EX-99.1
Published on May 18, 2022
Exhibit 99.1
Dynatrace Reports Fourth Quarter and Full Year Fiscal 2022 Financial Results
Delivers Adjusted ARR growth of 35% year-over-year
WALTHAM, Mass, May 18, 2022 (Business Wire) - Software intelligence company Dynatrace (NYSE: DT) today released financial results for the fourth quarter and full year fiscal 2022 ended March 31, 2022. Dynatrace also announced today that Kevin Burns, its Chief Financial Officer, will be leaving at the end of calendar year 2022. Dynatrace has initiated a search for a new CFO, and Mr. Burns will work to ensure a smooth transition of his duties once a new CFO is appointed.
“Dynatrace delivered an extremely strong fourth quarter, closing out fiscal 2022 with 35% Adjusted ARR growth for the second straight year,” said Rick McConnell, Chief Executive Officer. “I am proud of the Dynatrace team for having now crossed the $1 billion dollar threshold in annualized revenue during the quarter, all while delivering strong profitability and free cash flow. Digital transformation and cloud migration trends continue to grow at a rapid pace and serve as the foundation for significant future growth. The combination of our material ongoing innovation coupled with expanding routes to market with key partnerships provides Dynatrace with strong momentum to capture the sizable market opportunity ahead of us.”
All growth rates are compared to the fourth quarter and full year of fiscal 2021 unless otherwise noted.
Fourth Quarter Fiscal 2022 Financial Highlights:
•Total ARR of $995 million, Adjusted ARR growth of 35% year-over-year
•Total Revenue of $253 million, up 31% on a constant currency basis
•Subscription Revenue of $235 million, up 31% on a constant currency basis
•GAAP Operating Income of $18 million and Non-GAAP Operating Income of $58 million
•GAAP EPS of $0.00 and non-GAAP EPS of $0.17, on a dilutive basis
Full Year Fiscal 2022 Financial Highlights:
•Total Revenue of $929 million, up 32% on a constant currency basis
•Subscription Revenue of $870 million, 32% on a constant currency basis
•GAAP Operating Income of $81 million and Non-GAAP Operating Income of $234 million
•GAAP EPS of $0.18 and non-GAAP EPS of $0.68, on a dilutive basis
•Unlevered Free Cash Flow of $234 million, or 25% of revenue
Business Highlights:
•Platform innovation: Delivered general availability of the Dynatrace® platform as native SaaS on Microsoft Azure and Google Cloud Platform in addition to existing availability through Amazon Web Services. Enhanced the Dynatrace® Application Security Module with real-time attack blocking capabilities. Enabled development teams to bring higher quality, more secure code to market faster by making Dynatrace observability, application security, and advanced AIOps capabilities available as code.
•Go-to-market momentum: Grew new logos by 21% in fiscal 2022, adding 205 new logos to the Dynatrace® platform in the fourth quarter, for a total of 706 new logos added this year. Sustained a net expansion rate at or above 120% for the sixteenth consecutive quarter.
•Partnership expansion: New ARR transacted through hyperscaler partnerships, including AWS, Google, Microsoft, more than tripled compared to the same period last year. Deloitte selected the Dynatrace platform to power its expanded observability practice (announced today). Enhanced Dynatrace Partner Program with new DevSecOps Automation Partner Program, enabling partners to extend the value of their solutions through seamless integrations with the Dynatrace® platform and providing DevSecOps teams with easy access to the industry’s leading solutions.
Executive Leadership Update
"On behalf of the entire Dynatrace team, I’d like to thank Kevin for his many contributions since joining the company in 2016,” said Rick McConnell, Chief Executive Officer. “He has played an integral role in positioning Dynatrace for long term success, including the transformation of our business model and successful IPO. We are fortunate to have a strong and deep finance team, and we are intent on the successful recruitment of a world-class CFO. I very much appreciate Kevin’s commitment to a smooth transition over the coming months.”
"The past six years at Dynatrace have been an incredible experience. It has been a privilege to work alongside this very talented group of people to grow this company into a billion-dollar business," said Burns. "Heading into fiscal 2023, Dynatrace’s position in the market has never been stronger. I am very proud of Dynatrace’s accomplishments and believe it is well positioned to continue to deliver significant growth and profitability in the future."
Fourth Quarter 2022 Financial Highlights
(Unaudited – In thousands, except per share data)
| Three Months Ended March 31, | |||||||||||
| 2022 | 2021 | ||||||||||
| Key Operating Metric: | |||||||||||
| Annualized recurring revenue | $ | 995,121 | $ | 774,090 | |||||||
| Year-over-Year Increase | 29 | % | |||||||||
| Adjusted ARR Growth | 35 | % | |||||||||
| Revenue: | |||||||||||
| Total revenue | $ | 252,585 | $ | 196,504 | |||||||
| Year-over-Year Increase | 29 | % | |||||||||
Total revenue - constant currency (*)
|
$ | 257,911 | $ | 196,504 | |||||||
| Year-over-Year Increase | 31 | % | |||||||||
| Subscription revenue | $ | 234,974 | $ | 182,842 | |||||||
| Year-over-Year Increase | 29 | % | |||||||||
Subscription revenue - constant currency (*)
|
$ | 239,937 | $ | 182,842 | |||||||
| Year-over-Year Increase | 31 | % | |||||||||
| Non-GAAP Financial Measures: | |||||||||||
Non-GAAP operating income (*)
|
$ | 57,656 | $ | 49,478 | |||||||
Non-GAAP operating margin (*)
|
23 | % | 25 | % | |||||||
Non-GAAP net income (*)
|
$ | 48,287 | $ | 43,371 | |||||||
| Non-GAAP net income per share - diluted | $ | 0.17 | $ | 0.15 | |||||||
| Non-GAAP shares outstanding - diluted | 290,339 | 288,067 | |||||||||
Unlevered Free Cash Flow (*)
|
$ | 82,306 | $ | 85,602 | |||||||
Full Year 2022 Financial Highlights
(Unaudited – In thousands, except per share data)
| Year Ended March 31, | |||||||||||
| 2022 | 2021 | ||||||||||
| Revenue: | |||||||||||
| Total revenue | $ | 929,445 | $ | 703,509 | |||||||
| Year-over-Year Increase | 32 | % | |||||||||
Total revenue - constant currency (*)
|
$ | 925,281 | $ | 703,509 | |||||||
Year-over-Year Increase |
32 | % | |||||||||
| Subscription revenue | $ | 870,385 | $ | 655,180 | |||||||
| Year-over-Year Increase | 33 | % | |||||||||
Subscription revenue - constant currency (*)
|
$ | 866,533 | $ | 655,180 | |||||||
| Year-over-Year Increase | 32 | % | |||||||||
| Non-GAAP Financial Measures: | |||||||||||
Non-GAAP operating income (*)
|
$ | 233,766 | $ | 207,251 | |||||||
Non-GAAP operating margin (*)
|
25 | % | 29 | % | |||||||
Non-GAAP net income (*)
|
$ | 197,502 | $ | 180,056 | |||||||
| Non-GAAP net income per share - diluted | $ | 0.68 | $ | 0.63 | |||||||
| Non-GAAP shares outstanding - diluted | 290,903 | 286,509 | |||||||||
Unlevered Free Cash Flow (*)
|
$ | 234,265 | $ | 237,055 | |||||||
* Use of Non-GAAP Financial Measures
In our earnings press releases, conference calls, slide presentations, and webcasts, we may use or discuss non-GAAP financial measures, as defined by Regulation G. The GAAP financial measure most directly comparable to each non-GAAP financial measure used or discussed, and a reconciliation of the differences between each non-GAAP financial measure and the comparable GAAP financial measure, are included in this press release after the consolidated financial statements. Our earnings press releases containing such non-GAAP reconciliations can be found in the Investors section of our website at https://ir.dynatrace.com.
Financial Outlook
Our guidance is based on foreign exchange rates as of April 30, 2022. Since March 31, 2022, the U.S. dollar has continued to strengthen, which results in a sizeable foreign exchange ("FX") headwind. For fiscal 2023, we expect a total FX headwind to be approximately $20 million dollars on ARR and revenue.
In addition, on March 8, 2022, we announced that we suspended business in Russia and Belarus which results in a headwind of approximately $6 million dollars on ARR and revenue for fiscal 2023.
Growth rates for Adjusted ARR, Total revenue, and Subscription revenue are presented in constant currency in the table below to provide better visibility into the underlying growth of the business.
Based on information available, as of May 18, 2022, Dynatrace is issuing guidance for the first quarter fiscal 2023 and full year fiscal 2023 as follows:
All growth rates are compared to the first quarter and full year of fiscal 2022 unless otherwise noted.
| (In millions, except per share data) | First Quarter Fiscal 2023 |
Full Year Fiscal 2023 |
|||||||||
| Total ARR | $1,250 - $1,265 |
||||||||||
| As reported | 26% - 27% |
||||||||||
| Constant currency | 28% - 29% |
||||||||||
| Adjusted ARR growth | 29% - 30% |
||||||||||
| Total revenue | $261 - $263.5 |
$1,142 - $1,158 |
|||||||||
| As reported | 24% - 26% |
23% - 25% |
|||||||||
| Constant currency | 29% - 31% |
27% - 28% |
|||||||||
| Subscription revenue | $244.5 - $246.5 |
$1,071 - $1,086 |
|||||||||
| As reported | 24% - 25% |
23% - 25% |
|||||||||
| Constant currency | 29% - 30% |
27% - 28% |
|||||||||
| Non-GAAP operating income | $60 - $62 |
$257 - $266 |
|||||||||
| Non-GAAP net income | $50 - $52 |
$216 - $225 |
|||||||||
| Non-GAAP net income per diluted share | $0.17 - $0.18 |
$0.74 - $0.77 |
|||||||||
| Diluted weighted average shares outstanding | 291 - 292 |
292 - 294 |
|||||||||
| Free cash flow | $330 - $345 |
||||||||||
| Free cash flow margin | 29% - 30% |
||||||||||
Reconciliation of non-GAAP operating income, non-GAAP net income, non-GAAP net income per share and free cash flow guidance to the most directly comparable GAAP measures is not available without unreasonable efforts on a forward-looking basis due to the high variability, complexity and low visibility with respect to the charges excluded from these non-GAAP measures; in particular, the measures and effects of share-based compensation expense, employer taxes and tax deductions specific to equity compensation awards that are directly impacted by future hiring, turnover and retention needs, as well as unpredictable fluctuations in our stock price. We expect the variability of the above charges to have a significant, and potentially unpredictable, impact on our future GAAP financial results.
Conference Call and Webcast Information
Dynatrace will host a conference call and live webcast to discuss its results and business outlook at 8:00 a.m. Eastern Time today, May 18, 2022. To access the conference call from the U.S. and Canada, dial (866) 405-1247, or internationally, dial (201) 689-8045 with event confirmation #: 13728998. The call will also be available live via webcast on the company’s website, ir.dynatrace.com.
An audio replay of the call will also be available until 11:59 p.m. Eastern Time on May 26, 2021, by dialing (877) 660-6853 from the U.S. or Canada, or for international callers by dialing (201) 612-7415 and entering event confirmation #: 13728998. In addition, an archived webcast will be available at ir.dynatrace.com.
The company has used, and intends to continue to use, the investor relations portion of its website as a means of disclosing material non-public information and for complying with disclosure obligations under Regulation FD.
Non-GAAP Financial Measures & Key Metrics
In addition to disclosing financial measures prepared in accordance with GAAP, this press release and the accompanying tables contain certain non-GAAP financial measures.
Non-GAAP financial measures do not have any standardized meaning and are therefore unlikely to be comparable to similarly titled measures presented by other companies. Dynatrace considers these non-GAAP financial measures to be important because they provide useful indicators of its performance and liquidity measures. These are key measures used by our management and board of directors to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget and to develop short and long-term operational plans. In addition, investors often use similar measures to evaluate the performance of a company. Non-GAAP financial measures are presented for supplemental informational purposes only for understanding the company’s operating performance. The non-GAAP financial measures should not be considered a substitute for financial information presented in accordance with GAAP, and may be different from non-GAAP financial measures presented by other companies. The GAAP financial measure most directly comparable to each non-GAAP financial measure used or discussed, and a reconciliation of the differences between each non-GAAP financial measure and the comparable GAAP financial measure, are included in this press release after the consolidated financial statements.
Dynatrace presents constant currency amounts for Revenue and Annual Recurring Revenue to provide a framework for assessing how our underlying business performed excluding the effect of foreign currency rate fluctuations. To present this information, current and comparative prior period results for entities reporting in currencies other than United States dollars are converted into United States dollars using the average exchange rates from the comparative period rather than the actual exchange rates in effect during the respective periods. All growth comparisons relate to the corresponding period in the prior fiscal year. Dynatrace provides this non-GAAP financial information to aid investors in better understanding our performance.
Annual Recurring Revenue “ARR” is defined as the daily revenue of all subscription agreements that are actively generating revenue as of the last day of the reporting period multiplied by 365. We exclude from our calculation of Total ARR any revenues derived from month-to-month agreements and/or product usage overage billings.
Adjusted ARR is defined as ARR excluding the impact of foreign exchange rate fluctuations that occurred over the trailing twelve month period. This calculation also excludes the headwind associated with the Dynatrace® perpetual license ARR that rolled off in the trailing twelve month period.
Adjusted ARR Growth is defined as year-over-year growth in Adjusted ARR divided by ARR as reported.
Dynatrace® Net Expansion Rate is defined as the Dynatrace® ARR at the end of a reporting period for the cohort of Dynatrace® accounts as of one year prior to the date of calculation, divided by the Dynatrace® ARR one year prior to the date of calculation for that same cohort. This calculation excludes the benefit of Dynatrace® ARR resulting from the conversion of Classic products to the Dynatrace® platform. Given that perpetual license ARR continues to diminish, we will begin to exclude the headwind associated with the Dynatrace perpetual license ARR effective the first quarter of fiscal year 2023. We believe that eliminating the perpetual license headwind will result in a Net Expansion Rate metric that better reflects Dynatrace’s ability to expand existing customer relationships.
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.
Unlevered Free Cash Flow is defined as net cash provided by (used in) operating activities and adjusted to exclude cash paid for interest (net of tax), non-recurring restructuring and acquisition related costs, along with costs associated with one-time offerings and filings, less cash used in investing activities for acquisition of property and equipment. However, given our debt obligations, unlevered free cash flow does not represent residual cash flow available for discretionary expenses.
Free Cash Flow is defined as net cash provided by (used in) operating activities less capital expenditures.
About Dynatrace
Dynatrace exists to make the world’s software work perfectly. Our unified software intelligence platform combines broad and deep observability and continuous runtime application security with the most advanced AIOps to provide answers and intelligent automation from data at an enormous scale. This enables innovators to modernize and automate cloud operations, deliver software faster and more securely, and ensure flawless digital experiences. That is why the world’s largest organizations trust Dynatrace® to accelerate digital transformation.
Cautionary Language Concerning Forward-Looking Statements
This press release includes certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding management’s expectations of future financial and operational performance and operational expenditures, expected growth, and business outlook, including our financial guidance for the first quarter and full year of fiscal 2023, and statements regarding the size of our market and our positioning for capturing a larger share of our market. These forward-looking statements include, but are not limited to, plans, objectives, expectations and intentions and other statements contained in this press release that are not historical facts and statements identified by words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates” or words of similar meaning. These forward-looking statements reflect our current views about our plans, intentions, expectations, strategies and prospects, which are based on the information currently available to us and on assumptions we have made. Although we believe that our plans, intentions, expectations, strategies and prospects as reflected in or suggested by those forward-looking statements are reasonable, we can give no assurance that the plans, intentions, expectations or strategies will be attained or achieved. Furthermore, actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of risks and factors that are beyond our control including, without limitation, the effect of the COVID-19 pandemic on our business operations and demand for our products as well as its impact on general economic and financial market conditions; our ability to maintain our subscription revenue growth rates in future periods, our ability to service our level of indebtedness, market adoption of software intelligence solutions for application performance monitoring, digital experience monitoring, infrastructure monitoring, AIOps, business intelligence and analytics and application security, continued spending on and demand for software intelligence solutions, our ability to maintain and acquire new customers, our ability to differentiate our platform from competing products and technologies; our ability to successfully recruit and retain highly-qualified personnel; the price volatility of our common stock, and other risks set forth under the caption “Risk Factors” in our most recently filed Form 10-Q filed on February 2, 2022 and our other SEC filings. We assume no obligation to update any forward-looking statements contained in this document as a result of new information, future events or otherwise.
DYNATRACE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
| Three Months Ended March 31, | Twelve Months Ended March 31, | ||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
| (unaudited) | |||||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||
| Subscription | $ | 234,974 | $ | 182,842 | $ | 870,385 | $ | 655,180 | |||||||||||||||
| License | 2 | 109 | 54 | 1,446 | |||||||||||||||||||
| Service | 17,609 | 13,553 | 59,006 | 46,883 | |||||||||||||||||||
| Total revenue | 252,585 | 196,504 | 929,445 | 703,509 | |||||||||||||||||||
| Cost of revenue: | |||||||||||||||||||||||
| Cost of subscription | 31,245 | 22,073 | 111,646 | 77,488 | |||||||||||||||||||
| Cost of service | 12,796 | 9,432 | 45,717 | 34,903 | |||||||||||||||||||
| Amortization of acquired technology | 3,875 | 3,830 | 15,513 | 15,317 | |||||||||||||||||||
| Total cost of revenue | 47,916 | 35,335 | 172,876 | 127,708 | |||||||||||||||||||
| Gross profit | 204,669 | 161,169 | 756,569 | 575,801 | |||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Research and development | 42,833 | 31,668 | 156,342 | 111,415 | |||||||||||||||||||
| Sales and marketing | 101,300 | 74,805 | 362,116 | 245,487 | |||||||||||||||||||
| General and administrative | 35,368 | 25,140 | 126,622 | 92,219 | |||||||||||||||||||
| Amortization of other intangibles | 7,539 | 8,687 | 30,157 | 34,744 | |||||||||||||||||||
| Restructuring and other | — | 17 | 25 | 40 | |||||||||||||||||||
| Total operating expenses | 187,040 | 140,317 | 675,262 | 483,905 | |||||||||||||||||||
| Income from operations | 17,629 | 20,852 | 81,307 | 91,896 | |||||||||||||||||||
| Interest expense, net | (2,234) | (3,035) | (10,192) | (14,205) | |||||||||||||||||||
| Other income (expense), net | 1,889 | (2,582) | 544 | 162 | |||||||||||||||||||
| Income before income taxes | 17,284 | 15,235 | 71,659 | 77,853 | |||||||||||||||||||
| Income tax (expense) benefit | (16,355) | 11,719 | (19,208) | (2,139) | |||||||||||||||||||
| Net income | $ | 929 | $ | 26,954 | $ | 52,451 | $ | 75,714 | |||||||||||||||
| Net income per share: | |||||||||||||||||||||||
Basic |
$ | 0.00 | $ | 0.10 | $ | 0.18 | $ | 0.27 | |||||||||||||||
Diluted |
$ | 0.00 | $ | 0.09 | $ | 0.18 | $ | 0.26 | |||||||||||||||
Weighted average shares outstanding: |
|||||||||||||||||||||||
Basic |
285,349 | 281,726 | 284,161 | 280,469 | |||||||||||||||||||
Diluted |
290,339 | 288,067 | 290,903 | 286,509 | |||||||||||||||||||
SHARE-BASED COMPENSATION
| Three Months Ended March 31, | Twelve Months Ended March 31, | ||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
| (unaudited) | |||||||||||||||||||||||
| Cost of revenue | $ | 3,321 | $ | 1,877 | $ | 12,863 | $ | 7,307 | |||||||||||||||
| Research and development | 5,985 | 3,018 | 21,316 | 11,684 | |||||||||||||||||||
| Sales and marketing | 9,470 | 6,146 | 35,957 | 24,153 | |||||||||||||||||||
| General and administrative | 8,810 | 3,652 | 29,400 | 14,640 | |||||||||||||||||||
| Total share-based compensation expense | $ | 27,586 | $ | 14,693 | $ | 99,536 | $ | 57,784 | |||||||||||||||
DYNATRACE, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
| March 31, | |||||||||||
| 2022 | 2021 | ||||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 462,967 | $ | 324,962 | |||||||
| Accounts receivable, net | 350,666 | 242,079 | |||||||||
| Deferred commissions, current | 62,601 | 48,986 | |||||||||
| Prepaid expenses and other current assets | 72,188 | 64,255 | |||||||||
| Total current assets | 948,422 | 680,282 | |||||||||
| Property and equipment, net | 45,271 | 36,916 | |||||||||
| Operating lease right-of-use asset, net | 58,849 | 42,959 | |||||||||
| Goodwill | 1,281,876 | 1,271,195 | |||||||||
| Other intangible assets, net | 105,736 | 149,484 | |||||||||
| Deferred tax assets, net | 28,106 | 16,811 | |||||||||
| Deferred commissions, non-current | 63,435 | 48,638 | |||||||||
| Other assets | 9,615 | 9,933 | |||||||||
| Total assets | $ | 2,541,310 | $ | 2,256,218 | |||||||
| Liabilities and shareholders' equity | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | 22,715 | $ | 9,621 | |||||||
| Accrued expenses, current | 141,556 | 119,527 | |||||||||
| Deferred revenue, current | 688,554 | 509,272 | |||||||||
| Operating lease liabilities, current | 12,774 | 9,491 | |||||||||
| Total current liabilities | 865,599 | 647,911 | |||||||||
| Deferred revenue, non-current | 25,783 | 47,504 | |||||||||
| Accrued expenses, non-current | 19,409 | 16,072 | |||||||||
| Operating lease liabilities, non-current | 52,070 | 38,203 | |||||||||
| Deferred tax liabilities | 85 | 1,014 | |||||||||
| Long-term debt | 273,918 | 391,913 | |||||||||
| Total liabilities | 1,236,864 | 1,142,617 | |||||||||
| Shareholders' equity: | |||||||||||
Common shares, $0.001 par value, 600,000,000 shares authorized, 286,053,276 and 283,130,238 shares issued and outstanding at March 31, 2022 and 2021, respectively |
286 | 283 | |||||||||
| Additional paid-in capital | 1,792,197 | 1,653,328 | |||||||||
| Accumulated deficit | (461,348) | (513,799) | |||||||||
| Accumulated other comprehensive loss | (26,689) | (26,211) | |||||||||
| Total shareholders' equity | 1,304,446 | 1,113,601 | |||||||||
| Total liabilities and shareholders' equity | $ | 2,541,310 | $ | 2,256,218 | |||||||
DYNATRACE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
| Year Ended March 31, | |||||||||||
| 2022 | 2021 | ||||||||||
| Cash flows from operating activities: | |||||||||||
| Net income | $ | 52,451 | $ | 75,714 | |||||||
| Adjustments to reconcile net income to cash provided by operations: | |||||||||||
| Depreciation | 10,638 | 9,022 | |||||||||
| Amortization | 46,238 | 51,942 | |||||||||
| Share-based compensation | 99,536 | 57,784 | |||||||||
| Deferred income taxes | (12,401) | (7,036) | |||||||||
| Other | 1,486 | 1,845 | |||||||||
| Net change in operating assets and liabilities: | |||||||||||
| Accounts receivable | (108,848) | (81,992) | |||||||||
| Deferred commissions | (29,533) | (16,323) | |||||||||
| Prepaid expenses and other assets | (8,108) | 5,669 | |||||||||
| Accounts payable and accrued expenses | 35,946 | 26,592 | |||||||||
| Operating leases, net | 1,353 | 731 | |||||||||
| Deferred revenue | 162,159 | 96,488 | |||||||||
| Net cash provided by operating activities | 250,917 | 220,436 | |||||||||
| Cash flows from investing activities: | |||||||||||
| Purchase of property and equipment | (17,695) | (14,076) | |||||||||
| Capitalized software costs | — | 197 | |||||||||
| Acquisition of businesses, net of cash acquired | (13,195) | — | |||||||||
| Net cash used in investing activities | (30,890) | (13,879) | |||||||||
| Cash flows from financing activities: | |||||||||||
| Repayment of term loans | (120,000) | (120,000) | |||||||||
| Proceeds from employee stock purchase plan | 13,913 | 9,195 | |||||||||
| Proceeds from exercise of stock options | 25,489 | 13,052 | |||||||||
| Equity repurchases | (66) | (49) | |||||||||
| Net cash used in financing activities | (80,664) | (97,802) | |||||||||
| Effect of exchange rates on cash and cash equivalents | (1,358) | 3,037 | |||||||||
| Net increase in cash and cash equivalents | 138,005 | 111,792 | |||||||||
| Cash and cash equivalents, beginning of year | 324,962 | 213,170 | |||||||||
| Cash and cash equivalents, end of year | $ | 462,967 | $ | 324,962 | |||||||
DYNATRACE, INC.
GAAP to Non-GAAP Reconciliations
(Unaudited - In thousands)
| Three Months Ended March 31, 2022 | |||||||||||||||||||||||||||||||||||
| GAAP | Share-based compensation | Employer payroll taxes on employee stock transactions | Amortization of other intangibles | Restructuring & other | Non-GAAP | ||||||||||||||||||||||||||||||
| Non-GAAP operating income: | |||||||||||||||||||||||||||||||||||
| Cost of revenue | $ | 47,916 | $ | (3,321) | $ | (143) | $ | (3,875) | $ | — | $ | 40,577 | |||||||||||||||||||||||
| Gross profit | 204,669 | 3,321 | 143 | 3,875 | — | 212,008 | |||||||||||||||||||||||||||||
| Gross margin | 81 | % | 84 | % | |||||||||||||||||||||||||||||||
| Research and development | 42,833 | (5,985) | (259) | — | — | 36,589 | |||||||||||||||||||||||||||||
| Sales and marketing | 101,300 | (9,470) | (424) | — | — | 91,406 | |||||||||||||||||||||||||||||
| General and administrative | 35,368 | (8,810) | (123) | — | (78) | 26,357 | |||||||||||||||||||||||||||||
| Amortization of other intangibles | 7,539 | — | — | (7,539) | — | — | |||||||||||||||||||||||||||||
| Restructuring and other | — | — | — | — | — | — | |||||||||||||||||||||||||||||
| Operating income | $ | 17,629 | $ | 27,586 | $ | 949 | $ | 11,414 | $ | 78 | $ | 57,656 | |||||||||||||||||||||||
| Operating margin | 7 | % | 23 | % | |||||||||||||||||||||||||||||||
| Three Months Ended March 31, 2021 | |||||||||||||||||||||||||||||||||||
| GAAP | Share-based compensation | Employer payroll taxes on employee stock transactions | Amortization of other intangibles | Restructuring & other | Non-GAAP | ||||||||||||||||||||||||||||||
| Non-GAAP operating income: | |||||||||||||||||||||||||||||||||||
| Cost of revenue | $ | 35,335 | $ | (1,877) | $ | (224) | $ | (3,830) | $ | — | $ | 29,404 | |||||||||||||||||||||||
| Gross profit | 161,169 | 1,877 | 224 | 3,830 | — | 167,100 | |||||||||||||||||||||||||||||
| Gross margin | 82 | % | 85 | % | |||||||||||||||||||||||||||||||
| Research and development | 31,668 | (3,018) | (378) | — | — | 28,272 | |||||||||||||||||||||||||||||
| Sales and marketing | 74,805 | (6,146) | (637) | — | — | 68,022 | |||||||||||||||||||||||||||||
| General and administrative | 25,140 | (3,652) | (202) | — | 42 | 21,328 | |||||||||||||||||||||||||||||
| Amortization of other intangibles | 8,687 | — | — | (8,687) | — | — | |||||||||||||||||||||||||||||
| Restructuring and other | 17 | — | — | — | (17) | — | |||||||||||||||||||||||||||||
| Operating income (loss) | $ | 20,852 | $ | 14,693 | $ | 1,441 | $ | 12,517 | $ | (25) | $ | 49,478 | |||||||||||||||||||||||
| Operating margin | 11 | % | 25 | % | |||||||||||||||||||||||||||||||
DYNATRACE, INC.
GAAP to Non-GAAP Reconciliations
(Unaudited - In thousands, except per share data)
| Three Months Ended March 31, | |||||||||||
| 2022 | 2021 | ||||||||||
| Non-GAAP net income: | |||||||||||
| Net income | $ | 929 | $ | 26,954 | |||||||
| Income tax expense (benefit) | 16,355 | (11,719) | |||||||||
| Non-GAAP effective cash tax | (7,543) | (3,546) | |||||||||
| Interest expense, net | 2,234 | 3,035 | |||||||||
| Cash paid for interest | (1,826) | (2,561) | |||||||||
| Share-based compensation | 27,586 | 14,693 | |||||||||
| Employer payroll taxes on employee stock transactions | 949 | 1,441 | |||||||||
| Amortization of other intangibles | 7,539 | 8,687 | |||||||||
| Amortization of acquired technology | 3,875 | 3,830 | |||||||||
| Transaction, restructuring, and other | 78 | (25) | |||||||||
| (Gain) loss on currency translation | (1,889) | 2,582 | |||||||||
| Non-GAAP net income | $ | 48,287 | $ | 43,371 | |||||||
| Share count: | |||||||||||
| Weighted-average shares outstanding - basic | 285,349 | 281,726 | |||||||||
| Weighted-average shares outstanding - diluted | 290,339 | 288,067 | |||||||||
| Shares used in non-GAAP per share calculations: | |||||||||||
| Weighted-average shares outstanding - basic | 285,349 | 281,726 | |||||||||
| Weighted-average shares outstanding - diluted | 290,339 | 288,067 | |||||||||
| Net income per share: | |||||||||||
| Net income per share - basic | $ | 0.00 | $ | 0.10 | |||||||
| Net income per share - diluted | $ | 0.00 | $ | 0.09 | |||||||
| Non-GAAP net income per share - basic | $ | 0.17 | $ | 0.15 | |||||||
| Non-GAAP net income per share - diluted | $ | 0.17 | $ | 0.15 | |||||||
DYNATRACE, INC.
GAAP to Non-GAAP Reconciliations
(Unaudited - In thousands)
| Three Months Ended March 31, | |||||||||||
| 2022 | 2021 | ||||||||||
| Unlevered Free Cash Flow ("uFCF"): | |||||||||||
| Net cash provided by operating activities | $ | 88,305 | $ | 85,871 | |||||||
| Cash paid for interest expense | 1,826 | 2,561 | |||||||||
| Purchase of property and equipment | (5,927) | (5,208) | |||||||||
| Transaction, restructuring, and other | 78 | (25) | |||||||||
| Discrete tax items | (1,519) | 3,043 | |||||||||
| Total uFCF | 82,763 | 86,242 | |||||||||
| Interest tax adjustment | (457) | (640) | |||||||||
| uFCF | $ | 82,306 | $ | 85,602 | |||||||
DYNATRACE, INC.
GAAP to Non-GAAP Reconciliations
(Unaudited - In thousands)
| Year Ended March 31, 2022 | |||||||||||||||||||||||||||||||||||
| GAAP | Share-based compensation | Employer payroll taxes on employee stock transactions | Amortization of other intangibles | Restructuring & other | Non-GAAP | ||||||||||||||||||||||||||||||
| Non-GAAP operating income: | |||||||||||||||||||||||||||||||||||
| Cost of revenue | $ | 172,876 | $ | (12,863) | $ | (1,059) | $ | (15,513) | $ | — | $ | 143,441 | |||||||||||||||||||||||
| Gross profit | 756,569 | 12,863 | 1,059 | 15,513 | — | 786,004 | |||||||||||||||||||||||||||||
| Gross margin | 81 | % | 85 | % | |||||||||||||||||||||||||||||||
| Research and development | 156,342 | (21,316) | (1,879) | — | — | 133,147 | |||||||||||||||||||||||||||||
| Sales and marketing | 362,116 | (35,957) | (2,305) | — | — | 323,854 | |||||||||||||||||||||||||||||
| General and administrative | 126,622 | (29,400) | (701) | — | (1,284) | 95,237 | |||||||||||||||||||||||||||||
| Amortization of other intangibles | 30,157 | — | — | (30,157) | — | — | |||||||||||||||||||||||||||||
| Restructuring and other | 25 | — | — | — | (25) | — | |||||||||||||||||||||||||||||
| Operating income | $ | 81,307 | $ | 99,536 | $ | 5,944 | $ | 45,670 | $ | 1,309 | $ | 233,766 | |||||||||||||||||||||||
| Operating margin | 9 | % | 25 | % | |||||||||||||||||||||||||||||||
| Year Ended March 31, 2021 | |||||||||||||||||||||||||||||||||||
| GAAP | Share-based compensation | Employer payroll taxes on employee stock transactions | Amortization of other intangibles | Restructuring & other | Non-GAAP | ||||||||||||||||||||||||||||||
| Non-GAAP operating income: | |||||||||||||||||||||||||||||||||||
| Cost of revenue | $ | 127,708 | $ | (7,307) | $ | (718) | $ | (15,317) | $ | — | $ | 104,366 | |||||||||||||||||||||||
| Gross profit | 575,801 | 7,307 | 718 | 15,317 | — | 599,143 | |||||||||||||||||||||||||||||
| Gross margin | 82 | % | 85 | % | |||||||||||||||||||||||||||||||
| Research and development | 111,415 | (11,684) | (1,356) | — | — | 98,375 | |||||||||||||||||||||||||||||
| Sales and marketing | 245,487 | (24,153) | (1,630) | — | — | 219,704 | |||||||||||||||||||||||||||||
| General and administrative | 92,219 | (14,640) | (410) | — | (3,356) | 73,813 | |||||||||||||||||||||||||||||
| Amortization of other intangibles | 34,744 | — | — | (34,744) | — | — | |||||||||||||||||||||||||||||
| Restructuring and other | 40 | — | — | — | (40) | — | |||||||||||||||||||||||||||||
| Operating income | $ | 91,896 | $ | 57,784 | $ | 4,114 | $ | 50,061 | $ | 3,396 | $ | 207,251 | |||||||||||||||||||||||
| Operating margin | 13 | % | 29 | % | |||||||||||||||||||||||||||||||
DYNATRACE, INC.
GAAP to Non-GAAP Reconciliations
(Unaudited - In thousands, except per share data)
GAAP to Non-GAAP Reconciliations
(Unaudited - In thousands, except per share data)
| Year Ended March 31, | |||||||||||
| 2022 | 2021 | ||||||||||
| Non-GAAP net income: | |||||||||||
| Net income | $ | 52,451 | $ | 75,714 | |||||||
| Income tax expense | 19,208 | 2,139 | |||||||||
| Non-GAAP effective cash tax | (27,889) | (14,720) | |||||||||
| Interest expense, net | 10,192 | 14,205 | |||||||||
| Cash paid for interest | (8,375) | (12,475) | |||||||||
| Share-based compensation | 99,536 | 57,784 | |||||||||
| Employer payroll taxes on employee stock transactions | 5,944 | 4,114 | |||||||||
| Amortization of other intangibles | 30,157 | 34,744 | |||||||||
| Amortization of acquired technology | 15,513 | 15,317 | |||||||||
| Transaction, restructuring, and other | 1,309 | 3,396 | |||||||||
| Gain on currency translation | (544) | (162) | |||||||||
| Non-GAAP net income | $ | 197,502 | $ | 180,056 | |||||||
| Share count: | |||||||||||
| Weighted-average shares outstanding - basic | 284,161 | 280,469 | |||||||||
| Weighted-average shares outstanding - diluted | 290,903 | 286,509 | |||||||||
| Shares used in non-GAAP per share calculations: | |||||||||||
| Weighted-average shares outstanding - basic | 284,161 | 280,469 | |||||||||
| Weighted-average shares outstanding - diluted | 290,903 | 286,509 | |||||||||
| Net income (loss) per share: | |||||||||||
| Net income (loss) per share - basic | $ | 0.18 | $ | 0.27 | |||||||
| Net income (loss) per share - diluted | $ | 0.18 | $ | 0.26 | |||||||
| Non-GAAP net income per share - basic | $ | 0.70 | $ | 0.64 | |||||||
| Non-GAAP net income per share - diluted | $ | 0.68 | $ | 0.63 | |||||||
DYNATRACE, INC.
GAAP to Non-GAAP Reconciliations
(Unaudited - In thousands)
| Year Ended March 31, | |||||||||||
| 2022 | 2021 | ||||||||||
| Unlevered Free Cash Flow ("uFCF"): | |||||||||||
| Net cash provided by operating activities | $ | 250,917 | $ | 220,436 | |||||||
| Cash paid for interest expense | 8,375 | 12,475 | |||||||||
| Purchase of property and equipment | (17,695) | (14,076) | |||||||||
| Transaction, restructuring, and other | 1,309 | 3,396 | |||||||||
| Discrete tax items | (6,547) | 17,943 | |||||||||
| Total uFCF | 236,359 | 240,174 | |||||||||
| Interest tax adjustment | (2,094) | (3,119) | |||||||||
| uFCF | $ | 234,265 | $ | 237,055 | |||||||
Contacts
Investor Contact:
Noelle Faris
VP, Investor Relations
Noelle.Faris@dynatrace.com
Media Relations:
Jerome Stewart
VP, Communications
Jerome.Stewart@dynatrace.com