AI Firm Dynatrace Reports EPS and Revenue Beat in Fiscal Q4
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AI Firm Dynatrace Reports EPS and Revenue Beat in Fiscal Q4

In the fourth quarter of fiscal 2024, Dynatrace, an AI and automation firm, exceeded its financial targets with total revenue hitting $381 million, a 21% year-over-year increase.
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In the fourth quarter of fiscal 2024, Dynatrace (NYSE: DT) delivered remarkable financial performance, exceeding its own guidance across all key metrics.

The company reported total revenue of $381 million, marking a 21% year-over-year increase, and subscription revenue of $360 million, up 23%. The annual recurring revenue (ARR) reached $1.504 billion, reflecting a 21% growth. The GAAP income from operations stood at $23 million, with a non-GAAP income from operations at $95 million.

The GAAP earnings per share (EPS) were $0.13, while the non-GAAP EPS came in at $0.30, indicating a robust financial health.

Dynatrace’s CEO, Rick McConnell, attributed the strong quarterly results to a record number of seven-figure deals closed during the period. The company’s focus on consolidating disparate monitoring tools into a unified observability platform has resonated well with customers, driving substantial growth.

The company also announced a $500 million share repurchase program, underscoring its confidence in future growth prospects and commitment to enhancing shareholder value.

Dynatrace Beats EPS and Revenue Expectations in Fiscal Q4

Comparing Dynatrace’s actual performance against market expectations, the company outperformed both EPS and revenue projections. Analysts had anticipated an EPS of $0.27 and revenue of $375.27 million for the quarter.

However, Dynatrace exceeded these expectations with an EPS of $0.30 and revenue of $381 million. This overachievement highlights the company’s effective execution of its strategic initiatives and ability to capitalize on market opportunities.

The company’s 21% year-over-year ARR growth, reaching $1.504 billion, further surpassed expectations. This metric is crucial as it reflects the recurring nature of Dynatrace’s revenue, providing a stable and predictable income stream.

The strong performance in subscription revenue, which grew by 23%, also indicates a healthy demand for Dynatrace’s services and a successful customer retention strategy.

Dynatrace Forecasts Total Revenue for Full Year 2025 to Be Between $1.644 Billion and $1.658 Billion

Looking ahead, Dynatrace has issued optimistic guidance for the first quarter and full fiscal year 2025. The company expects ARR to be in the range of $1.720 billion to $1.735 billion, representing a 14% to 15% growth as reported, and 15% to 16% on a constant currency basis.

For the first quarter, total revenue is anticipated to be between $391 million and $393 million, with subscription revenue projected at $374 million to $376 million.

For the full fiscal year 2025, Dynatrace forecasts total revenue between $1.644 billion and $1.658 billion, with subscription revenue expected to range from $1.571 billion to $1.585 billion.

The non-GAAP income from operations is projected to be between $459 million and $467 million, with a non-GAAP operating margin of 28%. The company also anticipates a non-GAAP net income per diluted share of $1.26 to $1.29.

Disclaimer: The author does not hold or have a position in any securities discussed in the article.