Exceeds high end of guidance across all metrics; raises FY'26 guidance

Delivers ARR growth of 16% on a constant currency basis

Achieves GAAP Operating Margin of 14% and Non-GAAP Operating Margin of 30%

Announces new $1 billion share repurchase program

BOSTON: Dynatrace (NYSE: DT), the leading AI-powered observability platform, today announced financial results for the third quarter of fiscal 2026 ended December 31, 2025.

"Our third quarter results surpassed the high end of our guidance across all top line growth and profitability metrics. Notably, we've generated double-digit net new ARR growth for three consecutive quarters, which reflects the growing number of enterprises adopting Dynatrace as their end-to-end observability platform,” said Rick McConnell, CEO of Dynatrace. “As organizations broadly deploy AI, observability is mission critical to managing the reliability and performance of those workloads. The Dynatrace platform combines the strengths of deterministic and agentic AI to deliver trustworthy insights that drive optimal business outcomes.”

Dynatrace also announced today that its Board of Directors has authorized a new share repurchase program for up to $1 billion of common stock.

"In the last four months, we repurchased over $200 million of Dynatrace stock, significantly accelerating the pace of our repurchases and nearly completing our inaugural $500 million buyback program," said Jim Benson, Chief Financial Officer. "This new $1 billion authorization reflects our conviction in the underlying strength of the business and commitment to driving shareholder value. Our scale, balance sheet, and proven ability to generate strong cash flow allow us to invest for durable long-term growth, while also returning capital to shareholders."

Third Quarter Fiscal 2026 Financial and Other Recent Business Highlights:

All growth rates are compared to the third quarter of fiscal 2025, unless otherwise noted.

Financial Highlights:

• Total ARR of $1,972 million, an increase of 20%, or 16% on a constant currency basis
• Total revenue of $515 million, an increase of 18%, or 16% on a constant currency basis
• Subscription revenue of $493 million, an increase of 18%, or 16% on a constant currency basis
• GAAP income from operations of $73 million and non-GAAP income from operations of $153 million
• GAAP net income per share of $0.13 and non-GAAP net income per share of $0.44, on a dilutive basis

Business Highlights:

• Go-to-market traction:
  • Closed 12 deals greater than $1 million in ARR in the quarter, 11 of which were in collaboration with partners, and five of which were new logos, contributing to record new logo ARR.
  • Surpassed the milestone of $100 million in annualized consumption dollars for log management, which continues to be the company's fastest growing major product category.
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• Product innovations:
  • Unveiled Dynatrace Intelligence, a new agentic AI-powered operations system that combines deterministic and agentic AI to deliver reliable, autonomous actions at enterprise scale.
  • Introduced domain specific agents to augment site reliability engineer (SRE), development and security teams with autonomous action.
  • Expanded cloud-native integrations across Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform (GCP) to give enterprises a unified view across multi‑cloud environments.
  • Delivered significantly evolved user experience to unify frontend, backend, AI telemetry, database, cloud, and mobile into an active system of control for cloud and AI-native software delivery.
  • Launched next-generation Real User Monitoring (RUM) capabilities fully integrated into our Grail data lakehouse.
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• Strategic ecosystem advancements:
  • Integrated Dynatrace with Amazon Bedrock AgentCore, delivering real-time visibility into autonomous agents and their interactions across AWS services.
  • Introduced a next‑generation cloud operations solution for Microsoft Azure and embedded Dynatrace with Microsoft’s Azure SRE Agent to transform incident management.
  • Expanded collaboration with GCP, becoming a launch partner for Gemini Command Line Interface (CLI) extensions and Gemini Enterprise to accelerate intelligent automation across GCP environments.

Share Repurchase Program

• Dynatrace has substantially completed its $500 million share repurchase program announced in May 2024. During the third quarter of fiscal 2026, Dynatrace spent $160 million to repurchase 3.5 million shares at an average price of $45.31 under that program. From the inception of the program through February 6, 2026, Dynatrace repurchased 10.6 million shares for $495 million at an average price of $46.79.

• Share repurchases under the new $1 billion program may be made from time to time on the open market or through privately negotiated transactions, including, without limitation, through Rule 10b5-1 trading plans, any other legally permissible means, or any combination of the foregoing. The share repurchase program has no time limit, does not obligate Dynatrace to acquire a specified number of shares, and may be suspended, modified, or terminated at any time, without prior notice. The number of shares to be repurchased will depend on market conditions and other factors. Repurchases under the program are expected to be funded from a combination of existing cash balances and future cash flow. 

Financial Outlook

Based on information available as of February 9, 2026, Dynatrace is issuing guidance for the fourth quarter and updating its prior guidance for full year fiscal 2026 in the tables below.

This guidance is based on the average foreign exchange rates for the month of January 2026. We expect foreign exchange to be a tailwind of approximately $49 million on ARR and approximately $37 million on revenue for fiscal 2026 compared to ARR and revenue at constant currency. This represents an incremental tailwind of approximately $11 million to ARR and $3 million to revenue compared to our prior guidance. This guidance also excludes the impact of any share repurchases after December 31, 2025.

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.

Conference Call and Webcast Information

Dynatrace will host a conference call and live webcast to discuss its results and business outlook at 8:00 a.m. Eastern Time today, February 9, 2026. To access the conference call from the U.S. and Canada, dial (866) 405-1247, or internationally, dial (201) 689-8045 with event confirmation #: 13758089. 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 May 9, 2026 by dialing (877) 660-6853 from the U.S. and Canada, or for international callers by dialing (201) 612-7415 and entering event confirmation #: 13758089. 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

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, free cash flow, and free cash flow margin. 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 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.

Non-GAA