Dynatrace (NYSE:DT) Posts Quarterly Earnings Results, Beats Estimates By $0.03 EPS

Dynatrace (NYSE:DT) issued its quarterly earnings results on Wednesday. The company reported $0.48 earnings per share for the quarter, topping analysts’ consensus estimates of $0.45 by $0.03, FiscalAI reports. The company had revenue of $554.55 million during the quarter, compared to the consensus estimate of $550.18 million. Dynatrace had a net margin of 8.06% and a return on equity of 10.37%. The firm’s quarterly revenue was up 16.3% on a year-over-year basis. During the same quarter in the prior year, the firm posted $0.42 EPS. Dynatrace updated its Q2 2027 guidance to 0.480-0.490 EPS and its FY 2027 guidance to 1.970-1.990 EPS.

Here are the key takeaways from Dynatrace’s conference call:

• Strong Q1 execution: ARR grew 17%, net new ARR increased 66% year over year (41% organically), and record new-logo growth exceeded 160%. Total and subscription revenue both surpassed the high end of guidance, while operating margin reached 29%.
• Dynatrace reported continued momentum in consumption, particularly log management, which nearly doubled to approximately $200 million in annualized consumption. More than 1,000 customers now monitor AI workloads and over 800 use agentic capabilities; AI-focused customers consume at 1.5 times the rate of other customers.
• The company raised its full-year revenue growth outlook to 14.5%-15%, increased the high end of operating-margin guidance to 29.75%, and raised non-GAAP EPS guidance to $1.97-$1.99. Management maintained its 15.5%-16.5% constant-currency ARR growth target and expressed confidence in fiscal-year ARR acceleration.
• Net retention remained at 110%, with management expecting a potential improvement in the second half as roughly 70% of DPS renewal activity occurs then and higher consumption supports expansions. Q1 and Q2 are comparatively light renewal periods, limiting near-term visibility into that upside.
• Foreign-exchange movements became a larger headwind, reducing the outlook by approximately $14 million for ARR and $4 million for revenue. CFO Jim Benson also plans to retire by the end of the fiscal year, creating a leadership transition risk despite management’s expectation of a smooth succession.

Dynatrace Stock Performance

Shares of NYSE:DT traded down $1.99 during midday trading on Thursday, hitting $48.87. 6,669,980 shares of the stock were exchanged, compared to its average volume of 6,332,069. The stock has a market capitalization of $14.18 billion, a price-to-earnings ratio of 90.50, a P/E/G ratio of 2.94 and a beta of 0.72. The business’s 50-day moving average price is $43.21 and its 200 day moving average price is $39.45. Dynatrace has a 12 month low of $31.64 and a 12 month high of $53.28.

Dynatrace News Roundup

Here are the key news stories impacting Dynatrace this week:

• Positive Sentiment: Quarterly results exceeded expectations: Dynatrace reported fiscal Q1 EPS of $0.48 versus the $0.45 consensus estimate, while revenue rose 16.3% year over year to $554.6 million, above expectations of $550.2 million. Dynatrace Reports First Quarter Fiscal Year 2027 Financial Results
• Positive Sentiment: Accelerating recurring-revenue growth: Annual recurring revenue increased 17%, organic net new ARR grew 41%, and net new ARR jumped 66%, with larger new-logo deals helping drive subscription-led growth. Management also cited stronger enterprise demand tied to cloud-native workloads and AI initiatives. Dynatrace Q1 Earnings Beat on ARR Growth and Strong New-Logo Wins
• Positive Sentiment: Profit guidance was raised relative to consensus: Dynatrace forecast fiscal 2027 EPS of $1.97–$1.99, well above the $1.78 analyst consensus, and guided second-quarter EPS to $0.48–$0.49 versus expectations of $0.44. UBS raised its price target to $65 and assigned a Buy rating, while RBC lifted its target to $59 and rated the shares Outperform. BTIG also raised its target to $62 with a Buy rating. Analyst Price Target Changes
• Neutral Sentiment: Revenue guidance was mixed: Fiscal-year revenue guidance was broadly in line with consensus, while second-quarter revenue guidance of $565 million–$570 million was slightly below the $570.1 million estimate. The company also disclosed a CFO transition, which investors may monitor during the execution of its growth plan. Dynatrace Earnings Beat, Guidance and CFO Transition

Hedge Funds Weigh In On Dynatrace

Several institutional investors and hedge funds have recently added to or reduced their stakes in DT. State Street Corp increased its stake in shares of Dynatrace by 1.0% in the fourth quarter. State Street Corp now owns 10,664,357 shares of the company’s stock valued at $462,193,000 after buying an additional 101,994 shares during the period. Wellington Management Group LLP boosted its holdings in Dynatrace by 9.0% in the fourth quarter. Wellington Management Group LLP now owns 7,999,919 shares of the company’s stock valued at $346,716,000 after acquiring an additional 659,792 shares during the last quarter. Alyeska Investment Group L.P. increased its position in Dynatrace by 1,201.7% during the 4th quarter. Alyeska Investment Group L.P. now owns 2,888,249 shares of the company’s stock valued at $125,177,000 after purchasing an additional 2,666,373 shares during the period. Scge Management L.P. acquired a new stake in Dynatrace during the 2nd quarter valued at approximately $155,858,000. Finally, Northern Trust Corp raised its holdings in Dynatrace by 1.4% during the 3rd quarter. Northern Trust Corp now owns 2,822,509 shares of the company’s stock worth $136,751,000 after purchasing an additional 38,148 shares during the last quarter. 94.28% of the stock is currently owned by institutional investors and hedge funds.

Analyst Ratings Changes

Several research firms have weighed in on DT. Needham & Company LLC restated a “hold” rating on shares of Dynatrace in a research note on Thursday, June 25th. TD Cowen upped their price objective on Dynatrace from $45.00 to $50.00 and gave the stock a “buy” rating in a research report on Wednesday, July 22nd. Wedbush set a $48.00 price objective on Dynatrace in a research note on Friday, May 15th. Jefferies Financial Group reissued a “buy” rating on shares of Dynatrace in a research note on Wednesday. Finally, Wolfe Research restated an “outperform” rating and issued a $42.00 price target on shares of Dynatrace in a research note on Thursday, May 14th. One investment analyst has rated the stock with a Strong Buy rating, twenty-two have given a Buy rating and seven have assigned a Hold rating to the company. According to data from MarketBeat, the stock has an average rating of “Moderate Buy” and a consensus price target of $53.58.

About Dynatrace

Dynatrace is a global software intelligence company specializing in application performance management (APM), cloud infrastructure monitoring, and digital experience management. Its flagship offering, the Dynatrace Software Intelligence Platform, leverages artificial intelligence to provide real-time observability across distributed environments, including on-premises data centers, private clouds, public clouds and hybrid deployments. Organizations rely on Dynatrace to detect anomalies, troubleshoot performance issues and optimize end-user experiences through automated root-cause analysis powered by the company’s engine, Davis.

The Dynatrace platform comprises modules for full-stack application monitoring, digital experience monitoring, infrastructure monitoring and business analytics.