Dynatrace Reports Third Quarter of Fiscal Year 2023 Financial Results
Dynatrace (NYSE: DT) reported strong financial results for Q3 FY2023, with a 29% year-over-year growth in Adjusted ARR, totaling $1,163 million. Total Revenue rose to $297 million, reflecting a 29% increase on a constant currency basis. Subscription Revenue also grew by 29%, amounting to $279 million. Non-GAAP Operating Income was $81 million, with a Non-GAAP EPS of $0.25. Looking ahead, the company projects Q4 revenue between $304 - $307 million and updates its full-year guidance, anticipating total revenue of $1,148 - $1,151 million, representing a 24% growth.
- Adjusted ARR grew 29% year-over-year to $1,163 million.
- Total Revenue increased 29% to $297 million on a constant currency basis.
- Subscription Revenue rose 29% to $279 million on a constant currency basis.
- Non-GAAP Operating Income reached $81 million, up from $61 million the previous year.
- Guidance for Q4 FY2023 revenue set at $304 - $307 million, reflecting robust growth expectations.
- Foreign exchange impacts are expected to negatively affect ARR and Revenue by approximately $30 million and $45 million, respectively.
Delivers Adjusted ARR growth of
“Dynatrace delivered another strong quarter, beating expectations across the board and demonstrating the durability of our business model that supports a balance of growth and profitability,” said
Third Quarter Fiscal 2023 and Other Recent Business Highlights:
All growth rates are compared to the third quarter of fiscal 2022, unless otherwise noted.
Financial Highlights:
-
Total ARR of
, Adjusted ARR growth of$1,163 million 29% year-over-year -
Total Revenue of
, up$297 million 29% on a constant currency basis -
Subscription Revenue of
, up$279 million 29% on a constant currency basis -
Operating Income of
and Non-GAAP Operating Income of$34 million $81 million -
EPS of
and Non-GAAP EPS of$0.05 , both on a dilutive basis$0.25
Business Highlights:
-
Analyst and Customer recognition:
Dynatrace was named a Leader in The Forrester Wave™: Artificial Intelligence for IT Operations (AIOps), Q4 2022 report with the top scores in both the Current Offering and Strategy categories. In addition,Dynatrace is a Leader in the Gartner® 2022 Magic Quadrant™ for Application Performance Monitoring and Observability1. In the last quarter, we were also named a Customers’ Choice in the 2022 Gartner Peer Insights™ ‘Voice of the Customer’: Application Performance Monitoring and Observability2. We are the only provider with Industry and Customer recognition in this market.
-
Expanded partnerships:
Dynatrace is working closely with ten strategic Global System Integrators (GSIs) to help customers digitally transform their businesses and reduce cloud complexity. We continue to see a robust technical readiness investment from our key strategic GSIs resulting in over 500 individuals trained or certified on theDynatrace platform. We are beginning to see early traction with these partnerships, including a recent seven-figure deal inLatin America . And as more workloads move to the cloud, we continue to gain leverage from the frictionless go-to-market motion of our hyperscaler relationships. On a trailing-twelve-month basis, business transacted through these partners, including AWS,Google Cloud, and Microsoft, is more than 1.6x compared to the same period last year.
- Ongoing platform expansion: We expanded the Dynatrace Grail data lakehouse to power business analytics. This builds on existing support for log analytics and management and is designed to drive accurate, reliable, and cost-effective automation and analytics covering a wide range of business use cases, including order fulfillment, customer service activation, and the impact on revenue from new digital services.
Third Quarter 2023 Financial Highlights (Unaudited – In thousands, except per share data) |
||||||||
|
Three Months Ended
|
|||||||
|
2022 |
|
2021 |
|||||
Key Operating Metric: |
|
|
||||||
Annualized recurring revenue |
$ |
1,162,591 |
|
$ |
929,906 |
|
||
Year-over-Year Increase |
|
25 |
% |
|
||||
Year-over-Year Increase - constant currency |
|
28 |
% |
|
||||
Adjusted ARR Growth |
|
29 |
% |
|
||||
|
|
|
||||||
Revenue: |
|
|
||||||
Total revenue |
$ |
297,456 |
|
$ |
240,766 |
|
||
Year-over-Year Increase |
|
24 |
% |
|
||||
Year-over-Year Increase - constant currency (*) |
|
29 |
% |
|
||||
|
|
|
||||||
Subscription revenue |
$ |
279,152 |
|
$ |
226,290 |
|
||
Year-over-Year Increase |
|
23 |
% |
|
||||
Year-over-Year Increase - constant currency (*) |
|
29 |
% |
|
||||
|
|
|
||||||
GAAP Financial Measures: |
|
|
||||||
GAAP operating income |
$ |
33,887 |
|
$ |
21,215 |
|
||
GAAP operating margin |
|
11 |
% |
|
9 |
% |
||
|
|
|
||||||
GAAP net income |
$ |
15,026 |
|
$ |
14,587 |
|
||
|
|
|
||||||
GAAP net income per share - diluted |
$ |
0.05 |
|
$ |
0.05 |
|
||
|
|
|
||||||
GAAP share outstanding - diluted |
|
291,228 |
|
|
291,845 |
|
||
|
|
|
||||||
Net cash provided by operating activities |
$ |
61,962 |
|
$ |
60,844 |
|
||
|
|
|
||||||
Non-GAAP Financial Measures: |
|
|
||||||
Non-GAAP operating income (*) |
$ |
80,653 |
|
$ |
61,102 |
|
||
Non-GAAP operating margin (*) |
|
27 |
% |
|
25 |
% |
||
|
|
|
||||||
Non-GAAP net income (*) |
$ |
73,469 |
|
$ |
52,020 |
|
||
|
|
|
||||||
Non-GAAP net income per share - diluted |
$ |
0.25 |
|
$ |
0.18 |
|
||
|
|
|
||||||
Non-GAAP shares outstanding - diluted |
|
291,228 |
|
|
291,845 |
|
||
|
|
|
||||||
Free Cash Flow (*) |
$ |
57,574 |
|
$ |
56,688 |
|
* 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 https://ir.dynatrace.com/.
Financial Outlook
Since
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
(In millions, except per share data) |
Q4 Fiscal 2023 Guidance |
|
|
|
|
|
Total revenue |
|
|
|
|
|
|
As reported |
|
|
|
|
|
|
Constant currency |
|
|
|
|
|
|
Subscription revenue |
|
|
|
|
|
|
As reported |
|
|
|
|
|
|
Constant currency |
|
|
|
|
|
|
Non-GAAP operating income |
|
|
|
|
|
|
Non-GAAP operating margin |
|
|
|
|
|
|
Non-GAAP net income |
|
|
|
|
|
|
Non-GAAP net income per diluted share |
|
|
|
|
|
|
Diluted weighted average shares outstanding |
293 - 294 |
|
|
|
|
|
|
|
|
|
|
||
(In millions, except per share data) |
Current Guidance Fiscal 2023 |
|
Prior Guidance Fiscal 2023 |
|
Guidance Change at Midpoint* |
|
Total ARR |
|
|
|
|
|
|
As reported |
|
|
|
|
500 bps |
|
Constant currency |
|
|
|
|
200 bps |
|
Adjusted ARR growth |
|
|
|
|
200 bps |
|
Total revenue |
|
|
|
|
|
|
As reported |
|
|
|
|
300 bps |
|
Constant currency |
|
|
|
|
150 bps |
|
Subscription revenue |
|
|
|
|
|
|
As reported |
|
|
|
|
300 bps |
|
Constant currency |
|
|
|
|
150 bps |
|
Non-GAAP operating income |
|
|
|
|
|
|
Non-GAAP operating margin |
|
|
|
|
50 bps |
|
Non-GAAP net income |
|
|
|
|
|
|
Non-GAAP net income per diluted share |
|
|
|
|
|
|
Diluted weighted average shares outstanding |
292 - 293 |
|
292 - 293 |
|
0 |
|
Free cash flow |
|
|
|
|
|
|
Free cash flow margin |
|
|
|
|
-25 bps |
|
*Changes in our guidance for ARR and Revenue metrics are rounded to the nearest 50 bps |
Our guidance is based on foreign exchange rates as of the end of December.
Reconciliation of non-GAAP operating income, non-GAAP net income, non-GAAP net income per diluted 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
An audio replay of the call will also be available until
The company has used, and intends to continue to use, the investor relations portion of its website, its Twitter account and LinkedIn page as 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.
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
Adjusted ARR Growth is defined as year-over-year growth in Adjusted ARR divided by ARR as reported.
Free Cash Flow is defined as net cash provided by (used in) operating activities less capital expenditures.
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 regarding management’s expectations of future financial and operational performance and operational expenditures, expected growth, and business outlook, including our financial guidance for the fourth fiscal quarter and full year 2023, and statements regarding future customer requirements, product innovation, 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 on our business of general economic and financial market conditions, a potential downturn in or instability of general economic conditions including currency fluctuations, our ability to maintain our subscription revenue growth rates in future periods, our ability to service our 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 Form 10-K filed on
___________________________
1 Gartner, Magic Quadrant for Application Performance Monitoring and Observability,
2 Gartner, Peer Insights ‘Voice of the Customer’: Application Performance Monitoring and Observability,
Gartner, Magic Quadrant and Peer Insights are trademarks of Gartner, Inc. and/or its affiliates and is used herein with permission. All rights reserved. Gartner Peer Insights Customers’ Choice constitute the subjective opinions of individual end-user reviews, ratings, and data applied against a documented methodology; they neither represent the views of, nor constitute an endorsement by, Gartner or its affiliates.
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.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited – In thousands, except per share data) |
||||||||||||||||
|
Three Months Ended
|
|
Nine Months Ended
|
|||||||||||||
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|||||||||
Revenue: |
|
|
|
|
|
|
|
|||||||||
Subscription |
$ |
279,152 |
|
|
$ |
226,290 |
|
|
$ |
790,016 |
|
|
$ |
635,411 |
|
|
License |
|
— |
|
|
|
2 |
|
|
|
— |
|
|
|
52 |
|
|
Service |
|
18,304 |
|
|
|
14,474 |
|
|
|
54,039 |
|
|
|
41,397 |
|
|
Total revenue |
|
297,456 |
|
|
|
240,766 |
|
|
|
844,055 |
|
|
|
676,860 |
|
|
Cost of revenue: |
|
|
|
|
|
|
|
|||||||||
Cost of subscription |
|
36,891 |
|
|
|
28,284 |
|
|
|
105,393 |
|
|
|
80,401 |
|
|
Cost of service |
|
15,044 |
|
|
|
12,232 |
|
|
|
46,264 |
|
|
|
32,921 |
|
|
Amortization of acquired technology |
|
3,889 |
|
|
|
3,944 |
|
|
|
11,669 |
|
|
|
11,638 |
|
|
Total cost of revenue |
|
55,824 |
|
|
|
44,460 |
|
|
|
163,326 |
|
|
|
124,960 |
|
|
Gross profit |
|
241,632 |
|
|
|
196,306 |
|
|
|
680,729 |
|
|
|
551,900 |
|
|
|
|
|
|
|
|
|
|
|||||||||
Operating expenses: |
|
|
|
|
|
|
|
|||||||||
Research and development |
|
53,411 |
|
|
|
40,876 |
|
|
|
153,800 |
|
|
|
113,509 |
|
|
Sales and marketing |
|
111,524 |
|
|
|
94,033 |
|
|
|
321,208 |
|
|
|
260,816 |
|
|
General and administrative |
|
36,242 |
|
|
|
32,643 |
|
|
|
112,637 |
|
|
|
91,254 |
|
|
Amortization of other intangibles |
|
6,573 |
|
|
|
7,539 |
|
|
|
19,719 |
|
|
|
22,618 |
|
|
Restructuring and other |
|
(5 |
) |
|
|
— |
|
|
|
(15 |
) |
|
|
25 |
|
|
Total operating expenses |
|
207,745 |
|
|
|
175,091 |
|
|
|
607,349 |
|
|
|
488,222 |
|
|
Income from operations |
|
33,887 |
|
|
|
21,215 |
|
|
|
73,380 |
|
|
|
63,678 |
|
|
Interest expense, net |
|
(4,787 |
) |
|
|
(2,450 |
) |
|
|
(7,475 |
) |
|
|
(7,958 |
) |
|
Other income (expense), net |
|
1,617 |
|
|
|
(1,357 |
) |
|
|
(1,847 |
) |
|
|
(1,345 |
) |
|
Income before income taxes |
|
30,717 |
|
|
|
17,408 |
|
|
|
64,058 |
|
|
|
54,375 |
|
|
Income tax expense |
|
(15,691 |
) |
|
|
(2,821 |
) |
|
|
(36,392 |
) |
|
|
(2,853 |
) |
|
Net income |
$ |
15,026 |
|
|
$ |
14,587 |
|
|
$ |
27,666 |
|
|
$ |
51,522 |
|
|
Net income per share: |
|
|
|
|
|
|
|
|||||||||
Basic |
$ |
0.05 |
|
|
$ |
0.05 |
|
|
$ |
0.10 |
|
|
$ |
0.18 |
|
|
Diluted |
$ |
0.05 |
|
|
$ |
0.05 |
|
|
$ |
0.10 |
|
|
$ |
0.18 |
|
|
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|||||||||
Basic |
|
287,957 |
|
|
|
284,722 |
|
|
|
287,120 |
|
|
|
283,773 |
|
|
Diluted |
|
291,228 |
|
|
|
291,845 |
|
|
|
290,803 |
|
|
|
290,895 |
|
|
UNAUDITED SHARE-BASED COMPENSATION |
||||||||||||||||
|
Three Months Ended
|
|
Nine Months Ended
|
|||||||||||||
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|||||||||
Cost of revenue |
$ |
4,285 |
|
|
$ |
3,405 |
|
|
$ |
13,410 |
|
|
$ |
9,542 |
|
|
Research and development |
|
11,057 |
|
|
|
5,908 |
|
|
|
29,339 |
|
|
|
15,331 |
|
|
Sales and marketing |
|
13,385 |
|
|
|
9,267 |
|
|
|
37,399 |
|
|
|
26,487 |
|
|
General and administrative |
|
6,777 |
|
|
|
8,543 |
|
|
|
24,705 |
|
|
|
20,590 |
|
|
Total share-based compensation |
$ |
35,504 |
|
|
$ |
27,123 |
|
|
$ |
104,853 |
|
|
$ |
71,950 |
|
CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share data) |
||||||||
|
2022 |
|
2022 |
|||||
|
(unaudited) |
|
|
|||||
Assets |
|
|
|
|||||
Current assets: |
|
|
|
|||||
Cash and cash equivalents |
$ |
422,451 |
|
|
$ |
462,967 |
|
|
Accounts receivable, net |
|
304,411 |
|
|
|
350,666 |
|
|
Deferred commissions, current |
|
71,001 |
|
|
|
62,601 |
|
|
Prepaid expenses and other current assets |
|
33,034 |
|
|
|
72,188 |
|
|
Total current assets |
|
830,897 |
|
|
|
948,422 |
|
|
Property and equipment, net |
|
50,528 |
|
|
|
45,271 |
|
|
Operating lease right-of-use assets, net |
|
68,730 |
|
|
|
58,849 |
|
|
|
|
1,281,507 |
|
|
|
1,281,876 |
|
|
Other intangible assets, net |
|
74,073 |
|
|
|
105,736 |
|
|
Deferred tax assets, net |
|
23,726 |
|
|
|
28,106 |
|
|
Deferred commissions, non-current |
|
69,150 |
|
|
|
63,435 |
|
|
Other assets |
|
15,268 |
|
|
|
9,615 |
|
|
Total assets |
$ |
2,413,879 |
|
|
$ |
2,541,310 |
|
|
|
|
|
|
|||||
Liabilities and shareholders' equity |
|
|
|
|||||
Current liabilities: |
|
|
|
|||||
Accounts payable |
$ |
14,687 |
|
|
$ |
22,715 |
|
|
Accrued expenses, current |
|
154,081 |
|
|
|
141,556 |
|
|
Deferred revenue, current |
|
647,259 |
|
|
|
688,554 |
|
|
Operating lease liabilities, current |
|
14,990 |
|
|
|
12,774 |
|
|
Total current liabilities |
|
831,017 |
|
|
|
865,599 |
|
|
Deferred revenue, non-current |
|
25,778 |
|
|
|
25,783 |
|
|
Accrued expenses, non-current |
|
30,449 |
|
|
|
19,409 |
|
|
Operating lease liabilities, non-current |
|
59,589 |
|
|
|
52,070 |
|
|
Deferred tax liabilities |
|
23 |
|
|
|
85 |
|
|
Long-term debt, net |
|
— |
|
|
|
273,918 |
|
|
Total liabilities |
|
946,856 |
|
|
|
1,236,864 |
|
|
|
|
|
|
|||||
Shareholders' equity: |
|
|
|
|||||
Common shares, |
|
289 |
|
|
|
286 |
|
|
Additional paid-in capital |
|
1,929,940 |
|
|
|
1,792,197 |
|
|
Accumulated deficit |
|
(433,682 |
) |
|
|
(461,348 |
) |
|
Accumulated other comprehensive loss |
|
(29,524 |
) |
|
|
(26,689 |
) |
|
Total shareholders' equity |
|
1,467,023 |
|
|
|
1,304,446 |
|
|
Total liabilities and shareholders' equity |
$ |
2,413,879 |
|
|
$ |
2,541,310 |
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited – In thousands) |
||||||||
|
Nine Months Ended
|
|||||||
|
2022 |
|
2021 |
|||||
Cash flows from operating activities: |
|
|
|
|||||
Net income |
$ |
27,666 |
|
|
$ |
51,522 |
|
|
Adjustments to reconcile net income to cash provided by operations: |
|
|
|
|||||
Depreciation |
|
9,012 |
|
|
|
7,788 |
|
|
Amortization |
|
31,566 |
|
|
|
34,682 |
|
|
Share-based compensation |
|
104,853 |
|
|
|
71,950 |
|
|
Loss on extinguishment of debt |
|
5,925 |
|
|
|
— |
|
|
Other |
|
5,171 |
|
|
|
2,906 |
|
|
Net change in operating assets and liabilities: |
|
|
|
|||||
Accounts receivable |
|
40,314 |
|
|
|
(22,362 |
) |
|
Deferred commissions |
|
(17,198 |
) |
|
|
(19,581 |
) |
|
Prepaid expenses and other assets |
|
29,616 |
|
|
|
(17,508 |
) |
|
Accounts payable and accrued expenses |
|
19,365 |
|
|
|
10,987 |
|
|
Operating leases, net |
|
(36 |
) |
|
|
683 |
|
|
Deferred revenue |
|
(21,796 |
) |
|
|
41,545 |
|
|
Net cash provided by operating activities |
|
234,458 |
|
|
|
162,612 |
|
|
|
|
|
|
|||||
Cash flows from investing activities: |
|
|
|
|||||
Purchase of property and equipment |
|
(15,625 |
) |
|
|
(11,768 |
) |
|
Acquisition of businesses, net of cash acquired |
|
— |
|
|
|
(13,195 |
) |
|
Net cash used in investing activities |
|
(15,625 |
) |
|
|
(24,963 |
) |
|
|
|
|
|
|||||
Cash flows from financing activities: |
|
|
|
|||||
Repayment of term loans |
|
(281,125 |
) |
|
|
(90,000 |
) |
|
Debt issuance costs |
|
(1,949 |
) |
|
|
— |
|
|
Proceeds from employee stock purchase plan |
|
17,806 |
|
|
|
13,913 |
|
|
Proceeds from exercise of stock options |
|
15,102 |
|
|
|
23,650 |
|
|
Equity repurchases |
|
(15 |
) |
|
|
(51 |
) |
|
Net cash used in financing activities |
|
(250,181 |
) |
|
|
(52,488 |
) |
|
|
|
|
|
|||||
Effect of exchange rates on cash and cash equivalents |
|
(9,168 |
) |
|
|
(1,400 |
) |
|
|
|
|
|
|||||
Net (decrease) increase in cash and cash equivalents |
|
(40,516 |
) |
|
|
83,761 |
|
|
|
|
|
|
|||||
Cash and cash equivalents, beginning of period |
|
462,967 |
|
|
|
324,962 |
|
|
Cash and cash equivalents, end of period |
$ |
422,451 |
|
|
$ |
408,723 |
|
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 other intangibles |
|
Restructuring & other |
|
Non-GAAP |
|||||||||||||
Non-GAAP operating income: |
||||||||||||||||||||||||
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 |
|
53,411 |
|
|
|
(11,057 |
) |
|
|
(329 |
) |
|
|
— |
|
|
|
— |
|
|
|
42,025 |
|
|
Sales and marketing |
|
111,524 |
|
|
|
(13,385 |
) |
|
|
(297 |
) |
|
|
— |
|
|
|
— |
|
|
|
97,842 |
|
|
General and administrative |
|
36,242 |
|
|
|
(6,777 |
) |
|
|
(68 |
) |
|
|
— |
|
|
|
3 |
|
|
|
29,400 |
|
|
Amortization of other intangibles |
|
6,573 |
|
|
|
— |
|
|
|
— |
|
|
|
(6,573 |
) |
|
|
— |
|
|
|
— |
|
|
Restructuring and other |
|
(5 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
5 |
|
|
|
— |
|
|
Operating income |
$ |
33,887 |
|
|
$ |
35,504 |
|
|
$ |
808 |
|
|
$ |
10,462 |
|
|
$ |
(8 |
) |
|
$ |
80,653 |
|
|
Operating margin |
|
11 |
% |
|
|
|
|
|
|
|
|
|
|
27 |
% |
|||||||||
|
Three Months Ended |
|||||||||||||||||||||||
|
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 |
$ |
44,460 |
|
|
$ |
(3,405 |
) |
|
$ |
(149 |
) |
|
$ |
(3,944 |
) |
|
$ |
— |
|
|
$ |
36,962 |
|
|
Gross profit |
|
196,306 |
|
|
|
3,405 |
|
|
|
149 |
|
|
|
3,944 |
|
|
|
— |
|
|
|
203,804 |
|
|
Gross margin |
|
82 |
% |
|
|
|
|
|
|
|
|
|
|
85 |
% |
|||||||||
Research and development |
|
40,876 |
|
|
|
(5,908 |
) |
|
|
(493 |
) |
|
|
— |
|
|
|
— |
|
|
|
34,475 |
|
|
Sales and marketing |
|
94,033 |
|
|
|
(9,267 |
) |
|
|
(511 |
) |
|
|
— |
|
|
|
— |
|
|
|
84,255 |
|
|
General and administrative |
|
32,643 |
|
|
|
(8,543 |
) |
|
|
(124 |
) |
|
|
— |
|
|
|
(4 |
) |
|
|
23,972 |
|
|
Amortization of other intangibles |
|
7,539 |
|
|
|
— |
|
|
|
— |
|
|
|
(7,539 |
) |
|
|
— |
|
|
|
— |
|
|
Restructuring and other |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Operating income |
$ |
21,215 |
|
|
$ |
27,123 |
|
|
$ |
1,277 |
|
|
$ |
11,483 |
|
|
$ |
4 |
|
|
$ |
61,102 |
|
|
Operating margin |
|
9 |
% |
|
|
|
|
|
|
|
|
|
|
25 |
% |
GAAP to Non-GAAP Reconciliations (Unaudited - In thousands, except per share data) |
||||||||
|
|
|
||||||
|
|
Three Months Ended
|
||||||
|
|
2022 |
|
2021 |
||||
Non-GAAP net income: |
|
|
|
|||||
Net income |
$ |
15,026 |
|
|
$ |
14,587 |
|
|
Income tax expense |
|
15,691 |
|
|
|
2,821 |
|
|
Non-GAAP effective cash tax |
|
(9,080 |
) |
|
|
(7,093 |
) |
|
Interest expense, net |
|
4,787 |
|
|
|
2,450 |
|
|
Cash received from (paid for) interest, net |
|
1,896 |
|
|
|
(1,989 |
) |
|
Share-based compensation |
|
35,504 |
|
|
|
27,123 |
|
|
Employer payroll taxes on employee stock transactions |
|
808 |
|
|
|
1,277 |
|
|
Amortization of other intangibles |
|
6,573 |
|
|
|
7,539 |
|
|
Amortization of acquired technology |
|
3,889 |
|
|
|
3,944 |
|
|
Transaction, restructuring, and other |
|
(8 |
) |
|
|
4 |
|
|
(Gain) loss on currency translation |
|
(1,617 |
) |
|
|
1,357 |
|
|
Non-GAAP net income |
$ |
73,469 |
|
|
$ |
52,020 |
|
|
|
|
|
|
|||||
Share count: |
|
|
|
|||||
Weighted-average shares outstanding - basic |
|
287,957 |
|
|
|
284,722 |
|
|
Weighted-average shares outstanding - diluted |
|
291,228 |
|
|
|
291,845 |
|
|
|
|
|
|
|||||
Shares used in non-GAAP per share calculations: |
|
|
|
|||||
Weighted-average shares outstanding - basic |
|
287,957 |
|
|
|
284,722 |
|
|
Weighted-average shares outstanding - diluted |
|
291,228 |
|
|
|
291,845 |
|
|
|
|
|
|
|||||
Net income per share: |
|
|
|
|||||
Net income per share - basic |
$ |
0.05 |
|
|
$ |
0.05 |
|
|
Net income per share - diluted |
$ |
0.05 |
|
|
$ |
0.05 |
|
|
Non-GAAP net income per share - basic |
$ |
0.26 |
|
|
$ |
0.18 |
|
|
Non-GAAP net income per share - diluted |
$ |
0.25 |
|
|
$ |
0.18 |
|
|
|
Three Months Ended
|
|||||||
|
2022 |
|
2021 |
|||||
Free Cash Flow ("FCF"): |
|
|
|
|||||
Net cash provided by operating activities |
$ |
61,962 |
|
|
$ |
60,844 |
|
|
Purchase of property and equipment |
|
(4,388 |
) |
|
|
(4,156 |
) |
|
FCF |
$ |
57,574 |
|
|
$ |
56,688 |
|
GAAP to Non-GAAP Reconciliations (Unaudited - In thousands, except percentages) |
||||||||||||||||||||||||
|
Nine Months Ended |
|||||||||||||||||||||||
|
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 |
$ |
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 |
|
153,800 |
|
|
|
(29,339 |
) |
|
|
(1,259 |
) |
|
|
— |
|
|
|
— |
|
|
|
123,202 |
|
|
Sales and marketing |
|
321,208 |
|
|
|
(37,399 |
) |
|
|
(1,195 |
) |
|
|
— |
|
|
|
— |
|
|
|
282,614 |
|
|
General and administrative |
|
112,637 |
|
|
|
(24,705 |
) |
|
|
(510 |
) |
|
|
— |
|
|
|
(380 |
) |
|
|
87,042 |
|
|
Amortization of other intangibles |
|
19,719 |
|
|
|
— |
|
|
|
— |
|
|
|
(19,719 |
) |
|
|
— |
|
|
|
— |
|
|
Restructuring and other |
|
(15 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
15 |
|
|
|
— |
|
|
Operating income |
$ |
73,380 |
|
|
$ |
104,853 |
|
|
$ |
3,490 |
|
|
$ |
31,388 |
|
|
$ |
745 |
|
|
$ |
213,856 |
|
|
Operating margin |
|
9 |
% |
|
|
|
|
|
|
|
|
|
|
25 |
% |
|||||||||
|
Nine Months Ended |
|||||||||||||||||||||||
|
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 |
$ |
124,960 |
|
|
$ |
(9,542 |
) |
|
$ |
(916 |
) |
|
$ |
(11,638 |
) |
|
$ |
— |
|
|
$ |
102,864 |
|
|
Gross profit |
|
551,900 |
|
|
|
9,542 |
|
|
|
916 |
|
|
|
11,638 |
|
|
|
— |
|
|
|
573,996 |
|
|
Gross margin |
|
82 |
% |
|
|
|
|
|
|
|
|
|
|
85 |
% |
|||||||||
Research and development |
|
113,509 |
|
|
|
(15,331 |
) |
|
|
(1,620 |
) |
|
|
— |
|
|
|
— |
|
|
|
96,558 |
|
|
Sales and marketing |
|
260,816 |
|
|
|
(26,487 |
) |
|
|
(1,881 |
) |
|
|
— |
|
|
|
— |
|
|
|
232,448 |
|
|
General and administrative |
|
91,254 |
|
|
|
(20,590 |
) |
|
|
(578 |
) |
|
|
— |
|
|
|
(1,206 |
) |
|
|
68,880 |
|
|
Amortization of other intangibles |
|
22,618 |
|
|
|
— |
|
|
|
— |
|
|
|
(22,618 |
) |
|
|
— |
|
|
|
— |
|
|
Restructuring and other |
|
25 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(25 |
) |
|
|
— |
|
|
Operating income |
$ |
63,678 |
|
|
$ |
71,950 |
|
|
$ |
4,995 |
|
|
$ |
34,256 |
|
|
$ |
1,231 |
|
|
$ |
176,110 |
|
|
Operating margin |
|
9 |
% |
|
|
|
|
|
|
|
|
|
|
26 |
% |
GAAP to Non-GAAP Reconciliations (Unaudited - In thousands, except per share data) |
||||||||
|
Nine Months Ended
|
|||||||
|
2022 |
|
2021 |
|||||
Non-GAAP net income: |
|
|
||||||
Net income |
$ |
27,666 |
|
$ |
51,522 |
|
||
Income tax expense |
|
36,392 |
|
|
2,853 |
|
||
Non-GAAP effective cash tax |
|
(23,454 |
) |
|
(20,346 |
) |
||
Interest expense, net |
|
7,475 |
|
|
7,958 |
|
||
Cash paid for interest, net |
|
(637 |
) |
|
(6,549 |
) |
||
Share-based compensation |
|
104,853 |
|
|
71,950 |
|
||
Employer payroll taxes on employee stock transactions |
|
3,490 |
|
|
4,995 |
|
||
Amortization of other intangibles |
|
19,719 |
|
|
22,618 |
|
||
Amortization of acquired technology |
|
11,669 |
|
|
11,638 |
|
||
Transaction, restructuring, and other |
|
745 |
|
|
1,231 |
|
||
Loss on currency translation |
|
1,847 |
|
|
1,345 |
|
||
Non-GAAP net income |
$ |
189,765 |
|
$ |
149,215 |
|
||
|
|
|
||||||
Share count: |
|
|
||||||
Weighted-average shares outstanding - basic |
|
287,120 |
|
|
283,773 |
|
||
Weighted-average shares outstanding - diluted |
|
290,803 |
|
|
290,895 |
|
||
|
|
|
||||||
Shares used in non-GAAP per share calculations: |
|
|
||||||
Weighted-average shares outstanding - basic |
|
287,120 |
|
|
283,773 |
|
||
Weighted-average shares outstanding - diluted |
|
290,803 |
|
|
290,895 |
|
||
|
|
|
||||||
Net income per share: |
|
|
||||||
Net income per share - basic |
$ |
0.10 |
|
$ |
0.18 |
|
||
Net income per share - diluted |
$ |
0.10 |
|
$ |
0.18 |
|
||
Non-GAAP net income per share - basic |
$ |
0.66 |
|
$ |
0.53 |
|
||
Non-GAAP net income per share - diluted |
$ |
0.65 |
|
$ |
0.51 |
|
||
|
Nine Months Ended
|
|||||||
|
2022 |
|
2021 |
|||||
Free Cash Flow ("FCF"): |
|
|
||||||
Net cash provided by operating activities |
$ |
234,458 |
|
$ |
162,612 |
|
||
Purchase of property and equipment |
|
(15,625 |
) |
|
(11,768 |
) |
||
FCF |
$ |
218,833 |
|
$ |
150,844 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20230201005080/en/
Investor Contact:
VP, Investor Relations
Noelle.Faris@dynatrace.com
Media Relations:
VP, Communications
Jerome.Stewart@dynatrace.com
Source:
FAQ
What were Dynatrace's Q3 2023 earnings results?
What is Dynatrace's guidance for Q4 FY2023?
How did Dynatrace perform compared to last year?