Overview
Dynatrace fiscal Q2 revenue grows 18%, beating analyst expectations
Adjusted EPS for fiscal Q2 beats consensus, driven by AI-powered observability demand
Company raises FY26 guidance, reflecting confidence in future growth
Outlook
Dynatrace raises FY26 ARR guidance to $2.010 bln - $2.025 bln
Company expects Q3 revenue between $503 mln and $508 mln
Dynatrace sees FY26 revenue at $1.985 bln - $1.995 bln
Result Drivers
OBSERVABILITY DEMAND - Growing demand for AI-powered observability solutions driven by large-scale tool consolidations, per CEO Rick McConnell
STRATEGIC COLLABORATIONS - Multi-year collaboration with ServiceNow and integration with Atlassian cited as growth drivers
LARGE DEAL GROWTH - 53% growth in annual contract value from 7-figure deals, all leveraging end-to-end observability
Dynatrace shares gained 3.9% in premarket trading.
Key Details
Metric | Beat/Miss | Actual | Consensus Estimate |
Q2 Revenue | Beat | $494 mln | $487.20 mln (31 Analysts) |
Q2 Adjusted EPS | Beat | $0.44 | $0.41 (31 Analysts) |
Q2 EPS | $0.19 | ||
Q2 Adjusted Operating Income | $153 mln | ||
Q2 Annual Recurring Revenue | $1.89 bln | ||
Q2 Operating Income | $73 mln |
Analyst Coverage
The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 28 "strong buy" or "buy", 8 "hold" and no "sell" or "strong sell"
The average consensus recommendation for the it services & consulting peer group is "buy"
Wall Street's median 12-month price target for Dynatrace Inc is $64.00, about 22.5% above its November 4 closing price of $49.63
The stock recently traded at 29 times the next 12-month earnings vs. a P/E of 32 three months ago
Press Release: ID:nBw5Lh1pPa