DT Dynatrace Inc

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☒			ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Dynatrace, Inc.

Delaware			47-2386428
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)
1601 Trapelo Road, Suite 116 Waltham, MA (Address of principal executive offices)			02451 (Zip code)

Registrant’s telephone number, including area code: (781) 530-1000

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common stock, par value $0.001 per share

DT

New York Stock Exchange

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

The Registrant had 290,975,536 shares of common stock outstanding as of May 22, 2023.

PART I
Item 1.			Business			6
Item 1A.			Risk Factors			14
Item 1B.			Unresolved Staff Comments			38
Item 2.			Properties			38
Item 3.			Legal Proceedings			38
Item 4.			Mine Safety Disclosures			38
PART II
Item 5.			Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities			38
Item 6.			[Reserved]			40
Item 7.			Management’s Discussion and Analysis of Financial Condition and Results of Operations			41
Item 7A.			Quantitative and Qualitative Disclosures About Market Risk			54
Item 8.			Financial Statements and Supplementary Data			56
Item 9.			Changes in and Disagreements with Accountants on Accounting and Financial Disclosure			84
Item 9A.			Controls and Procedures			84
Item 9B.			Other Information			86
Item 9C.			Disclosure Regarding Foreign Jurisdictions that Prevent Inspections			86
PART III
Item 10.			Directors, Executive Officers and Corporate Governance			86
Item 11.			Executive Compensation			86
Item 12.			Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters			86
Item 13.			Certain Relationships and Related Transactions, and Director Independence			86
Item 14.			Principal Accounting Fees and Services			86
PART IV
Item 15.			Exhibits and Financial Statement Schedules			87
			Exhibit Index			87
Item 16.			Form 10-K Summary			88
			Signatures			89

•our future financial performance, including our expectations regarding key factors driving future performance, our revenue, annual recurring revenue, gross profit or gross margin, operating expenses, ability to generate cash flow, billing/revenue mix, and our pricing and licensing model;

•our ability to navigate the current macroeconomic environment;

•anticipated trends in our business and in the markets in which we operate;

•our ability to anticipate market needs and successfully develop new and enhanced solutions to meet those needs;

•the evolution of technology affecting our offerings, platform and markets, including our plans to continue evolving our technology capabilities;

•our plans to continue investing in research and development and driving innovation to meet customers’ needs and grow our customer base;

•our ability to maintain and expand our customer base and our partner ecosystem;

•our expectations regarding the evolving competitive environment;

•our plans to invest in future growth opportunities that we expect will drive long-term value;

•our ability to sell our offerings and expand internationally;

•our ability to hire and retain necessary qualified employees to grow our business and expand our operations; and

•our ability to adequately protect our intellectual property.

•We have experienced rapid revenue growth in recent periods, and our recent growth rates may not be indicative of our future growth.

•Our quarterly and annual operating results may be adversely affected due to a variety of factors, which could make our future results difficult to predict.

•Market adoption of the solutions that we offer is relatively new and may not grow as we expect, which may harm our business and prospects.

•Our business is dependent on overall demand for observability and security solutions and therefore reduced spending on those solutions or overall adverse economic conditions may negatively affect our business, operating results, and financial condition.

•If we fail to innovate and do not continue to develop and effectively market solutions that anticipate and respond to the needs of our customers, our business, operating results, and financial condition may suffer.

•If our platform and solutions do not effectively interoperate with our customers’ existing or future IT infrastructures, installations of our solutions could be delayed or canceled, which would harm our business.

•If we are unable to acquire new customers or retain and expand our relationships with existing customers, our future revenues and operating results will be harmed.

•Failure to effectively expand our sales and marketing capabilities could harm our ability to execute on our business plan, increase our customer base, and achieve broader market acceptance of our applications.

•We face significant competition, which may adversely affect our ability to add new customers, retain existing customers, and grow our business.

•If we are unable to maintain successful relationships with our partners, or if our partners fail to perform, our ability to market, sell, and distribute our applications and services will be limited, and our business, operating results, and financial condition could be harmed.

•Security breaches, computer malware, computer hacking attacks and other security incidents could harm our business, reputation, brand and operating results.

•Real or perceived errors, failures, defects, or vulnerabilities in our solutions could adversely affect our financial results and growth prospects.

•Failure to protect and enforce our proprietary technology and intellectual property rights could substantially harm our business, operating results, and financial condition.

•Thoma Bravo has significant influence over matters requiring stockholder approval, which may have the effect of delaying or preventing changes of control, or limiting the ability of other stockholders to approve transactions they deem to be in their best interest.

Dynatrace offers a unified observability and security platform with analytics and automation at its core, purpose-built for dynamic, hybrid, multicloud environments. Our comprehensive solutions help global organizations simplify cloud complexity, innovate faster, and do more with less in the modern cloud.

Our mission is to deliver answers and intelligent automation from data at an enormous scale.

Our purpose is to enable flawless and secure digital interactions.

Our vision is a world where software works perfectly.

As enterprises and public sector institutions embrace modern cloud environments as the underlying foundation of their digital transformations, we believe that the scale, growing complexity, and dynamic nature of these environments are rapidly making solutions such as the Dynatrace® platform mandatory instead of optional for many organizations. Our Dynatrace® platform combines the only fully unified end-to-end solution for comprehensive observability and continuous runtime application security together with advanced artificial intelligence (“AI”) for IT operations (“AIOps”) to provide answers and intelligent automation from data at enormous scale. This approach enables IT, development, security, and business operations teams to modernize and automate operations, deliver software faster and more securely, and provide better digital experiences.

The Dynatrace platform provides the following key benefits:

•Single agent, fully automated configuration. Dynatrace® is installed as a single agent, OneAgent®, which automatically configures itself, and continuously discovers all components of the customer’s full stack to enable high fidelity data capture at great scale. OneAgent® dynamically profiles the performance of all components of the full stack with code-level precision, even as applications and environments update and change. In addition, Dynatrace® incorporates and enriches data from open source approaches such as OpenTelemetry.

•Distributed tracing and code-level analysis technology. PurePath®, our patented distributed tracing and code-level analysis technology, automatically integrates high-fidelity distributed tracing with user experience data, data from open source technologies, including OpenTelemetry, and code level analytics.

•Topology mapping and visualization. As OneAgent® discovers all of the components and dependencies in the application environment, our proprietary Smartscape® technology simultaneously builds an interactive map of how everything in the environment is interconnected.

•AI-powered, answer-centric insights. Davis®, our proprietary AI engine, dynamically baselines the performance of all components in the full stack, continually learning to provide precise answers when performance deviates from expected or desired conditions. Unlike machine learning (“ML”)-based correlation engines that rely on historical data for learning behavior and which can overwhelm IT professionals with alerts, Dynatrace® provides a single problem resolution and precise root-cause determination. We believe the accuracy and precision of the answers delivered by Davis® enable our customers to shift from reactive to proactive remediation, providing a substantial advantage in time savings, resource efficiency, customer satisfaction, and business outcomes.

•Unified observability, security and business data at any scale. GrailTM, our proprietary data lakehouse architecture with massively parallel processing (“MPP”) technology, allows customers to analyze large volumes of data in modern cloud-native environments quickly and cost effectively without the overhead, expense and limitation of storage tiering, re-indexing, and rehydration imposed by alternative solutions.

•Automated workflow processes. Our AutomationEngine enables customers to automate workflow processes throughout the BizDevSecOps cycle allowing them to orchestrate integrations and take actions in a production environment. This enables customers to act faster, increase development and team efficiency, reduce risk, and accomplish more with fewer resources.

•APIs to easily build customer applications. Our AppEngine provides our customers’ teams with a no-code/low-code toolset and programmability with application programming interfaces (“APIs”) to build custom applications for specific use cases. Teams can collaborate and innovate faster with greater security and smarter BizDevsSecOps answers.

When combined, OneAgent®, Purepath®, Smartscape® and GrailTM have the unique ability to derive causal AI for the myriad of issues that impact a customer’s uptime and performance. OneAgent® discovers and automatically updates configuration without requiring constant manual agent updates or application code changes. Purepath® and Smartscape® automatically enrich the data with full topological and dependency mapping context. GrailTM enables almost any type of query in near-real-time and Davis® leverages all of the data in context to provide precise answers and intelligent automation.

All of our offerings leverage the Dynatrace® observability and security platform to provide application and microservices monitoring, runtime application security, infrastructure monitoring, log management and analytics, digital experience monitoring (“DEM”), digital business analytics, and cloud automation in an easy-to-use, highly automated, all-in-one solution.

Dynatrace® Infrastructure Monitoring provides complete visibility into a customer’s infrastructure layer across public and private clouds and hybrid, multicloud environments. This coverage extends to the leading cloud platforms, including AWS, Azure, GCP, VMWare Tanzu, Red Hat OpenShift, and Kubernetes, utilizing our OneAgent® instrumentation and powerful API ingestion capabilities to provide a single source of analysis across environments.

Optimized for cloud-native applications, containers, and Kubernetes, Dynatrace® Application Security automatically and continuously detects vulnerabilities in applications, libraries, and code at runtime. It also provides real-time detection and blocking to help protect against injection attacks that exploit critical vulnerabilities, such as Log4Shell. It removes blind spots and helps development teams more quickly determine the cause of vulnerabilities, which we believe provides organizations with confidence in the security of their applications.

Dynatrace® Digital Experience Monitoring integrates three user experience capabilities into one solution - Real User Monitoring (“RUM”), Synthetic Monitoring, and Session Replay. Dynatrace® RUM automatically captures every user click, tap, and swipe from any device across targeted applications and automatically connects these to back-end services for a complete picture of the user journey. Dynatrace® Synthetic Monitoring simulates user experience across production and development environments in internally built and third-party applications, such as Salesforce, Zoom, NetSuite, and ServiceNow, to provide a proactive view into applications and API performance and availability without the need for live users. Dynatrace® Session Replay delivers a movie-like review of a real user’s experience with an application, including what they saw and clicked on, how they converted, or where they abandoned the application. We believe these insights enable digital teams to create more perfect user experiences. They also help align IT, developer, and business teams with a singular view and source of digital truth.

Dynatrace® Digital Business Analytics leverages the data already flowing through the Dynatrace platform’s APM, Infrastructure Monitoring, and DEM modules and leverages Davis®, the AI engine, to provide precise, real-time answers that enable teams to understand how the performance of their digital services affects critical key performance indicators (“KPIs”), such as feature adoption, conversion, orders, release validation, customer segmentation, and app store ratings. These insights enable teams to continuously improve their user experience and accelerate the delivery of digital innovation.

Dynatrace® Cloud Automation leverages the observability and intelligence at the core of the Dynatrace platform and includes an embedded control plane to enable development, DevOps, and site reliability engineering (“SRE”) teams to automate continuous integration and continuous delivery (“CI/CD”), deployment, and release processes to accelerate release cycles, drive production reliability, and meet business imperatives. Through shorter feedback loops between Dev and Ops teams and continuous release validation, DevOps and SRE teams can focus on delivering innovation faster and with less risk.

The Dynatrace® platform utilizes big data architecture and enterprise-proven cloud technologies that are engineered for large, complex hybrid, multicloud environments. With role-based access and advanced security functionality, we built the Dynatrace® platform for enterprise-wide adoption by the largest organizations in the world.

Dynatrace® provides out-of-the-box configuration for the leading cloud platforms, such as AWS, Azure, GCP, Red Hat OpenShift, and SAP, as well as coverage for traditional on-premises systems, including mainframe and monolithic applications in a single, easy-to-use, intelligent platform.

The majority of our customers deploy Dynatrace® as a Software-as-a-Service (“SaaS”) solution to get the latest Dynatrace® features and updates with greatly reduced administrative effort. Our SaaS solution provides customers with the ability to scale up and down rapidly, without having to purchase, provision, and manage their hardware. We also provide options to deploy our platform at the edge in customer-provisioned infrastructure, which we refer to as Dynatrace Managed. This offering allows customers the flexibility to maintain control of the environment where their data resides, whether in the cloud or on-premises, combining the simplicity of SaaS with the ability to adhere to their own data security and sovereignty requirements. Our Mission Control center automatically upgrades all Dynatrace® instances and offers on-premises cluster customers auto-deployment options that suit their specific enterprise management processes.

Extend our technology and market leadership position. We intend to maintain our position as the market-leading unified observability and security platform through increased investment in research and development, and continued innovation. We expect to focus on expanding the functionality of our unified Dynatrace® platform and investing in capabilities that address new market opportunities. We also plan to continue evolving our causal AI capabilities to drive differentiation through precise answers and broad-based automation. We believe this strategy will enable new growth opportunities and allow us to continue to deliver differentiated high-value outcomes to our customers.

Grow our customer base. We intend to drive new customer growth by expanding our direct sales force focused on the largest 15,000 global enterprise accounts, which generally have annual revenues in excess of $1 billion. In addition, we plan to leverage our global partner ecosystem to add new customers in geographies where we have direct coverage and work jointly with our partners.

Increase penetration within existing customers. We plan to continue to increase the penetration within our existing customers by establishing new and deeper relationships within our customers’ organizations (notably, development teams) and expanding the breadth of our platform capabilities to provide for continued cross-selling opportunities. In addition, we believe the ease of implementation for Dynatrace® provides us the opportunity to expand adoption within our existing enterprise customers, across new customer applications, and into additional business units or divisions. Once customers are on the Dynatrace® platform, we have seen significant dollar-based net expansion due to the ease of use and power of our platform.

Enhance our strategic partner ecosystem. We intend to continue to invest in our strategic partner ecosystem, with a particular emphasis on cloud-focused partnerships with GSIs and hyperscaler cloud providers. These strategic partners continually work with their customers to help them digitally transform their businesses and reduce cloud complexity. By working more closely with strategic partners, our objective is to participate in digital transformation projects earlier in the purchasing cycle and enable customers to establish more resilient cloud deployments from the start.

We take Dynatrace® to market through a combination of our global direct sales team and a network of partners, including global system integrators (“GSIs”), cloud providers, resellers and technology alliance partners. We target the largest 15,000 global enterprise accounts, which generally have annual revenues in excess of $1 billion, which we believe see more value from our integrated full-stack platform.

Our sales and marketing organizations seek to promote the Dynatrace® brand, our platform capabilities, and develop partnerships to drive revenue growth. We utilize a variety of go-to-market strategies, including search-engine optimization, online advertising, free software trials, events, online webinars, and broad content marketing strategies. We nurture our existing customer base through ongoing education, and training, including upsell and cross-sell opportunities. We do this primarily through our digital online channels, such as the Dynatrace News blog, Dynatrace Community, and Dynatrace University, as well as our customer event series ‘Perform’ and ‘Innovate’.

We develop and maintain partnerships that help us market and deliver our offerings to our customers around the world. Our goal is to bring together industry experts and hands-on practitioners to create a world-class partner network. In addition, our partner network extends the sales reach of the Dynatrace® platform providing new sales opportunities, renewals of existing subscriptions, as well as upsell and cross-sell opportunities. Our partner network includes:

•Global system integrators. We work closely with 10 strategic GSIs, including Deloitte and DXC, 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 hundreds of individuals trained or certified on the Dynatrace platform. In addition, we continue to foster relationships with a network of regional systems integrators that help joint customers integrate our offerings into their multicloud ecosystems. These partners extend our scale and reach and collaborate with our direct sales teams, bringing domain expertise in technologies and industries along with additional offerings powered by Dynatrace®.

•Cloud providers. We work with the major cloud providers to increase awareness of our offerings and make it easy for customers to access our software. Our software is developed to run in and integrate with leading cloud providers, such as AWS, Azure, and GCP. Our customers are also able to procure our software through leading marketplaces, such as AWS, Azure, SAP, and Google.

•Resellers. Our resellers market and sell our offerings throughout the world and provide a go-to-market channel in countries and regions where we do not have a direct presence, such as in Africa, Japan, the Middle East, and South Korea.

•Technology alliance partners. We partner with leading innovative technology organizations such as Atlassian, Red Hat, ServiceNow, Snyk, and VMware to develop integrations, best practices, and extended capabilities that help our customers and solution partners achieve faster time to market and enhanced value in dynamic multicloud environments.

Our Dynatrace Services Organization empowers our customers to innovate, automate, and transform the way they work with the Dynatrace® platform. Our expertise and cloud modernization practices cover cloud ecosystem integration, automated incident management and problem resolution, DevOps CI/CD integration, user experience, business intelligence insights, digital business analytics, and more.

The principal competitive factors in our markets are:

•AI capabilities;

•automation;

•product features, functionality, and reliability;

•ease and cost of deployment, use and maintenance;

•deployment options and flexibility;

•customer, technology, and platform support;

•ability to easily integrate with customers’ software application and IT infrastructure environments;

•the quality of data collection and correlation;

•interoperability and ease of integration; and

•brand recognition.

We compete either directly or indirectly with:

•APM vendors, such as Cisco and New Relic;

•infrastructure monitoring vendors, such as BMC and Datadog;

•log management vendors, such as Splunk and Datadog;

•DEM vendors, such as Akamai and Catchpoint;

•security vendors, such as Palo Alto Networks and Splunk;

•open source and commercial open source vendors, such as Elastic and Grafana;

•point solutions from public cloud providers; and

•IT operations management, AIOps, and business intelligence providers with offerings that cover some portion of the capabilities that we provide.

We subsequently built on that foundation. Since our 2022 ESG materiality update, we gathered additional stakeholder feedback and recalibrated our ESG initiatives under the following three key pillars: sustaining our environment; people, culture and community; and governance and ethics. Later this fiscal year, we plan to issue our inaugural Global Impact Report. Our Global Impact Report will discuss our three key ESG pillars in more detail. For information about some of our people, culture and community focuses, please see the “Human Capital Management” section below.

Dynatrace continues to be recognized as an employer of choice, earning awards around the globe in the last two years. In 2022 and 2023, Dynatrace won two of Comparably’s workplace awards - Best Company Outlook and Best Global Culture. In 2022, we were also listed in Comparably’s Best Places to Work in Boston and named a Trend Top Employer in Austria, where we maintain a large R&D presence.

Strengthening our approach to DEIB - People, culture, and community initiatives focused on improving our DEIB efforts help us build a more inclusive and supportive culture. We believe these initiatives also help us invest in the development of our employees and are critical to our ability to continuously innovate as unique perspectives and individual life experiences can foster creativity and agility. At Dynatrace, we respect and value all of our diverse backgrounds, identities, and perspectives. DEIB is critical to our mission, and we are committed to maintaining a culture where every Dynatracer feels respected, safe, included, and valued. As of March 31, 2023, women represented 25% of our global employee population and 26% of our U.S. employees were from diverse racial and ethnic backgrounds.

Optimizing the Dynatrace workplace experience - In fiscal 2023, we conducted a detailed discovery initiative to better understand the global employee experience. We held in-person and virtual focus groups and conducted a broad employee survey. We also interviewed the executive team and a broader group of our extended management team. The findings from these assessments highlighted a number of strengths and also provided focus areas for future refinements. We designed a Dynatrace Work Model (which has hybrid and remote options) to support increased connection and collaboration, driving cultural vibrancy and supporting innovation, all while enabling a flexible work approach. We encourage Dynatracers to find the solutions that work best for them and their team.

Building out our learning and development program - At Dynatrace, we embrace a culture of continuous learning. We offer employees a comprehensive, global, and scalable learning solution that includes access to thousands of online courses for every role and level. Employees can also use Dynatrace University to develop skills to monitor, manage, and analyze Dynatrace customer environments. We require Dynatracers to complete a set of mandatory training courses each year. We also reimburse employees for certain educational expenses, including tuition, conferences, training, and books.

Wellness – We value the health and well-being of our employees. As part of our focus in this area beyond the Dynatrace Work Model (discussed above), we provide employees with quarterly, company-designated Wellness Days to disconnect from work and recharge. Our mental health resources include access to an employee assistance program (“EAP”), and we also provide employees with financial wellness tools.

Saving for the future: compensation and benefits - Our compensation program is designed to attract, reward, and retain talented individuals who possess the skills necessary to support our business, contribute to our strategic goals, and create long-term value for our stockholders. We provide employees with industry-competitive compensation and benefits, including retirement savings programs, the opportunity to invest in Dynatrace at a discount through our Employee Stock Purchase Plan (“ESPP”), and medical, dental, vision, and life and disability plans. Our benefits vary around the world due to local country regulations and cultural preferences.

Community service and volunteering - We take pride in giving back to the communities in which we work and live. We are eager to share our skills, passion, and resources to help benefit others, whether they are underprivileged members of society or underrepresented communities in the technology space. Through our volunteer program, Dynatracers can engage in paid time off to volunteer with charitable organizations that they are passionate about.

The Dynatrace design logo and our other registered or common law trademarks, service marks or trade names appearing in this Annual Report are the property of Dynatrace LLC. This Annual Report includes our trademarks and trade names, including, without limitation, Dynatrace®, OneAgent®, SmartScape®, PurePath®, Davis® and GrailTM which are our property and are protected under applicable intellectual property laws. Other trademarks and trade names referred to in this Annual Report are the property of their respective owners.

Risks Related to Our Business and Industry

We have experienced rapid revenue growth in recent periods. Our annual revenue grew 25%, 32% and 29% in the years ended March 31, 2023, 2022 and 2021, respectively, compared to the prior year. This revenue growth may not be indicative of our future revenue growth, and we may not be able to sustain revenue growth consistent with recent history, or at all. We believe our ability to continue to increase our revenue depends on several factors, including, but not limited to:

•our ability to attract new customers and retain and increase sales to existing customers;

•our ability to continue to expand customer adoption and usage of our Dynatrace® platform;

•our ability to develop our existing platform, introduce new solutions, and enhance and improve existing solutions on our platform;

•continued growth of cloud-based services and solutions;

•our ability to continue to develop offerings and solutions that our customers prefer over those of our competitors;

•our ability to hire and retain sufficient numbers of sales and marketing, R&D, and general and administrative personnel; and

•our ability to expand into new geographies and markets, including the business intelligence, data analytics, and application security markets, and expand our global operations.

Our annual and quarterly revenue and operating results have fluctuated significantly in the past and may vary significantly in the future due to a variety of factors, many of which are outside of our control. Our financial results in any one quarter may not be meaningful and should not be relied upon as indicative of future performance. If our revenues, earnings, or operating results fall below the expectations of investors or securities analysts in a particular quarter, or below any guidance that we may provide, the price of our common stock could decline. We may not be able to accurately predict our future billings, revenues, earnings, or operating results. Some of the important factors that may cause our operating results to fluctuate from quarter to quarter or year to year include:

•fluctuations in the demand for our solutions, the timing of purchases by our customers, and the length of the sales cycles, particularly for larger purchases;

•fluctuations in the rate of utilization by customers of the cloud to manage their business needs, or a slowdown in the migration of enterprise systems to the cloud;

•the impact of recessionary pressures or uncertainties in the global economy, or in the economies of the countries in which we operate, on our customers’ purchasing decisions and the length of our sales cycles:

•our ability to attract new customers and retain existing customers;

•our ability to expand into new geographies and markets, including the business intelligence, data analytics, and application security markets;

•the budgeting cycles and internal purchasing priorities of our customers;

•changes in customer renewal rates, churn, and our ability to cross-sell additional solutions to our existing customers and our ability to up-sell additional quantities of previously purchased offerings to existing customers;

•the seasonal buying patterns of our customers;

•the payment terms and contract term length associated with our product sales and their effect on our billings and free cash flow;

•changes in customer requirements or market needs;

•the emergence of significant privacy, data protection, systems and application security or other threats, regulations or requirements applicable to the use of enterprise systems or cloud-based systems that we are not prepared to meet or that require additional investment by us;

•changes in the demand and growth rate of the market for observability, application security, and analytics solutions;

•our ability to anticipate or respond to changes in the competitive landscape, or improvements in the functionality of competing solutions that reduce or eliminate one or more of our competitive advantages;

•our ability to timely develop, introduce and gain market acceptance for new solutions and product enhancements;

•our ability to adapt and update our offerings and solutions on an ongoing and timely basis in order to maintain compatibility and efficacy with the frequently changing and expanding variety of software and systems that our offerings are designed to monitor;

•our ability to maintain and expand our relationships with strategic technology partners who own, operate, and offer the major platforms on which applications operate, with which we must interoperate and remain compatible, and from which we must obtain certifications and endorsements in order to maintain credibility and momentum in the market;

•our ability to control costs, including our operating expenses;

•our ability to efficiently complete and integrate any acquisitions or business combinations that we may undertake in the future;

•general economic, industry, and market conditions, both domestically and in our foreign markets, including regional or geopolitical conflicts or other disruptions to commerce;

•the emergence of new technologies or trends in the marketplace, or a change in the trends that are important to our strategy and the value of our platform in the marketplace;

•foreign currency exchange rate fluctuations;

•the timing of revenue recognition for our customer transactions, and the effect of the mix of subscriptions and services on the timing of revenue recognition;

•extraordinary expenses, such as litigation or other dispute-related settlement payments; and

•future accounting pronouncements or changes in our accounting policies.

Any one of the factors referred to above or the cumulative effect of some of the factors referred to above may result in our operating results being below our expectations and the expectations of securities analysts and investors and any guidance that we may provide or may result in significant fluctuations in our quarterly and annual operating results, including fluctuations in our key performance indicators. This variability and unpredictability could result in our failure to meet our business plan or the expectations of securities analysts or investors for any period. In addition, a significant percentage of our operating expenses are fixed in nature in the short term and based on forecasted revenue trends. Accordingly, in the event of revenue shortfalls, we are generally unable to mitigate the negative impact on margins in the short term.

The utilization of solutions that we offer on the Dynatrace® platform is relatively new. We believe our future success will depend in large part on the growth, if any, in the demand for observability and security solutions that utilize analytics and automation at their core, particularly the demand for enterprise-wide solutions and our ability to provide solutions that meet such ever-evolving needs. We currently target the markets for observability, APM, application security, infrastructure monitoring, log management and analytics, DEM, digital business analytics, and automation. It is difficult to predict customer demand, adoption, churn and renewal rates for our new and existing solutions, the rate at which existing customers expand their usage of our solutions, and the size and growth rate of the market for our solutions. Expansion in our addressable market depends on a number of factors, including the continued and growing reliance of enterprises on software applications to manage and drive critical business functions and customer interactions, increased use of microservices and containers, as well as the continued proliferation of mobile applications, large data sets, cloud computing and the Internet of Things. If our solutions do not achieve widespread adoption, we are not able to develop new solutions that meet customer needs, or there is a reduction in demand for observability and security solutions generally, it could result in reduced customer purchases, reduced renewal rates, and decreased revenue, any of which will adversely affect our business, operating results and financial condition.

Our business is dependent on overall demand for observability and security solutions and therefore reduced spending on those solutions or overall adverse economic conditions may negatively affect our business, operating results, and financial condition.

In addition, the process of developing new technology is complex and uncertain, and if we fail to accurately predict customers’ changing needs and emerging technological trends, our business could be harmed. We believe that we must continue to dedicate significant resources to our research and development efforts, including significant resources to developing new solutions and solution enhancements before knowing whether the market will accept them. For example, we have made significant investments in our new application security offering and in developing our GrailTM core technology, AutomationEngine, and AppEngine. Our new solutions and solution enhancements could fail to attain sufficient market acceptance for many reasons, including:

•delays in developing and releasing new solutions or enhancements to the market;

•delays or failures to provide updates to customers to maintain compatibility between Dynatrace® and the various applications and platforms being used in the customers’ applications and multicloud environments;

•failures to accurately predict market or customer demands, priorities, and practices, including other technologies utilized by customers in their environments and partners that they prefer to work with;

•the introduction or anticipated introduction of competing products by existing and emerging competitors;

•the inability of our sales and marketing teams or those of our partners to sell solutions for new markets and product categories;

•defects, errors, or failures in the design or performance of our new solutions or solution enhancements;

•negative publicity about the performance or effectiveness of our solutions; and

•the perceived value of our solutions or enhancements relative to their cost.

•offer a compelling, unified observability and security platform, together with advanced AIOps, that provides answers and intelligent automation from data at an enormous scale;

•execute our sales and marketing strategy;

•effectively identify, attract, onboard, train, develop, motivate and retain new sales, marketing, professional services, and support personnel in the markets we pursue;

•develop or expand relationships with technology partners, systems integrators, resellers, online marketplaces, and other partners, including strategic alliances and cloud-focused partnerships with GSIs, including Deloitte and DXC, and hyperscalers such as AWS, GCP, Azure, IBM Red Hat and others, some of which may also compete with us;

•expand into new geographies and markets, including the business intelligence and data analytics market;

•deploy our platform and solutions for new customers; and

•provide quality customer support and professional services.

•greater brand recognition and longer operating histories;

•longer-term and more extensive relationships with existing and potential customers, and access to larger customer bases, which often provide incumbency advantages;

•broader global distribution and presence;

•larger sales and marketing budgets and resources;

•the ability to integrate or bundle competitive offerings with other products, offerings and services;

•lower labor and development costs;

•greater resources to make acquisitions;

•larger and more mature intellectual property portfolios; and

•substantially greater financial, technical, management and other resources.

If the prices we charge for our solutions and services are unacceptable to our customers, our operating results will be harmed.

Our agreements with our partners are generally non-exclusive, meaning our partners may offer products from several different companies to their customers or have their products or technologies also interoperate with products and technologies of other companies, including products that compete with our offerings. Moreover, some of our partners also compete with us, and if our partners do not effectively market and sell our offerings, choose to use greater efforts to market and sell their own products or those of our competitors or fail to meet the needs of our customers, our ability to grow our business and sell our offerings will be harmed. Many of our customers are also customers of hyperscalers such as AWS, GCP, Azure, or IBM Red Hat. If our solutions fail to interoperate effectively with the hyperscalers’ products, or if our partnerships with one or more of these hyperscalers is not successful or is terminated, our ability to sell additional products or offerings to these customers and our ability to grow our business will be harmed. Furthermore, our partners may cease marketing our offerings with limited or no notice and with little or no penalty, and new partners could require extensive training and may take several months or more to achieve productivity. The loss of a substantial number of our partners, our possible inability to replace them or our failure to recruit additional partners could harm our results of operations. Our partner structure could also subject us to lawsuits or reputational harm if, for example, a partner misrepresents the functionality of our offerings to customers or violates applicable laws or our corporate policies.

We believe the Dynatrace® brand is integral to our future success and if we fail to cost-effectively maintain and enhance our brand, our business and competitive position may be harmed.

We believe that maintaining and enhancing the Dynatrace® brand and increasing market awareness of our company and our solutions are critical to achieving broad market acceptance of our existing and future solutions and are important elements in attracting and retaining customers, partners, and employees, particularly as we continue to expand internationally and introduce new capabilities and enhancements. In addition, independent industry analysts, such as Gartner and Forrester, often provide reviews of our solutions, as well as those of our competitors, and perception of our solutions in the marketplace may be significantly influenced by these reviews. We have no control over what these or other industry analysts report, and because industry analysts may influence current and potential customers, our brand could be harmed if they do not provide a positive review of our solutions or view us as a market leader.

The successful promotion of the Dynatrace® brand and the market’s awareness of our solutions and platform will depend largely upon our ability to continue to offer enterprise-grade observability and security solutions, our ability to be thought leaders in application intelligence, our marketing efforts, and our ability to successfully differentiate our solutions from those of our competitors. We have invested, and expect to continue to invest, substantial resources to promote and maintain our brand and generate sales leads, both in the United States and internationally, but there is no guarantee that our brand development strategies will enhance the recognition of our brand or lead to increased sales. If our efforts to promote and maintain our brand are not cost effective or successful, our operating results and our ability to attract and retain customers, partners and employees may be adversely affected. In addition, even if our brand recognition and customer loyalty increase, this may not result in increased sales of our solutions or higher revenue.

Many of our customers are large enterprises, whose purchasing decisions, budget cycles and constraints, and evaluation processes are unpredictable and out of our control. During recessionary times, or when there is volatility or uncertainty in the global economy or in the economies of the countries in which we operate, our sales cycles may be elongated and our customers’ purchasing decisions may be delayed or cancelled. The length of our sales cycle, from initial evaluation to payment for our subscriptions, can range from several months to over a year and can vary substantially from customer to customer. Our sales efforts involve significant investment of resources in field sales, partner development, marketing, and educating our customers about the use, technical capabilities, and benefits of our platform and services. Customers often undertake a prolonged evaluation process, which frequently involves not only our platform, but also those of other companies or the consideration of internally developed alternatives, including those using open source software. Some of our customers initially deploy our platform on a limited basis, with no guarantee that they will deploy our platform widely enough across their organization to justify our substantial pre-sales investment. As a result, it is difficult to predict exactly when, or even if, we will make a sale to a potential customer or if we can increase sales to our existing customers.

In December 2022, we entered into a senior secured revolving credit facility in the aggregate amount of $400.0 million. As of March 31, 2023, we had $384.5 million available under the credit facility with $15.5 million of letters of credit outstanding. The actual amounts of our debt servicing payments vary based on the amounts of indebtedness outstanding, the applicable interest accrual periods and the applicable interest rates and fee margins, which vary based on prescribed formulas. The credit facility contains various customary covenants (including a financial covenant requiring compliance with a maximum leverage ratio) that are operative so long as our Credit Facility remains outstanding.

We currently host our Dynatrace® solutions on cloud infrastructure hyperscaler providers, such as AWS, Azure and GCP. Our Dynatrace® solutions reside on hardware operated by these providers. Our operations depend on protecting the virtual cloud infrastructure hosted by a hyperscaler by maintaining its configuration, architecture, features, and interconnection specifications, as well as the information stored in these virtual data centers and which third-party internet service providers transmit. Although we have disaster recovery plans, including the use of multiple hyperscaler locations, any incident affecting a hyperscaler’s infrastructure that may be caused by fire, flood, severe storm, earthquake, or other natural disasters, actual or threatened public health emergencies, cyber-attacks, terrorist or other attacks, and other similar events beyond our control could negatively affect our platform and our ability to deliver our solutions to our customers. A prolonged hyperscaler service disruption affecting our SaaS platform for any of the foregoing reasons would negatively impact our ability to serve our customers and could damage our reputation with current and potential customers, expose us to liability, cause us to lose customers, or otherwise harm our business. We may also incur significant costs for using alternative equipment or taking other actions in preparation for, or in reaction to, events that damage the hyperscaler services we use.

As of March 31, 2023, we had 115 issued patents, 80 of which are in the United States, and 42 pending applications, of which 25 are in the United States. Our issued patents expire at various dates through July 2041. The process of obtaining patent protection is expensive and time-consuming, and we may not be able to prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner. We may choose not to seek patent protection for certain innovations and may choose not to pursue patent protection in certain jurisdictions. Furthermore, it is possible that our patent applications may not result in issued patents, that the scope of the claims in our issued patents will be insufficient or not have the coverage originally sought, that our issued patents will not provide us with any competitive advantages, and that our issued patents and other intellectual property rights may be challenged by others or invalidated through administrative process or litigation. In addition, issuance of a patent does not guarantee that we have an absolute right to practice our patented technology, or that we have the right to exclude others from practicing our patented technology. As a result, we may not be able to obtain adequate patent protection or to enforce our issued patents effectively.

As part of our strategy to broaden our target markets and accelerate adoption of our offerings, we contribute software program code to certain open source projects managed by organizations such as Microsoft, Google, and Cloud Native Computing Foundation. We also undertake our own open source initiatives to promote “open innovation” and “enterprise openness,” meaning that we make technologies available under open source licenses with the goal of exchanging insights and experience with other experts in the community, broadening the adoption of our platform by our customers, and providing our partners with the ability to leverage their own technologies through the Dynatrace® platform. In some cases, we accept contributions of code from the community, our customers, and partners.

•In the United States, state legislatures continue to propose and pass comprehensive privacy legislation. For example, California enacted the California Consumer Privacy Act (“CCPA”), which was amended by a ballot initiative, the California Privacy Rights Act (“CPRA”) in November 2020. The newly amended version of the CCPA became effective on January 1, 2023. Among other things, the CCPA gives California residents rights to access and delete their personal information, opt out of certain personal information sharing, and receive detailed information about how their personal information is used. The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches that is expected to increase data breach litigation. It is not yet fully clear how the recently amended CCPA will be interpreted. The effects of the recently amended CCPA are potentially significant and may require us to modify our data collection or processing practices and policies and to incur substantial costs and expenses to comply and increase our potential exposure to regulatory enforcement and/or litigation. Certain other state laws impose similar privacy obligations and we also anticipate that more states will increasingly enact legislation similar to the CCPA. The CCPA has prompted a number of proposals for new federal and state-level privacy legislation, and in some states efforts to pass comprehensive privacy laws have been successful. The existence of comprehensive privacy laws in different states in the country, if enacted, will add additional complexity, variation in requirements, restrictions, and potential legal risk, require additional investment of resources in compliance programs, impact strategies and the availability of previously useful data, and has resulted in and will result in increased compliance costs and/or changes in business practices and policies.

•Outside of the United States, virtually every jurisdiction in which we operate has established its own privacy, data protection and/or data security legal framework with which we or our customers must comply, including, but not limited to, the European Union (“EU”).

◦In the EU, data protection laws are stringent and continue to evolve, resulting in possible significant operational costs for internal compliance and risk to our business. The EU has adopted the GDPR, which imposes robust obligations upon covered companies, including heightened notice and consent requirements, greater rights of data subjects (e.g., the “right to be forgotten”), increased data portability for EU consumers, additional data breach notification and data security requirements, requirements for engaging third-party processors, and increased fines for non-compliance. Serious breaches of the GDPR (and similar data protection regulations in the United Kingdom) may result in monetary penalties of up to 4% of worldwide annual revenue and fines up to 2% of annual worldwide revenue can be imposed for other violations. In addition to the GDPR, the EU also is considering the Regulation on Privacy and Electronic Communications (“ePrivacy Regulation”) which would replace an existing ePrivacy Directive. The ePrivacy Regulation is focused on privacy regarding electronic communications services and data processed by electronic communications services. The ePrivacy Regulation may require us to further modify some of our data practices and compliance could result in additional costs for our company. In addition, the proposed EU Digital Services Act (“DSA”) and Digital Markets Act (“DMA”) will add further complexity and increased consumer protection and technology regulation.

◦Many jurisdictions outside of Europe where we do business directly or through resellers today and may seek to expand our business in the future, are also considering and/or have enacted comprehensive data protection and/or cybersecurity legislation. These include Australia, Brazil, China, Japan, Mexico, and Singapore.

•We are subject to various data transfer rules related to our ability to transfer data from one country to another. This may limit our ability to transfer certain data or require us to guarantee a certain level of protection when transferring data from one country to another.

•We are also subject to data localization laws in certain countries that may, for example, require personal information of citizens to be collected, stored, and modified only within that country. These and similar regulations may interfere with our intended business activities, inhibit our ability to expand into those markets, require modifications to our offerings or services, or prohibit us from continuing to offer services in those markets without significant additional costs.

•Current or future laws, regulations, and ethical considerations related to the use of AI technology and ML may impact our ability to provide insights from data and use certain data to develop our offerings. These factors may also impose burdensome and costly requirements on our ability to utilize data in innovative ways.

•increased expenses associated with international sales and operations, including establishing and maintaining office space and equipment for our international operations;

•fluctuations in exchange rates between currencies in the markets where we do business, including the recently strengthened dollar, and other controls, regulations, and orders that might restrict our ability to repatriate cash;

•volatility, uncertainties, and recessionary pressures in the global economy or in the economies of the countries in which we operate;

•difficulties in penetrating new markets due to existing competition or local lack of recognition of the Dynatrace® brand;

•risks associated with trade restrictions and additional legal requirements, including the exportation of our technology or source code that is required in many of the countries in which we operate;

•greater risk of unexpected changes in regulatory rules, regulations and practices, tariffs and tax laws and treaties;

•compliance with United States and foreign import and export control and economic sanctions laws and regulations, including the Export Administration Regulations administered by the U.S. Department of Commerce’s Bureau of Industry and Security and the executive orders and laws implemented by the U.S. Department of the Treasury’s Office of Foreign Asset Controls;

•compliance with anti-bribery laws, including the U.S. Foreign Corrupt Practices Act (“FCPA”) and the U.K. Anti-Bribery Act, and a heightened risk of unfair or corrupt business practices in certain geographies, and of improper or fraudulent sales arrangements that may impact financial results and result in restatements of, or irregularities in, financial statements;

•compliance with privacy, data protection, and data security laws of many countries and jurisdictions, including the EU’s GDPR and the CCPA;

•limited or uncertain protection of intellectual property rights in some countries and the risks and costs associated with monitoring and enforcing intellectual property rights abroad;

•greater difficulty in enforcing contracts and managing collections in certain jurisdictions, as well as longer collection periods;

•management communication and integration problems resulting from cultural and geographic dispersion;

•difficulties hiring local staff, differing employer/employee relationships, and the potential need for country-specific benefits, programs, and systems;

•social, economic, and political instability, epidemics and pandemics, terrorist attacks, wars, geopolitical conflicts, disputes and security concerns in general; and

•potentially adverse tax consequences.

Under accounting standards update No. 2014-09 (Topic 606), Revenue from Contracts with Customers (“ASC 606”), we recognize revenue when our customer obtains control of goods or services in an amount that reflects the consideration that we expect to receive in exchange for those goods or services. Our subscription revenue consists of (i) SaaS agreements, (ii) term-based licenses for the Dynatrace® platform which are recognized ratably over the contract term, (iii) Dynatrace® perpetual license revenue that is recognized ratably or over the term of the expected optional maintenance renewals, which is generally three years, and (iv) maintenance and support agreements. A significant increase or decline in our subscription contracts in any one quarter may not be fully reflected in the results for that quarter, but will affect our revenue in future quarters.

•challenges, difficulties, or increased costs associated with integrating new employees, systems, technologies, and business cultures;

•failure of the acquisition to advance our business strategy and failure to achieve the acquisition’s anticipated benefits or synergies;

•disruption of our ongoing operations, diversion of our management’s attention, and increased costs and expenses associated with pursuing acquisition opportunities;

•inadequate data security, cybersecurity, and operational and information technology compliance and resilience;

•failure to identify, or our underestimation of, commitments, liabilities, deficiencies, and other risks associated with acquired businesses or assets;

•inconsistency between the business models of our company and the acquired company, and potential exposure to new or increased regulatory oversight and uncertain or evolving legal, regulatory, and compliance requirements;

•the potential loss of key management, other employees, or customers of the acquired business;

•potential reputational risks that could arise from transactions with, or investments in, companies involved in new or developing businesses or markets, which may be subject to uncertain or evolving legal, regulatory, and compliance requirements;

•potential impairment of goodwill or other acquisition-related intangible assets; and

•the potential for acquisitions to result in dilutive issuances of our equity securities or significant additional debt.

•announcements of new products, offerings or technologies, commercial relationships, acquisitions, or other events by us or our competitors;

•changes in how customers perceive the benefits of our platform;

•shifts in the mix of billings and revenue attributable to SaaS subscriptions, licenses and services from quarter to quarter;

•departures of our Chief Executive Officer, Chief Financial Officer, other executive officers, senior management or other key personnel;

•price and volume fluctuations in the overall stock market from time to time;

•fluctuations in the trading volume of our shares or the size of our public float;

•sales of large blocks of our common stock, including by the Thoma Bravo Funds;

•actual or anticipated changes or fluctuations in our operating results;

•whether our operating results meet the expectations of securities analysts or investors;

•changes in actual or future expectations of investors or securities analysts;

•litigation, data breaches, or security incidents involving us, our industry or both;

•regulatory developments in the United States, foreign countries or both;

•general economic conditions and trends; and

•major catastrophic events in our domestic and foreign markets.

If our internal controls over financial reporting or our disclosure controls and procedures are not effective, we may not be able to accurately report our financial results, prevent fraud or file our periodic reports in a timely manner, which may cause investors to lose confidence in our reported financial information and may lead to a decline in our stock price.

•the composition of our board of directors, which has the authority to direct our business and to appoint and remove our officers;

•approving or rejecting a merger, consolidation, or other business combination;

•raising future capital; and

•amending our charter and bylaws, which govern the rights attached to our common stock.

•a classified board of directors with three-year staggered terms, which could delay the ability of stockholders to change the membership of a majority of our board of directors;

•directors may only be removed for cause, and subject to the affirmative vote of the holders of 66 2/3% or more of our outstanding shares of capital stock then entitled to vote at a meeting of our stockholders called for that purpose;

•the ability of our board of directors to issue shares of preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer;

•allowing only our board of directors to fill vacancies on our board of directors, which prevents stockholders from being able to fill vacancies on our board of directors;

•a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders;

•the requirement that a special meeting of stockholders may be called only by our board of directors, the chair of our board of directors, our Chief Executive Officer or our president (in the absence of a Chief Executive Officer), which could delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors;

•the requirement for the affirmative vote of holders of at least 66 2/3% of the voting power of all of the then outstanding shares of the voting stock, voting together as a single class, to amend the provisions of our charter relating to the management of our business (including our classified board structure) or certain provisions of our bylaws, which may inhibit the ability of an acquirer to effect such amendments to facilitate an unsolicited takeover attempt;

•the ability of our board of directors to amend the bylaws, which may allow our board of directors to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend the bylaws to facilitate an unsolicited takeover attempt;

•advance notice procedures with which stockholders must comply to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of us; and

•a prohibition of cumulative voting in the election of our board of directors, which would otherwise allow less than a majority of stockholders to elect director candidates.

As of May 22, 2023, there were 53 stockholders of record of our common stock. We believe a substantially greater number of beneficial owners hold shares through brokers, banks or other nominees.

			Base Period
			8/1/2019						3/31/2020						3/31/2021						3/31/2022						3/31/2023
Dynatrace, Inc.			$	100.00					$	99.96					$	202.26					$	197.48					$	177.36
S&P 500			$	100.00					$	87.51					$	134.51					$	153.39					$	139.13
S&P 500 Information Technology			$	100.00					$	100.32					$	165.35					$	198.19					$	187.19

•Our annual recurring revenue (“ARR”) was $1,247 million as of March 31, 2023, which reflected 25% growth year-over-year;

•For the full year ended March 31, 2023, we were once again profitable and delivered solid operating income;

•As of March 31, 2023, we had approximately $555 million of cash and cash equivalents and no long-term debt; and

•Dynatrace® customers increased to more than 3,600 as of March 31, 2023 from approximately 3,300 as of March 31, 2022.

•Extend our technology and market leadership position. We intend to maintain our position as the market-leading unified observability and security platform through increased investment in research and development and continued innovation. We expect to focus on expanding the functionality of our unified Dynatrace® and investing in capabilities that address new market opportunities. We also plan to continue evolving our causal AI capabilities to drive differentiation through precise answers and broad-based automation. We believe this strategy will enable new growth opportunities and allow us to continue to deliver differentiated high-value outcomes to our customers.

•Grow our customer base. We intend to drive new customer growth by expanding our direct sales force focused on the largest 15,000 global enterprise accounts, which generally have annual revenues in excess of $1 billion. In addition, we plan to leverage our global partner ecosystem to add new customers in geographies where we have direct coverage and work jointly with our partners.

•Increase penetration within existing customers. We plan to continue to increase the penetration within our existing customers by establishing new and deeper relationships within our customers’ organizations (notably, development teams) and expanding the breadth of our platform capabilities to provide for continued cross-selling opportunities. In addition, we believe the ease of implementation for Dynatrace® provides us the opportunity to expand adoption within our existing enterprise customers, across new customer applications, and into additional business units or divisions. Once customers are on the Dynatrace® platform, we have seen significant dollar-based net retention rate expansion due to the ease of use and power of our platform.

•Enhance our strategic partner ecosystem. We intend to continue to invest in our strategic partner ecosystem, with a particular emphasis on cloud-focused partnerships with GSIs and hyperscaler cloud providers. These strategic partners continually work with their customers to help them digitally transform their businesses and reduce cloud complexity. By working more closely with strategic partners, our objective is to participate in digital transformation projects earlier in the purchasing cycle and enable customers to establish more resilient cloud deployments from the start.

			As of
			3/31/2023						12/31/2022						9/30/2022						6/30/2022						3/31/2022						12/31/2021						9/30/2021						6/30/2021
Total ARR (in thousands)			$	1,246,681					$	1,162,591					$	1,064,951					$	1,031,284					$	995,121					$	929,906					$	863,863					$	823,222
Dollar-based Net Retention Rate			119		%				119		%				120%+						120%+						120%+						120%+						120%+						120%+

Dollar-based Net Retention Rate: We define the dollar-based net retention rate 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. Beginning in fiscal 2023, we began to exclude the headwind associated with the Dynatrace perpetual license

Subscription. Our subscription revenue consists of (i) SaaS agreements, (ii) Dynatrace® term-based licenses which are recognized ratably over the contract term, (iii) Dynatrace® perpetual licenses that are recognized ratably over the term of the expected optional maintenance renewals, which is generally three years, and (iv) maintenance and support agreements. We typically invoice SaaS subscription fees and term licenses annually in advance and recognize subscription revenue ratably over the term of the applicable agreement, provided that all other revenue recognition criteria have been satisfied. Fees for our Dynatrace® perpetual licenses are generally billed up front. See the section titled “Critical Accounting Policies and Estimates—Revenue Recognition” for more information.

Service. Service revenue consists of revenue from helping our customers deploy our software in highly complex operational environments and training their personnel. We recognize the revenues associated with these professional services on a time and materials basis as we deliver the services or provide the training. We generally recognize the revenues associated with our services in the period the services are performed, provided that collection of the related receivable is reasonably assured.

General and administrative. General and administrative expenses primarily consist of the personnel and facility-related costs for our executive, finance, legal, human resources and administrative personnel, and other corporate expenses, including those associated with our ongoing public reporting obligations. We anticipate continuing to incur additional expenses as we continue to invest in the growth of our operations, as well as incur ongoing costs primarily associated with other transactional activities and the compliance of being a publicly traded company.

Amortization of other intangibles. Amortization of other intangibles primarily consists of amortization of customer relationships and capitalized software and tradenames.

			Fiscal Year Ended March 31,
			2023												2022												2021
			Amount						Percent						Amount						Percent						Amount						Percent
			(in thousands, except percentages)
Revenue:
Subscription			$	1,083,330					94		%				$	870,439					94		%				$	656,626					93		%
Service			75,200						6		%				59,006						6		%				46,883						7		%
Total revenue			1,158,530						100		%				929,445						100		%				703,509						100		%
Cost of revenue:
Cost of subscription			144,445						12		%				111,646						12		%				77,488						11		%
Cost of service			62,882						6		%				45,717						5		%				34,903						5		%
Amortization of acquired technology			15,564						1		%				15,513						2		%				15,317						2		%
Total cost of revenue (1)			222,891						19		%				172,876						19		%				127,708						18		%
Gross profit			935,639						81		%				756,569						81		%				575,801						82		%
Operating expenses:
Research and development (1)			218,349						19		%				156,342						17		%				111,415						16		%
Sales and marketing (1)			448,015						39		%				362,116						39		%				245,487						35		%
General and administrative (1)			150,031						13		%				126,622						14		%				92,219						13		%
Amortization of other intangibles			26,292						2		%				30,157						3		%				34,744						5		%
Restructuring and other			141												25												40
Total operating expenses			842,828												675,262												483,905
Income from operations			92,811												81,307												91,896
Other expense, net			(2,844)												(9,648)												(14,043)
Income before income taxes			89,967												71,659												77,853
Income tax benefit (expense)			17,992												(19,208)												(2,139)
Net income			$	107,959											$	52,451											$	75,714

			Fiscal Year Ended March 31,
			2023												2022												2021
			(in thousands)
Cost of revenue			$	18,383											$	12,863											$	7,307
Research and development			41,406												21,316												11,684
Sales and marketing			51,147												35,957												24,153
General and administrative			35,938												29,400												14,640
Total share-based compensation expense			$	146,874											$	99,536											$	57,784

			Fiscal Year Ended March 31,												Change
			2023						2022						Amount						Percent
			(in thousands, except percentages)
Subscription			$	1,083,330					$	870,439					$	212,891					24		%
Service			75,200						59,006						16,194						27		%
Total revenue			$	1,158,530					$	929,445					$	229,085					25		%

			Fiscal Year Ended March 31,												Change
			2023						2022						Amount						Percent
			(in thousands, except percentages)
Cost of subscription			$	144,445					$	111,646					$	32,799					29		%
Cost of service			62,882						45,717						17,165						38		%
Amortization of acquired technology			15,564						15,513						51						—		%
Total cost of revenue			$	222,891					$	172,876					$	50,015					29		%

			Fiscal Year Ended March 31,												Change
			2023						2022						Amount						Percent
			(in thousands, except percentages)
Gross profit:
Subscription			$	938,885					$	758,793					$	180,092					24		%
Service			12,318						13,289						(971)						(7		%)
Amortization of acquired technology			(15,564)						(15,513)						(51)						—		%
Total gross profit			$	935,639					$	756,569					$	179,070					24		%
Gross margin:
Subscription			87		%				87		%
Service			16		%				23		%
Amortization of acquired technology			(100		%)				(100		%)
Total gross margin			81		%				81		%

			Fiscal Year Ended March 31,												Change
			2023						2022						Amount						Percent
			(in thousands, except percentages)
Operating expenses:
Research and development			$	218,349					$	156,342					$	62,007					40		%
Sales and marketing			448,015						362,116						85,899						24		%
General and administrative			150,031						126,622						23,409						18		%
Amortization of other intangibles			26,292						30,157						(3,865)						(13		%)
Restructuring and other			141						25						116						464		%
Total operating expenses			$	842,828					$	675,262					$	167,566					25		%

			Fiscal Year Ended March 31,												Change
			2022						2021						Amount						Percent
			(in thousands, except percentages)
Subscription			$	870,439					$	656,626					$	213,813					33		%
Service			59,006						46,883						12,123						26		%
Total revenue			$	929,445					$	703,509					$	225,936					32		%

			Fiscal Year Ended March 31,												Change
			2022						2021						Amount						Percent
			(in thousands, except percentages)
Cost of subscription			$	111,646					$	77,488					$	34,158					44		%
Cost of service			45,717						34,903						10,814						31		%
Amortization of acquired technology			15,513						15,317						196						1		%
Total cost of revenue			$	172,876					$	127,708					$	45,168					35		%

			Fiscal Year Ended March 31,												Change
			2022						2021						Amount						Percent
			(in thousands, except percentages)
Gross profit:
Subscription			$	758,793					$	579,138					$	179,655					31		%
Service			13,289						11,980						1,309						11		%
Amortization of acquired technology			(15,513)						(15,317)						(196)						1		%
Total gross profit			$	756,569					$	575,801					$	180,768					31		%
Gross margin:
Subscription			87		%				88		%
Service			23		%				26		%
Amortization of acquired technology			(100)		%				(100		%)
Total gross margin			81		%				82		%

			Fiscal Year Ended March 31,												Change
			2022						2021						Amount						Percent
			(in thousands, except percentages)
Operating expenses:
Research and development			$	156,342					$	111,415					$	44,927					40		%
Sales and marketing			362,116						245,487						116,629						48		%
General and administrative			126,622						92,219						34,403						37		%
Amortization of other intangibles			30,157						34,744						(4,587)						(13		%)
Restructuring and other			25						40						(15)						(38		%)
Total operating expenses			$	675,262					$	483,905					$	191,357					40		%

In December 2022, we entered into a senior secured revolving credit facility in an aggregate amount of $400.0 million (the “Credit Facility”). As of March 31, 2023, we had $384.5 million available under the Credit Facility with $15.5 million of letters of credit outstanding. As of March 31, 2023, we were in compliance with all applicable covenants pertaining to the Credit Facility. The Credit Facility is discussed further in Note 9, Long-term Debt, of our audited consolidated financial statements included in this Annual Report.

						Fiscal Year Ended March 31,
						2023						2022						2021
						(in thousands)
Net cash provided by operating activities(1)						$	354,885					$	250,917					$	220,436
Net cash used in investing activities						(21,540)						(30,890)						(13,879)
Net cash used in financing activities						(232,344)						(80,664)						(97,802)
Effect of exchange rate changes on cash and cash equivalents						(8,620)						(1,358)						3,037
Net increase in cash and cash equivalents						$	92,381					$	138,005					$	111,792

						Fiscal Year Ended March 31,
						2023						2022						2021
						(in thousands)
Cash paid for interest						$	7,109					$	8,375					$	12,475
Cash (received from) paid for tax, net						$	(14,311)					$	24,247					$	(7,337)

			Revenue Recognition – Determination of Distinct Performance Obligations
Description of the Matter			As described in Note 2 to the consolidated financial statements, the Company enters into contracts with customers that may include promises to transfer software licenses, subscription services, maintenance and support for software licenses, and professional services. Given the nature of the Company’s product and service offerings, there is complexity in determining whether software licenses and services are considered performance obligations that should be accounted for separately or together. Auditing the Company’s determination of distinct performance obligations related to its various product and service offerings involved a high degree of judgment. Specifically, significant auditor judgment was required when assessing whether the when-and-if available updates included within the Company’s maintenance agreements and the related software licenses should be accounted for as separate performance obligations or as inputs to a combined performance obligation.
How We Addressed the Matter in Our Audit			We obtained an understanding, evaluated the design and tested the operating effectiveness of internal controls over the Company’s processes as they relate to the determination of distinct performance obligations within contracts with customers. Among other audit procedures, we selected a sample of contracts and evaluated whether management appropriately identified and considered whether the contract had (1) multiple promised products or services that constitute separate performance obligations or (2) a single performance obligation that is comprised of combined products and/or services. To evaluate management’s conclusion that when-and-if available updates included within the Company’s maintenance agreements are critical to the continued utility of the related software licenses such that they should be accounted together as inputs to a combined performance obligation, we obtained an understanding of the nature and importance of the updates, assessed the impact and frequency of updates, and reviewed information around the updates included on the Company’s website and marketing materials.

			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
Commitments and contingencies (Note 11)
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

			Fiscal Year Ended March 31,
			2023						2022						2021
Revenue:
Subscription			$	1,083,330					$	870,439					$	656,626
Service			75,200						59,006						46,883
Total revenue			1,158,530						929,445						703,509
Cost of revenue:
Cost of subscription			144,445						111,646						77,488
Cost of service			62,882						45,717						34,903
Amortization of acquired technology			15,564						15,513						15,317
Total cost of revenue			222,891						172,876						127,708
Gross profit			935,639						756,569						575,801
Operating expenses:
Research and development			218,349						156,342						111,415
Sales and marketing			448,015						362,116						245,487
General and administrative			150,031						126,622						92,219
Amortization of other intangibles			26,292						30,157						34,744
Restructuring and other			141						25						40
Total operating expenses			842,828						675,262						483,905
Income from operations			92,811						81,307						91,896
Interest expense, net			(3,409)						(10,192)						(14,205)
Other income, net			565						544						162
Income before income taxes			89,967						71,659						77,853
Income tax benefit (expense)			17,992						(19,208)						(2,139)
Net income			$	107,959					$	52,451					$	75,714
Net income per share:
Basic			$	0.38					$	0.18					$	0.27
Diluted			$	0.37					$	0.18					$	0.26
Weighted average shares outstanding:
Basic			287,700						284,161						280,469
Diluted			291,617						290,903						286,509

			Fiscal Year Ended March 31,
			2023						2022						2021
Net income			$	107,959					$	52,451					$	75,714
Other comprehensive loss
Foreign currency translation adjustment			(5,140)						(478)						(8,106)
Total other comprehensive loss			(5,140)						(478)						(8,106)
Comprehensive income			$	102,819					$	51,973					$	67,608

			Common Shares												Additional Paid-In Capital						Accumulated Deficit						Accumulated Other Comprehensive Loss						Shareholders’ Equity
			Shares						Amount
Balance, March 31, 2020			280,853						$	281					$	1,573,347					$	(589,819)					$	(18,105)					$	965,704
Foreign currency translation																											(8,106)						(8,106)
Restricted stock units vested			1,256						1																								1
Restricted stock awards forfeited			(110)						—																								—
Issuance of common stock related to employee stock purchase plan			331						—						9,195																		9,195
Exercise of stock options			800						1						13,051																		13,052
Share-based compensation															57,784																		57,784
Equity repurchases															(49)																		(49)
Cumulative effects adjustment for ASU 2016-02 adoption																					306												306
Net income																					75,714												75,714
Balance, March 31, 2021			283,130						$	283					$	1,653,328					$	(513,799)					$	(26,211)					$	1,113,601
Foreign currency translation																											(478)						(478)
Restricted stock units vested			1,305						1						(1)																		—
Restricted stock awards forfeited			(20)						—																								—
Issuance of common stock related to employee stock purchase plan			372						1						13,912																		13,913
Exercise of stock options			1,266						1						25,488																		25,489
Share-based compensation															99,536																		99,536
Equity repurchases															(66)																		(66)
Net income																					52,451												52,451
Balance, March 31, 2022			286,053						$	286					$	1,792,197					$	(461,348)					$	(26,689)					$	1,304,446
Foreign currency translation																											(5,140)						(5,140)
Restricted stock units vested			2,139						2						(2)																		—
Restricted stock awards forfeited			(15)						—																								—
Issuance of common stock related to employee stock purchase plan			553						—						17,806																		17,806
Exercise of stock options			1,681						2						32,937																		32,939
Share-based compensation															146,874																		146,874
Equity repurchases															(15)																		(15)
Net income																					107,959												107,959
Balance, March 31, 2023			290,411						$	290					$	1,989,797					$	(353,389)					$	(31,829)					$	1,604,869