Dynatrace Inc
DT
$44.45 0.32%
Exchange: NYSE | Sector: Technology | Industry: Software Application
Q2 2026
Published: Nov 5, 2025

Earnings Highlights

  • Revenue of $493.85M up 18.1% year-over-year
  • EPS of $0.19 increased by 26.7% from previous year
  • Gross margin of 81.8%
  • Net income of 57.24M
  • ""AI-powered observability is mission-critical to software reliability and performance, especially in an evolving agentic world."" - Rick McConnell
DT
Company DT

Executive Summary

Dynatrace reported a solid Q2 FY2026, delivering 16% year-over-year ARR growth to $1.90 billion and total revenue of $494 million, led by subscription revenue of $473 million (+17%). Gross margin stood at 81.8% with non-GAAP operating margin of 31% for the quarter, and trailing-12-month free cash flow represented 32% of revenue. Management reinforced a strategic shift toward end-to-end observability and autonomous operations powered by the third-generation platform (Grail data lake, Smartscape topology, Davis AI, Copilot remediation). The company raised its full-year guidance, highlighting durable demand for platform adoption, large-scale tool consolidation, and the accelerating consumption backdrop, particularly in logs. Management also emphasized DPS as the de facto contracting model, with 50% of customers and 70% of ARR on DPS by Q2, signaling higher cross-sell and consumption velocity. Key growth drivers include logs (fastest-growing category near $100M annualized consumption), a maturing partner ecosystem (GSIs, hyperscalers), and strategic collaborations (ServiceNow, Atlassian, GitHub). While the near-term outlook remains constructive, the firm acknowledged timing variability in large-scale deals and a macro environment that remains dynamic in EMEA, guiding a prudent second half. Investors should monitor DPS adoption trajectory, platform consumption as a leading indicator for expansions, and potential headwinds from revenue recognition shifts impacting quarterly ODC revenue cadence.

Key Performance Indicators

Revenue
Increasing
493.85M
QoQ: 3.46% | YoY: 18.11%
Gross Profit
Increasing
404.09M
81.82% margin
QoQ: 3.05% | YoY: 18.73%
Operating Income
Increasing
72.97M
QoQ: 17.05% | YoY: 55.17%
Net Income
Increasing
57.24M
QoQ: 19.37% | YoY: 30.07%
EPS
Increasing
0.19
QoQ: 18.75% | YoY: 26.67%

Revenue Trend

Margin Analysis

Historical Earnings Comparison

PeriodRevenue ($M)EPS ($)YoY GrowthReport
Q2 2026 493.85 0.19 +18.1% View
Q1 2026 477.35 0.16 +19.6% View
Q4 2025 445.17 0.13 +16.9% View
Q3 2025 436.17 1.19 +19.5% View
Q2 2025 418.13 0.15 +18.9% View