"Given recent industry-wide outages that have impacted billions of end users globally, observability software has become mandatory." - Rick McConnell
— Rick McConnell
03Detailed Report
DT
Dynatrace Inc
Period
Q1 2025
CurrencyUSD
Report TypeQuarterly Earnings
GeneratedJun 17, 2026
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Executive Summary
Dynatrace Inc reported robust financial results for the first quarter of fiscal year 2025, achieving a revenue of $399 million, up 21% year-over-year in constant currency. The Annual Recurring Revenue (ARR) reached $1.54 billion, reflecting a 20% increase and underscoring the company's strong market momentum driven by higher customer demand for their observability platform. Notably, net income was $38.62 million, or $0.13 per diluted share, exceeding expectations guidance, signaling resilience in a competitive landscape. Management expressed optimism about the growing adoption of observability solutions, propelled by AI and cloud migration trends, while maintaining a prudent stance on guidance amid market fluctuations. Overall, the fiscal outlook remains positive, bolstered by continued investments in product innovation and customer success initiatives.
Key Performance Indicators
Revenue
Increasing
399.22M
QoQ: 4.82% | YoY: 19.93%
Gross Profit
Increasing
324.47M
81.28% margin
QoQ: 5.01% | YoY: 19.93%
Operating Income
Increasing
42.03M
QoQ: 81.76% | YoY: 22.58%
Net Income
Increasing
38.62M
QoQ: 1.78% | YoY: 1.13%
EPS
Stable
0.13
QoQ: 0.00% | YoY: 0.00%
Revenue Trend
Margin Analysis
Financial Highlights
### Financial Performance Metrics
1. Revenue: $399 million, up from $330 million YoY (21% increase)
2. ARR: $1.54 billion, reflecting a 20% increase YoY.
3. Net Income: $38.62 million, compared to $38.28 million YoY (1.13% increase).
4. Earnings per Share: $0.13, consistent with Q1 2024.
5. Gross Margin: 81.28%, a slight improvement compared to previous quarters.
6. Operating Income: $42.03 million, 10.53% of revenue.
7. Free Cash Flow: $227 million, highlighting strong cash generation with approximately 30% margin on revenue.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
399.22M
19.93%
4.82%
Gross Profit
324.47M
19.93%
5.01%
Operating Income
42.03M
22.58%
81.76%
Net Income
38.62M
1.13%
1.78%
EPS
0.13
0.00%
0.00%
Key Financial Ratios
Gross Profit Margin
Excellent
81.30%
Gross profit margin is exceptional, indicating strong pricing power and operational efficiency
Operating Profit Margin
Fair
10.50%
Operating margin is moderate, room for improvement in cost management
Net Profit Margin
Fair
9.67%
Net profit margin is moderate, room for improvement in cost management
Return on Assets
Weak
1.19%
Return on assets suggests inefficient capital allocation
Return on Equity
Weak
1.87%
Return on equity suggests inefficient capital allocation
Current Ratio
Adequate
1.36
Current ratio meets minimum requirements but limited cushion
Debt to Equity
Conservative
0.04
Debt-to-equity shows conservative leverage and low financial risk
P/E Ratio
High Growth
86.76x
Very high P/E indicates aggressive growth expectations, higher risk
Price to Book
High Premium
6.48x
Very high premium suggests asset-light business model or lofty expectations
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