Dynatrace Reports First Quarter of Fiscal Year 2022 Financial Results

WALTHAM, Mass.–(BUSINESS WIRE)–Software intelligence company Dynatrace (NYSE: DT) today released financial results for the first quarter of its fiscal 2022 ended June 30, 2021. 

“We are pleased with our strong first quarter results, once again exceeding guidance across all our key metrics, led by ARR growth of 37% year-over-year,” said John Van Siclen, Dynatrace’s CEO. “The unique value of combining the broadest cloud observability with powerful automation and AIOps capabilities continues to resonate with customers as they accelerate their digital transformation and modern cloud initiatives.”

First Quarter Fiscal 2022 and Other Recent Business Highlights:

All growth rates are compared to the first quarter of fiscal 2021 unless otherwise noted.

Financial Highlights:

• Total ARR of $823 million, an increase of 37%, or 32% on a constant currency basis
• Total Revenue of $210 million, an increase of 35%, or 29% on a constant currency basis
• Subscription revenue of $197 million, an increase of 36%, or 30% on a constant currency basis, and representing 94% of total revenue
• GAAP Operating Income of $21 million and Non-GAAP Operating Income of $54 million
• GAAP EPS of $0.05 and non-GAAP EPS of $0.16, on a dilutive basis

Business Highlights:

• Enhanced Application Security Module with Davis Security Advisor, which provides continuous and intelligent vulnerability scoring to address the most critical issues with greater confidence and efficiency and preserves more time to drive innovation.

• Awarded the AWS Government Competency, recognizing Dynatrace’s experience and success enabling civilian agencies, the national defense and intelligence communities, and state and local governments around the world to accelerate digital innovation on AWS.

• Expanded support for OpenTelemetry to enable data ingest both with and without agents, providing developers and SREs flexibility to use OpenTel with any data source or use case and leverage Dynatrace’s AIOps capabilities to efficiently integrate, analyze and manage cloud environments.

* 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 at https://ir.dynatrace.com.

Financial Outlook

Based on information available, as of July 28, 2021, Dynatrace is issuing guidance for the second quarter and raising guidance for full year fiscal 2022 as follows:

Second Quarter of Fiscal Year 2022:

• Total revenue is expected to be in the range of $219 to $221 million, 30% to 31% growth as reported, or 28% to 29% on a constant currency basis
• Subscription revenue is expected to be in the range of $206.5 to $208 million, 31% to 32% growth as reported, or 29% to 30% on a constant currency basis
• Non-GAAP operating income is expected to be in the range of $53 to $55 million
• Non-GAAP net income is expected to be in the range of $44.5 to $46.5 million
• Non-GAAP net income per diluted share is expected to be in the range of $0.15 to $0.16, based on a range of 290 to 291 million diluted weighted-average shares outstanding

Full Year Fiscal 2022:

• Total ARR is expected to be in the range of $984 to $996 million, 27% to 29% growth as reported, or 26% to 28% on a constant currency basis
• Total revenue is expected to be in the range of $902 to $914 million, 28% to 30% growth as reported, or 26% to 28% growth on a constant currency basis
• Subscription revenue is expected to be in the range of $848 to $856 million, 29% to 31% growth as reported, or 27% to 29% growth on a constant currency basis
• Non-GAAP operating income is expected to be in the range of $208 to $218 million
• Non-GAAP net income is expected to be in the range of $175 to $184 million
• Non-GAAP net income per diluted share is expected to be in the range of $0.60 to $0.63, based on a range of 291 to 292 million diluted weighted-average shares outstanding
• Total unlevered free cash flow is expected to be in the range of $262 to $274 million, or 29% to 30% of revenue

Our guidance is based on foreign exchange rates as of June 30, 2021.

Reconciliation of non-GAAP operating income, non-GAAP net income, non-GAAP net income per share and unlevered 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.

About Dynatrace

Dynatrace provides software intelligence to simplify cloud complexity and accelerate digital transformation. With automatic and intelligent observability at scale, our all-in-one platform delivers precise answers about the performance and security of applications, the underlying infrastructure, and the experience of all users to enable organizations to innovate faster, collaborate more efficiently, and deliver more value with dramatically less effort. That’s why many of the world’s largest enterprises trust Dynatrace^® to modernize and automate cloud operations, release better software faster, and deliver unrivalled digital experiences.