Q1 FY2027
Filed Aug 5, 2026alphai · Earnings readDT · First Quarter Fiscal 2027 · ended June 30, 2026
Dynatrace Reports First Quarter Fiscal Year 2027 Financial Results
✓Strong quarter
Dynatrace reported 17% ARR growth, 16% total revenue growth, record new logo ARR growth of more than 160%, and stated that it exceeded the high end of guidance across all metrics. The company also generated $309,177 in adjusted free cash flow and repurchased $275 million of stock.
Revenue
$ 554,548 (In thousands)
16% y/y
Operating margin · GAAP
13%
EPS · non-GAAP
$ 0.48
Fiscal 2027 and Q2 Fiscal 2027 outlook
Fiscal 2027: $2,306 - $2,320; Q2 Fiscal 2027: $565 - $570
Actuals vs. the company’s prior outlook
from its previous release| Metric | Guided | Reported | Verdict |
|---|---|---|---|
| Fiscal 2027 ARR | $2,382 - $2,402 | Not reported for full year fiscal 2027 | n/a |
| Fiscal 2027 total revenue | $2,317 - $2,335 | Not reported for full year fiscal 2027 | n/a |
| Fiscal 2027 subscription revenue | $2,217 - $2,235 | Not reported for full year fiscal 2027 | n/a |
| Fiscal 2027 non-GAAP income from operations | $682 - $690 | Not reported for full year fiscal 2027 | n/a |
| Fiscal 2027 non-GAAP net income | $584 - $594 | Not reported for full year fiscal 2027 | n/a |
| Fiscal 2027 non-GAAP net income per diluted share | $1.93 - $1.95 | Not reported for full year fiscal 2027 | n/a |
| Fiscal 2027 adjusted free cash flow | $613 - $620 | Not reported for full year fiscal 2027 | n/a |
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total ARRother | $ 2,135,982 (In thousands) | – | 17% |
| Total ARR year-over-year increase constant currencyother | 17% | – | – |
| Total revenueGAAP | $ 554,548 (In thousands) | – | 16% |
| Total revenue year-over-year increase constant currencyother | 15% | – | – |
| Subscription revenueGAAP | $ 530,255 (In thousands) | – | 16% |
| Subscription revenue year-over-year increase constant currencyother | 15% | – | – |
| GAAP income from operationsGAAP | $ 71,476 (In thousands) | – | – |
| GAAP operating marginGAAP | 13% | – | – |
| GAAP net incomeGAAP | $ 36,651 (In thousands) | – | – |
| GAAP net income per share - dilutedGAAP | $ 0.12 | – | – |
| GAAP shares outstanding - dilutedGAAP | 293,744 (In thousands) | – | – |
| Net cash provided by operating activitiesGAAP | $ 306,240 (In thousands) | – | – |
| Net cash provided by operating activities as a percent of revenueGAAP | 55% | – | – |
| Non-GAAP income from operationsnon-GAAP | $ 161,600 (In thousands) | – | – |
| Non-GAAP operating marginnon-GAAP | 29% | – | – |
| Non-GAAP net incomenon-GAAP | $ 139,721 (In thousands) | – | – |
| Non-GAAP net income per share - dilutednon-GAAP | $ 0.48 | – | – |
| Non-GAAP shares outstanding - dilutednon-GAAP | 293,744 (In thousands) | – | – |
| Adjusted free cash flownon-GAAP | $ 309,177 (In thousands) | – | – |
| Adjusted free cash flow marginnon-GAAP | 56% | – | – |
| Organic net new ARR growthother | 41% | – | – |
| Annualized logs consumptionother | $200 million | – | well over 100% year-over-year |
| New logo ARR growthother | more than 160% | – | – |
Fiscal 2027 and Q2 Fiscal 2027 outlook
- RevenueFiscal 2027: $2,306 - $2,320; Q2 Fiscal 2027: $565 - $570
- NoteFiscal 2027 ARR: $2,359 - $2,379
- NoteFiscal 2027 ARR as reported: 15% - 16%
- NoteFiscal 2027 ARR constant currency: 15.5% - 16.5%
- NoteFiscal 2027 total revenue as reported: 14% - 15%
- NoteFiscal 2027 total revenue constant currency: 14.5% - 15%
- NoteFiscal 2027 subscription revenue: $2,206 - $2,220
- NoteFiscal 2027 subscription revenue as reported: 14% - 15%
- NoteFiscal 2027 subscription revenue constant currency: 14.5% - 15%
- NoteFiscal 2027 non-GAAP income from operations: $682 - $690
- NoteFiscal 2027 non-GAAP operating margin: 29.5% - 29.75%
- NoteFiscal 2027 non-GAAP net income: $581 - $591
- NoteFiscal 2027 non-GAAP net income per diluted share: $1.97 - $1.99
- NoteFiscal 2027 diluted weighted average shares outstanding: 295 - 297
- NoteFiscal 2027 adjusted free cash flow: $610 - $615
- NoteFiscal 2027 adjusted free cash flow margin: 26.5%
- NoteQ2 Fiscal 2027 total revenue as reported: 14% - 15%
- NoteQ2 Fiscal 2027 total revenue constant currency: 15% - 16%
- NoteQ2 Fiscal 2027 subscription revenue: $540 - $545
- NoteQ2 Fiscal 2027 subscription revenue as reported: 14% - 15%
- NoteQ2 Fiscal 2027 subscription revenue constant currency: 15% - 16%
- NoteQ2 Fiscal 2027 non-GAAP income from operations: $166 - $170
- NoteQ2 Fiscal 2027 non-GAAP operating margin: 29.5% - 30%
- NoteQ2 Fiscal 2027 non-GAAP net income: $141 - $145
- NoteQ2 Fiscal 2027 non-GAAP net income per diluted share: $0.48 - $0.49
- NoteQ2 Fiscal 2027 diluted weighted average shares outstanding: 293 - 294
- NoteForeign exchange headwind for fiscal 2027: approximately $14 million on ARR and approximately $4 million on revenue
Capital returns
- During the first quarter of fiscal 2027, Dynatrace spent $275 million to repurchase 7.1 million shares at an average price of $38.88.
What drove it
- Demand continues to strengthen as enterprises expand cloud-native workloads and accelerate their AI initiatives.
- The company reported four consecutive quarters of acceleration in trailing-twelve-month organic net new ARR growth.
- Annualized logs consumption nearly doubled in the last two quarters to $200 million.
- Dynatrace launched the private preview of Dynatrace Bluebox and delivered new Dynatrace Intelligence capabilities including Autonomous SRE agent, Cloud SE agent, and Agent Building.
Concerns
- GAAP net income was $ 36,651 (In thousands), compared with $ 47,955 (In thousands) in the prior-year period.
- GAAP net income per share - diluted was $ 0.12, compared with $ 0.16 in the prior-year period.
- Non-GAAP operating margin was 29%, compared with 30% in the prior-year period.
- Fiscal 2027 as-reported ARR, total revenue, and subscription revenue guidance was reduced from prior guidance, while the company cited foreign exchange headwinds.
- Jim Benson will resign as Chief Financial Officer by the company’s current fiscal year end on March 31, 2027.
What to watch
- Execution toward the fiscal 2027 ARR guidance range of $2,359 - $2,379.
- The effect of the approximately $14 million foreign exchange headwind on ARR and approximately $4 million headwind on revenue for fiscal 2027.
- Whether annualized logs consumption continues to grow well over 100% year-over-year.
- Progress in the CFO search and transition before March 31, 2027.
- Further share repurchases after June 30, 2026, which are excluded from guidance.
Balance sheet and cash flow
- Net cash provided by operating activities: $ 306,240 (In thousands)
- Adjusted free cash flow: $ 309,177 (In thousands)
- Adjusted free cash flow margin: 56%
Analysis
Dynatrace opened fiscal 2027 with $ 2,135,982 in total ARR and 17% ARR growth on both an as-reported and constant-currency basis. Total revenue was $ 554,548, up 16%, while subscription revenue was $ 530,255, also up 16%. Management characterized the quarter as exceeding the high end of its top-line and profitability guidance. The company also reported 41% organic net new ARR growth and record new logo ARR growth of more than 160%.
Management, verbatim
Dynatrace delivered an exceptional quarter, led by 41% organic net new ARR growth.
Rick McConnell, Chief Executive Officer of Dynatrace
Demand continues to strengthen as enterprises expand cloud-native workloads and accelerate their AI initiatives.
Rick McConnell, Chief Executive Officer of Dynatrace
In Q1, we exceeded the high end of our top-line and profitability guidance, increased free cash flow, and returned capital to shareholders.
Jim Benson, Chief Financial Officer, Dynatrace
Not in the filing
stated, not guessed- Gross profit and gross margin
- Operating expenses
- Tax rate
- Cash balance
- Debt balance
- Capital expenditures
- Dividend information
- Revenue by operating segment
- ARR or revenue by operating segment
- Prior-quarter comparisons for reported first-quarter metrics
- Actual full-year fiscal 2027 results for comparison with prior full-year guidance
- Q1 fiscal 2027 guidance ranges issued previously
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.