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Dec 31, 2025
Dynatrace Q3 2026 Earnings Report
Dynatrace exceeded its Q3 FY26 guidance across all metrics, demonstrating strong growth in ARR and revenue, alongside robust profitability and a new share repurchase program.
Key Takeaways
Dynatrace reported strong third-quarter fiscal year 2026 financial results, surpassing the high end of its guidance for all top-line growth and profitability metrics. The company achieved significant increases in total ARR, total revenue, and subscription revenue, both on an as-reported and constant currency basis. Profitability also saw a notable rise, with GAAP operating margin reaching 14% and non-GAAP operating margin at 30%. Additionally, Dynatrace announced a new $1 billion share repurchase program, reflecting confidence in its business strength and commitment to shareholder value.
Total ARR reached $1,972 million, marking a 20% increase year-over-year, or 16% on a constant currency basis.
Total revenue grew by 18% to $515 million, with subscription revenue also increasing by 18% to $493 million.
GAAP operating margin improved to 14%, while non-GAAP operating margin remained strong at 30%.
The company announced a new $1 billion share repurchase program, following the near completion of its previous $500 million program.
Revenue by Segment
Forward Guidance
Dynatrace has raised its full-year fiscal 2026 guidance across all key metrics, including ARR, total revenue, subscription revenue, non-GAAP income from operations, non-GAAP net income, and free cash flow. The company anticipates continued strong growth, with foreign exchange expected to be a tailwind. For Q4 Fiscal 2026, Dynatrace projects total revenue between $518 million and $523 million, and non-GAAP operating margin of 26%.
Positive Outlook
- Raised full-year fiscal 2026 guidance for ARR to $2,053 - $2,061 million, an increase of $40 million at the midpoint.
- Increased full-year fiscal 2026 total revenue guidance to $2,005 - $2,010 million, an $18 million increase at the midpoint.
- Boosted full-year fiscal 2026 non-GAAP income from operations guidance to $582 - $587 million, a $9 million increase at the midpoint.
- Raised full-year fiscal 2026 non-GAAP net income per diluted share guidance to $1.67 - $1.69, a $0.05 increase at the midpoint.
- Increased full-year fiscal 2026 free cash flow guidance to $520 - $525 million, a $13 million increase at the midpoint.
Challenges Ahead
- Non-GAAP operating margin guidance for Q4 Fiscal 2026 is 26%, which is lower than the 30% achieved in Q3 Fiscal 2026.
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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