Dynatrace Reports Third Quarter Fiscal Year 2024 Financial Results

Dynatrace (NYSE: DT), the leader in unified observability and security, today announced financial results for the third quarter of fiscal 2024 ended December 31, 2023.

"Our Q3 results of balanced growth, profitability, and free cash flow reflect our continued ability to execute successfully in a dynamic market,” said Rick McConnell, Chief Executive Officer. “As customers look to address the business challenges of modern cloud environments, they are coming to Dynatrace for a more comprehensive observability architecture that enables them to drive innovation, optimize costs, and mitigate risk. Our contextual analytics, hypermodal AI, and automation differentiate the Dynatrace platform in the market and provide us with a powerful advantage to capture the opportunity ahead of us.”

Third Quarter Fiscal 2024 and Other Recent Business Highlights:

All growth rates are compared to the third quarter of fiscal 2023, unless otherwise noted.

Financial Highlights:

• Total ARR of $1,425 million, an increase of 23%, or 21% on a constant currency basis
• Total Revenue of $365 million, an increase of 23%, or 21% on a constant currency basis
• Subscription Revenue of $348 million, an increase of 25%, or 23% on a constant currency basis
• GAAP Income from Operations of $36 million, and Non-GAAP Income from Operations of $105 million
• GAAP EPS of $0.14, and Non-GAAP EPS of $0.32, both on a dilutive basis

Business Highlights:

• Platform innovation: Dynatrace recently hosted over 2,000 in-person attendees and over 4,000 virtual attendees for Perform 2024, the company's annual customer conference. As part of showcasing the value and innovation of the Dynatrace platform, the company announced the following current and planned enhancements:
  • Dynatrace AI Observability provides insights into all layers of AI-powered applications, including large language models (LLMs) and generative AI solutions, to manage cost, experience, reliability, and security.
  • Dynatrace OpenPipeline empowers customers with full visibility of data at the point of ingest into the Dynatrace platform and evaluates data streams five to ten times faster than legacy technologies, based on our testing.
  • Dynatrace Data Observability helps ensure data collected via external sources, such as OpenTelemetry and Dynatrace APIs, is reliable and accurate.
• Runecast acquisition: On January 29, 2024, we announced the signing of a definitive agreement to acquire Runecast, an AI-powered security and compliance solution provider. This planned addition to the Dynatrace platform will enable customers to proactively prevent cloud misconfigurations and compliance issues with automated, AI-driven, real-time vulnerability assessments.
• Extended partnerships: Dynatrace achieved the Amazon Web Services (AWS) Security Competency, reflecting our deep technical expertise in helping customers proactively remediate vulnerabilities and defend against threats across their AWS environments. The AWS Security Competency helps customers select validated AWS Partner Network members who provide technology that helps organizations adopt, develop, and deploy security solutions on AWS.
• Industry and customer recognition: Dynatrace was named a Leader in both the Cloud-Native Observability and Security quadrants in the 2023 ISG Provider Lens, Multi-Public Cloud Solutions Report, highlighting Dynatrace’s innovation and go-to-market success in the converging spaces of observability and security. Also, Dynatrace was recognized as a Gartner Peer Insights Customers’ Choice in the 2023 Voice of the Customer for Application Performance Monitoring and Observability report for the fifth consecutive year.¹ In addition, Dynatrace won the 2023 Silverlinings Innovation Award for Best Cloud AI Solution, for the platform’s Davis AI and its proven ability to boost the performance and security of software environments.
• Workplace recognition: We were named one of the Best Places to Work in Boston, San Francisco, and Colorado by BuiltIn; a Great Place to Work in 13 of the countries where we operate; one of the Top 10 Best Workplaces in Tech in Austria by 2024 Great Place to Work; and a Top Company in Austria by Kununu.

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1} Gartner, Voice of the Customer for Application Performance Monitoring and Observability, 29 December 2023.

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Third Quarter 2024 Financial Highlights (Unaudited – In thousands, except per share data)
		Three Months Ended December 31,
			2023				2022
Key Operating Metric:
Annual recurring revenue		$	1,425,284			$	1,162,591
Year-over-Year Increase			23	%
Year-over-Year Increase - constant currency (*)			21	%
Revenue:
Total revenue		$	365,096			$	297,456
Year-over-Year Increase			23	%
Year-over-Year Increase - constant currency (*)			21	%
Subscription revenue		$	348,294			$	279,152
Year-over-Year Increase			25	%
Year-over-Year Increase - constant currency (*)			23	%
GAAP Financial Measures:
GAAP income from operations		$	35,720			$	33,887
GAAP operating margin			10	%			11	%
GAAP net income		$	42,691			$	15,026
GAAP net income per share - diluted		$	0.14			$	0.05
GAAP shares outstanding - diluted			299,246				291,228
Net cash provided by operating activities		$	75,657			$	61,962
Non-GAAP Financial Measures:
Non-GAAP income from operations (*)		$	104,636			$	80,653
Non-GAAP operating margin (*)			29	%			27	%
Non-GAAP net income (*)		$	96,184			$	73,469
Non-GAAP net income per share - diluted (*)		$	0.32			$	0.25
Non-GAAP shares outstanding - diluted (*)			299,246				291,228
Free Cash Flow (*)		$	67,357			$	57,574

* 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 February 8, 2024, Dynatrace is issuing guidance for the fourth quarter and updating guidance for full year fiscal 2024 in the table below.

This guidance reflects foreign exchange rates as of January 31, 2024. We now expect foreign exchange to be a tailwind of approximately $10 million on ARR and approximately $13 million on revenue for fiscal 2024. Given recent weakening in the U.S. dollar, this represents an incremental tailwind of approximately $15 million to ARR and $6 million to revenue for the full year when compared to our prior guidance.

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 fourth quarter and full year of fiscal 2023.

(In millions, except per share data)		Q4 Fiscal 2024 Guidance
Total revenue		$372 - $377
As reported		18% - 20%
Constant currency		18% - 19%
Subscription revenue		$353 - $358
As reported		20% - 22%
Constant currency		20% - 21%
Non-GAAP income from operations		$85 - $90
Non-GAAP operating margin		23% - 24%
Non-GAAP net income		$79 - $84
Non-GAAP net income per diluted share		$0.26 - $0.28
Diluted weighted average shares outstanding		300 - 301
(In millions, except per share data)		Current Guidance Fiscal 2024		Prior Guidance Fiscal 2024*		Guidance Change at Midpoint**
Total ARR		$1,485 - $1,495		$1,480 - $1,490		$5
As reported		19% - 20%		19% - 20%		— bps
Constant currency		18% - 19%		19% - 20%		(100) bps
Total revenue		$1,422 - $1,427		$1,409 - $1,419		$11
As reported		23%		22%		100 bps
Constant currency		22%		21% - 22%		50 bps
Subscription revenue		$1,352 - $1,357		$1,334 - $1,344		$16
As reported		25%		23% - 24%		150 bps
Constant currency		24%		22% - 23%		150 bps
Non-GAAP income from operations		$388 - $393		$377 - $386		$9
Non-GAAP operating margin		27.25% - 27.5%		27%		50 bps
Non-GAAP net income		$348 - $353		$328 - $337		$18
Non-GAAP net income per diluted share		$1.16 - $1.18		$1.09 - $1.12		$0.06
Diluted weighted average shares outstanding		299 - 300		300 - 301		(1)
Free cash flow		$330 - $335		$313 - $320		$16
Free cash flow margin		23%		22% - 23%		50 bps
*Prior guidance was issued on November 2, 2023. **Changes in our guidance metrics are rounded to the nearest 50 bps.

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 for investors and analysts at 8:00 a.m. Eastern Time today, February 8, 2024. To access the conference call from the U.S. and Canada, dial [phone], or internationally, dial [phone] with conference ID# 13743643. 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 February 22, 2024, by dialing [phone] from the U.S. or Canada, or for international callers by dialing [phone] and entering conference ID# 13743643. 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.

Dollar-Based Gross Retention Rate is defined as the ARR from all customers as of one year prior, less contraction and customer churn, divided by the total ARR from one year prior. This metric reflects the percentage of ARR from all customers as of the year prior that has been retained.

Dollar-Based Net Retention Rate (NRR) 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. Our dollar-based net retention rate reflects customer renewals, expansion, contraction and churn, and excludes the benefit of Dynatrace ARR resulting from the conversion of Classic products to the Dynatrace platform. Effective the first quarter of fiscal year 2023, we began to exclude the headwind associated with the Dynatrace perpetual license ARR given diminishing impact of perpetual license ARR. We believe that eliminating the perpetual license headwind results in a dollar-based net retention rate metric that better reflects Dynatrace’s ability to expand existing customer relationships. Dollar-based net retention rate is presented on a constant currency basis.

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 exists to make the world's software work perfectly. Our unified 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'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 platform innovation, the Runecast acquisition (which is subject to customary closing conditions and expected to close later in Dynatrace's fourth quarter which ends on March 31, 2024), partnerships, and business outlook, including our financial guidance for the fourth quarter and full year of fiscal 2024. 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. 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. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited – In thousands, except per share data)
		Three Months Ended December 31,								Nine Months Ended December 31,
			2023				2022				2023				2022
Revenue:
Subscription		$	348,294			$	279,152			$	999,245			$	790,016
Service			16,802				18,304				50,437				54,039
Total revenue			365,096				297,456				1,049,682				844,055
Cost of revenue:
Cost of subscription			46,888				36,891				134,584				105,393
Cost of service			16,744				15,044				47,961				46,264
Amortization of acquired technology			4,237				3,889				12,035				11,669
Total cost of revenue			67,869				55,824				194,580				163,326
Gross profit			297,227				241,632				855,102				680,729
Operating expenses:
Research and development (1)			80,102				54,531				220,468				156,847
Sales and marketing (1)			132,723				112,292				385,445				323,313
General and administrative (1)			43,232				34,354				127,075				107,485
Amortization of other intangibles			5,451				6,573				16,838				19,719
Restructuring and other			(1	)			(5	)			(1	)			(15	)
Total operating expenses			261,507				207,745				749,825				607,349
Income from operations			35,720				33,887				105,277				73,380
Interest income (expense), net			10,605				(4,787	)			26,260				(7,475	)
Other (expense) income, net			(3,901	)			1,617				(6,724	)			(1,847	)
Income before income taxes			42,424				30,717				124,813				64,058
Income tax benefit (expense)			267				(15,691	)			(8,125	)			(36,392	)
Net income		$	42,691			$	15,026			$	116,688			$	27,666
Net income per share:
Basic		$	0.14			$	0.05			$	0.40			$	0.10
Diluted		$	0.14			$	0.05			$	0.39			$	0.10
Weighted average shares outstanding:
Basic			294,869				287,957				293,295				287,120
Diluted			299,246				291,228				298,335				290,803
(1) Prior period results have been updated to allocate depreciation expense to operating expenses based upon location and headcount.

UNAUDITED SHARE-BASED COMPENSATION
		Three Months Ended December 31,								Nine Months Ended December 31,
			2023				2022				2023				2022
Cost of revenue		$	6,975			$	4,285			$	19,660			$	13,410
Research and development			18,678				11,057				50,119				29,339
Sales and marketing			15,947				13,385				48,823				37,399
General and administrative			13,222				6,777				34,696				24,705
Total share-based compensation		$	54,822			$	35,504			$	153,298			$	104,853

DYNATRACE, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share data)
		December 31, 2023				March 31, 2023
		(unaudited)
Assets
Current assets:
Cash and cash equivalents		$	782,649			$	555,348
Accounts receivable, net			361,653				442,518
Deferred commissions, current			90,059				83,029
Prepaid expenses and other current assets			52,301				37,289
Total current assets			1,286,662				1,118,184
Property and equipment, net			49,408				53,576
Operating lease right-of-use assets, net			65,895				68,074
Goodwill			1,312,691				1,281,812
Other intangible assets, net			54,118				63,599
Deferred tax assets, net			129,119				79,822
Deferred commissions, non-current			79,724				86,232
Other assets			21,596				14,048
Total assets		$	2,999,213			$	2,765,347
Liabilities and shareholders' equity
Current liabilities:
Accounts payable		$	13,230			$	21,953
Accrued expenses, current			171,929				188,380
Deferred revenue, current			757,141				811,058
Operating lease liabilities, current			16,288				15,652
Total current liabilities			958,588				1,037,043
Deferred revenue, non-current			38,508				34,423
Accrued expenses, non-current			29,918				29,212
Operating lease liabilities, non-current			58,002				59,520
Deferred tax liabilities			321				280
Total liabilities			1,085,337				1,160,478
Shareholders' equity:
Common shares, $0.001 par value, 600,000,000 shares authorized, 295,777,477 and 290,411,108 shares issued and outstanding at December 31, 2023 and March 31, 2023, respectively			296				290
Additional paid-in capital			2,186,766				1,989,797
Accumulated deficit			(236,701	)			(353,389	)
Accumulated other comprehensive loss			(36,485	)			(31,829	)
Total shareholders' equity			1,913,876				1,604,869
Total liabilities and shareholders' equity		$	2,999,213			$	2,765,347

DYNATRACE, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited – In thousands)
		Nine Months Ended December 31,
			2023				2022
Cash flows from operating activities:
Net income		$	116,688			$	27,666
Adjustments to reconcile net income to cash provided by operations:
Depreciation			11,781				9,012
Amortization			29,067				31,566
Share-based compensation			153,298				104,853
Deferred income taxes			(49,579	)			2,057
Loss on extinguishment of debt			—				5,925
Other			7,016				3,114
Net change in operating assets and liabilities:
Accounts receivable			83,444				40,314
Deferred commissions			874				(17,198	)
Prepaid expenses and other assets			(27,437	)			29,616
Accounts payable and accrued expenses			(24,022	)			19,365
Operating leases, net			1,253				(36	)
Deferred revenue			(55,946	)			(21,796	)
Net cash provided by operating activities			246,437				234,458
Cash flows from investing activities:
Purchase of property and equipment			(16,662	)			(15,625	)
Capitalized software additions			(4,655	)			—
Acquisition of a business, net of cash acquired			(32,297	)			—
Net cash used in investing activities			(53,614	)			(15,625	)
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			24,205				15,102
Equity repurchases			—				(15	)
Net cash provided by (used in) financing activities			43,677				(250,181	)
Effect of exchange rates on cash and cash equivalents			(9,199	)			(9,168	)
Net increase (decrease) in cash and cash equivalents			227,301				(40,516	)
Cash and cash equivalents, beginning of period			555,348				462,967
Cash and cash equivalents, end of period		$	782,649			$	422,451

DYNATRACE, INC. GAAP to Non-GAAP Reconciliations (Unaudited - In thousands, except percentages)
		Three Months Ended December 31, 2023
		GAAP				Share-based compensation				Employer payroll taxes on employee stock transactions				Amortization of other intangibles				Restructuring & other				Non-GAAP
Non-GAAP income from operations:
Cost of revenue		$	67,869			$	(6,975	)		$	(284	)		$	(4,237	)		$	—			$	56,373
Gross profit			297,227				6,975				284				4,237				—				308,723
Gross margin			81	%																			85	%
Research and development			80,102				(18,678	)			(1,196	)			—				—				60,228
Sales and marketing			132,723				(15,947	)			(1,029	)			—				201				115,948
General and administrative			43,232				(13,222	)			(360	)			—				(1,739	)			27,911
Amortization of other intangibles			5,451				—				—				(5,451	)			—				—
Restructuring and other			(1	)			—				—				—				1				—
Income from operations		$	35,720			$	54,822			$	2,869			$	9,688			$	1,537			$	104,636
Operating margin			10	%																			29	%
		Three Months Ended December 31, 2022
		GAAP				Share-based compensation				Employer payroll taxes on employee stock transactions				Amortization of other intangibles				Restructuring & other				Non-GAAP
Non-GAAP income from operations:
Cost of revenue		$	55,824			$	(4,285	)		$	(114	)		$	(3,889	)		$	—			$	47,536
Gross profit			241,632				4,285				114				3,889				—				249,920
Gross margin			81	%																			84	%
Research and development (1)			54,531				(11,057	)			(329	)			—				—				43,145
Sales and marketing (1)			112,292				(13,385	)			(297	)			—				—				98,610
General and administrative (1)			34,354				(6,777	)			(68	)			—				3				27,512
Amortization of other intangibles			6,573				—				—				(6,573	)			—				—
Restructuring and other			(5	)			—				—				—				5				—
Income from operations		$	33,887			$	35,504			$	808			$	10,462			$	(8	)		$	80,653
Operating margin			11	%																			27	%
(1) Prior period results have been updated to allocate depreciation expense to operating expenses based upon location and headcount.

DYNATRACE, INC. GAAP to Non-GAAP Reconciliations (Unaudited - In thousands, except per share data)
		Three Months Ended December 31,
			2023				2022
Non-GAAP net income:
Net income		$	42,691			$	15,026
Income tax (benefit) expense			(267	)			15,691
Non-GAAP effective cash tax			(18,516	)			(9,080	)
Interest (income) expense, net			(10,605	)			4,787
Cash received from interest, net			10,064				1,896
Share-based compensation			54,822				35,504
Employer payroll taxes on employee stock transactions			2,869				808
Amortization of other intangibles			5,451				6,573
Amortization of acquired technology			4,237				3,889
Transaction, restructuring, and other			1,537				(8	)
Loss (gain) on currency translation			3,901				(1,617	)
Non-GAAP net income		$	96,184			$	73,469
Share count:
Weighted-average shares outstanding - basic			294,869				287,957
Weighted-average shares outstanding - diluted			299,246				291,228
Shares used in non-GAAP per share calculations:
Weighted-average shares outstanding - basic			294,869				287,957
Weighted-average shares outstanding - diluted			299,246				291,228
Non-GAAP net income per share:
Net income per share - basic		$	0.14			$	0.05
Net income per share - diluted		$	0.14			$	0.05
Non-GAAP net income per share - basic		$	0.33			$	0.26
Non-GAAP net income per share - diluted		$	0.32			$	0.25
		Three Months Ended December 31,
			2023				2022
Free Cash Flow:
Net cash provided by operating activities		$	75,657			$	61,962
Purchase of property and equipment			(3,645	)			(4,388	)
Capitalized software additions			(4,655	)			—
Free Cash Flow		$	67,357			$	57,574

DYNATRACE, INC. GAAP to Non-GAAP Reconciliations (Unaudited - In thousands, except percentages)
		Nine Months Ended December 31, 2023
		GAAP				Share-based compensation				Employer payroll taxes on employee stock transactions				Amortization of other intangibles				Restructuring & other				Non-GAAP
Non-GAAP income from operations:
Cost of revenue		$	194,580			$	(19,660	)		$	(1,516	)		$	(12,035	)		$	—			$	161,369
Gross profit			855,102				19,660				1,516				12,035				—				888,313
Gross margin			81	%																			85	%
Research and development			220,468				(50,119	)			(4,391	)			—								165,958
Sales and marketing			385,445				(48,823	)			(3,341	)			—				399				333,680
General and administrative			127,075				(34,696	)			(1,125	)			—				(5,725	)			85,529
Amortization of other intangibles			16,838				—				—				(16,838	)			—				—
Restructuring and other			(1	)			—				—				—				1				—
Income from operations		$	105,277			$	153,298			$	10,373			$	28,873			$	5,325			$	303,146
Operating margin			10	%																			29	%
		Nine Months Ended December 31, 2022
		GAAP				Share-based compensation				Employer payroll taxes on employee stock transactions				Amortization of other intangibles				Restructuring & other				Non-GAAP
Non-GAAP income from operations:
Cost of revenue		$	163,326			$	(13,410	)		$	(526	)		$	(11,669	)		$	(380	)		$	137,341
Gross profit			680,729				13,410				526				11,669				380				706,714
Gross margin			81	%																			84	%
Research and development (1)			156,847				(29,339	)			(1,259	)			—				—				126,249
Sales and marketing (1)			323,313				(37,399	)			(1,195	)			—				—				284,719
General and administrative (1)			107,485				(24,705	)			(510	)			—				(380	)			81,890
Amortization of other intangibles			19,719				—				—				(19,719	)			—				—
Restructuring and other			(15	)			—				—				—				15				—
Income from operations		$	73,380			$	104,853			$	3,490			$	31,388			$	745			$	213,856
Operating margin			9	%																			25	%
(1) Prior period results have been updated to allocate depreciation expense to operating expenses based upon location and headcount.

DYNATRACE, INC. GAAP to Non-GAAP Reconciliations (Unaudited - In thousands, except per share data)
		Nine Months Ended December 31,
			2023				2022
Non-GAAP net income:
Net income		$	116,688			$	27,666
Income tax expense			8,125				36,392
Non-GAAP effective cash tax			(58,986	)			(23,454	)
Interest (income) expense, net			(26,260	)			7,475
Cash received from (paid for) interest, net			24,556				(637	)
Share-based compensation			153,298				104,853
Employer payroll taxes on employee stock transactions			10,373				3,490
Amortization of other intangibles			16,838				19,719
Amortization of acquired technology			12,035				11,669
Transaction, restructuring, and other			5,325				745
Loss on currency translation			6,724				1,847
Non-GAAP net income		$	268,716			$	189,765
Share count:
Weighted-average shares outstanding - basic			293,295				287,120
Weighted-average shares outstanding - diluted			298,335				290,803
Shares used in non-GAAP per share calculations:
Weighted-average shares outstanding - basic			293,295				287,120
Weighted-average shares outstanding - diluted			298,335				290,803
Non-GAAP net income per share:
Net income per share - basic		$	0.40			$	0.10
Net income per share - diluted		$	0.39			$	0.10
Non-GAAP net income per share - basic		$	0.92			$	0.66
Non-GAAP net income per share - diluted		$	0.90			$	0.65
		Nine Months Ended December 31,
			2023				2022
Free Cash Flow:
Net cash provided by operating activities		$	246,437			$	234,458
Purchase of property and equipment			(16,662	)			(15,625	)
Capitalized software additions		$	(4,655	)			—
Free Cash Flow		$	225,120			$	218,833

 

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The Dynatrace Stock at the time of publication of the news with a raise of +1,80 % to 60,65USD on NYSE stock exchange (08. Februar 2024, 02:04 Uhr).