Dynatrace Reports Fourth Quarter and Full Year Fiscal 2024 Financial Results

Exceeds high end of guidance across all FY24 metrics

Delivers ARR growth of 20% year-over-year on a constant currency basis

Achieves FY24 GAAP Operating Margin of 9% and Non-GAAP Operating Margin of 28%

Announces $500 million share repurchase program

WALTHAM, Mass.--(BUSINESS WIRE)-- Dynatrace (NYSE: DT), the leader in unified observability and security, today announced financial results for the fourth quarter and full year ended March 31, 2024.

“Dynatrace delivered a strong finish to fiscal 2024. Our fourth quarter results exceeded guidance across all key operating metrics, fueled in part by a record number of 7-figure deals closed in the quarter,” said Rick McConnell, Chief Executive Officer. “We continue to see a growing number of companies looking to consolidate often ineffective and costly monitoring tools into a unified observability platform. We believe that our contextual analytics, AI leadership, and automation differentiate us in the market and empower us to capture this opportunity.”

Dynatrace also announced today that its Board of Directors has authorized a share repurchase program for up to $500 million of common stock.

“The share repurchase program demonstrates our confidence in the business and conviction in our future growth prospects,” said Jim Benson, Chief Financial Officer. “While investing in the business is our foremost priority, this program allows us to leverage our strong balance sheet and cash flow opportunistically to drive shareholder return while also allowing us the flexibility to consider strategic acquisitions to accelerate growth and deliver business value for our customers.”

All growth rates are compared to the fourth quarter and full year of fiscal 2023 unless otherwise noted.

Fourth Quarter Fiscal 2024 Financial Highlights:

  • Total ARR of $1,504 million, an increase of 21%, or 20% on a constant currency basis
  • Total Revenue of $381 million, an increase of 21%, or 21% on a constant currency basis
  • Subscription Revenue of $360 million, an increase of 23%, or 22% on a constant currency basis
  • GAAP Income from Operations of $23 million and Non-GAAP Income from Operations of $95 million
  • GAAP EPS of $0.13 and non-GAAP EPS of $0.30, on a dilutive basis

Full Year Fiscal 2024 Financial Highlights:

  • Total Revenue of $1,431 million, an increase of 23%, or 22% on a constant currency basis
  • Subscription Revenue of $1,359 million, an increase of 25%, or 24% on a constant currency basis
  • GAAP Income from Operations of $128 million and Non-GAAP Income from Operations of $398 million
  • GAAP EPS of $0.52 and non-GAAP EPS of $1.20, on a dilutive basis
  • GAAP Operating Cash Flow of $378 million and Free Cash Flow of $346 million

Business Highlights:

  • Go-to-market traction: We closed a record 18 deals greater than $1 million in annual contract value (ACV) in the quarter. Fifteen of these deals were in collaboration with partners, including our first-ever 9-figure total contract value (TCV) deal, which was an expansion deal closed in conjunction with Accenture. We also closed our largest new logo win, a nearly 8-figure ACV deal.
  • Industry recognition: We were named a Leader in the 2024 GigaOm Radar Report for Cloud Observability Solutions, positioned as the vendor closest to the center of the radar, reflecting Dynatrace's industry-leading innovation and ability to deliver the highest impact for customers.
  • Customer recognition: Dynatrace was also recognized as a Customers' Choice in the 2024 Gartner® Peer Insights™ Voice of the Customer for Digital Experience Monitoring report, the only vendor with this distinction.1
  • Runecast acquisition: We successfully closed the acquisition of Runecast, an AI-powered security and compliance solution provider. We are integrating Runecast technology into the Dynatrace platform to enable customers to prevent cloud misconfigurations and compliance issues proactively with automated, AI-driven, real-time vulnerability assessments.

Share Repurchase Program

Share repurchases under the new $500 million program may be made from time to time on the open market, pursuant to Rule 10b5-1 trading plans, or other legally permissible means. The share repurchase program has no time limit, does not obligate Dynatrace to acquire a specified number of shares, and may be suspended, modified, or terminated at any time, without prior notice. The number of shares to be repurchased will depend on market conditions and other factors. Repurchases under the program are expected to be funded from a combination of existing cash balances and future cash flow.

_____________________
1 Gartner, Peer Insights Voice of the Customer: Digital Experience Monitoring, 24 April 2024.

 

Gartner and Gartner Peer Insights™ are trademarks of Gartner, Inc. and/or its affiliates. All rights reserved.

 

Gartner® Peer Insights™ content consists of the opinions of individual end users based on their own experiences, and should not be construed as statements of fact, nor do they represent the views of Gartner or its affiliates. Gartner does not endorse any vendor, product or service depicted in this content nor makes any warranties, expressed or implied, with respect to this content, about its accuracy or completeness, including any warranties of merchantability or fitness for a particular purpose.

Fourth Quarter 2024 Financial Highlights

(Unaudited – In thousands, except per share data)

 

 

Three Months Ended March 31,

 

 

2024

 

 

 

2023

 

Key Operating Metric:

 

 

 

Annual recurring revenue (ARR)

$

1,503,819

 

 

$

1,246,681

 

Year-over-Year Increase

 

21

%

 

 

Year-over-Year Increase - constant currency (*)

 

20

%

 

 

 

 

 

 

Total revenue

$

380,848

 

 

$

314,475

 

Year-over-Year Increase

 

21

%

 

 

Year-over-Year Increase - constant currency (*)

 

21

%

 

 

 

 

 

 

Subscription revenue

$

360,109

 

 

$

293,314

 

Year-over-Year Increase

 

23

%

 

 

Year-over-Year Increase - constant currency (*)

 

22

%

 

 

 

 

 

 

GAAP Financial Measures:

 

 

 

GAAP income from operations

$

23,123

 

 

$

19,431

 

GAAP operating margin

 

6

%

 

 

6

%

 

 

 

 

GAAP net income

$

37,944

 

 

$

80,293

 

 

 

 

 

GAAP net income per share - diluted

$

0.13

 

 

$

0.27

 

 

 

 

 

GAAP shares outstanding - diluted

 

300,867

 

 

 

293,917

 

 

 

 

 

Net cash provided by operating activities

$

131,672

 

 

$

120,427

 

 

 

 

 

Non-GAAP Financial Measures:

 

 

 

Non-GAAP income from operations (*)

$

95,093

 

 

$

77,935

 

Non-GAAP operating margin (*)

 

25

%

 

 

25

%

 

 

 

 

Non-GAAP net income (*)

$

89,401

 

 

$

92,459

 

 

 

 

 

Non-GAAP net income per share - diluted (*)

$

0.30

 

 

$

0.31

 

 

 

 

 

Non-GAAP shares outstanding - diluted (*)

 

300,867

 

 

 

293,917

 

 

 

 

 

Free Cash Flow (*)

$

121,262

 

 

$

114,512

 

 

 

 

 

 

Full Year 2024 Financial Highlights

(Unaudited – In thousands, except per share data)

 

 

Year Ended March 31,

 

 

2024

 

 

 

2023

 

Revenue:

 

 

 

Total revenue

$

1,430,530

 

 

$

1,158,530

 

Year-over-Year Increase

 

23

%

 

 

Year-over-Year Increase - constant currency (*)

 

22

%

 

 

 

 

 

 

Subscription revenue

$

1,359,354

 

 

$

1,083,330

 

Year-over-Year Increase

 

25

%

 

 

Year-over-Year Increase - constant currency (*)

 

24

%

 

 

 

 

 

 

GAAP Financial Measures:

 

 

 

GAAP income from operations

$

128,400

 

 

$

92,811

 

GAAP operating margin

 

9

%

 

 

8

%

 

 

 

 

GAAP net income

$

154,632

 

 

$

107,959

 

 

 

 

 

GAAP net income per share - diluted

$

0.52

 

 

$

0.37

 

 

 

 

 

GAAP shares outstanding - diluted

 

299,280

 

 

 

291,617

 

 

 

 

 

Net cash provided by operating activities

$

378,109

 

 

$

354,885

 

 

 

 

 

Non-GAAP Financial Measures:

 

 

 

Non-GAAP income from operations (*)

$

398,239

 

 

$

291,791

 

Non-GAAP operating margin (*)

 

28

%

 

 

25

%

 

 

 

 

Non-GAAP net income (*)

$

358,117

 

 

$

282,224

 

 

 

 

 

Non-GAAP net income per share - diluted (*)

$

1.20

 

 

$

0.97

 

 

 

 

 

Non-GAAP shares outstanding - diluted (*)

 

299,280

 

 

 

291,617

 

 

 

 

 

Free Cash Flow (*)

 

346,382

 

 

 

333,345

 

* Use of Non-GAAP Financial Measures

In our earnings press releases, conference calls, slide presentations, and webcasts, we may use or discuss non-GAAP financial measures, as defined by Regulation G. The GAAP financial measure most directly comparable to each non-GAAP financial measure used or discussed, and a reconciliation of the differences between each non-GAAP financial measure and the comparable GAAP financial measure, are included in this press release after the consolidated financial statements. Our earnings press releases containing such non-GAAP reconciliations can be found in the Investor Relations section of our website at ir.dynatrace.com.

Financial Outlook

Based on information available as of May 15, 2024, Dynatrace is issuing guidance for the first quarter and full year fiscal 2025 in the table below. This guidance is based on foreign exchange rates as of April 30, 2024. The total foreign exchange headwind for fiscal 2025 is expected to be approximately $10 million on ARR and 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 2024 unless otherwise noted.

(In millions, except per share data)

First Quarter

Fiscal 2025

 

Full Year

Fiscal 2025*

ARR

-

 

$1,720 - $1,735

As reported

-

 

14% - 15%

Constant currency

-

 

15% - 16%

Total revenue

$391 - $393

 

$1,644 - $1,658

As reported

17% - 18%

 

15% - 16%

Constant currency

18% - 19%

 

16% - 17%

Subscription revenue

$374 - $376

 

$1,571 - $1,585

As reported

18% - 19%

 

16% - 17%

Constant currency

19%

 

16% - 17%

Non-GAAP income from operations

$105 - $108

 

$459 - $467

Non-GAAP operating margin

27% - 27.5%

 

28%

Non-GAAP net income

$86 - $89

 

$383 - $392

Non-GAAP net income per diluted share

$0.29 - $0.30

 

$1.26 - $1.29

Diluted weighted average shares outstanding

301 - 302

 

303 - 305

Free cash flow

-

 

$386 - $398

Free cash flow margin

-

 

23.5% - 24%

*Guidance growth rates rounded to the nearest percentage point.

Reconciliations of non-GAAP income from operations, non-GAAP net income, non-GAAP net income per diluted share and free cash flow guidance to the most directly comparable GAAP measures are not available without unreasonable efforts on a forward-looking basis due to the high variability, complexity and low visibility with respect to the charges excluded from these non-GAAP measures; in particular, the measures and effects of share-based compensation expense, employer taxes and tax deductions specific to equity compensation awards that are directly impacted by future hiring, turnover and retention needs, as well as unpredictable fluctuations in our stock price. We expect the variability of the above charges to have a significant, and potentially unpredictable, impact on our future GAAP financial results.

Conference Call and Webcast Information

Dynatrace will host a conference call and live webcast to discuss its results and business outlook at 8:00 a.m. Eastern Time today, May 15, 2024. To access the conference call from the U.S. and Canada, dial (866) 405-1247, or internationally, dial (201) 689-8045 with event confirmation #: 13746345. 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 July 15, 2024, by dialing (877) 660-6853 from the U.S. or Canada, or for international callers by dialing (201) 612-7415 and entering event confirmation #: 13746345. In addition, an archived webcast will be available at ir.dynatrace.com.

We announce material financial information to our investors using our Investor Relations website, press releases, SEC filings and public conference calls and webcasts. We also use these channels to disclose information about the company, our planned financial and other announcements, attendance at upcoming investor and industry conferences, and for complying with our disclosure obligations under Regulation FD.

Non-GAAP Financial Measures & Key Metrics

In addition to disclosing financial measures prepared in accordance with GAAP, this press release and the accompanying tables contain certain non-GAAP financial measures.

Non-GAAP financial measures do not have any standardized meaning and are therefore unlikely to be comparable to similarly titled measures presented by other companies. Dynatrace considers these non-GAAP financial measures to be important because they provide useful indicators of its performance and liquidity measures. These are key measures used by our management and Board of Directors to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget and to develop short and long-term operational plans. In addition, investors often use similar measures to evaluate the performance of a company. Non-GAAP financial measures are presented for supplemental informational purposes only for understanding the company’s operating performance. The non-GAAP financial measures should not be considered a substitute for financial information presented in accordance with GAAP, and may be different from non-GAAP financial measures presented by other companies. The GAAP financial measure most directly comparable to each non-GAAP financial measure used or discussed, and a reconciliation of the differences between each non-GAAP financial measure and the comparable GAAP financial measure, are included in this press release after the consolidated financial statements.

Dynatrace presents constant currency amounts for Revenue and Annual Recurring Revenue to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency rate fluctuations. Dynatrace provides this non-GAAP financial information to aid investors in better understanding our performance.

Annual Recurring Revenue (ARR) is defined as the daily revenue of all subscription agreements that are actively generating revenue as of the last day of the reporting period multiplied by 365. We exclude from our calculation of Total ARR any revenues derived from month-to-month agreements and/or product usage overage billings.

Constant Currency amounts for ARR, Total Revenue and Subscription Revenue are presented to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign exchange rate fluctuations. To present this information, current and comparative prior period results for entities reporting in currencies other than United States dollars are converted into United States dollars using the average exchange rates from the comparative period rather than the actual exchange rates in effect during the respective periods. All growth comparisons relate to the corresponding period in the last fiscal year.

Dynatrace Customers are defined as accounts, as identified by a unique account identifier, that generate at least $10,000 of Dynatrace ARR as of the reporting date. In infrequent cases, a single large organization may comprise multiple customer accounts when there are distinct divisions, departments or subsidiaries that operate and make purchasing decisions independently from the parent organization. In cases where multiple customer accounts exist under a single organization, each customer account is counted separately based on a mutually exclusive accounting of ARR.

Free Cash Flow is defined as net cash provided by (used in) operating activities less capital expenditures (reflected as "purchase of property and equipment" and "capitalized software additions" in our financial statements).

About Dynatrace

Dynatrace (NYSE: DT) exists to make the world’s software work perfectly. Our unified platform combines broad and deep observability and continuous runtime application security with Davis® hypermodal AI to provide answers and intelligent automation from data at an enormous scale. This enables innovators to modernize and automate cloud operations, deliver software faster and more securely, and ensure flawless digital experiences. That’s why the world’s largest organizations trust the Dynatrace® platform to accelerate digital transformation.

Cautionary Language Concerning Forward-Looking Statements

This press release includes certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding management’s expectations related to industry trends, future financial and operational performance and operational expenditures and investments, the share repurchase program and sources and uses of capital, expected growth, and business outlook, including our financial outlook for the first quarter and full year of fiscal 2025. These forward-looking statements include, but are not limited to, plans, objectives, expectations and intentions and other statements contained in this press release that are not historical facts and statements identified by words such as “will,” “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates” or words of similar meaning. These forward-looking statements reflect our current views about our plans, intentions, expectations, strategies and prospects, which are based on the information currently available to us and on assumptions we have made. Although we believe that our plans, intentions, expectations, strategies and prospects as reflected in or suggested by those forward-looking statements are reasonable, we can give no assurance that the plans, intentions, expectations or strategies will be attained or achieved. Furthermore, actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of risks and factors that are beyond our control including, without limitation, our ability to maintain our revenue growth rates in future periods; market adoption of our product offerings; continued demand for, and spending on, our solutions; our ability to innovate and develop solutions that meet customer needs, including through Davis AI; the ability of our platform and solutions to effectively interoperate with customers’ IT infrastructures; our ability to acquire new customers and retain and expand our relationships with existing customers; our ability to expand our sales and marketing capabilities; our ability to compete; our ability to maintain successful relationships with partners; security breaches, other security incidents and any real or perceived errors, failures, defects or vulnerabilities in our solutions; our ability to protect our intellectual property; our ability to hire and retain necessary qualified employees to grow our business and expand our operations; our ability to successfully complete acquisitions and to integrate newly acquired businesses and offerings; the effect on our business of the macroeconomic environment, associated global economic conditions and geopolitical disruption; and other risks set forth under the caption “Risk Factors” in our Form 10-Q filed on February 8, 2024 and our other SEC filings, including our Annual Report on Form 10-K for the fiscal year ended March 31, 2024, 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,

 

 

2024

 

 

2023

 

 

2024

 

 

 

2023

 

 

(unaudited)

 

 

 

 

Revenue:

 

 

 

 

 

 

 

Subscription

$

360,109

 

 

$

293,314

 

$

1,359,354

 

 

$

1,083,330

 

Service

 

20,739

 

 

 

21,161

 

 

71,176

 

 

 

75,200

 

Total revenue

 

380,848

 

 

 

314,475

 

 

1,430,530

 

 

 

1,158,530

 

Cost of revenue:

 

 

 

 

 

 

 

Cost of subscription

 

50,181

 

 

 

39,052

 

 

184,765

 

 

 

144,445

 

Cost of service

 

17,462

 

 

 

16,618

 

 

65,423

 

 

 

62,882

 

Amortization of acquired technology

 

4,230

 

 

 

3,895

 

 

16,265

 

 

 

15,564

 

Total cost of revenue

 

71,873

 

 

 

59,565

 

 

266,453

 

 

 

222,891

 

Gross profit

 

308,975

 

 

 

254,910

 

 

1,164,077

 

 

 

935,639

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

Research and development

 

84,271

 

 

 

61,502

 

 

304,739

 

 

 

218,349

 

Sales and marketing

 

148,788

 

 

 

124,702

 

 

534,233

 

 

 

448,015

 

General and administrative

 

47,338

 

 

 

42,702

 

 

174,412

 

 

 

150,172

 

Amortization of other intangibles

 

5,455

 

 

 

6,573

 

 

22,293

 

 

 

26,292

 

Total operating expenses

 

285,852

 

 

 

235,479

 

 

1,035,677

 

 

 

842,828

 

Income from operations

 

23,123

 

 

 

19,431

 

 

128,400

 

 

 

92,811

 

Interest income (expense), net

 

11,024

 

 

 

4,066

 

 

37,284

 

 

 

(3,409

)

Other (expense) income, net

 

(4,045

)

 

 

2,412

 

 

(10,769

)

 

 

565

 

Income before income taxes

 

30,102

 

 

 

25,909

 

 

154,915

 

 

 

89,967

 

Income tax benefit (expense)

 

7,842

 

 

 

54,384

 

 

(283

)

 

 

17,992

 

Net income

$

37,944

 

 

$

80,293

 

$

154,632

 

 

$

107,959

 

Net income per share:

 

 

 

 

 

 

 

Basic

$

0.13

 

 

$

0.28

 

$

0.53

 

 

$

0.38

 

Diluted

$

0.13

 

 

$

0.27

 

$

0.52

 

 

$

0.37

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

Basic

 

296,264

 

 

 

289,751

 

 

294,051

 

 

 

287,700

 

Diluted

 

300,867

 

 

 

293,917

 

 

299,280

 

 

 

291,617

 

SHARE-BASED COMPENSATION

 

 

Three Months Ended March 31,

 

Twelve Months Ended March 31,

 

2024

 

2023

 

2024

 

2023

 

(unaudited)

 

 

 

 

Cost of revenue

$

6,962

 

$

4,973

 

$

26,622

 

$

18,383

Research and development

 

19,424

 

 

12,067

 

 

69,543

 

 

41,406

Sales and marketing

 

16,939

 

 

13,748

 

 

65,762

 

 

51,147

General and administrative

 

12,273

 

 

11,233

 

 

46,969

 

 

35,938

Total share-based compensation expense

$

55,598

 

$

42,021

 

$

208,896

 

$

146,874

 

DYNATRACE, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

 

 

March 31,

 

 

2024

 

 

 

2023

 

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

778,983

 

 

$

555,348

 

Short-term investments

 

57,891

 

 

 

 

Accounts receivable, net

 

602,739

 

 

 

442,518

 

Deferred commissions, current

 

98,935

 

 

 

83,029

 

Prepaid expenses and other current assets

 

66,749

 

 

 

37,289

 

Total current assets

 

1,605,297

 

 

 

1,118,184

 

Long-term investments

 

46,350

 

 

 

 

Property and equipment, net

 

53,325

 

 

 

53,576

 

Operating lease right-of-use asset, net

 

61,390

 

 

 

68,074

 

Goodwill

 

1,335,494

 

 

 

1,281,812

 

Intangible assets, net

 

50,995

 

 

 

63,599

 

Deferred tax assets, net

 

138,836

 

 

 

79,822

 

Deferred commissions, non-current

 

93,310

 

 

 

86,232

 

Other assets

 

24,782

 

 

 

14,048

 

Total assets

$

3,409,779

 

 

$

2,765,347

 

 

 

 

 

Liabilities and shareholders' equity

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

21,410

 

 

$

21,953

 

Accrued expenses, current

 

233,675

 

 

 

188,380

 

Deferred revenue, current

 

987,953

 

 

 

811,058

 

Operating lease liabilities, current

 

15,513

 

 

 

15,652

 

Total current liabilities

 

1,258,551

 

 

 

1,037,043

 

Deferred revenue, non-current

 

62,308

 

 

 

34,423

 

Accrued expenses, non-current

 

18,404

 

 

 

29,212

 

Operating lease liabilities, non-current

 

54,013

 

 

 

59,520

 

Deferred tax liabilities

 

1,013

 

 

 

280

 

Total liabilities

 

1,394,289

 

 

 

1,160,478

 

Shareholders' equity:

 

 

 

Common shares, $0.001 par value, 600,000,000 shares authorized, 296,962,547 and 290,411,108 shares issued and outstanding at March 31, 2024 and 2023, respectively

 

297

 

 

 

290

 

Additional paid-in capital

 

2,249,349

 

 

 

1,989,797

 

Accumulated deficit

 

(198,757

)

 

 

(353,389

)

Accumulated other comprehensive loss

 

(35,399

)

 

 

(31,829

)

Total shareholders' equity

 

2,015,490

 

 

 

1,604,869

 

Total liabilities and shareholders' equity

$

3,409,779

 

 

$

2,765,347

 

 

DYNATRACE, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

 

 

Year Ended March 31,

 

 

2024

 

 

 

2023

 

Cash flows from operating activities:

 

 

 

Net income

$

154,632

 

 

$

107,959

 

Adjustments to reconcile net income to cash provided by operations:

 

 

 

Depreciation

 

15,499

 

 

 

12,541

 

Amortization

 

39,441

 

 

 

42,070

 

Share-based compensation

 

208,896

 

 

 

146,874

 

Loss on extinguishment of debt

 

 

 

 

5,925

 

Deferred income taxes

 

(59,915

)

 

 

(53,534

)

Other

 

11,216

 

 

 

988

 

Net change in operating assets and liabilities:

 

 

 

Accounts receivable

 

(161,888

)

 

 

(94,910

)

Deferred commissions

 

(23,520

)

 

 

(45,191

)

Prepaid expenses and other assets

 

(47,401

)

 

 

26,753

 

Accounts payable and accrued expenses

 

37,896

 

 

 

58,680

 

Operating leases, net

 

1,026

 

 

 

1,186

 

Deferred revenue

 

202,227

 

 

 

145,544

 

Net cash provided by operating activities

 

378,109

 

 

 

354,885

 

 

 

 

 

Cash flows from investing activities:

 

 

 

Purchase of property and equipment

 

(26,459

)

 

 

(21,540

)

Capitalized software additions

 

(5,268

)

 

 

 

Acquisition of businesses, net of cash acquired

 

(57,111

)

 

 

 

Purchases of investments

 

(104,210

)

 

 

 

Net cash used in investing activities

 

(193,048

)

 

 

(21,540

)

 

 

 

 

Cash flows from financing activities:

 

 

 

Repayment of term loans

 

 

 

 

(281,125

)

Debt issuance costs

 

 

 

 

(1,949

)

Proceeds from employee stock purchase plan

 

19,472

 

 

 

17,806

 

Proceeds from exercise of stock options

 

31,191

 

 

 

32,939

 

Equity repurchases

 

 

 

 

(15

)

Net cash used in financing activities

 

50,663

 

 

 

(232,344

)

 

 

 

 

Effect of exchange rates on cash and cash equivalents

 

(12,089

)

 

 

(8,620

)

 

 

 

 

Net increase in cash and cash equivalents

 

223,635

 

 

 

92,381

 

 

 

 

 

Cash and cash equivalents, beginning of year

 

555,348

 

 

 

462,967

 

Cash and cash equivalents, end of year

$

778,983

 

 

$

555,348

 

 

DYNATRACE, INC.

GAAP to Non-GAAP Reconciliations

(Unaudited - In thousands)

 

 

Three Months Ended March 31, 2024

 

GAAP

 

Share-based compensation

 

Employer payroll taxes on employee stock transactions

 

Amortization of intangibles

 

Restructuring & other

 

Non-GAAP

Non-GAAP income from operations:

Cost of revenue

$

71,873

 

 

$

(6,962

)

 

$

(542

)

 

$

(4,230

)

 

$

 

 

$

60,139

 

Gross profit

 

308,975

 

 

 

6,962

 

 

 

542

 

 

 

4,230

 

 

 

 

 

 

320,709

 

Gross margin

 

81

%

 

 

 

 

 

 

 

 

 

 

84

%

Research and development

 

84,271

 

 

 

(19,424

)

 

 

(1,055

)

 

 

 

 

 

(26

)

 

 

63,766

 

Sales and marketing

 

148,788

 

 

 

(16,939

)

 

 

(1,626

)

 

 

 

 

 

(615

)

 

 

129,608

 

General and administrative

 

47,338

 

 

 

(12,273

)

 

 

(392

)

 

 

 

 

 

(2,431

)

 

 

32,242

 

Amortization of other intangibles

 

5,455

 

 

 

 

 

 

 

 

 

(5,455

)

 

 

 

 

 

 

Income from operations

$

23,123

 

 

$

55,598

 

 

$

3,615

 

 

$

9,685

 

 

$

3,072

 

 

$

95,093

 

Operating margin

 

6

%

 

 

 

 

 

 

 

 

 

 

25

%

 

Three Months Ended March 31, 2023

 

GAAP

 

Share-based compensation

 

Employer payroll taxes on employee stock transactions

 

Amortization of intangibles

 

Restructuring & other

 

Non-GAAP

Non-GAAP income from operations:

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

 

42,702

 

 

 

(11,233

)

 

 

(841

)

 

 

 

 

 

(1,982

)

 

 

28,646

 

Amortization of other intangibles

 

6,573

 

 

 

 

 

 

 

 

 

(6,573

)

 

 

 

 

 

 

Income from operations

$

19,431

 

 

$

42,021

 

 

$

2,701

 

 

$

10,468

 

 

$

3,314

 

 

$

77,935

 

Operating margin

 

6

%

 

 

 

 

 

 

 

 

 

 

25

%

 

DYNATRACE, INC.

GAAP to Non-GAAP Reconciliations

(Unaudited - In thousands, except per share data)

 

 

Three Months Ended March 31,

 

 

2024

 

 

 

2023

 

Non-GAAP net income:

 

 

 

Net income

$

37,944

 

 

$

80,293

 

Income tax benefit

 

(7,842

)

 

 

(54,384

)

Non-GAAP effective cash tax

 

(16,618

)

 

 

10,084

 

Interest income, net

 

(11,024

)

 

 

(4,066

)

Cash received from interest, net

 

10,926

 

 

 

4,440

 

Share-based compensation

 

55,598

 

 

 

42,021

 

Employer payroll taxes on employee stock transactions

 

3,615

 

 

 

2,701

 

Amortization of other intangibles

 

5,455

 

 

 

6,573

 

Amortization of acquired technology

 

4,230

 

 

 

3,895

 

Transaction, restructuring, and other

 

3,072

 

 

 

3,314

 

Loss (gain) on currency translation

 

4,045

 

 

 

(2,412

)

Non-GAAP net income

$

89,401

 

 

$

92,459

 

 

 

 

 

Share count:

 

 

 

Weighted-average shares outstanding - basic

 

296,264

 

 

 

289,751

 

Weighted-average shares outstanding - diluted

 

300,867

 

 

 

293,917

 

 

 

 

 

Shares used in non-GAAP per share calculations:

 

 

 

Weighted-average shares outstanding - basic

 

296,264

 

 

 

289,751

 

Weighted-average shares outstanding - diluted

 

300,867

 

 

 

293,917

 

 

 

 

 

Non-GAAP net income per share:

 

 

 

Net income per share - basic

$

0.13

 

 

$

0.28

 

Net income per share - diluted

$

0.13

 

 

$

0.27

 

Non-GAAP net income per share - basic

$

0.30

 

 

$

0.32

 

Non-GAAP net income per share - diluted

$

0.30

 

 

$

0.31

 

 

Three Months Ended March 31,

 

 

2024

 

 

 

2023

 

Free Cash Flow:

 

 

 

Net cash provided by operating activities

$

131,672

 

 

$

120,427

 

Purchase of property and equipment

 

(9,797

)

 

 

(5,915

)

Capitalized software additions

 

(613

)

 

 

 

Free Cash Flow

$

121,262

 

 

$

114,512

 

 

DYNATRACE, INC.

GAAP to Non-GAAP Reconciliations

(Unaudited - In thousands)

 

 

Year Ended March 31, 2024

 

GAAP

 

Share-based compensation

 

Employer payroll taxes on employee stock transactions

 

Amortization of intangibles

 

Restructuring & other

 

Non-GAAP

Non-GAAP income from operations:

Cost of revenue

$

266,453

 

 

$

(26,622

)

 

$

(2,058

)

 

$

(16,265

)

 

$

 

 

$

221,508

 

Gross profit

 

1,164,077

 

 

 

26,622

 

 

 

2,058

 

 

 

16,265

 

 

 

 

 

 

1,209,022

 

Gross margin

 

81

%

 

 

 

 

 

 

 

 

 

 

85

%

Research and development (1)

 

304,739

 

 

 

(69,543

)

 

 

(5,446

)

 

 

 

 

 

(26

)

 

 

229,724

 

Sales and marketing (1)

 

534,233

 

 

 

(65,762

)

 

 

(4,967

)

 

 

 

 

 

(216

)

 

 

463,288

 

General and administrative (1)

 

174,412

 

 

 

(46,969

)

 

 

(1,517

)

 

 

 

 

 

(8,155

)

 

 

117,771

 

Amortization of other intangibles

 

22,293

 

 

 

 

 

 

 

 

 

(22,293

)

 

 

 

 

 

 

Income from operations

$

128,400

 

 

$

208,896

 

 

$

13,988

 

 

$

38,558

 

 

$

8,397

 

 

$

398,239

 

Operating margin

 

9

%

 

 

 

 

 

 

 

 

 

 

28

%

 

Year Ended March 31, 2023

 

GAAP

 

Share-based compensation

 

Employer payroll taxes on employee stock transactions

 

Amortization of intangibles

 

Restructuring & other

 

Non-GAAP

Non-GAAP income from operations:

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

 

218,349

 

 

 

(41,406

)

 

 

(1,704

)

 

 

 

 

 

 

 

 

175,239

 

Sales and marketing

 

448,015

 

 

 

(51,147

)

 

 

(2,338

)

 

 

 

 

 

(1,332

)

 

 

393,198

 

General and administrative

 

150,172

 

 

 

(35,938

)

 

 

(1,351

)

 

 

 

 

 

(2,347

)

 

 

110,536

 

Amortization of other intangibles

 

26,292

 

 

 

 

 

 

 

 

 

(26,292

)

 

 

 

 

 

 

Income from operations

$

92,811

 

 

$

146,874

 

 

$

6,191

 

 

$

41,856

 

 

$

4,059

 

 

$

291,791

 

Operating margin

 

8

%

 

 

 

 

 

 

 

 

 

 

25

%

 

DYNATRACE, INC.

GAAP to Non-GAAP Reconciliations

(Unaudited - In thousands, except per share data)

 

 

Year Ended March 31,

 

 

2024

 

 

 

2023

 

Non-GAAP net income:

 

 

 

Net income

$

154,632

 

 

$

107,959

 

Income tax expense (benefit)

 

283

 

 

 

(17,992

)

Non-GAAP effective cash tax

 

(75,604

)

 

 

(13,370

)

Interest (income) expense, net

 

(37,284

)

 

 

3,409

 

Cash received from interest, net

 

35,482

 

 

 

3,803

 

Share-based compensation

 

208,896

 

 

 

146,874

 

Employer payroll taxes on employee stock transactions

 

13,988

 

 

 

6,191

 

Amortization of other intangibles

 

22,293

 

 

 

26,292

 

Amortization of acquired technology

 

16,265

 

 

 

15,564

 

Transaction, restructuring, and other

 

8,397

 

 

 

4,059

 

Loss (gain) on currency translation

 

10,769

 

 

 

(565

)

Non-GAAP net income

$

358,117

 

 

$

282,224

 

 

 

 

 

Share count:

 

 

 

Weighted-average shares outstanding - basic

 

294,051

 

 

 

287,700

 

Weighted-average shares outstanding - diluted

 

299,280

 

 

 

291,617

 

 

 

 

 

Shares used in non-GAAP per share calculations:

 

 

 

Weighted-average shares outstanding - basic

 

294,051

 

 

 

287,700

 

Weighted-average shares outstanding - diluted

 

299,280

 

 

 

291,617

 

 

 

 

 

Non-GAAP net income per share:

 

 

 

Net income per share - basic

$

0.53

 

 

$

0.38

 

Net income per share - diluted

$

0.52

 

 

$

0.37

 

Non-GAAP net income per share - basic

$

1.22

 

 

$

0.98

 

Non-GAAP net income per share - diluted

$

1.20

 

 

$

0.97

 

 

Year Ended March 31,

 

 

2024

 

 

 

2023

 

Free Cash Flow:

 

 

 

Net cash provided by operating activities

$

378,109

 

 

$

354,885

 

Purchase of property and equipment

 

(26,459

)

 

 

(21,540

)

Capitalized software additions

 

(5,268

)

 

 

 

Free Cash Flow

 

346,382

 

 

 

333,345

 

 

Investor Contact:
Noelle Faris
VP, Investor Relations
Noelle.Faris@dynatrace.com

Media Relations:
Jerome Stewart
VP, Marketing
Jerome.Stewart@dynatrace.com

Source: Dynatrace