Dynatrace, Inc.

Previous wording

•Our annual recurring revenue (“ARR”) was $1,822 million as of June 30, 2025, which reflected 18% growth year-over-year;

Current wording

•Our annual recurring revenue (“ARR”) was $1,899 million as of September 30, 2025, which reflected 17% growth year-over-year;

Previous wording

•Our total revenue was $477 million, which reflected 20% growth year-over-year;

Current wording

•Our total revenue was $494 million, which reflected 18% growth year-over-year;

Previous wording

•Our subscription revenue was $458 million, which reflected 20% growth year-over-year;

Current wording

•Our subscription revenue was $473 million, which reflected 18% growth year-over-year;

Previous wording

•We delivered GAAP income from operations of $62 million and non-GAAP income from operations(1) of $143 million; and

Current wording

•We delivered GAAP income from operations of $73 million and non-GAAP income from operations(1) of $153 million; and

Previous wording

•Our net cash provided by operating activities and free cash flow(1) was $270 million and $262 million, respectively.

Current wording

•Our net cash provided by operating activities and free cash flow(1) was $32 million and $28 million, respectively.

Previous wording

•Expand and strengthen our relationships with existing customers. We plan to establish new and deeper relationships within our existing customers’ organizations and expand the breadth of our platform capabilities to provide for expansion opportunities. In addition, we believe the ease of implementation of Dynatrace provides us with the opportunity to expand adoption within our existing enterprise customers, across new customer applications, with cloud-native and development teams, and into additional business units or divisions. We also believe that our DPS licensing model will drive broader consumption of the Dynatrace platform and further expansion opportunities for customers that prefer the flexibility and predictability of pricing under that model. Over 45% of our customer base and over 65% of our ARR leveraged this flexible, scalable, and transparent subscription approach as of June 30, 2025. With access to the full Dynatrace platform, DPS customers are able to adopt Dynatrace more broadly across their IT environments, which can lead to increased consumption.

Current wording

•Expand and strengthen our relationships with existing customers. We plan to establish new and deeper relationships within our existing customers’ organizations and expand the breadth of our platform capabilities to provide for expansion opportunities. In addition, we believe the ease of implementation of Dynatrace provides us with the opportunity to expand adoption within our existing enterprise customers, across new customer applications, with cloud-native and development teams, and into additional business units or divisions. We also believe that our DPS licensing model will drive broader consumption of the Dynatrace platform and further expansion opportunities for customers that prefer the flexibility and predictability of pricing under that model. As of September 30, 2025, 50% of our customer base and 70% of our ARR leveraged this flexible, scalable, and transparent subscription approach. With access to the full Dynatrace platform, DPS customers are able to adopt Dynatrace more broadly across their IT environments, which can lead to increased consumption.

Previous wording

Service. Service revenue consists of revenue from helping our customers deploy our software in highly complex operational environments and training their personnel. We recognize the revenues associated with these professional services on a time and materials basis as we deliver the services or provide the training. We generally recognize the revenues associated with our services in the period the services are performed, provided that collection of the related receivable is reasonably assured.

Current wording

Service. Service revenue consists of revenue from helping our customers deploy our software in operational environments and training their personnel. We recognize the revenues associated with these professional services on a time and materials basis as we deliver the services or provide the training. We generally recognize the revenues associated with our services in the period the services are performed, provided that collection of the related receivable is reasonably assured.

Previous wording

Interest income, net, consists primarily of interest income from money market funds, bank deposits, debt securities held as investments, and certificates of deposits, partially offset by interest expense associated with fees on our Credit Facility (as defined later in this section) and amortization of debt issuance costs.

Current wording

Interest income, net, consists primarily of interest income from money market funds, bank deposits, and debt securities held as investments, partially offset by interest expense associated with fees on our Credit Facility (as defined later in this section) and amortization of debt issuance costs.

Previous wording

Our income tax rate varies from the U.S. federal statutory rate mainly due to (1) the net global intangible low-taxed income (“GILTI”) inclusion, (2) foreign withholding taxes, and (3) nondeductible executive compensation. We expect these items to continue to affect our income tax rate and income tax expense.

Current wording

Our income tax rate varies from the U.S. federal statutory rate mainly due to (1) the net global intangible low-taxed income (“GILTI”) inclusion, (2) foreign withholding taxes, (3) nondeductible executive compensation, and (4) the recognition of royalty income in the U.S. as a result of the intra-entity IP transfer in fiscal 2025, partially offset by the generation of U.S. foreign tax credits. We expect these items to continue to affect our income tax rate and income tax expense.

Previous wording

Subscription revenue increased by $75.9 million, or 20%, for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024, primarily due to existing customers expanding their use of the Dynatrace platform combined with the adoption of our solutions by new customers. In addition, variable on-demand consumption revenue increased $9.1 million as compared to the three months ended June 30, 2024, primarily driven by a $7.4 million benefit due to a variable consideration change in estimate.

Current wording

Subscription revenue increased by $73.3 million, or 18%, for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024, primarily due to existing customers expanding their use of the Dynatrace platform combined with the adoption of our solutions by new customers.

Previous wording

Service revenue increased by $2.2 million, or 12%, for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024. The increase was primarily due to growth in customer demand for product enablement and adoption services.

Current wording

Service revenue increased by $2.4 million, or 13%, for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024. The increase was primarily due to growth in customer demand for product enablement and adoption services.

Previous wording

Cost of subscription increased by $11.4 million, or 21%, for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024. The increase was primarily due to increased cloud-based hosting costs of $7.1 million to support the growing usage of the Dynatrace SaaS platform and increased personnel costs of $4.1 million, inclusive of a $1.5 million increase in share-based compensation, largely due to headcount growth to support our growing customer base.

Current wording

Cost of subscription increased by $12.6 million, or 23%, for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024. The increase was primarily due to increased cloud-based hosting costs of $8.3 million to support the growing usage of the Dynatrace SaaS platform and increased personnel costs of $3.3 million, inclusive of share-based compensation, largely due to headcount growth to support our growing customer base.

Previous wording

Cost of service increased by $2.6 million, or 15%, for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024. The increase was primarily the result of increased personnel costs of $3.1 million, inclusive of a $0.7 million increase in share-based compensation, as our service delivery organization has scaled to support our product enablement and adoption within our customer base.

Current wording

Cost of service increased by $2.9 million, or 17%, for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024. The increase was primarily the result of increased personnel costs, inclusive of share-based compensation, as our service delivery organization has scaled to support our product enablement and adoption within our customer base.

Previous wording

Amortization of acquired technology decreased by $3.5 million, or 81%, for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. The decrease was primarily the result of certain acquired technology becoming fully amortized during fiscal 2025.

Current wording

Amortization of acquired technology decreased by $3.5 million, or 80%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The decrease was primarily the result of certain acquired technology becoming fully amortized during fiscal 2025.

Previous wording

Subscription gross profit increased by $64.5 million, or 20%, during the three months ended June 30, 2025 as compared to the three months ended June 30, 2024. Subscription gross margin remained consistent at 86%.

Current wording

Subscription gross profit increased by $60.7 million, or 18%, during the three months ended September 30, 2025 as compared to the three months ended September 30, 2024. Subscription gross margin remained consistent at 86%.

Previous wording

Service gross profit decreased by $0.4 million during the three months ended June 30, 2025 as compared to the three months ended June 30, 2024. Service gross margin decreased to 2% for the three months ended June 30, 2025 compared to 5% for the three months ended June 30, 2024. The decrease in gross profit and gross margin was primarily due to increased share-based compensation expense.

Current wording

Service gross profit decreased by $0.5 million, or 64%, during the three months ended September 30, 2025 as compared to the three months ended September 30, 2024. Service gross margin decreased to 1% for the three months ended September 30, 2025 compared to 4% for the three months ended September 30, 2024. The decrease in gross profit and gross margin was primarily due to increased personnel costs.

Previous wording

Research and development expenses increased by $20.6 million, or 24%, for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024. The increase was primarily the result of increased personnel costs of $18.3 million, inclusive of a $5.3 million increase in share-based compensation, largely due to headcount growth to support the continued expansion of functionality and capabilities of the Dynatrace platform. Cloud-based hosting costs incurred in developing our platform also increased by $1.4 million.

Current wording

Research and development expenses increased by $19.6 million, or 21%, for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024. The increase was primarily the result of increased personnel costs of $15.7 million, inclusive of a $3.1 million increase in share-based compensation, largely due to headcount growth to support the continued expansion of functionality and capabilities of the Dynatrace platform. Cloud-based hosting costs incurred in developing our platform also increased by $1.8 million.

Previous wording

Sales and marketing expenses increased by $20.2 million, or 14%, for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024. The increase was primarily due to increased personnel costs of $19.5 million, inclusive of a $4.0 million increase in share-based compensation, due to headcount growth as we continue to invest in our go-to-market strategy.

Current wording

Sales and marketing expenses increased by $23.5 million, or 16%, for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024. The increase was primarily due to increased personnel costs of $20.6 million, inclusive of a $1.8 million increase in share-based compensation, due to headcount growth as we continue to invest in our go-to-market strategy.

Previous wording

Interest income, net, was $12.3 million for the three months ended June 30, 2025 compared to $12.8 million for the three months ended June 30, 2024. The decrease was primarily the result of lower interest rates, partially offset by increased cash, cash equivalents, and investment balances.

Current wording

Interest income, net, was $13.2 million for the three months ended September 30, 2025 compared to $12.9 million for the three months ended September 30, 2024. The increase was primarily the result of increased cash, cash equivalents, and investment balances.

Previous wording

Other income, net, was $6.8 million for the three months ended June 30, 2025 compared to other expense, net, of $2.0 million for the three months ended June 30, 2024. The change was primarily the result of foreign currency realized and unrealized gains and losses related to the impact of transactions denominated in a foreign currency, including balances between subsidiaries.

Current wording

Other income, net, was $0.9 million for the three months ended September 30, 2025 compared to other expense, net, of $2.0 million for the three months ended September 30, 2024. The change was primarily the result of foreign currency realized and unrealized gains and losses related to the impact of transactions denominated in a foreign currency, including balances between subsidiaries.

Previous wording

Income tax expense was $33.4 million for the three months ended June 30, 2025, which increased by $19.3 million from $14.1 million for the three months ended June 30, 2024. This increase was due to the intra-entity asset transfer of the global economic rights of our IP to Switzerland in fiscal 2025 resulting in an increase to the GILTI inclusion, primarily due to an increase in capitalized research and development expenses within GILTI, a decrease to the foreign-derived intangible income deduction, and establishment of a current year uncertain tax position. We elect to treat GILTI as a period cost for GAAP purposes.

Current wording

Income tax expense was $29.9 million for the three months ended September 30, 2025, which increased by $16.1 million from $13.8 million for the three months ended September 30, 2024. This increase was due to an increase to pre-tax income, the intra-entity asset transfer of the global economic rights of our IP to Switzerland in fiscal 2025 resulting in an increase to the GILTI inclusion, primarily due to an increase in capitalized foreign research and development expenses within GILTI, a decrease to the foreign-derived intangible income deduction, and changes to our uncertain tax positions. We elect to treat GILTI as a period cost for GAAP purposes.

Previous wording

General and administrative expenses increased $11.3 million, or 25%, for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024. The increase was primarily the result of increased personnel costs of $5.6 million, inclusive of a $2.8 million increase in share-based compensation, as we continue to scale our functions to support our continued growth. In addition other administrative costs increased by $3.0 million and professional fees increased by $1.3 million.

Current wording

General and administrative expenses increased $10.8 million, or 12%, for the six months ended September 30, 2025, as compared to the six months ended September 30, 2024. The increase was primarily the result of increased personnel costs of $7.7 million, inclusive of a $2.7 million increase in share-based compensation, as we continue to scale our functions to support our continued growth.

Previous wording

We have historically maintained a disciplined and balanced approach to optimizing costs and improving the efficiency and profitability of our business, while continuing to invest in future growth opportunities that we expect will drive long-term value. Our principal sources of liquidity are cash and cash equivalents, marketable securities (investments) and cash provided by operating activities. From time to time, we may borrow under our Credit Facility (as defined below). As of June 30, 2025, we had $1,247.4 million of cash and cash equivalents, $149.7 million of investments, primarily consisting of U.S. Treasury securities, corporate debt securities, commercial paper, and U.S. agency securities, that have maturities between one and 30 months, and $399.0 million available under our Credit Facility.

Current wording

We have historically maintained a disciplined and balanced approach to optimizing costs and improving the efficiency and profitability of our business, while continuing to invest in future growth opportunities that we expect will drive long-term value. Our principal sources of liquidity are cash and cash equivalents, marketable securities (investments) and cash provided by operating activities. From time to time, we may borrow under our Credit Facility (as defined below). As of September 30, 2025, we had $1,225.0 million of cash and cash equivalents, $144.2 million of investments, primarily consisting of U.S. Treasury securities, corporate debt securities, U.S. agency securities, and commercial paper that have maturities between one and 30 months, and $399.0 million available under our Credit Facility.

Previous wording

Our material cash requirements from known contractual and other obligations consist of our rent payments required under operating lease agreements and non-cancelable purchase obligations entered into in the ordinary course of business, primarily for cloud hosting support. As of June 30, 2025, total contractual commitments were $757.4 million, with $111.3 million committed within the next 12 months.

Current wording

Our material cash requirements from known contractual and other obligations consist of our rent payments required under operating lease agreements and non-cancelable purchase obligations entered into in the ordinary course of business, primarily for cloud hosting support. As of September 30, 2025, total contractual commitments were $729.8 million, with $92.5 million committed within the next 12 months.

Previous wording

We announced a share repurchase program for up to $500 million of common stock on May 15, 2024. For the three months ended June 30, 2025 and 2024, we repurchased and retired 0.9 million and 1.1 million shares of our common stock for a total of $45.0 million and $50.1 million, respectively. As of June 30, 2025, $282.4 million remained available for future repurchases. For additional information, please see Part II, Item 2 of this Quarterly Report.

Current wording

In May 2024, we announced a share repurchase program for up to $500 million of common stock. For the three months ended September 30, 2025 and 2024, we repurchased and retired 1.0 million and 0.8 million shares of our common stock for a total of $50.0 million and $40.0 million, respectively. For the six months ended September 30, 2025 and 2024, we repurchased and retired 1.9 million shares of our common stock for a total of $95.0 million and $90.1 million, respectively. As of September 30, 2025, $232.3 million remained available for future repurchases. For additional information, please see Part II, Item 2 of this Quarterly Report.

Previous wording

Net cash provided by operating activities was $269.7 million during the three months ended June 30, 2025 as compared to $230.7 million during the three months ended June 30, 2024. The $39.0 million increase in net cash provided by operating activities was driven by increased net income, adjusted for non-cash charges, of $33.8 million, and favorable changes in operating assets and liabilities of $5.1 million. The net increase in operating cash flow was primarily due to higher collections driven by revenue growth.

Current wording

Net cash provided by operating activities was $301.7 million during the six months ended September 30, 2025 as compared to $254.4 million during the six months ended September 30, 2024. The $47.3 million increase in net cash provided by operating activities was driven by increased net income, adjusted for non-cash charges, of $62.9 million, partially offset by a decrease in the net changes of operating assets and liabilities of $15.6 million. The net increase in operating cash flow was primarily due to higher collections driven by revenue growth.

Previous wording

Net cash used in investing activities was $8.4 million during the three months ended June 30, 2025 as compared to $35.6 million during the three months ended June 30, 2024. The $27.1 million decrease in net cash used in investing activities was driven by a $31.4 million decrease in purchases of investments, net of proceeds from sales and maturities, partially offset by a $4.1 million increase in the purchases of property and equipment.

Current wording

Net cash used in investing activities was $6.5 million during the six months ended September 30, 2025 as compared to $46.6 million during the six months ended September 30, 2024. The $40.1 million decrease in net cash used in investing activities was driven by a $45.0 million increase in proceeds from sales and maturities of investments, net of purchases, partially offset by a $4.8 million increase in the purchases of property and equipment.

Previous wording

Net cash used in financing activities was $43.9 million during the three months ended June 30, 2025 as compared to $42.8 million during the three months ended June 30, 2024. The $1.0 million increase in net cash used in financing activities was driven by a $2.2 million payment of deferred consideration related to the acquisition of Runecast Solutions Limited, a $2.0 million increase of taxes paid for net share settlement of equity awards, and a $1.8 million decrease in proceeds from exercise of stock options, partially offset by a $3.5 million decrease in repurchases of common stock and a $1.5 million increase in proceeds from the employee share purchase plan.

Current wording

Net cash used in financing activities was $99.1 million during the six months ended September 30, 2025 as compared to $84.6 million during the six months ended September 30, 2024. The $14.5 million increase in net cash used in financing activities was driven by a $5.0 million decrease in proceeds from exercise of stock options, a $4.9 million increase in repurchases of common stock, a $4.4 million increase in taxes paid for net share settlement of equity awards, and a $1.7 million increase in other financing activities, consisting of deferred consideration paid for an acquisition of a business and capitalized software additions, partially offset by a $1.5 million increase in proceeds from the employee share purchase plan.

Previous wording

There have been no significant changes in our critical accounting policies and estimates during the three months ended June 30, 2025, as compared to the critical accounting policies and estimates disclosed within “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report.

Current wording

There have been no significant changes in our critical accounting policies and estimates during the six months ended September 30, 2025, as compared to the critical accounting policies and estimates disclosed within “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report.