipment
(21,540
)
(17,695
)
FCF
333,345
233,222
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230517005058/en/
Investor: Noelle Faris VP, Investor Relations
Noelle.Faris@dynatrace.com
Media Relations: Jerome Stewart VP, Communications
Jerome.Stewart@dynatrace.com
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