Key Highlights

  • Revenue of USD 579.9 million rose 17% and topped the consensus estimate of USD 568.03 million, led by subscriptions.
  • EPS of USD 0.54 compared with a consensus estimate of USD 0.49, while GAAP diluted EPS was USD 0.23.
  • Annual recurring Revenue grew 16% to USD 2.207 billion, though dollar-based net retention slipped to 109% from 111%.
  • The company closed its USD 815.9 million Arize Acquisition on October 1 and authorized a USD 1 billion buyback.

Dynatrace, Inc. (NYSE:DT) reported fiscal second quarter 2027 total revenue of USD 579.9 million, up 17% from USD 493.8 million a year earlier and above a consensus estimate of USD 568.03 million. EPS of USD 0.54 compared with a consensus estimate of USD 0.49, while GAAP diluted EPS was USD 0.23 versus USD 0.19 a year earlier. Net Income rose to USD 67.8 million from USD 57.2 million. Subscription revenue grew 17% to USD 553.1 million and service revenue rose to USD 26.8 million from USD 20.8 million. Annual Recurring Revenue reached USD 2.207 billion, up from USD 1.899 billion.

Operating Income and Cash Flow Expand Alongside Revenue

GAAP income from operations rose to USD 95.6 million from USD 73.0 million, and non-GAAP income from operations rose to USD 184.3 million from USD 152.8 million, equal to 31.8% of revenue against 30.9%. Gross Profit was USD 467.2 million, and total operating expenses were USD 371.5 million against USD 331.1 million. Operating Cash Flow was USD 41.1 million against USD 32.0 million, and adjusted free cash flow was USD 42.3 million against USD 27.8 million. Remaining performance obligations stood at USD 3.490 billion, of which USD 1.105 billion was billed and USD 2.385 billion unbilled. The company repurchased 5.2 million shares for USD 245.6 million during the quarter.

Capital Deployment, Liquidity and Stated Risks

Cash and cash equivalents totaled USD 2.076 billion against USD 1.097 billion at March 31, 2026, following the August 2026 issuance of 2031 exchangeable notes with USD 1.4375 billion of principal and no regular interest. The company also held USD 102.1 million of unrestricted marketable securities and had USD 500.0 million available under its revolving Credit facility. Management said these resources plus operating cash flow cover cash requirements for at least the next 12 months. The company named macroeconomic conditions, tariffs and trade policy, inflation, interest rates, currency swings and longer sales cycles among factors that could affect customer buying patterns, and said it has seen resiliency in its industry.

Acquisition, Buyback and Retention Figures Against Comparators

The Arize acquisition closed with USD 815.9 million of cash and 1.8 million restricted shares and RSUs valued at USD 98.2 million, against cash of USD 2.076 billion at quarter end. Repurchases of USD 521.1 million over six months compare with USD 95.0 million a year earlier, with USD 327.5 million left under the February 2026 authorization before the new USD 1 billion program, which may begin once that authorization is fully used. Dollar-based net retention of 109% compares with 111% a year earlier, and ARR growth of 16% compares with 17%. Contractual cash commitments total USD 667.6 million, of which USD 132.5 million falls within 12 months.