Dynatrace Inc
Q1 2026 Earnings
Market Reaction
S&P 500 over the same 30 days: +2.54%.
Did DT Beat Earnings? Q1 2026 Results
Dynatrace kicked off fiscal 2026 with a decidedly strong first quarter, posting non-GAAP diluted EPS of $0.42 against a consensus estimate of $0.38, a beat of 11.55%, while revenue of $477.35 million topped expectations by 2.05% and grew 19.6% year-over-year. The primary engine behind the results was accelerating platform adoption, with Annual Recurring Revenue reaching $1.82 billion, up 18% year-over-year, and the company's DPS licensing model now accounting for over 65% of ARR as customers consolidated onto its unified observability platform. Notably, the quarter featured 12 expansion deals greater than $1 million in annual contract value, with half of those involving significant log management deployments, a product area that analysts have flagged as a key growth catalyst. Free cash flow was robust at $262.02 million, representing a 55% margin. Encouraged by the momentum, Dynatrace raised its full-year fiscal 2026 revenue guidance to $1.97 billion to $1.99 billion and lifted its non-GAAP EPS outlook to $1.58 to $1.61, signaling continued confidence in the durability of demand.
- 12 expansion deals greater than $1 million in ACV during the quarter
- Accelerating log management deployment with 50% of large deals featuring significant Log Management
- DPS licensing model adoption: over 45% of customer base and over 65% of ARR
- 10 of 12 large expansion deals involved partner collaboration
- Subscription revenue growth of 20% YoY (19% constant currency)
“We delivered a strong start to the fiscal year, exceeding guidance across all our metrics, driven by a large number of seven-figure expansion deals and accelerating log management deployment.”
Dynatrace CEO, on the earnings call
Forward Guidance & Outlook
For Q2 fiscal 2026, Dynatrace expects total revenue of $484-$489 million (16%-17% growth as reported, 15%-16% constant currency), subscription revenue of $464-$469 million, non-GAAP operating income of $140-$145 million (29%-29.5% margin), and non-GAAP EPS of $0.40-$0.41. For full-year fiscal 2026, the company raised guidance: total revenue of $1,970-$1,985 million (up $20M at midpoint from prior guidance), ARR of $1,988-$2,003 million (up $13M), subscription revenue of $1,884-$1,899 million (up $19M), non-GAAP income from operations of $563-$573 million, non-GAAP EPS of $1.58-$1.61, and free cash flow of $505-$515 million. Foreign exchange is now expected to be a tailwind of approximately $34 million on ARR and $29 million on revenue.
DT YoY Financials
DT Revenue by Segment
Figures from SEC filings and company reports. Not investment advice.