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Jun 30, 2024
Dynatrace Q1 2025 Earnings Report
Dynatrace's Q1 2025 financial results surpassed expectations, demonstrating strong growth and profitability.
Key Takeaways
Dynatrace reported a strong first quarter for fiscal year 2025, exceeding guidance across all key metrics. The company achieved significant ARR growth, driven by the strength of its end-to-end observability platform and its 'power of 3' approach to AI.
ARR increased by 19% year-over-year, or 20% on a constant currency basis, reaching $1,541 million.
Total revenue grew by 20% year-over-year, or 21% on a constant currency basis, totaling $399 million.
GAAP operating margin was 11%, while non-GAAP operating margin reached 29%.
The company launched several new platform extensions and expanded its product capabilities, including Kubernetes Security Posture Management.
Revenue by Segment
Forward Guidance
Dynatrace is issuing guidance for the second quarter and maintaining its previous guidance for full year fiscal 2025. We now expect foreign exchange to be a headwind of approximately $12 million on ARR and approximately $10 million on revenue for fiscal 2025.
Positive Outlook
- Total revenue Q2 Fiscal 2025 Guidance: $404 - $407 million, As reported 15% - 16%, Constant currency 16% - 17%
- Subscription revenue Q2 Fiscal 2025 Guidance: $388 - $390 million, As reported 16% - 17%, Constant currency 17% - 18%
- Non-GAAP income from operations Q2 Fiscal 2025 Guidance: $113 - $116 million
- Non-GAAP operating margin Q2 Fiscal 2025 Guidance: 28% - 28.5%
- Non-GAAP net income Q2 Fiscal 2025 Guidance: $96 - $99 million
Challenges Ahead
- ARR Fiscal 2025 Guidance: $1,720 - $1,735 million, As reported 14% - 15%, Constant currency 15% - 16%
- Total revenue Fiscal 2025 Guidance: $1,644 - $1,658 million, As reported 15% - 16%, Constant currency 16% - 17%
- Subscription revenue Fiscal 2025 Guidance: $1,571 - $1,585 million, As reported 16% - 17%, Constant currency 16% - 17%
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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