Dynatrace, Inc.

(Unaudited)

1. Description of the Business

Business

Dynatrace, Inc. (“Dynatrace” or the “Company”) combines broad and deep observability, continuous runtime application security, and advanced agentic artificial intelligence (“AI”) operations to deliver answers and intelligent automation across information technology (“IT”) operations, development, security, business, and executive teams, enabling organizations to optimize cloud and IT operations, accelerate secure software delivery, and improve digital performance.

Fiscal year

The Company’s fiscal year ends on March 31. References to fiscal 2027, for example, refer to the fiscal year ending March 31, 2027.

2. Significant Accounting Policies

Basis of presentation and consolidation

The condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. All intercompany balances and transactions have been eliminated in the accompanying condensed consolidated financial statements.

Unaudited interim consolidated financial information

The accompanying interim condensed consolidated balance sheet as of June 30, 2026 and the interim condensed consolidated statements of operations, statements of comprehensive income, statements of shareholders’ equity, and statement of cash flows for the three months ended June 30, 2026 and 2025 and the related disclosures are unaudited. In management’s opinion, the unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and include all normal and recurring adjustments necessary for the fair presentation of the Company’s financial position as of June 30, 2026, and its results of operations and cash flows for the three months ended June 30, 2026 and 2025, are in accordance with GAAP. The results for the three months ended June 30, 2026 are not necessarily indicative of the results to be expected for the full fiscal year or any other interim period.

These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2026 (the “Annual Report”).

Use of estimates

The preparation of unaudited condensed consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect amounts reported in the condensed consolidated financial statements and accompanying notes. Management evaluates such estimates and assumptions for continued reasonableness. In particular, the Company makes estimates with respect to revenue recognition, the fair value of assets acquired and liabilities assumed in business combinations, the valuation of long-lived assets, the period of benefit for deferred contract costs, income taxes, share-based compensation expense, and the determination of the incremental borrowing rate used for operating lease liabilities, among other things. Management bases these estimates on historical experiences and on various other assumptions that the Company believes are reasonable. Actual results could differ from those estimates.

Significant accounting policies

The Company’s significant accounting policies are discussed in Note 2, Significant Accounting Policies, to the audited consolidated financial statements in the Annual Report. There have been no changes to the Company’s significant accounting policies described in the Annual Report that have had a material impact on its condensed consolidated financial statements and related notes.

Recently adopted accounting pronouncements

In July 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which introduces a practical expedient for estimating the expected credit losses on current accounts receivables and contract assets. The Company adopted ASU 2025-05 on a prospective basis on April 1, 2026 and the adoption of this standard did not have a material impact on the Company’s condensed consolidated financial statements.

Recently issued accounting pronouncements

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires the disclosure of more detailed information on commonly presented expenses. ASU 2024-03 will be effective for the Company’s annual periods beginning fiscal 2028 and interim periods beginning the first quarter of fiscal 2029. The Company is currently evaluating the impact ASU 2024-03 will have on its financial statement disclosures.

In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40); Targeted Improvements to the Accounting for Internal-Use Software, which removes the software development stages in the capitalization guidance and introduces a more judgment-based capitalization approach. ASU 2025-06 is effective for annual periods beginning after December 15, 2027, and interim periods within those annual reporting periods, which is the Company’s fiscal 2029. The Company is currently evaluating the impact ASU 2025-06 will have on its consolidated financial statements and disclosures.

3. Revenue Recognition

Disaggregation of revenue

The following table is a summary of the Company’s total revenue by geographic region based on customer location (in thousands, except percentages):

For thethree months ended June 30, 2026 and 2025, the United States was the only country that represented more than 10% of the Company’s revenue, constituting $255.6 million and 46% and $222.5 million and 47% of total revenue, respectively.

Revenue recognized during the three months ended June 30, 2026 and 2025, which was included in the deferred revenue balance at the beginning of each respective period, was $461.0 million and $409.7 million, respectively.

Remaining performance obligations

As of June 30, 2026, the aggregate amount of the transaction price allocated to remaining performance obligations was $3,441.5 million, which consists of both billed consideration in the amount of $1,158.6 million and unbilled consideration in the amount of $2,282.9 million that the Company expects to recognize as subscription and service revenue. The Company expects to recognize 53% of the total remaining performance obligations as revenue over the next 12 months and the remainder thereafter.

Contract assets

As of June 30, 2026 and March 31, 2026, contract assets of $21.7 million and $19.8 million, respectively, are included in accounts receivable, net, on the Company’s condensed consolidated balance sheets.

4. Business Combinations

Bindplane

On April 14, 2026, the Company acquired all of the outstanding equity of observIQ, Inc. d/b/a Bindplane (“Bindplane”), a provider of an open-standards-based telemetry pipeline that helps organizations capture and manage data at scale, for an aggregate purchase price of $99.7 million. The acquisition provides Dynatrace’s customers greater access, flexibility, and control of their logs, metrics, and application data. The preliminary purchase consideration consisted of $100.2 million of cash paid at closing and a $0.4 million receivable for purchase price adjustments.

In connection with the acquisition, the Company issued $3.3 million of restricted stock units (“RSUs”) to former Bindplane employees, subject to continuing employment with the Company. During the three months ended June 30, 2026, $0.3 million was recognized as share-based compensation expense.

The acquisition was accounted for as a business combination. The purchase price was allocated to the preliminary fair value of identifiable assets acquired and liabilities assumed as of the acquisition date, with the excess recorded to goodwill as shown below (in thousands).

The fair value of assets acquired and liabilities assumed may change as additional information is obtained related to working capital and deferred income taxes during the measurement period. The Company expects to finalize the valuation as soon as practicable, but no later than one year from the acquisition date.

Goodwill is primarily attributable to expected synergies and acquired skilled workforce. The goodwill was allocated to the Company’s single reporting unit. The Company identified developed technology, customer relationships, and trademarks and tradenames as acquired intangible assets. The estimated fair value of these intangible assets was based on valuations using the income approach. The acquired goodwill and intangible assets are not deductible for tax purposes.

The fair value and estimated useful life for these intangible assets were as follows (in thousands, except years):

The operating results of Bindplane from the date of acquisition have been included in the Company’s condensed consolidated statements of operations. The revenue and net income attributable to Bindplane for the three months ended June 30, 2026 were not material.

5. Investments and Fair Value Measurements

The following table summarizes the amortized cost, unrealized gains and losses, and fair value of the Company’s available-for-sale securities, including those securities classified within “Cash and cash equivalents” in the condensed consolidated balance sheets (in thousands):

Unrealized gains and losses on available-for-sale securities, net of tax, are included within accumulated other comprehensive loss in the condensed consolidated balance sheets. The Company regularly reviews the securities in an unrealized loss position and evaluates the current expected credit loss by considering factors such as credit ratings, issuer-specific factors, current economic conditions, and reasonable and supportable forecasts. The Company does not intend to sell these securities and it is more likely than not that the Company will not be required to sell these securities before recovery of their amortized cost basis. Based on the evaluation of available evidence, the Company does not believe any unrealized losses on its marketable securities as of June 30, 2026 represent credit losses.

As of June 30, 2026, the fair values of available-for-sale securities, excluding those securities classified within “Cash and cash equivalents” in the condensed consolidated balance sheets, by remaining contractual maturity were as follows (in thousands):

The Company offers a non-qualified deferred compensation plan to eligible U.S. employees and directors. The Company held $3.4 million and $2.2 million of mutual funds that are associated with this plan and were classified as restricted trading securities as of June 30, 2026 and March 31, 2026, respectively. These securities are not included in the tables above but are included as marketable securities in the condensed consolidated balance sheets.

The following tables present the Company’s financial assets that have been measured at fair value on a recurring basis as of June 30, 2026 and March 31, 2026 and indicate the fair value hierarchy of the valuation inputs utilized to determine such fair value (in thousands):

The Company recorded interest income from its cash, cash equivalents, and marketable securities of $9.1 million and $12.5 million for the three months ended June 30, 2026 and 2025, respectively.

6. Goodwill and Other Intangible Assets, Net

Changes in the carrying amount of goodwill for the three months ended June 30, 2026 consist of the following (in thousands):

Intangible assets, net, excluding goodwill, consist of the following (in thousands):

Amortization of intangible assets totaled $2.9 million and $1.4 million for the three months ended June 30, 2026 and 2025, respectively.

As of June 30, 2026, the estimated future amortization expense of the Company’s intangible assets was as follows (in thousands):

7. Income Taxes

The Company computes its interim provision for income taxes by applying the estimated annual effective tax rate to income from operations and adjusts the provision for discrete tax items occurring in the period. The Company’s effective tax rate for the three months ended June 30, 2026 was 54.6% compared to 41.1% for the three months ended June 30, 2025. The increase in the effective tax rate for the three months ended June 30, 2026 was primarily due to the tax impact of share-based compensation shortfalls recognized in the current fiscal year as compared to share-based compensation windfalls recognized in the prior fiscal year.

8. Long-term Debt

In December 2022, the Company entered into a Credit Agreement for a senior secured revolving credit facility (as amended to date, the “Credit Facility”) in an aggregate amount of $400.0 million. The Credit Facility has sublimits for swing line loans up to $30.0 million and for the issuance of standby letters of credit in a face amount up to $45.0 million. The Credit Facility will mature on December 2, 2027. As of June 30, 2026 and March 31, 2026, there wereno amounts outstanding under the Credit Facility. There were $1.1 million and $1.0 million of letters of credit issued as of June 30, 2026 and March 31, 2026, respectively. The Company had $398.9 million and $399.0 million of availability under the Credit Facility as of June 30, 2026 and March 31, 2026, respectively.

Borrowings under the Credit Facility are available in U.S. dollars, Euros, Pounds Sterling, and Canadian Dollars, with a sublimit of $100.0 million for non-U.S. dollar-denominated borrowings. Borrowings under the Credit Facility currently bear interest at (i) the Term Secured Overnight Financing Rate plus 0.10%, (ii) the Adjusted Euro Interbank Offer Rate, (iii) the Canadian Overnight Repo Rate Average, (iv) the Base Rate, as defined per the Credit Facility, or (v) the Sterling Overnight Index Average, in each case plus an applicable margin as defined per the Credit Facility. Interest payments are due quarterly, or more frequently, based on the terms of the Credit Facility.

The Company incurs fees with respect to the Credit Facility, including (i) a commitment fee ranging from 0.175% to 0.35% per annum, dependent on the Company’s leverage ratio, as defined per the Credit Facility, of the unused commitment under the Credit Facility; (ii) a fronting fee of 0.125% per annum of the face amount of each letter of credit; (iii) a participation fee equal to the applicable margin, as defined per the Credit Facility, applied to the daily average face amount of letters of credit; and (iv) customary administrative fees.

Debt issuance costs of $1.9 million were incurred in connection with the Credit Facility. The debt issuance costs are included within “Other assets” in the condensed consolidated balance sheets and are being amortized into interest expense over the contractual term of the Credit Facility. There were $0.6 million of unamortized debt issuance costs as of June 30, 2026 and March 31, 2026.

Pursuant to the Credit Facility, obligations owed under the Credit Facility are secured by a first priority security interest on substantially all assets of Dynatrace LLC and other wholly owned subsidiaries of the Company, including a pledge of the capital stock and other equity interests of certain subsidiaries. Under certain circumstances, the guarantees may be released without action by, or consent of, the administrative agent of the Credit Facility. The Credit Facility contains customary affirmative and negative covenants, including financial covenants that require the Company to maintain specified financial ratios. At June 30, 2026, the Company was in compliance with all applicable covenants.

Interest expense

Interest expense, including amortization of debt issuance costs and original issuance discount, was $0.2 million for the three months ended June 30, 2026 and 2025.

9. Leases

The Company leases office space under non-cancelable operating leases which expire at various dates from fiscal 2027 to 2037. As of June 30, 2026, the weighted average remaining lease term was 7.8 years and the weighted average discount rate was 4.0%. The Company did not have any finance leases as of June 30, 2026.

The following table presents information about leases reflected in the condensed consolidated statements of operations (in thousands):

The following table presents supplemental cash flow information about the Company’s leases (in thousands):

(1)Includes the impact of new leases as well as remeasurements and modifications of existing leases.

As of June 30, 2026, remaining maturities of lease liabilities were as follows (in thousands):

As of June 30, 2026, the Company had commitments of $4.3 million for operating leases that have not yet commenced, and therefore are not included in the right-of-use assets or operating lease liabilities. These operating leases are expected to commence during fiscal year 2027 with lease terms ranging fromtwo tofive years.

10. Commitments and Contingencies

Legal matters

The Company is, from time to time, party to legal proceedings and subject to claims in the ordinary course of business. Although the outcome of legal proceedings and claims cannot be predicted with certainty, the Company currently believes that the resolution of any such matters will not have a material adverse effect on its business, operating results, financial condition, or cash flows.

11. Shareholders’ Equity

Share Repurchase Program

In May 2024, the Company announced a share repurchase program for up to $500 million of common stock, which was completed in February 2026.

In February 2026, the Company announced a new share repurchase program under which it is authorized to purchase up to $1 billion of common stock from time to time on the open market or through privately negotiated transactions, including, without limitation, through Rule 10b5-1 trading plans, any other legally permissible means, or any combination of the foregoing. The new share repurchase program has no time limit and does not obligate the Company to acquire any specific dollar amount or to acquire any specific number of shares on any particular timetable or at all. The number of shares to be repurchased will depend on market conditions and other factors. Repurchases under the program are expected to be funded from a combination of existing cash balances and future cash flow.

For the three months ended June 30, 2026 and 2025, the Company repurchased and retired 7.1 million and 0.9 million shares of its common stock for $275.5 million and $45.0 million, respectively, excluding excise taxes. For the three months ended June 30, 2026, the Company recognized $1.6 million of excise taxes as a cost of shares repurchased, which is included within “Accrued expenses, current” in the condensed consolidated balance sheets. For the three months ended June 30, 2025, the Company didnot recognize excise taxes on the cost of shares repurchased, because the fair value of shares issued exceeded shares repurchased. As of June 30, 2026, $573.1 million remained available for future repurchases.

12. Share-based Compensation

The following table summarizes the components of total share-based compensation expense included in the condensed consolidated statements of operations for each period presented (in thousands):

Amended and Restated 2019 Equity Incentive Plan

In July 2019, the Company’s Board of Directors (the “Board”), upon the recommendation of the Compensation Committee of the Board, adopted the 2019 Equity Incentive Plan (the “Equity Incentive Plan”), which was subsequently approved by the Company’s stockholders and was later amended and restated by the Board in January 2021.

The Company initially reserved 52,000,000 shares of common stock for the issuance of awards under the Equity Incentive Plan. The Equity Incentive Plan provides that the number of shares reserved and available for issuance under the plan automatically increases each April 1 by 4% of the outstanding number of shares of the Company’s common stock on the immediately preceding March 31 or such lesser number determined by the Compensation Committee. This number is subject to adjustment in the event of a stock split, stock dividend or other change in the Company’s capitalization. As of June 30, 2026,68,589,942 shares of common stock were available for future issuance under the Equity Incentive Plan.

Restricted shares and units

The following table provides a summary of changes in the number of RSUs and restricted stock awards (“RSAs”) for the three months ended June 30, 2026:

RSUs outstanding as of June 30, 2026 were comprised of 12.9 million RSUs with only service conditions and 1.3 million RSUs with both service and performance or market-based conditions (“PSUs”).

The Company grants PSUs that contain financial performance conditions (“Financial PSUs”) and PSUs based on relative total stockholder return performance (“rTSR PSUs”). Both the Financial PSUs and rTSR PSUs are not earned if the applicable threshold percentage of the specific metric is not achieved. The maximum number of shares that may be earned is 200% of the target award. The PSUs are also subject to time-based vesting and are contingent upon the employee remaining employed by the Company or one of its subsidiaries through the applicable vesting dates.

The Financial PSUs generally vest 33%one year after the grant date and the remaining 67% vest ratably on a quarterly basis over the followingtwo years. The number of shares that may be earned pursuant to the Financial PSUs is based on specific Company metrics related to the fiscal year in which the award was granted.

The rTSR PSUs generally vest 33% annually after the grant date. The number of shares that may be earned pursuant to the rTSR PSUs granted is based on the Company’s stock price performance relative to companies that are the constituents of the Russell 3000 index over performance periods of one, two, and three fiscal years.

As of June 30, 2026, the total unrecognized compensation expense related to unvested RSUs was $609.3 million and is expected to be recognized over a weighted average period of 2.4 years. As of June 30, 2026, the total unrecognized compensation expense related to unvested RSAs was $1.5 million and is expected to be recognized over a weighted average period of 0.6 years.

Stock options

The Company hasnot granted new stock options since its fiscal 2022. The following table summarizes activity for stock options during the three months ended June 30, 2026:

As of June 30, 2026, there wasno unrecognized compensation expense related to non-vested stock options.

Employee Stock Purchase Plan

In July 2019, the Board adopted, and the Company’s stockholders approved, the 2019 Employee Stock Purchase Plan (the “ESPP”). The Company offers, sells, and issues shares of common stock under the ESPP from time to time based on various factors and conditions, although the Company is under no obligation to sell any shares under the ESPP. The ESPP provides forsix-month offering periods and each offering period consists ofsix-month purchase periods. On each purchase date, eligible employees purchase shares of the Company’s common stock at a price per share equal to 85% of the lesser of (1) the fair market value of the Company’s common stock on the offering date or (2) the fair market value of the Company’s common stock on the purchase date. During the three months ended June 30, 2026,352,344 shares of common stock were purchased under the ESPP. As of June 30, 2026,23,311,662 shares of common stock were available for future issuance under the ESPP.

As of June 30, 2026, there was $4.0 million of unrecognized share-based compensation related to the ESPP that is expected to be recognized over the remaining term of the current offering period.

13. Net Income Per Share

The following table sets forth the computation of basic and diluted net income per share (in thousands, except per share data):

The effect of certain common share equivalents were excluded from the computation of weighted-average diluted shares outstanding for the three months ended June 30, 2026 and 2025 as inclusion would have resulted in anti-dilution. A summary of these weighted-average anti-dilutive common share equivalents is provided in the table below (in thousands):

14. Segment and Geographic Information

The Company’s chief operating decision maker (“CODM”) is its Chief Executive Officer. The CODM uses consolidated net income for purposes of making operating decisions, assessing financial performance and allocating resources in the budget and forecasting process and budget-to-actual reviews. As such, the Company has determined that it operates asone operating and reportable segment.

The CODM also utilizes expense information in order to assess the Company’s financial performance. The Company’s significant expenses and other segment items, as included in consolidated net income, are provided in the table below (in thousands):

(1) Excludes share-based compensation; employer payroll taxes on employee stock transactions; amortization of intangibles; and acquisition-related, restructuring and other-non-recurring or unusual items, which are independently reviewed by the CODM.

(2)Other segment items primarily includes interest income, net; other income, net; and income tax expense, as reported in the condensed consolidated statements of operations. Other segment items also includes $7.7 million of acquisition-related, restructuring, and other non-recurring or unusual items for the three months ended June 30, 2025. There wereno acquisition-related, restructuring, and other non-recurring or unusual items for the three months ended June 30, 2026.

Revenue

Revenues by geography are based on the location of the customer (or end-customer under partner transactions). Refer to Note 3, Revenue Recognition, for a disaggregation of revenue by geographic region.

Long-lived assets, net

The following table presents the Company’s long-lived assets, net, which consists of property and equipment, net, and operating lease right-of-use asset, net, by geographic region for the periods presented (in thousands):