Dynatrace's Q3 sales beat estimates on ARR growth, raises guidance

Overview

• AI observability platform's Q3 revenue and adjusted EPS beat analyst expectations

• Company announced new $1 bln share repurchase program

• Company achieved 16% ARR growth on constant currency basis

Outlook

• Dynatrace raises FY26 ARR guidance to $2.053 bln - $2.061 bln

• Company expects FY26 total revenue of $2.005 bln - $2.010 bln

• Dynatrace anticipates FY26 non-GAAP EPS of $1.67 - $1.69

Result Drivers

• ARR GROWTH - Dynatrace reported a 16% increase in annual recurring revenue on a constant currency basis, driven by enterprise adoption of its observability platform

• PRODUCT INNOVATIONS - The company launched Dynatrace Intelligence, an AI-powered operations system, and expanded cloud-native integrations, enhancing its platform capabilities

• STRATEGIC DEALS - Dynatrace closed 12 deals over $1 mln in ARR, with significant partner collaboration and new logos, boosting new logo ARR

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 26 "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 $57.00, about 69.1% above its February 6 closing price of $33.71

• The stock recently traded at 19 times the next 12-month earnings vs. a P/E of 29 three months ago

Press Release: ID:nBw5CKV54a

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