• | Total Revenue of $129.4 million, a year-over-year increase of 27% |
• | Annualized recurring revenue "ARR" of $470.9 million, a year-over-year increase of 44% |
• | Subscription and Services revenue of $126.6 million, a year-over-year increase of 37% |
• | GAAP EPS of $(1.58) and non-GAAP EPS of $0.06 |
• | Total Revenue of $129.4 million, an increase of 27% compared to $101.9 million in Q2 2019 |
• | Total ARR of $470.9 million, an increase of 44% compared to $326.4 million at the end of Q2 2019 |
• | Subscription and Services revenue of $126.6 million, an increase of 37% compared to $92.2 million in Q2 2019, and representing 98% of total revenue |
• | GAAP Operating loss of $(154.5) million and Non-GAAP Operating Income of $29.4 million |
• | GAAP EPS of $(1.58) and non-GAAP EPS of $0.06 |
• | Ended the quarter with 1,828 Dynatrace customers, a sequential increase of 250 from the end of Q1 2020 |
• | Dynatrace Dollar-Based Net Expansion rate greater than 120% for the sixth consecutive quarter |
• | Dynatrace ARR represents 80% of total ARR, increasing from 75% of total ARR at the end of Q1 2020 |
• | Completed our initial public offering and listed our shares on the New York Stock Exchange on August 1, 2019. The offering resulted in approximately $622.0 million in gross primary proceeds and $590.3 million of net proceeds. |
• | Announced Digital Business Analytics, a new module to the Dynatrace Software Intelligence Platform. Digital Business Analytics provides real-time, AI-powered answers to business questions from observability data already flowing through the Dynatrace platform. |
• | To support a growing number of webscale, multi-cloud implementations, Dynatrace doubled the capacity of a cluster which now scales to 50,000 hosts per cluster, and added support for the clustering of clusters for software intelligence scalability without limits. |
Three Months Ended September 30, | |||||||
2019 | 2018 | ||||||
Annualized recurring revenue | $ | 470,905 | $ | 326,439 | |||
Year-over-Year Increase | 44 | % | |||||
Revenues: | |||||||
Total revenue | $ | 129,378 | $ | 101,887 | |||
Year-over-Year Increase | 27 | % | |||||
Subscription and services revenue | $ | 126,633 | $ | 92,225 | |||
Year-over-Year Increase | 37 | % | |||||
Non-GAAP operating income (*) | $ | 29,396 | $ | 17,294 | |||
Non-GAAP operating margin (*) | 23 | % | 17 | % | |||
Non-GAAP net income (*) | $ | 17,275 | $ | 7,423 | |||
Non-GAAP net income per share | $ | 0.06 | $ | 0.03 | |||
Shares outstanding used in computing Non-GAAP per share amounts - diluted | 269,985 | 236,275 | |||||
Unlevered Free Cash Flow (*) | $ | 27,159 | $ | 24,327 |
• | Total revenue is expected to be in the range of $137 million to $138 million |
• | Non-GAAP operating income is expected to be in the range of $30 million to $31 million |
• | Non-GAAP net income is expected to be in the range of $18 million to $19 million |
• | Non-GAAP net income per diluted share is expected to be in the range of $0.06 to $0.07, based on approximately 282 million diluted weighted-average shares |
• | Total revenue is expected to be in the range of $533 million to $535 million |
• | Total ARR is expected to be in the range of $550 million to $555 million |
• | Non-GAAP operating income is expected to be in the range of $119 million to $121 million |
• | Non-GAAP net income is expected to be in the range of $64 million to $67 million |
• | Non-GAAP net income per diluted share is expected to be in the range of $0.23 to $0.24, based on approximately 275 million diluted weighted-average shares |
Three Months Ended September 30, | Six Months Ended September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Revenue: | |||||||||||||||
Subscription | $ | 115,805 | $ | 82,389 | $ | 223,933 | $ | 160,313 | |||||||
License | 2,745 | 9,662 | 6,529 | 20,741 | |||||||||||
Service | 10,828 | 9,836 | 21,466 | 19,054 | |||||||||||
Total revenue | 129,378 | 101,887 | 251,928 | 200,108 | |||||||||||
Cost of revenue: | |||||||||||||||
Cost of subscription | 23,456 | 14,256 | 39,633 | 27,388 | |||||||||||
Cost of service | 11,847 | 7,522 | 20,656 | 14,417 | |||||||||||
Amortization of acquired technology | 4,243 | 4,558 | 8,800 | 9,222 | |||||||||||
Total cost of revenue | 39,546 | 26,336 | 69,089 | 51,027 | |||||||||||
Gross profit | 89,832 | 75,551 | 182,839 | 149,081 | |||||||||||
Operating expenses: | |||||||||||||||
Research and development | 46,596 | 19,690 | 72,255 | 37,586 | |||||||||||
Sales and marketing | 99,966 | 44,883 | 158,181 | 87,392 | |||||||||||
General and administrative | 86,953 | 25,211 | 118,835 | 45,092 | |||||||||||
Amortization of other intangibles | 10,061 | 11,964 | 20,203 | 24,013 | |||||||||||
Restructuring and other | 779 | 73 | 894 | 483 | |||||||||||
Total operating expenses | 244,355 | 101,821 | 370,368 | 194,566 | |||||||||||
Loss from operations | (154,523 | ) | (26,270 | ) | (187,529 | ) | (45,485 | ) | |||||||
Interest expense, net | (14,534 | ) | (17,495 | ) | (33,720 | ) | (28,182 | ) | |||||||
Other income (expense), net | 146 | (439 | ) | 240 | 2,424 | ||||||||||
Loss before income taxes | (168,911 | ) | (44,204 | ) | (221,009 | ) | (71,243 | ) | |||||||
Income tax (expense) benefit | (248,423 | ) | 4,266 | (245,480 | ) | 7,749 | |||||||||
Net loss | $ | (417,334 | ) | $ | (39,938 | ) | $ | (466,489 | ) | $ | (63,494 | ) | |||
Net loss per share: | |||||||||||||||
Basic and diluted | $ | (1.58 | ) | $ | (0.17 | ) | $ | (1.86 | ) | $ | (0.27 | ) | |||
Weighted average shares outstanding: | |||||||||||||||
Basic and diluted | 264,127 | 235,215 | 251,412 | 235,217 |
Three Months Ended September 30, | Six Months Ended September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Cost of revenues | $ | 12,720 | $ | 1,906 | $ | 16,029 | $ | 2,990 | |||||||
Research and development | 27,379 | 4,163 | 34,506 | 6,581 | |||||||||||
Sales and marketing | 56,781 | 7,998 | 71,885 | 12,461 | |||||||||||
General and administrative | 57,866 | 8,963 | 73,751 | 14,196 | |||||||||||
Total share-based compensation expense | $ | 154,746 | $ | 23,030 | $ | 196,171 | $ | 36,228 |
September 30, 2019 | March 31, 2019 | ||||||
(unaudited) | |||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 211,696 | $ | 51,314 | |||
Accounts receivable, net of allowance for doubtful accounts | 85,602 | 115,431 | |||||
Deferred commissions, current | 35,094 | 27,705 | |||||
Prepaid expenses and other current assets | 23,166 | 18,768 | |||||
Total current assets | 355,558 | 213,218 | |||||
Property and equipment, net | 24,664 | 17,925 | |||||
Goodwill | 1,270,163 | 1,270,120 | |||||
Other intangible assets, net | 229,880 | 259,123 | |||||
Deferred tax assets, net | 10,806 | 10,678 | |||||
Deferred commissions, non-current | 26,154 | 31,545 | |||||
Other assets | 8,117 | 7,649 | |||||
Receivable from related party | 7,480 | 1,108 | |||||
Total assets | $ | 1,932,822 | $ | 1,811,366 | |||
Liabilities and shareholders' equity / member's deficit | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 10,532 | $ | 6,559 | |||
Accrued expenses, current | 78,704 | 64,920 | |||||
Current portion of long-term debt | — | 9,500 | |||||
Deferred revenue, current | 291,857 | 272,772 | |||||
Payable to related party | — | 597,150 | |||||
Total current liabilities | 381,093 | 950,901 | |||||
Deferred revenue, non-current | 77,630 | 92,973 | |||||
Accrued expenses, non-current | 18,028 | 98,359 | |||||
Deferred tax liabilities | — | 47,598 | |||||
Long-term debt, net of current portion | 569,789 | 1,011,793 | |||||
Total liabilities | 1,046,540 | 2,201,624 | |||||
Commitments and contingencies | |||||||
Shareholders' equity / member's deficit: | |||||||
Common shares, $0.001 par value, 600,000,000 shares authorized, 280,509,056 shares issued and outstanding at September 30, 2019 | 281 | — | |||||
Common units, no par value, 100 units authorized, issued and outstanding at March 31, 2019 | — | — | |||||
Additional paid-in capital | 1,547,051 | (184,546 | ) | ||||
Accumulated deficit | (642,491 | ) | (176,002 | ) | |||
Accumulated other comprehensive loss | (18,559 | ) | (29,710 | ) | |||
Total shareholders' equity / member's deficit | 886,282 | (390,258 | ) | ||||
Total liabilities and shareholders' equity / member's deficit | $ | 1,932,822 | $ | 1,811,366 |
Six Months Ended September 30, | |||||||
2019 | 2018 | ||||||
Cash flows from operating activities: | |||||||
Net loss | $ | (466,489 | ) | $ | (63,494 | ) | |
Adjustments to reconcile net loss to cash (used in) provided by operations: | |||||||
Depreciation | 3,971 | 3,585 | |||||
Amortization | 29,810 | 36,697 | |||||
Share-based compensation | 196,171 | 36,228 | |||||
Deferred income taxes | (48,566 | ) | (9,437 | ) | |||
Other | 3,690 | 278 | |||||
Net change in operating assets and liabilities: | |||||||
Accounts receivable | 29,578 | 51,350 | |||||
Deferred commissions | (2,196 | ) | (2,203 | ) | |||
Prepaid expenses and other assets | (888 | ) | (5,071 | ) | |||
Accounts payable and accrued expenses | 27,230 | 9,981 | |||||
Deferred revenue | 9,461 | 18,246 | |||||
Net cash (used in) provided by operating activities | (218,228 | ) | 76,160 | ||||
Cash flows from investing activities: | |||||||
Purchase of property and equipment | (9,758 | ) | (3,261 | ) | |||
Capitalized software additions | (564 | ) | (782 | ) | |||
Net cash used in investing activities | (10,322 | ) | (4,043 | ) | |||
Cash flows from financing activities: | |||||||
Proceeds from initial public offering, net of underwriters' discounts and commissions | 590,297 | — | |||||
Settlement of deferred offering costs | (5,000 | ) | — | ||||
Proceeds from term loans | — | 1,120,000 | |||||
Debt issuance costs | — | (16,288 | ) | ||||
Repayment of term loans | (455,189 | ) | — | ||||
Payments to related parties | — | (1,177,021 | ) | ||||
Contribution for tax associated with reorganization | 265,000 | — | |||||
Equity repurchases | (145 | ) | (647 | ) | |||
Installments related to acquisition | (4,694 | ) | (3,653 | ) | |||
Net cash provided by (used in) financing activities | 390,269 | (77,609 | ) | ||||
Effect of exchange rates on cash and cash equivalents | (1,337 | ) | (2,356 | ) | |||
Net increase (decrease) in cash and cash equivalents | 160,382 | (7,848 | ) | ||||
Cash and cash equivalents, beginning of period | 51,314 | 77,581 | |||||
Cash and cash equivalents, end of period | $ | 211,696 | $ | 69,733 |
Three Months Ended September 30, 2019 | |||||||||||||||||||
GAAP | Share-based compensation | Amortization of other intangibles | Restructuring & other | Non-GAAP | |||||||||||||||
Non-GAAP operating income: | |||||||||||||||||||
Cost of revenues | $ | 39,546 | $ | (12,720 | ) | $ | (4,243 | ) | $ | — | $ | 22,583 | |||||||
Gross profit | 89,832 | 12,720 | 4,243 | — | 106,795 | ||||||||||||||
Gross margin | 69 | % | 83 | % | |||||||||||||||
Research and development | 46,596 | (27,379 | ) | — | — | 19,217 | |||||||||||||
Sales and marketing | 99,966 | (56,781 | ) | — | — | 43,185 | |||||||||||||
General and administrative | 86,953 | (57,866 | ) | — | (14,090 | ) | 14,997 | ||||||||||||
Amortization of other intangibles | 10,061 | — | (10,061 | ) | — | — | |||||||||||||
Restructuring and other | 779 | — | — | (779 | ) | — | |||||||||||||
Operating (loss) income | (154,523 | ) | 154,746 | 14,304 | 14,869 | 29,396 | |||||||||||||
Operating margin | (119 | )% | 23 | % |
Three Months Ended September 30, 2018 | |||||||||||||||||||
GAAP | Share-based compensation | Amortization of other intangibles | Restructuring & other | Non-GAAP | |||||||||||||||
Non-GAAP operating income: | |||||||||||||||||||
Cost of revenues | $ | 26,336 | $ | (1,906 | ) | $ | (4,558 | ) | $ | — | $ | 19,872 | |||||||
Gross profit | 75,551 | 1,906 | 4,558 | — | 82,015 | ||||||||||||||
Gross margin | 74 | % | 80 | % | |||||||||||||||
Research and development | 19,690 | (4,163 | ) | — | — | 15,527 | |||||||||||||
Sales and marketing | 44,883 | (7,998 | ) | — | — | 36,885 | |||||||||||||
General and administrative | 25,211 | (8,963 | ) | — | (3,939 | ) | 12,309 | ||||||||||||
Amortization of other intangibles | 11,964 | — | (11,964 | ) | — | — | |||||||||||||
Restructuring and other | 73 | — | — | (73 | ) | — | |||||||||||||
Operating (loss) income | (26,270 | ) | 23,030 | 16,522 | 4,012 | 17,294 | |||||||||||||
Operating margin | (26 | )% | 17 | % |
Three Months Ended September 30, | |||||||
2019 | 2018 | ||||||
Non-GAAP net income: | |||||||
Net loss | $ | (417,334 | ) | $ | (39,938 | ) | |
Tax expense (benefit) | 248,423 | (4,266 | ) | ||||
Cash paid for tax | (262,020 | ) | (3,981 | ) | |||
Tax associated with reorganization | 254,242 | — | |||||
Related party tax | 7,310 | — | |||||
Interest expense | 14,534 | 17,495 | |||||
Cash paid for interest | (11,653 | ) | (5,890 | ) | |||
Share-based compensation | 154,746 | 23,030 | |||||
Amortization of other intangibles | 10,061 | 11,964 | |||||
Amortization of acquired technology | 4,243 | 4,558 | |||||
Transaction and sponsor related costs | 14,090 | 3,939 | |||||
Restructuring and other | 779 | 73 | |||||
(Gain) loss on currency translation | $ | (146 | ) | $ | 439 | ||
Non-GAAP net income | $ | 17,275 | $ | 7,423 | |||
Share count: | |||||||
Weighted-average shares outstanding - basic | 264,127 | 235,215 | |||||
Weighted-average shares outstanding - diluted | 264,127 | 235,215 | |||||
Shares used in non-GAAP per share calculations: | |||||||
Weighted-average shares outstanding - basic | 264,127 | 235,215 | |||||
Weighted-average shares outstanding - diluted | 269,985 | 236,275 | |||||
Net income (loss) per share: | |||||||
Net loss per share - basic | $ | (1.58 | ) | $ | (0.17 | ) | |
Net loss per share - diluted | $ | (1.58 | ) | $ | (0.17 | ) | |
Non-GAAP net income per share - basic | $ | 0.07 | $ | 0.03 | |||
Non-GAAP net income per share - diluted | $ | 0.06 | $ | 0.03 |
Three Months Ended September 30, | Trailing Twelve Months Ended September 30, 2019 | ||||||||
2019 | 2018 | ||||||||
Adjusted EBITDA: | |||||||||
Net loss | (417,334 | ) | (39,938 | ) | $ | (519,189 | ) | ||
Income tax expense (benefit) | 248,423 | (4,266 | ) | 229,512 | |||||
Interest expense, net | 14,534 | 17,495 | 75,383 | ||||||
Amortization | 14,729 | 18,354 | 65,905 | ||||||
Depreciation | 1,937 | 1,642 | 7,705 | ||||||
Restructuring and other | 779 | 73 | 2,174 | ||||||
Transaction and sponsor related costs | 14,090 | 3,939 | 25,225 | ||||||
(Gain) loss on currency translation | (146 | ) | 439 | (457 | ) | ||||
Share-based compensation | 154,746 | 23,030 | 231,094 | ||||||
Adjusted EBITDA | 31,758 | 20,768 | $ | 117,352 |
Three Months Ended September 30, | |||||||
2019 | 2018 | ||||||
Unlevered Free Cash Flow ("uFCF") (After tax adjustment): | |||||||
Net cash (used in) provided by operating activities | $ | (252,395 | ) | $ | 17,600 | ||
Cash paid for interest expense | 11,653 | 5,890 | |||||
Restructuring and other | 779 | 73 | |||||
Purchase of property, plant, and equipment | (5,607 | ) | (1,702 | ) | |||
Transaction and sponsor related costs | 14,090 | 3,939 | |||||
Tax associated with reorganization | 254,242 | — | |||||
Related party tax | 7,310 | — | |||||
Total uFCF | 30,072 | 25,800 | |||||
Interest tax adjustment | (2,913 | ) | (1,473 | ) | |||
uFCF (After tax adjustment) | $ | 27,159 | $ | 24,327 |
September 30, 2019 | |||
Adjusted EBITDA/Net Debt Leverage Ratio: | |||
Long-term debt | $ | 569,789 | |
Cash | 211,696 | ||
Net debt | 358,093 | ||
TTM Adjusted EBITDA | $ | 117,352 | |
Leverage Ratio | 3.1 | x |
Six Months Ended September 30, 2019 | |||||||||||||||||||
GAAP | Share-based compensation | Amortization of other intangibles | Restructuring & other | Non-GAAP | |||||||||||||||
Non-GAAP operating income: | |||||||||||||||||||
Cost of revenues | $ | 69,089 | $ | (16,029 | ) | $ | (8,800 | ) | $ | — | $ | 44,260 | |||||||
Gross profit | 182,839 | 16,029 | 8,800 | — | 207,668 | ||||||||||||||
Gross margin | 73 | % | 82 | % | |||||||||||||||
Research and development | 72,255 | (34,506 | ) | — | — | 37,749 | |||||||||||||
Sales and marketing | 158,181 | (71,885 | ) | — | — | 86,296 | |||||||||||||
General and administrative | 118,835 | (73,751 | ) | — | (17,954 | ) | 27,130 | ||||||||||||
Amortization of other intangibles | 20,203 | — | (20,203 | ) | — | — | |||||||||||||
Restructuring and other | 894 | — | — | (894 | ) | — | |||||||||||||
Operating (loss) income | (187,529 | ) | 196,171 | 29,003 | 18,848 | 56,493 | |||||||||||||
Operating margin | (74 | )% | 22 | % |
Six Months Ended September 30, 2018 | |||||||||||||||||||
GAAP | Share-based compensation | Amortization of other intangibles | Restructuring & other | Non-GAAP | |||||||||||||||
Non-GAAP operating income: | |||||||||||||||||||
Cost of revenues | $ | 51,027 | $ | (2,990 | ) | $ | (9,222 | ) | $ | — | $ | 38,815 | |||||||
Gross profit | 149,081 | 2,990 | 9,222 | — | 161,293 | ||||||||||||||
Gross margin | 75 | % | 81 | % | |||||||||||||||
Research and development | 37,586 | (6,581 | ) | — | — | 31,005 | |||||||||||||
Sales and marketing | 87,392 | (12,461 | ) | — | — | 74,931 | |||||||||||||
General and administrative | 45,092 | (14,196 | ) | — | (5,272 | ) | 25,624 | ||||||||||||
Amortization of other intangibles | 24,013 | — | (24,013 | ) | — | — | |||||||||||||
Restructuring and other | 483 | — | — | (483 | ) | — | |||||||||||||
Operating (loss) income | (45,485 | ) | 36,228 | 33,235 | 5,755 | 29,733 | |||||||||||||
Operating margin | (23 | )% | 15 | % |
Six Months Ended September 30, | |||||||
2019 | 2018 | ||||||
Non-GAAP net income: | |||||||
Net loss | $ | (466,489 | ) | $ | (63,494 | ) | |
Income tax expense (benefit) | 245,480 | (7,749 | ) | ||||
Cash paid for tax | (264,072 | ) | (2,077 | ) | |||
Tax associated with reorganization | 254,242 | — | |||||
Related party tax | 7,310 | — | |||||
Interest expense | 33,720 | 28,182 | |||||
Cash paid for interest | (27,391 | ) | (5,890 | ) | |||
Share-based compensation | 196,171 | 36,228 | |||||
Amortization of other intangibles | 20,203 | 24,013 | |||||
Amortization of acquired technology | 8,800 | 9,222 | |||||
Transaction and sponsor related costs | 17,954 | 5,272 | |||||
Restructuring and other | 894 | 483 | |||||
(Gain) on currency translation | $ | (240 | ) | $ | (2,424 | ) | |
Non-GAAP net income | $ | 26,582 | $ | 21,766 | |||
Share count: | |||||||
Weighted-average shares outstanding - basic | 251,412 | 235,217 | |||||
Weighted-average shares outstanding - diluted | 251,412 | 235,217 | |||||
Shares used in non-GAAP per share calculations: | |||||||
Weighted-average shares outstanding - basic | 251,412 | 235,217 | |||||
Weighted-average shares outstanding - diluted | 258,043 | 235,931 | |||||
Net (loss) income per share: | |||||||
Net loss per share - basic | $ | (1.86 | ) | $ | (0.27 | ) | |
Net loss per share - diluted | $ | (1.86 | ) | $ | (0.27 | ) | |
Non-GAAP net (loss) income per share - basic | $ | 0.11 | $ | 0.09 | |||
Non-GAAP net (loss) income per share - diluted | $ | 0.10 | $ | 0.09 |
Six Months Ended September 30, | |||||||
2019 | 2018 | ||||||
Adjusted EBITDA: | |||||||
Net loss | $ | (466,489 | ) | $ | (63,494 | ) | |
Income tax expense (benefit) | 245,480 | (7,749 | ) | ||||
Interest expense, net | 33,720 | 28,182 | |||||
Amortization | 29,810 | 36,697 | |||||
Depreciation | 3,971 | 3,585 | |||||
Restructuring and other | 894 | 483 | |||||
Transaction and sponsor related costs | 17,954 | 5,272 | |||||
(Gain) on currency translation | (240 | ) | (2,424 | ) | |||
Share-based compensation | 196,171 | 36,228 | |||||
Adjusted EBITDA | $ | 61,271 | $ | 36,780 |
Six Months Ended September 30, | |||||||
2019 | 2018 | ||||||
Unlevered Free Cash Flow ("uFCF") (After tax adjustment): | |||||||
Net cash (used in) provided by operating activities | $ | (218,228 | ) | $ | 76,160 | ||
Cash paid for interest expense | 27,391 | 5,890 | |||||
Restructuring and other | 894 | 483 | |||||
Purchase of property, plant, and equipment | (9,758 | ) | (3,261 | ) | |||
Transaction and sponsor related costs | 17,954 | 5,272 | |||||
Tax associated with reorganization | 254,242 | — | |||||
Related party tax | 7,310 | — | |||||
Total uFCF | 79,805 | 84,544 | |||||
Interest tax adjustment | (6,848 | ) | (1,473 | ) | |||
uFCF (After tax adjustment) | $ | 72,957 | $ | 83,071 |