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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.
Revenue by Segment
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.
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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