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Dec 31, 2024
Dynatrace Q3 2025 Earnings Report
Dynatrace's Q3 2025 financial results surpassed expectations, driven by strong ARR and subscription revenue growth.
Key Takeaways
Dynatrace reported strong third-quarter results, exceeding guidance across all key operating metrics. The company's ARR grew by 18% on a constant currency basis, and subscription revenue increased by 21% on the same basis. Dynatrace achieved a GAAP operating margin of 11% and a non-GAAP operating margin of 30%.
ARR increased by 16%, or 18% on a constant currency basis, reaching $1,647 million.
Total revenue grew by 19%, or 20% on a constant currency basis, totaling $436 million.
Subscription revenue increased by 20%, or 21% on a constant currency basis, reaching $417 million.
GAAP EPS was $1.191, and Non-GAAP EPS was $0.37 on a dilutive basis.
Dynatrace
Dynatrace
Dynatrace Revenue by Segment
Revenue by Segment
Subscription Revenue
CapyFin.comService Revenue
CapyFin.com Forward Guidance
Dynatrace is issuing guidance for the fourth quarter and increasing its previous guidance for full year fiscal 2025.
Positive Outlook
- Total revenue for Q4 is expected to be $432 - $437 million (as reported growth of 13% - 15%).
- Subscription revenue for Q4 is expected to be $410 - $415 million (as reported growth of 14% - 15%).
- Non-GAAP income from operations for Q4 is expected to be $104 - $110 million.
- Non-GAAP net income for Q4 is expected to be $88 - $93 million.
- ARR is expected to be $1,705 - $1,715 million (as reported growth of 13% - 14%) for fiscal year 2025.
Challenges Ahead
- Foreign exchange is expected to be a headwind of approximately $38 million on ARR for fiscal 2025.
- Foreign exchange is expected to be a headwind of approximately $17 million on revenue for fiscal 2025.
- The guidance excludes the impact of any share repurchases during the fourth quarter of fiscal 2025.
- ARR prior guidance was $1,720 - $1,735 million, current guidance is $1,705 - $1,715 million.
- Prior total revenue guidance was $1,665 - $1,675 million, current guidance is $1,686 - $1,691 million.
Revenue & Expenses
Visualization of income flow from segment revenue to net income