Dynatrace, Inc.
For the period ended Dec 31, 2025. Filed Feb 9, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Dec 31, 2025 · Filed Feb 9, 2026
DT$43.44-0.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-05.
0001628280-25-049225
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-12-31; filed 2026-02-09.
0001773383-26-000008
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 137 previous paragraphs and 144 current paragraphs.
85 unchanged; 46 reworded; 12 added; 5 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 18 previous and 17 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (12)
Current report
Third-Quarter 2026 Financial Highlights
Current report
Other Income (Expense), Net
Current report
Income Tax Benefit
Current report
During the three months ended December 31, 2024, we completed an intra-entity asset transfer of the global economic rights of our IP from a wholly-owned U.S. subsidiary to a wholly-owned Swiss subsidiary, more closely aligning our IP rights with our business operations (the “IP Transfer”). The transaction is taxable in the U.S. through 2044. In Switzerland, the transaction resulted in a step-up of tax-deductible basis in the transferred assets, and accordingly, created a temporary difference where the tax basis exceeded the financial statement basis of such intangible assets, which resulted in the recognition of a tax benefit and related deferred tax asset of $320.9 million. We determined the estimated value of the transferred IP based principally on the present value of projected income related to the IP, requiring management to make significant assumptions related to the discount rate and the forecast of future revenues and expenses. The tax-deductible amortization related to the transferred IP rights will be recognized through 2035. The deferred tax asset and tax benefit were measured based on the enacted tax rates expected to apply in the years the asset is expected to be realized. We expect to realize the deferred tax asset resulting from the IP Transfer.
Current report
General and administrative expenses increased $2.9 million, or 6%, for the three months ended December 31, 2025 as compared to the three months ended December 31, 2024. The increase was primarily due to increased personnel costs of $4.8 million, inclusive of a $1.1 million increase in share-based compensation, as we continue to scale our functions to support our continued growth. This increase was partially offset by decreased professional fees of $2.3 million.
Current report
Other Expense, Net
Current report
Income Tax (Expense) Benefit
Current report
Comparison of the Nine Months Ended December 31, 2025 and 2024
Current report
Subscription gross profit increased by $188.2 million, or 18%, during the nine months ended December 31, 2025 compared to the nine months ended December 31, 2024. Subscription gross margin decreased to 85% for the nine months ended December 31, 2025 compared to 86% for the nine months ended December 31, 2024. Gross margin decreased primarily due to higher cloud hosting expenses, which were driven by increased customer utilization of the Dynatrace SaaS platform and expanding adoption of platform features.
Current report
Other Income (Expense), Net
Current report
Income Tax (Expense) Benefit
Current report
As of February 9, 2026, we substantially completed repurchases under the $500 million share repurchase program and on that date we announced a new share repurchase program for up to $1 billion of common stock. For additional information, refer to Note 10, Shareholders’ Equity, of the condensed consolidated financial statements in this Quarterly Report.
Removed paragraphs (5)
Previous report
Second-Quarter 2026 Financial Highlights
Previous report
General and administrative expenses decreased $0.5 million, or 1%, for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024. The decrease was primarily the result of decreased professional fees of $2.2 million and other administrative costs of $1.1 million, partially offset by increased personnel costs of $2.2 million, inclusive of share-based compensation.
Previous report
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 report
Comparison of the Six Months Ended September 30, 2025 and 2024
Previous report
(1)Net cash provided by operating activities includes cash payments for interest and tax as follows:
Reworded paragraphs (46)
Previous wording
•Our annual recurring revenue (“ARR”) was $1,899 million as of September 30, 2025, which reflected 17% growth year-over-year;
Current wording
•Our annual recurring revenue (“ARR”) was $1,972 million as of December 31, 2025, which reflected 20% growth year-over-year;
Previous wording
•Our total revenue was $494 million, which reflected 18% growth year-over-year;
Current wording
•Our total revenue was $515 million, which reflected 18% growth year-over-year;
Previous wording
•Our subscription revenue was $473 million, which reflected 18% growth year-over-year;
Current wording
•Our subscription revenue was $493 million, which reflected 18% growth year-over-year;
Previous wording
•Our net cash provided by operating activities and free cash flow(1) was $32 million and $28 million, respectively.
Current wording
•Our net cash provided by operating activities and free cash flow(1) was $34 million and $27 million, respectively.
Previous wording
•Extend our technology and market leadership position. We intend to maintain our position as a leading AI-powered observability platform through increased investment in innovation, research and development, and innovation. We plan to expand the functionality of our end-to-end Dynatrace platform and invest in capabilities that address new market opportunities. For example, in fiscal 2026, we believe we are well positioned to grow our next generation log management offering, which integrates logs, traces, metrics, and other core observability and security data types into a single platform, providing customers with greater value than legacy log management solutions that are viewed as too expensive, providing too little value, or largely operating independently from existing monitoring tools. We also plan to evolve our AI capabilities to drive differentiation, with a focus on evolving into an agentic AI platform that can act autonomously to make decisions and take actions without human intervention. We believe this strategy will enable new growth opportunities and allow us to deliver differentiated high-value outcomes to our customers.
Current wording
•Extend our technology and market leadership position. We intend to maintain our position as a leading AI-powered observability platform through increased investment in research and development, and innovation. We plan to expand the functionality of our end-to-end Dynatrace platform and invest in capabilities that address new market opportunities. For example, we believe we are well positioned to grow our next generation log management offering, which integrates logs, traces, metrics, and other core observability and security data types into a single platform, providing customers with greater value than legacy log management solutions that are viewed as too expensive, providing too little value, or largely operating independently from existing monitoring tools. We also plan to evolve our AI capabilities to drive differentiation, with a focus on evolving into an agentic AI platform that can act autonomously to make decisions and take actions without human intervention. We believe this strategy will enable new growth opportunities and allow us to deliver differentiated high-value outcomes to our customers.
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. 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.
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. 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
Amortization of acquired technology. Amortization of acquired technology includes amortization expense for technology acquired when our former controlling stockholder (the Thoma Bravo Funds) acquired our company in 2014 and from business combinations and asset acquisitions. During the year ended March 31, 2025, the acquired technology from the Thoma Bravo Funds’ acquisition of our company became fully amortized, therefore we expect amortization expense to decrease as compared to historical periods.
Current wording
Amortization of acquired technology. Amortization of acquired technology includes amortization expense for technology acquired when our former controlling stockholder (the Thoma Bravo Funds) acquired our company in 2014 and from business combinations and asset acquisitions. As the acquired technology from the Thoma Bravo Funds’ acquisition of our company became fully amortized during the year ended March 31, 2025, we expect amortization expense to decrease as compared to historical periods.
Previous wording
Amortization of other intangibles. Amortization of other intangibles primarily consists of amortization of customer relationships and tradenames acquired when our former controlling stockholder (the Thoma Bravo Funds) acquired our company in 2014 and from business combinations. During the year ended March 31, 2025, the customer relationships and tradenames acquired from the Thoma Bravo Funds' acquisition of our company became fully amortized, therefore we expect amortization expense to decrease as compared to historical periods.
Current wording
Amortization of other intangibles. Amortization of other intangibles primarily consists of amortization of customer relationships and tradenames acquired when our former controlling stockholder (the Thoma Bravo Funds) acquired our company in 2014 and from business combinations. As the customer relationships and tradenames acquired from the Thoma Bravo Funds’ acquisition of our company became fully amortized during the year ended March 31, 2025, we expect amortization expense to decrease as compared to historical periods.
Previous wording
We are subject to income taxes in both the United States and numerous foreign jurisdictions. Significant judgments and estimates are required in determining the consolidated income tax expense.
Current wording
We are subject to income taxes in both the United States and numerous foreign jurisdictions. Significant judgments and estimates are required in determining the consolidated income tax benefit.
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, (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.
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 “IP Transfer” (as defined below) 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 benefit.
Previous wording
Many countries have enacted or are in the process of enacting laws based on the Pillar Two proposal relating to a 15% global minimum tax issued by the Organization for Economic Cooperation and Development (“OECD”). For fiscal 2026, we do not expect these provisions to have a material impact on our condensed consolidated financial statements based on the guidance available thus far. We will continue to monitor ongoing developments and evaluate any potential impact on future periods.
Current wording
Many countries have enacted or are in the process of enacting laws based on the Pillar Two proposal relating to a 15% global minimum tax issued by the Organization for Economic Cooperation and Development (“OECD”). For fiscal 2026, we do not expect these provisions to have a material impact on our condensed consolidated financial statements based on the guidance available thus far. On January 5, 2026, the OECD released administrative guidance on a “side-by-side” system that would exempt U.S. parented multinational businesses from certain provisions of Pillar Two, effective for fiscal years beginning on or after January 1, 2026. We will continue to monitor ongoing developments and evaluate any potential impact on future periods.
Previous wording
On July 4, 2025, the “One Big Beautiful Bill Act” (the “OBBBA”) was enacted into law. The OBBBA contains a broad range of tax reform provisions including immediate expensing of domestic R&D expenditures, the reinstatement of 100% bonus depreciation, and modifications to the international tax framework. The OBBBA has multiple effective dates, with certain provisions effective in fiscal 2026 and other provisions effective in subsequent years. The OBBBA does not have a material impact on fiscal 2026. We are evaluating the potential impact of the provisions effective in future years, however we do not anticipate the OBBBA will have a material impact.
Current wording
On July 4, 2025, the “One Big Beautiful Bill Act” (the “OBBBA”) was enacted into law. The OBBBA contains a broad range of tax reform provisions including immediate expensing of domestic research and development expenditures, the reinstatement of 100% bonus depreciation, and modifications to the international tax framework. The OBBBA has multiple effective dates, with certain provisions effective in fiscal 2026 and other provisions effective in subsequent years. The OBBBA does not have a material impact on fiscal 2026. We are evaluating the potential impact of the provisions effective in future years, however we do not anticipate the OBBBA will have a material impact.
Previous 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.
Current wording
Subscription revenue increased by $76.2 million, or 18%, for the three months ended December 31, 2025 as compared to the three months ended December 31, 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 $2.4 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.
Current wording
Service revenue increased by $3.1 million, or 17%, for the three months ended December 31, 2025 as compared to the three months ended December 31, 2024. The increase was primarily due to growth in customer demand for product enablement and adoption services.
Previous 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.
Current wording
Cost of subscription increased by $13.2 million, or 22%, for the three months ended December 31, 2025 as compared to the three months ended December 31, 2024. The increase was primarily due to increased cloud-based hosting costs of $9.5 million to support the growing usage of the Dynatrace SaaS platform and increased personnel costs of $2.7 million, inclusive of share-based compensation, largely due to headcount growth to support our growing customer base.
Previous wording
Cost of service increased by $2.9 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.
Current wording
Cost of service increased by $3.0 million, or 17%, for the three months ended December 31, 2025 as compared to the three months ended December 31, 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 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.
Current wording
Amortization of acquired technology decreased by $2.9 million, or 77%, for the three months ended December 31, 2025 compared to the three months ended December 31, 2024. The decrease was primarily the result of certain acquired technology becoming fully amortized during fiscal 2025.
Previous 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%.
Current wording
Subscription gross profit increased by $63.0 million, or 18%, during the three months ended December 31, 2025 as compared to the three months ended December 31, 2024. Subscription gross margin remained consistent at 85%.
Previous wording
Subscription gross profit increased by $125.2 million, or 19%, during the six months ended September 30, 2025 compared to the six months ended September 30, 2024. Subscription gross margin remained consistent at 86%.
Current wording
Service gross profit increased by $0.1 million, or 17%, during the three months ended December 31, 2025 as compared to the three months ended December 31, 2024. Service gross margin remained consistent at 4%.
Previous 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.
Current wording
Research and development expenses increased by $22.2 million, or 23%, for the three months ended December 31, 2025 as compared to the three months ended December 31, 2024. The increase was primarily the result of increased personnel costs of $18.9 million, inclusive of a $2.6 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 $1.9 million.
Previous 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.
Current wording
Sales and marketing expenses increased by $19.6 million, or 13%, for the three months ended December 31, 2025 as compared to the three months ended December 31, 2024. The increase was primarily due to increased personnel costs of $19.2 million, inclusive of a $1.2 million increase in share-based compensation, due to headcount growth as we continue to invest in our go-to-market strategy.
Previous wording
Amortization of other intangibles decreased by $4.8 million, or 100%, for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024. The decrease was primarily the result of certain intangible assets becoming fully amortized during fiscal 2025.
Current wording
Amortization of other intangibles decreased by $4.0 million, or 100%, for the three months ended December 31, 2025 as compared to the three months ended December 31, 2024. The decrease was primarily the result of certain intangible assets becoming fully amortized during fiscal 2025.
Previous wording
Interest income, net, for the six months ended September 30, 2025 remained consistent relative to the six months ended September 30, 2024.
Current wording
Interest income, net, for the three months ended December 31, 2025 remained consistent relative to the three months ended December 31, 2024.
Previous 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.
Current wording
Other expense, net, was $0.4 million for the three months ended December 31, 2025 compared to $2.1 million for the three months ended December 31, 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 $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.
Current wording
Income tax expense was $44.4 million for the three months ended December 31, 2025, which increased by $349.1 million from an income tax benefit of $304.6 million for the three months ended December 31, 2024. This increase was primarily due to a $320.9 million discrete tax benefit recognized in fiscal 2025 on the intra-equity asset transfer of the global economic rights of the Company’s IP Transfer to Switzerland, and an increase to pre-tax income. The IP Transfer also impacted fiscal 2026 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. We elect to treat GILTI as a period cost for GAAP purposes.
Previous wording
Subscription revenue increased by $149.2 million, or 19%, for the six months ended September 30, 2025, as compared to the six 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.
Current wording
Subscription revenue increased by $225.4 million, or 19%, for the nine months ended December 31, 2025, as compared to the nine months ended December 31, 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 $4.6 million, or 13%, for the six months ended September 30, 2025 as compared to the six months ended September 30, 2024. The increase was primarily due to growth in customer demand for product enablement and adoption services.
Current wording
Service revenue increased by $7.8 million, or 14%, for the nine months ended December 31, 2025 as compared to the nine months ended December 31, 2024. The increase was primarily due to growth in customer demand for product enablement and adoption services.
Previous wording
Cost of subscription increased $24.1 million, or 22%, for the six months ended September 30, 2025 as compared to the six months ended September 30, 2024. The increase was primarily due to increased cloud-based hosting costs of $15.4 million to support the growing usage of the Dynatrace SaaS platform and increased personnel costs of $7.4 million, inclusive of a $1.2 million increase in share-based compensation, largely due to headcount growth to support our growing customer base.
Current wording
Cost of subscription increased $37.2 million, or 22%, for the nine months ended December 31, 2025 as compared to the nine months ended December 31, 2024. The increase was primarily due to increased cloud-based hosting costs of $24.9 million to support the growing usage of the Dynatrace SaaS platform and increased personnel costs of $10.1 million, inclusive of a $1.8 million increase in share-based compensation, largely due to headcount growth to support our growing customer base.
Previous wording
Cost of service increased $5.5 million, or 16%, 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, inclusive of 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 $8.5 million, or 16%, for the nine months ended December 31, 2025 as compared to the nine months ended December 31, 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 $7.1 million, or 81%, for the six months ended September 30, 2025 as compared to the six months ended September 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 $10.0 million, or 80%, for the nine months ended December 31, 2025 as compared to the nine months ended December 31, 2024. The decrease was primarily the result of certain acquired technology becoming fully amortized during fiscal 2025.
Previous wording
Services gross profit decreased by $0.8 million, or 52%, during the six months ended September 30, 2025 compared to the six months ended September 30, 2024. Services gross margin decreased to 2% for the six months ended September 30, 2025 compared to 4% for the six months ended September 30, 2024. The decrease in gross profit and gross margin was primarily due to increased personnel costs.
Current wording
Services gross profit decreased by $0.7 million, or 28%, during the nine months ended December 31, 2025 compared to the nine months ended December 31, 2024. Services gross margin decreased to 3% for the nine months ended December 31, 2025 compared to 4% for the nine months ended December 31, 2024. The decrease in gross margin was primarily due to increased personnel costs, including share-based compensation.
Previous wording
Research and development expenses increased by $40.2 million, or 22%, 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 $34.0 million, inclusive of a $8.4 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 $3.2 million.
Current wording
Research and development expenses increased by $62.4 million, or 22%, for the nine months ended December 31, 2025 as compared to the nine months ended December 31, 2024. The increase was primarily the result of increased personnel costs of $52.9 million, inclusive of a $11.0 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 $5.1 million.
Previous wording
Sales and marketing expenses increased by $43.7 million, or 15%, 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 $40.1 million, inclusive of a $5.8 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 $63.2 million, or 14%, for the nine months ended December 31, 2025, as compared to the nine months ended December 31, 2024. The increase was primarily the result of increased personnel costs of $59.3 million, inclusive of a $7.0 million increase in share-based compensation, due to headcount growth as we continue to invest in our go-to-market strategy.
Previous 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.
Current wording
General and administrative expenses increased $13.7 million, or 10%, for the nine months ended December 31, 2025, as compared to the nine months ended December 31, 2024. The increase was primarily the result of increased personnel costs of $12.5 million, inclusive of a $3.8 million increase in share-based compensation, as we continue to scale our functions to support our continued growth.
Previous wording
Amortization of other intangibles decreased by $9.5 million, or 100%, for the six months ended September 30, 2025 as compared to the six months ended September 30, 2024. The decrease was primarily the result of certain intangible assets becoming fully amortized during fiscal 2025.
Current wording
Amortization of other intangibles decreased by $13.5 million, or 100%, for the nine months ended December 31, 2025 as compared to the nine months ended December 31, 2024. The decrease was primarily the result of certain intangible assets becoming fully amortized during fiscal 2025.
Previous wording
Other income, net, was $7.7 million for the six months ended September 30, 2025 as compared to other expense, net, of $4.1 million for the six 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.
Current wording
Other income, net, was $7.3 million for the nine months ended December 31, 2025 as compared to other expense, net, of $6.1 million for the nine months ended December 31, 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 $63.3 million for the six months ended September 30, 2025, which increased by $35.3 million from $28.0 million for the six 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.
Current wording
Income tax expense was $107.7 million for the nine months ended December 31, 2025, which increased by $384.3 million from an income tax benefit of $276.7 million for the nine months ended December 31, 2024. This increase was primarily due to a $320.9 million discrete tax benefit recognized in fiscal 2025 on the intra-equity asset transfer of the global economic rights of the Company’s IP Transfer to Switzerland, and an increase to pre-tax income. The IP Transfer also impacted fiscal 2026 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. We elect to treat GILTI as a period cost for GAAP purposes.
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 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.
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 December 31, 2025, we had $1,091.5 million of cash and cash equivalents, $155.1 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 28 months, and $399.0 million available under our Credit Facility.
Previous wording
We have historically financed our operations primarily through payments by our customers for use of our product offerings and related services and, to a lesser extent, the net proceeds we have received from sales of equity securities.
Current wording
We have historically financed our operations primarily through payments by our customers for use of our product offerings and related services.
Previous wording
Over the past three years, cash flows from customer collections have increased. However, operating expenses have also increased as we have invested in growing our business. Our operating cash requirements may increase in the future as we continue to invest in the strategic growth of our company.
Current wording
Over the past three years, cash flows from customer collections have increased. Operating expenses have also increased to a lesser extent, growing our cash flows from operations. Our operating cash requirements may increase in the future as we continue to invest in the strategic growth of our company.
Showing the first 40 of 46 pairs. Open the source sections for the rest.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Interest income, net, for the nine months ended December 31, 2025 remained consistent relative to the nine months ended December 31, 2024.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
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.