Dynatrace Reports Second Quarter Fiscal Year 2025 Financial Results
Exceeds high end of guidance across all metrics
Delivers ARR growth of 19% year-over-year on a constant currency basis
Achieves GAAP Operating Margin of 11% and Non-GAAP Operating Margin of 31%
"Our continued out-performance across all of our key metrics is a result of the strength of our platform and ability to execute effectively in a dynamic market," said
Second Quarter Fiscal 2025 Financial and Other Recent Business Highlights:
All growth rates are compared to the second quarter of fiscal 2024, unless otherwise noted.
Financial Highlights:
-
ARR of
$1,617 million , an increase of 20%, or 19% on a constant currency basis -
Total Revenue of
$418 million , an increase of 19% on both an as reported and constant currency basis -
Subscription Revenue of
$400 million , an increase of 20% on both an as reported and constant currency basis -
GAAP Income from Operations of
$47 million and Non-GAAP Income from Operations of$131 million -
GAAP EPS of
$0.15 and Non-GAAP EPS of$0.37 , both on a dilutive basis
Business Highlights:
-
Industry recognition:
Dynatrace received the following recognitions by third-party industry analysts:-
Positioned furthest for Completeness of Vision and highest in Ability to Execute in the 2024 Gartner® Magic Quadrant™ for Observability Platforms. This is the 14th consecutive time that Gartner has named
Dynatrace a Leader in this report.1 - Ranked #1 across 3 of 5 use cases in the 2024 Gartner Critical Capabilities for Observability Platforms Report.2
- Named a Leader in the Inaugural 2024 Gartner Magic Quadrant for Digital Experience Monitoring for Completeness of Vision and Ability to Execute.3
- Recognized in the 2024 Constellation Research ShortLists™ for Observability, AIOPs, and Digital Performance Management.4
-
Positioned furthest for Completeness of Vision and highest in Ability to Execute in the 2024 Gartner® Magic Quadrant™ for Observability Platforms. This is the 14th consecutive time that Gartner has named
-
Product advancements:
Dynatrace announced improved user experience, advanced log management and analytics, and extended cloud-native capabilities that enable customers to gain deeper visibility, boost operational efficiency, and drive productivity across their business. -
Go-to-market engagement:
Dynatrace increased customer engagement with several events in the quarter, including more than 2,000 customers and partners attending the company's global Innovate sessions and more than 400 partners at the company's inaugural PowerUp program. In addition,Dynatrace hosted its most successful streaming event to date, "Power of Possible," showcasing how the company is extending customer value to more use cases and teams.
Share Repurchase Program
-
During the second quarter,
Dynatrace spent$40 million to repurchase 835,000 shares at an average price of$47.90 under its$500 million share repurchase program. From the inception of the program inMay 2024 throughSeptember 30, 2024 ,Dynatrace has repurchased 1.9 million shares for$90 million at an average price of$46.71 .
Second Quarter 2025 Financial Highlights (Unaudited – In thousands, except per share data) |
|||||||
|
Three Months Ended |
||||||
|
|
2024 |
|
|
|
2023 |
|
Key Operating Metric: |
|
|
|
||||
Annual recurring revenue (ARR) |
$ |
1,616,531 |
|
|
$ |
1,343,530 |
|
Year-over-Year Increase |
|
20 |
% |
|
|
||
Year-over-Year Increase - constant currency (*) |
|
19 |
% |
|
|
||
|
|
|
|
||||
Revenue: |
|
|
|
||||
Total revenue |
$ |
418,129 |
|
|
$ |
351,700 |
|
Year-over-Year Increase |
|
19 |
% |
|
|
||
Year-over-Year Increase - constant currency (*) |
|
19 |
% |
|
|
||
|
|
|
|
||||
Subscription revenue |
$ |
399,810 |
|
|
$ |
334,497 |
|
Year-over-Year Increase |
|
20 |
% |
|
|
||
Year-over-Year Increase - constant currency (*) |
|
20 |
% |
|
|
||
|
|
|
|
||||
GAAP Financial Measures: |
|
|
|
||||
GAAP income from operations |
$ |
47,026 |
|
|
$ |
35,269 |
|
GAAP operating margin |
|
11 |
% |
|
|
10 |
% |
|
|
|
|
||||
GAAP net income |
$ |
44,008 |
|
|
$ |
35,809 |
|
|
|
|
|
||||
GAAP net income per share - diluted |
$ |
0.15 |
|
|
$ |
0.12 |
|
|
|
|
|
||||
GAAP shares outstanding - diluted |
|
301,373 |
|
|
|
297,794 |
|
|
|
|
|
||||
Net cash provided by operating activities |
$ |
23,650 |
|
|
$ |
36,877 |
|
|
|
|
|
||||
Non-GAAP Financial Measures (*): |
|
|
|
||||
Non-GAAP income from operations |
$ |
130,669 |
|
|
$ |
106,435 |
|
Non-GAAP operating margin |
|
31 |
% |
|
|
30 |
% |
|
|
|
|
||||
Non-GAAP net income |
$ |
112,661 |
|
|
$ |
93,487 |
|
|
|
|
|
||||
Non-GAAP net income per share - diluted |
$ |
0.37 |
|
|
$ |
0.31 |
|
|
|
|
|
||||
Non-GAAP shares outstanding - diluted |
|
301,373 |
|
|
|
297,794 |
|
|
|
|
|
||||
Free cash flow |
$ |
20,138 |
|
|
$ |
34,127 |
|
* For additional information, please see the "Non-GAAP Financial Measures" and "Definitions - Non-GAAP and Other Metrics" sections of this press release. |
Financial Outlook
Based on information available as of
This guidance reflects foreign exchange rates as of
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 below are compared to the third quarter and full year of fiscal 2024.
(In millions, except per share data) |
Q3 Fiscal 2025 Guidance |
||||
Total revenue |
|
||||
As reported |
16% - 17% |
||||
Constant currency |
17% - 18% |
||||
Subscription revenue |
|
||||
As reported |
17% - 18% |
||||
Constant currency |
17% - 18% |
||||
Non-GAAP income from operations |
|
||||
Non-GAAP operating margin |
27.5% - 28% |
||||
Non-GAAP net income |
|
||||
Non-GAAP net income per diluted share |
|
||||
Diluted weighted average shares outstanding |
303 - 304 |
(In millions, except per share data) |
Current Guidance Fiscal 2025 |
|
Prior Guidance Fiscal 2025* |
|
Guidance Change at Midpoint |
ARR |
|
|
|
|
$— |
As reported |
14% - 15% |
|
14% - 15% |
|
— |
Constant currency |
15% - 16% |
|
15% - 16% |
|
— |
Total revenue |
|
|
|
|
|
As reported |
16% - 17% |
|
15% - 16% |
|
100 bps |
Constant currency |
17% - 18% |
|
16% - 17% |
|
100 bps |
Subscription revenue |
|
|
|
|
|
As reported |
17% - 18% |
|
16% - 17% |
|
100 bps |
Constant currency |
17% - 18% |
|
16% - 17% |
|
100 bps |
Non-GAAP income from operations |
|
|
|
|
|
Non-GAAP operating margin |
28% - 28.25% |
|
28% |
|
12 bps |
Non-GAAP net income |
|
|
|
|
|
Non-GAAP net income per diluted share |
|
|
|
|
|
Diluted weighted average shares outstanding |
303 - 305 |
|
303 - 305 |
|
— |
Free cash flow |
|
|
|
|
|
Free cash flow margin |
23.5% - 24% |
|
23.5% - 24% |
|
— |
*Prior guidance was issued on |
Conference Call and Webcast Information
An audio replay of the call will also be available until
We announce material financial information to our investors using our Investor Relations website, press releases,
Non-GAAP Financial Measures
In addition to disclosing financial measures prepared in accordance with GAAP, this press release and the accompanying tables contain certain non-GAAP financial measures as defined by Regulation G, including non-GAAP income from operations, non-GAAP operating margin, non-GAAP net income, non-GAAP net income per diluted share, and free cash flow. We also use or discuss non-GAAP financial measures in conference calls, slide presentations and webcasts.
We use these non-GAAP financial measures for financial and operational decision-making purposes, and as a means to evaluate period-to-period comparisons and liquidity. We believe that these non-GAAP financial measures provide useful information about our operating results, enhance the overall understanding of past financial performance and allow for greater transparency with respect to metrics used by our management in its financial and operational decision-making.
The presentation of the non-GAAP financial measures is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. Our non-GAAP financial measures may not provide information that is directly comparable to similarly titled metrics provided by other companies.
Non-GAAP financial measures are defined in this press release and the tables included in this press release include reconciliations of historical non-GAAP financial measures to their most directly comparable GAAP measures.
We also include non-GAAP financial measures in our financial outlook included in this press release. Reconciliations of forward-looking 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 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.
Definitions - Non-GAAP and Other Metrics
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 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
Non-GAAP Income from Operations is defined as GAAP income from operations adjusted for the following items: share-based compensation; employer payroll taxes on employee stock transactions; amortization of intangibles; transaction, restructuring and other non-recurring or unusual items that may arise from time to time. The related margin is non-GAAP income from operations expressed as a percentage of total revenue.
Non-GAAP Net Income is defined as GAAP net income adjusted for the following items: income tax expense/benefit; non-GAAP effective cash taxes; net interest expense and income; net cash received from and paid for interest; share-based compensation; employer payroll taxes on employee stock transactions, amortization of intangibles; gains and losses on currency translation; and transaction, restructuring and other non-recurring or unusual items that may arise from time to time. Non-GAAP net income per diluted share is calculated as non-GAAP net income divided by the diluted weighted average shares outstanding used to compute GAAP net income per diluted share.
Free Cash Flow is defined as the net cash provided by or used in operating activities less capital expenditures, reflected as purchase of property and equipment and capitalized software additions in our financial statements. The related margin is free cash flow expressed as a percentage of total revenue.
About
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 related to benefits that we believe organizations receive from using
Gartner Disclaimers and Constellation Disclosures
1) Gartner, Magic Quadrant for Observability Platforms, |
|
2) Gartner, Critical Capabilities for Observability Platforms, |
|
3) Gartner, Magic Quadrant for Digital Experience Monitoring, |
|
The Gartner content described herein (the “Gartner Content”) represents research opinion or viewpoints published, as part of a syndicated subscription service, by Gartner, Inc. ("Gartner"), and is not a representation of fact. Gartner Content speaks as of its original publication date (and not as of the date of this earnings press release), and the opinions expressed in the Gartner Content are subject to change without notice. |
|
Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner’s research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose. GARTNER is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the |
|
4) 2024 Constellation Research ShortLists™ for Observability ( |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited – In thousands, except per share data) |
||||||||||||||
|
Three Months Ended
|
Six Months Ended
|
||||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
2024 |
|
|
|
2023 |
|
Revenue: |
|
|
|
|
|
|
||||||||
Subscription |
$ |
399,810 |
|
|
$ |
334,497 |
|
$ |
781,386 |
|
|
$ |
650,951 |
|
Service |
|
18,319 |
|
|
|
17,203 |
|
|
35,963 |
|
|
|
33,635 |
|
Total revenue |
|
418,129 |
|
|
|
351,700 |
|
|
817,349 |
|
|
|
684,586 |
|
Cost of revenue: |
|
|
|
|
|
|
||||||||
Cost of subscription |
|
55,796 |
|
|
|
44,792 |
|
|
109,368 |
|
|
|
87,696 |
|
Cost of service |
|
17,595 |
|
|
|
15,675 |
|
|
34,397 |
|
|
|
31,217 |
|
Amortization of acquired technology |
|
4,393 |
|
|
|
3,900 |
|
|
8,772 |
|
|
|
7,798 |
|
Total cost of revenue |
|
77,784 |
|
|
|
64,367 |
|
|
152,537 |
|
|
|
126,711 |
|
Gross profit |
|
340,345 |
|
|
|
287,333 |
|
|
664,812 |
|
|
|
557,875 |
|
|
|
|
|
|
|
|
||||||||
Operating expenses: |
|
|
|
|
|
|
||||||||
Research and development |
|
95,366 |
|
|
|
74,084 |
|
|
182,944 |
|
|
|
140,366 |
|
Sales and marketing |
|
144,224 |
|
|
|
127,605 |
|
|
289,330 |
|
|
|
252,722 |
|
General and administrative |
|
48,953 |
|
|
|
44,748 |
|
|
93,931 |
|
|
|
83,843 |
|
Amortization of other intangibles |
|
4,776 |
|
|
|
5,627 |
|
|
9,552 |
|
|
|
11,387 |
|
Total operating expenses |
|
293,319 |
|
|
|
252,064 |
|
|
575,757 |
|
|
|
488,318 |
|
Income from operations |
|
47,026 |
|
|
|
35,269 |
|
|
89,055 |
|
|
|
69,557 |
|
Interest income, net |
|
12,850 |
|
|
|
8,509 |
|
|
25,625 |
|
|
|
15,655 |
|
Other expense, net |
|
(2,038 |
) |
|
|
(3,075 |
) |
|
(4,073 |
) |
|
|
(2,823 |
) |
Income before income taxes |
|
57,838 |
|
|
|
40,703 |
|
|
110,607 |
|
|
|
82,389 |
|
Income tax expense |
|
(13,830 |
) |
|
|
(4,894 |
) |
|
(27,979 |
) |
|
|
(8,392 |
) |
Net income |
$ |
44,008 |
|
|
$ |
35,809 |
|
$ |
82,628 |
|
|
$ |
73,997 |
|
Net income per share: |
|
|
|
|
|
|
||||||||
Basic |
$ |
0.15 |
|
|
$ |
0.12 |
|
$ |
0.28 |
|
|
$ |
0.25 |
|
Diluted |
$ |
0.15 |
|
|
$ |
0.12 |
|
$ |
0.27 |
|
|
$ |
0.25 |
|
Weighted average shares outstanding: |
|
|
|
|
|
|
||||||||
Basic |
|
298,089 |
|
|
|
293,654 |
|
|
297,736 |
|
|
|
292,504 |
|
Diluted |
|
301,373 |
|
|
|
297,794 |
|
|
301,714 |
|
|
|
297,492 |
|
UNAUDITED SHARE-BASED COMPENSATION |
||||||||||||||
|
Three Months Ended
|
Six Months Ended
|
||||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
2024 |
|
|
|
2023 |
|
Cost of revenue |
$ |
9,714 |
|
|
$ |
7,197 |
|
$ |
17,444 |
|
|
$ |
12,685 |
|
Research and development |
|
26,607 |
|
|
|
18,177 |
|
|
48,187 |
|
|
|
31,441 |
|
Sales and marketing |
|
20,750 |
|
|
|
18,877 |
|
|
36,772 |
|
|
|
32,876 |
|
General and administrative |
|
14,632 |
|
|
|
13,707 |
|
|
26,957 |
|
|
|
21,474 |
|
Total share-based compensation |
$ |
71,703 |
|
|
$ |
57,958 |
|
$ |
129,360 |
|
|
$ |
98,476 |
|
|
|||||||
|
|
|
|
||||
|
(unaudited) |
|
|
||||
Assets |
|
|
|
||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
907,177 |
|
|
$ |
778,983 |
|
Short-term investments |
|
97,834 |
|
|
|
57,891 |
|
Accounts receivable, net |
|
303,341 |
|
|
|
602,739 |
|
Deferred commissions, current |
|
106,554 |
|
|
|
98,935 |
|
Prepaid expenses and other current assets |
|
68,672 |
|
|
|
66,749 |
|
Total current assets |
|
1,483,578 |
|
|
|
1,605,297 |
|
Long-term investments |
|
48,312 |
|
|
|
46,350 |
|
Property and equipment, net |
|
52,649 |
|
|
|
53,325 |
|
Operating lease right-of-use assets, net |
|
70,957 |
|
|
|
61,390 |
|
|
|
1,337,205 |
|
|
|
1,335,494 |
|
Intangible assets, net |
|
31,701 |
|
|
|
50,995 |
|
Deferred tax assets, net |
|
177,714 |
|
|
|
138,836 |
|
Deferred commissions, non-current |
|
95,187 |
|
|
|
93,310 |
|
Other assets |
|
32,350 |
|
|
|
24,782 |
|
Total assets |
$ |
3,329,653 |
|
$ |
3,409,779 |
|
|
|
|
|
|
||||
Liabilities and shareholders' equity |
|
|
|
||||
Current liabilities: |
|
|
|
||||
Accounts payable |
$ |
17,298 |
|
|
$ |
21,410 |
|
Accrued expenses, current |
|
208,825 |
|
|
|
233,675 |
|
Deferred revenue, current |
|
806,171 |
|
|
|
987,953 |
|
Operating lease liabilities, current |
|
15,606 |
|
|
|
15,513 |
|
Total current liabilities |
|
1,047,900 |
|
|
|
1,258,551 |
|
Deferred revenue, non-current |
|
54,878 |
|
|
|
62,308 |
|
Accrued expenses, non-current |
|
16,926 |
|
|
|
18,404 |
|
Operating lease liabilities, non-current |
|
64,997 |
|
|
|
54,013 |
|
Deferred tax liabilities |
|
996 |
|
|
|
1,013 |
|
Total liabilities |
|
1,185,697 |
|
|
|
1,394,289 |
|
|
|
|
|
||||
Shareholders' equity: |
|
|
|
||||
Common shares, |
|
299 |
|
|
|
297 |
|
Additional paid-in capital |
|
2,295,796 |
|
|
|
2,249,349 |
|
Accumulated deficit |
|
(116,129 |
) |
|
|
(198,757 |
) |
Accumulated other comprehensive loss |
|
(36,010 |
) |
|
|
(35,399 |
) |
Total shareholders' equity |
|
2,143,956 |
|
|
|
2,015,490 |
|
Total liabilities and shareholders' equity |
$ |
3,329,653 |
$ |
3,409,779 |
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited – In thousands) |
|||||||
|
Six Months Ended
|
||||||
|
|
2024 |
|
|
|
2023 |
|
Cash flows from operating activities: |
|
|
|
||||
Net income |
$ |
82,628 |
|
|
$ |
73,997 |
|
Adjustments to reconcile net income to cash provided by operations: |
|
|
|
||||
Depreciation |
|
8,635 |
|
|
|
7,890 |
|
Amortization |
|
19,356 |
|
|
|
19,207 |
|
Share-based compensation |
|
129,360 |
|
|
|
98,476 |
|
Deferred income taxes |
|
(39,059 |
) |
|
|
(35,166 |
) |
Other |
|
3,133 |
|
|
|
3,019 |
|
Net change in operating assets and liabilities: |
|
|
|
||||
Accounts receivable |
|
300,077 |
|
|
|
177,689 |
|
Deferred commissions |
|
(7,166 |
) |
|
|
8,978 |
|
Prepaid expenses and other assets |
|
(14,073 |
) |
|
|
(22,909 |
) |
Accounts payable and accrued expenses |
|
(30,479 |
) |
|
|
(33,246 |
) |
Operating leases, net |
|
1,465 |
|
|
|
1,333 |
|
Deferred revenue |
|
(199,486 |
) |
|
|
(128,488 |
) |
Net cash provided by operating activities |
|
254,391 |
|
|
|
170,780 |
|
|
|
|
|
||||
Cash flows from investing activities: |
|
|
|
||||
Purchase of property and equipment |
|
(6,871 |
) |
|
|
(13,017 |
) |
Acquisition of a business, net of cash acquired |
|
(100 |
) |
|
|
(32,391 |
) |
Purchases of investments |
|
(80,024 |
) |
|
|
— |
|
Proceeds from sales and maturities of investments |
|
40,375 |
|
|
|
— |
|
Net cash used in investing activities |
|
(46,620 |
) |
|
|
(45,408 |
) |
|
|
|
|
||||
Cash flows from financing activities: |
|
|
|
||||
Payments of deferred consideration related to capitalized software additions |
|
(1,656 |
) |
|
|
— |
|
Proceeds from employee stock purchase plan |
|
10,389 |
|
|
|
9,584 |
|
Proceeds from exercise of stock options |
|
8,773 |
|
|
|
16,619 |
|
Repurchases of common stock |
|
(90,107 |
) |
|
|
— |
|
Taxes paid related to net share settlement of equity awards |
|
(11,966 |
) |
|
|
— |
|
Net cash (used in) provided by financing activities |
|
(84,567 |
) |
|
|
26,203 |
|
|
|
|
|
||||
Effect of exchange rates on cash and cash equivalents |
|
4,990 |
|
|
|
(5,399 |
) |
|
|
|
|
||||
Net increase in cash and cash equivalents |
|
128,194 |
|
|
|
146,176 |
|
|
|
|
|
||||
Cash and cash equivalents, beginning of period |
|
778,983 |
|
|
|
555,348 |
|
Cash and cash equivalents, end of period |
$ |
907,177 |
|
|
$ |
701,524 |
|
GAAP to Non-GAAP Reconciliations (Unaudited - In thousands, except percentages) |
|||||||||||||||||||||||
|
Three Months Ended |
||||||||||||||||||||||
|
GAAP |
|
Share-based compensation |
|
Employer payroll taxes on employee stock transactions |
|
Amortization of intangibles |
|
Transaction, restructuring, and other |
|
Non-GAAP |
||||||||||||
Non-GAAP income from operations: |
|||||||||||||||||||||||
Cost of revenue |
$ |
77,784 |
|
|
$ |
(9,714 |
) |
|
$ |
(431 |
) |
|
$ |
(4,393 |
) |
|
$ |
— |
|
|
$ |
63,246 |
|
Gross profit |
|
340,345 |
|
|
|
9,714 |
|
|
|
431 |
|
|
|
4,393 |
|
|
|
— |
|
|
354,883 |
|
|
Gross margin |
|
81 |
% |
|
|
|
|
|
|
|
|
|
|
85 |
% |
||||||||
Research and development |
|
95,366 |
|
|
|
(26,607 |
) |
|
|
(1,305 |
) |
|
|
— |
|
|
|
— |
|
|
|
67,454 |
|
Sales and marketing |
|
144,224 |
|
|
|
(20,750 |
) |
|
|
(729 |
) |
|
|
— |
|
|
|
— |
|
|
|
122,745 |
|
General and administrative |
|
48,953 |
|
|
|
(14,632 |
) |
|
|
(306 |
) |
|
|
— |
|
|
|
— |
|
|
|
34,015 |
|
Amortization of other intangibles |
|
4,776 |
|
|
|
— |
|
|
|
— |
|
|
|
(4,776 |
) |
|
|
— |
|
|
|
— |
|
Income from operations |
$ |
47,026 |
|
|
$ |
71,703 |
|
|
$ |
2,771 |
|
|
$ |
9,169 |
|
|
$ |
— |
|
|
$ |
130,669 |
|
Operating margin |
|
11 |
% |
|
|
|
|
|
|
|
|
|
|
31 |
% |
|
Three Months Ended |
||||||||||||||||||||||
|
GAAP |
|
Share-based compensation |
|
Employer payroll taxes on employee stock transactions |
|
Amortization of intangibles |
|
Transaction, restructuring, and other |
|
Non-GAAP |
||||||||||||
Non-GAAP income from operations: |
|||||||||||||||||||||||
Cost of revenue |
$ |
64,367 |
|
|
$ |
(7,197 |
) |
|
$ |
(309 |
) |
|
$ |
(3,900 |
) |
|
$ |
— |
|
|
$ |
52,961 |
|
Gross profit |
|
287,333 |
|
|
|
7,197 |
|
|
|
309 |
|
|
|
3,900 |
|
|
|
— |
|
|
|
298,739 |
|
Gross margin |
|
82 |
% |
|
|
|
|
|
|
|
|
|
|
85 |
% |
||||||||
Research and development |
|
74,084 |
|
|
|
(18,177 |
) |
|
|
(933 |
) |
|
|
— |
|
|
|
— |
|
|
|
54,974 |
|
Sales and marketing |
|
127,605 |
|
|
|
(18,877 |
) |
|
|
(760 |
) |
|
|
— |
|
|
|
198 |
|
|
|
108,166 |
|
General and administrative |
|
44,748 |
|
|
|
(13,707 |
) |
|
|
(299 |
) |
|
|
— |
|
|
|
(1,578 |
) |
|
|
29,164 |
|
Amortization of other intangibles |
|
5,627 |
|
|
|
— |
|
|
|
— |
|
|
|
(5,627 |
) |
|
|
— |
|
|
|
— |
|
Income from operations |
$ |
35,269 |
|
|
$ |
57,958 |
|
|
$ |
2,301 |
|
|
$ |
9,527 |
|
|
$ |
1,380 |
|
|
$ |
106,435 |
|
Operating margin |
|
10 |
% |
|
|
|
|
|
|
|
|
|
|
30 |
% |
GAAP to Non-GAAP Reconciliations (Unaudited - In thousands, except per share data) |
|||||||
|
Three Months Ended |
||||||
|
|
2024 |
|
|
|
2023 |
|
Non-GAAP net income: |
|
|
|
||||
Net income |
$ |
44,008 |
|
|
$ |
35,809 |
|
Income tax expense |
|
13,830 |
|
|
|
4,894 |
|
Non-GAAP effective cash tax |
|
(30,856 |
) |
|
|
(21,928 |
) |
Interest income, net |
|
(12,850 |
) |
|
|
(8,509 |
) |
Cash received from interest, net |
|
12,848 |
|
|
|
8,980 |
|
Share-based compensation |
|
71,703 |
|
|
|
57,958 |
|
Employer payroll taxes on employee stock transactions |
|
2,771 |
|
|
|
2,301 |
|
Amortization of intangibles |
|
9,169 |
|
|
|
9,527 |
|
Transaction, restructuring, and other |
|
— |
|
|
|
1,380 |
|
Loss on currency translation |
|
2,038 |
|
|
|
3,075 |
|
Non-GAAP net income |
$ |
112,661 |
|
|
$ |
93,487 |
|
|
|
|
|
||||
Share count: |
|
|
|
||||
Weighted-average shares outstanding - basic |
|
298,089 |
|
|
|
293,654 |
|
Weighted-average shares outstanding - diluted |
|
301,373 |
|
|
|
297,794 |
|
|
|
|
|
||||
Shares used in non-GAAP per share calculations: |
|
|
|
||||
Weighted-average shares outstanding - basic |
|
298,089 |
|
|
|
293,654 |
|
Weighted-average shares outstanding - diluted |
|
301,373 |
|
|
|
297,794 |
|
|
|
|
|
||||
Non-GAAP net income per share: |
|
|
|
||||
Net income per share - basic |
$ |
0.15 |
|
|
$ |
0.12 |
|
Net income per share - diluted |
$ |
0.15 |
|
|
$ |
0.12 |
|
Non-GAAP net income per share - basic |
$ |
0.38 |
|
|
$ |
0.32 |
|
Non-GAAP net income per share - diluted |
$ |
0.37 |
|
|
$ |
0.31 |
|
|
Three Months Ended |
||||||
|
|
2024 |
|
|
|
2023 |
|
Free cash flow: |
|
|
|
||||
Net cash provided by operating activities |
$ |
23,650 |
|
|
$ |
36,877 |
|
Purchase of property and equipment |
|
(3,512 |
) |
|
|
(2,750 |
) |
Capitalized software additions |
|
— |
|
|
|
— |
|
Free cash flow |
$ |
20,138 |
|
|
$ |
34,127 |
|
GAAP to Non-GAAP Reconciliations (Unaudited - In thousands, except percentages) |
|||||||||||||||||||||||
|
Six Months Ended |
||||||||||||||||||||||
|
GAAP |
|
Share-based compensation |
|
Employer payroll taxes on employee stock transactions |
|
Amortization of intangibles |
|
Transaction, restructuring, and other |
|
Non-GAAP |
||||||||||||
Non-GAAP income from operations: |
|||||||||||||||||||||||
Cost of revenue |
$ |
152,537 |
|
$ |
(17,444 |
) |
|
$ |
(1,317 |
) |
$ |
(8,772 |
) |
|
$ |
— |
|
$ |
125,004 |
|
|||
Gross profit |
|
664,812 |
|
|
|
17,444 |
|
|
|
1,317 |
|
|
|
8,772 |
|
|
|
— |
|
|
|
692,345 |
|
Gross margin |
|
81 |
% |
|
|
|
|
|
|
|
|
|
|
85 |
% |
||||||||
Research and development |
|
182,944 |
|
|
|
(48,187 |
) |
|
|
(3,714 |
) |
|
|
— |
|
|
|
(3 |
) |
|
|
131,040 |
|
Sales and marketing |
|
289,330 |
|
|
|
(36,772 |
) |
|
|
(2,233 |
) |
|
|
— |
|
|
|
|
|
250,325 |
|
||
General and administrative |
|
93,931 |
|
|
|
(26,957 |
) |
|
|
(916 |
) |
|
|
— |
|
|
|
3 |
|
|
|
66,061 |
|
Amortization of other intangibles |
|
9,552 |
|
|
|
— |
|
|
|
— |
|
|
|
(9,552 |
) |
|
|
— |
|
|
|
— |
|
Income from operations |
$ |
89,055 |
|
|
$ |
129,360 |
|
|
$ |
8,180 |
|
|
$ |
18,324 |
|
|
$ |
— |
|
|
$ |
244,919 |
|
Operating margin |
|
11 |
% |
|
|
|
|
|
|
|
|
|
|
30 |
% |
|
Six Months Ended |
||||||||||||||||||||||
|
GAAP |
|
Share-based compensation |
|
Employer payroll taxes on employee stock transactions |
|
Amortization of intangibles |
|
Transaction, restructuring, and other |
|
Non-GAAP |
||||||||||||
Non-GAAP income from operations: |
|||||||||||||||||||||||
Cost of revenue |
$ |
126,711 |
|
|
$ |
(12,685 |
) |
|
$ |
(1,232 |
) |
|
$ |
(7,798 |
) |
|
$ |
— |
|
|
$ |
104,996 |
|
Gross profit |
|
557,875 |
|
|
|
12,685 |
|
|
|
1,232 |
|
|
|
7,798 |
|
|
|
— |
|
|
|
579,590 |
|
Gross margin |
|
81 |
% |
|
|
|
|
|
|
|
|
|
|
85 |
% |
||||||||
Research and development |
|
140,366 |
|
|
|
(31,441 |
) |
|
|
(3,195 |
) |
|
|
— |
|
|
|
— |
|
|
|
105,730 |
|
Sales and marketing |
|
252,722 |
|
|
|
(32,876 |
) |
|
|
(2,312 |
) |
|
|
— |
|
|
|
198 |
|
|
|
217,732 |
|
General and administrative |
|
83,843 |
|
|
|
(21,474 |
) |
|
|
(765 |
) |
|
|
— |
|
|
|
(3,986 |
) |
|
|
57,618 |
|
Amortization of other intangibles |
|
11,387 |
|
|
|
— |
|
|
|
— |
|
|
|
(11,387 |
) |
|
|
— |
|
|
|
— |
|
Income from operations |
$ |
69,557 |
|
|
$ |
98,476 |
|
|
$ |
7,504 |
|
|
$ |
19,185 |
|
|
$ |
3,788 |
|
|
$ |
198,510 |
|
Operating margin |
|
10 |
% |
|
|
|
|
|
|
|
|
|
|
29 |
% |
GAAP to Non-GAAP Reconciliations (Unaudited - In thousands, except per share data) |
|||||||
|
Six Months Ended |
||||||
|
|
2024 |
|
|
|
2023 |
|
Non-GAAP net income: |
|
|
|
||||
Net income |
$ |
82,628 |
|
|
$ |
73,997 |
|
Income tax expense |
|
27,979 |
|
|
|
8,392 |
|
Non-GAAP effective cash tax |
|
(57,950 |
) |
|
|
(40,470 |
) |
Interest income, net |
|
(25,625 |
) |
|
|
(15,655 |
) |
Cash received from interest, net |
|
24,618 |
|
|
|
14,492 |
|
Share-based compensation |
|
129,360 |
|
|
|
98,476 |
|
Employer payroll taxes on employee stock transactions |
|
8,180 |
|
|
|
7,504 |
|
Amortization of intangibles |
|
18,324 |
|
|
|
19,185 |
|
Transaction, restructuring, and other |
|
— |
|
|
|
3,788 |
|
Loss on currency translation |
|
4,073 |
|
|
|
2,823 |
|
Non-GAAP net income |
$ |
211,587 |
|
|
$ |
172,532 |
|
|
|
|
|
||||
Share count: |
|
|
|
||||
Weighted-average shares outstanding - basic |
|
297,736 |
|
|
|
292,504 |
|
Weighted-average shares outstanding - diluted |
|
301,714 |
|
|
|
297,492 |
|
|
|
|
|
||||
Shares used in non-GAAP per share calculations: |
|
|
|
||||
Weighted-average shares outstanding - basic |
|
297,736 |
|
|
|
292,504 |
|
Weighted-average shares outstanding - diluted |
|
301,714 |
|
|
|
297,492 |
|
|
|
|
|
||||
Non-GAAP net income per share: |
|
|
|
||||
Net income per share - basic |
$ |
0.28 |
|
|
$ |
0.25 |
|
Net income per share - diluted |
$ |
0.27 |
|
|
$ |
0.25 |
|
Non-GAAP net income per share - basic |
$ |
0.71 |
|
|
$ |
0.59 |
|
Non-GAAP net income per share - diluted |
$ |
0.70 |
|
|
$ |
0.58 |
|
|
Six Months Ended |
||||||
|
|
2024 |
|
|
|
2023 |
|
Free cash flow: |
|
|
|
||||
Net cash provided by operating activities |
$ |
254,391 |
|
|
$ |
170,780 |
|
Purchase of property and equipment |
|
(6,871 |
) |
|
|
(13,017 |
) |
Capitalized software additions |
$ |
— |
|
|
|
— |
|
Free cash flow |
$ |
247,520 |
|
|
$ |
157,763 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20241107670760/en/
Investors:
VP, Investor Relations
Noelle.Faris@dynatrace.com
Media Relations:
VP,
Kristy.Campbell@dynatrace.com
Source: