Dynatrace, Inc.

Previous wording

•Our annual recurring revenue (“ARR”) was $2,136 million as of June 30, 2026, which reflected 17% growth year-over-year;

Current wording

•Our annual recurring revenue (“ARR”) was $2,207 million as of September 30, 2026, which reflected 16% growth year-over-year;

Previous wording

•Our total revenue was $555 million, which reflected 16% growth year-over-year;

Current wording

•Our total revenue was $580 million, which reflected 17% growth year-over-year;

Previous wording

•Our subscription revenue was $530 million, which reflected 16% growth year-over-year;

Current wording

•Our subscription revenue was $553 million, which reflected 17% growth year-over-year;

Previous wording

•We delivered GAAP income from operations of $71 million and non-GAAP income from operations(1) of $162 million; and

Current wording

•We delivered GAAP income from operations of $96 million and non-GAAP income from operations(1) of $184 million; and

Previous wording

•Our net cash provided by operating activities and adjusted free cash flow(1) was $306 million and $309 million, respectively.

Current wording

•Our net cash provided by operating activities and adjusted free cash flow(1) was $41 million and $42 million, respectively.

Previous wording

Non-GAAP income from operations: We define non-GAAP income from operations as GAAP income from operations adjusted for the following items: share-based compensation; employer payroll taxes on employee stock transactions; amortization of intangibles; acquisition-related, restructuring, and other non-recurring or unusual items that may arise from time to time.

Current wording

Non-GAAP income from operations: We define non-GAAP income from operations as GAAP income from operations adjusted for the following items: share-based compensation; employer payroll taxes on employee stock transactions; amortization of intangibles; and acquisition-related, restructuring, and other non-recurring or unusual items that may arise from time to time.

Previous wording

General and administrative. General and administrative expenses primarily consist of the personnel and facility-related costs for our executive, finance, legal, people and culture and administrative personnel, and other corporate expenses, including those associated with our ongoing public reporting obligations. We anticipate continuing to incur additional expenses as we continue to invest in the growth of our operations.

Current wording

General and administrative. General and administrative expenses primarily consist of the personnel and facility-related costs for our executive, finance, legal, people and culture and administrative personnel, and other corporate expenses, including those associated with our ongoing public reporting obligations and acquisition-related costs. We anticipate continuing to incur additional expenses as we continue to invest in the growth of our operations.

Previous wording

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

Previous wording

Other income, net, consists primarily 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) income, net, consists primarily 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

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) royalty income related to the 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, and (4) 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 controlled foreign corporation tested income (“NCTI”) inclusion, (2) foreign withholding taxes, (3) royalty income related to the 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, and (4) nondeductible executive compensation. We expect these items to continue to affect our income tax rate and income tax expense.

Previous wording

Subscription revenue increased by $72.7 million, or 16%, for the three months ended June 30, 2026 as compared to the three months ended June 30, 2025, 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 $80.0 million, or 17%, for the three months ended September 30, 2026 as compared to the three months ended September 30, 2025, primarily due to existing customers expanding their use of the Dynatrace platform combined with the adoption of our solutions by new customers.

Previous wording

Cost of subscription increased by $15.2 million, or 23%, for the three months ended June 30, 2026 as compared to the three months ended June 30, 2025. The increase was primarily due to increased cloud-based hosting costs of $13.3 million to support the growing usage of our SaaS platform.

Current wording

Cost of subscription increased by $20.1 million, or 29%, for the three months ended September 30, 2026 as compared to the three months ended September 30, 2025. The increase was primarily due to increased cloud-based hosting costs of $16.4 million to support the growing usage of our SaaS platform.

Previous wording

Amortization of acquired technology increased by $1.3 million, or 155%, for the three months ended June 30, 2026 as compared to the three months ended June 30, 2025. The increase was primarily attributable to amortization from developed technology acquired as part of the Bindplane acquisition during the first quarter of fiscal 2027. For additional information, please see Note 4, Business Combinations, of the condensed consolidated financial statements in this Quarterly Report.

Current wording

Amortization of acquired technology increased by $1.5 million, or 171%, for the three months ended September 30, 2026 as compared to the three months ended September 30, 2025. The increase was primarily attributable to amortization from developed technology acquired as part of the Bindplane acquisition during the first quarter of fiscal 2027.

Previous wording

Subscription gross profit increased by $57.5 million, or 15%, during the three months ended June 30, 2026 as compared to the three months ended June 30, 2025. Subscription gross margin decreased to 85% for the three months ended June 30, 2026 compared to 86% for the three months ended June 30, 2025. The decrease in gross margin was primarily due to higher cloud-based hosting costs, which were driven by increased customer utilization of our SaaS platform and expanding adoption of platform features, slightly offset by efficiencies in personnel costs.

Current wording

Subscription gross profit increased by $59.9 million, or 15%, during the three months ended September 30, 2026 as compared to the three months ended September 30, 2025. Subscription gross margin decreased to 84% for the three months ended September 30, 2026 compared to 86% for the three months ended September 30, 2025. The decrease in gross margin was primarily due to higher cloud-based hosting costs, which were driven by increased customer utilization of our SaaS platform and expanding adoption of platform features, slightly offset by efficiencies in personnel costs.

Previous wording

Service gross profit increased by $2.7 million, or 564%, during the three months ended June 30, 2026 as compared to the three months ended June 30, 2025. Service gross margin increase to 13% compared to 2% for the three months ended June 30, 2025. The increase in gross margin was primarily due to growth in customer demand for product enablement and adoption services and efficiencies in personnel costs.

Current wording

Service gross profit increased by $4.6 million during the three months ended September 30, 2026 as compared to the three months ended September 30, 2025. Service gross margin increased to 18% compared to 1% for the three months ended September 30, 2025. The increase in gross margin was primarily due to growth in customer demand for product enablement and adoption services and efficiencies in personnel costs.

Previous wording

Research and development expenses increased by $27.8 million, or 26%, for the three months ended June 30, 2026 as compared to the three months ended June 30, 2025. The increase was primarily the result of increased personnel costs of $23.5 million, inclusive of a $2.7 million increase in share-based compensation, largely due to headcount growth to support the continued expansion of functionality and capabilities of our platform. Cloud-based hosting costs incurred in developing our platform also increased by $2.2 million.

Current wording

Research and development expenses increased by $17.2 million, or 15%, for the three months ended September 30, 2026 as compared to the three months ended September 30, 2025. The increase was primarily the result of increased personnel costs of $13.4 million, inclusive of a $0.9 million increase in share-based compensation, largely due to headcount growth to support the continued expansion of functionality and capabilities of our platform. Cloud-based hosting costs incurred in developing our platform also increased by $2.9 million.

Previous wording

Sales and marketing expenses increased by $16.3 million, or 10%, for the three months ended June 30, 2026 as compared to the three months ended June 30, 2025. The increase was primarily due to increased personnel costs of $9.4 million, inclusive of share-based compensation, due to headcount growth as we continue to invest in our go-to-market strategy, and increased advertising and marketing costs of $3.1 million.

Current wording

Sales and marketing expenses increased by $12.6 million, or 8%, for the three months ended September 30, 2026 as compared to the three months ended September 30, 2025. The increase was primarily due to personnel costs of $7.3 million, inclusive of share-based compensation, due to headcount growth as we continue to invest in our go-to-market strategy. Further contributing to the increase were higher selling costs of $2.9 million.

Previous wording

Amortization of other intangibles increased $0.3 million for the three months ended June 30, 2026 as compared to the three months ended June 30, 2025. The increase was primarily attributable to amortization from other intangible assets acquired as part of the Bindplane acquisition during the first quarter of fiscal 2027. For additional information, please see Note 4, Business Combinations, of the condensed consolidated financial statements in this Quarterly Report.

Current wording

Amortization of other intangibles increased $0.3 million for the three months ended September 30, 2026 as compared to the three months ended September 30, 2025. The increase was primarily attributable to amortization from other intangible assets acquired as part of the Bindplane acquisition during the first quarter of fiscal 2027.

Previous wording

Other income, net, was $0.4 million for the three months ended June 30, 2026 compared to $6.8 million for the three months ended June 30, 2025. 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 $0.5 million for the three months ended September 30, 2026 compared to other income, net, of $0.9 million for the three months ended September 30, 2025. 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

General and administrative expenses increased $5.4 million, or 10%, for the three months ended June 30, 2026 as compared to the three months ended June 30, 2025. The increase was primarily due to increased professional fees of $6.6 million, due to acquisition-related and other non-recurring costs.

Current wording

General and administrative expenses increased $15.7 million, or 15%, for the six months ended September 30, 2026, as compared to the six months ended September 30, 2025. The increase was primarily due to increased professional fees of $12.5 million, due to acquisition-related and other non-recurring costs.

Previous wording

Interest income, net, for the three months ended June 30, 2026 decreased 28% relative to the three months ended June 30, 2025. The decrease is primarily due to reduced cash equivalent and marketable securities balances, because we increased the amount of our share repurchases.

Current wording

Interest income, net, for the six months ended September 30, 2026 decreased 19% compared to the six months ended September 30, 2025. The decrease was primarily due reduced cash equivalents and marketable securities as we increased our share repurchases. Additionally, interest expense increased due to higher amortization of debt issuance costs, primarily related to the 2031 Notes.

Previous wording

Income tax expense was $44.2 million for the three months ended June 30, 2026, which increased by $10.8 million from $33.4 million for the three months ended June 30, 2025. This increase 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.

Current wording

Income tax expense was $83.4 million for the six months ended September 30, 2026, which increased by $20.1 million from $63.3 million for the six months ended September 30, 2025. This increase was primarily due to an increase in pre-tax income, the NCTI inclusion, and 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. This was partially offset by the recognition of a $9.4 million tax benefit related to an intra-entity transfer of the global economic rights of Bindplane IP from a wholly-owned U.S. subsidiary of the Company to a wholly-owned Swiss subsidiary of the Company.

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 and cash provided by operating activities. From time to time, we may borrow under our Credit Facility (as defined below). As of June 30, 2026, we had $1,057.8 million of cash and cash equivalents, $94.8 million of unrestricted marketable securities, consisting of U.S. Treasury securities, corporate debt securities, and U.S. agency securities that have maturities between one and 28 months, and $398.9 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, and cash provided by operating activities. From time to time, we may borrow under our 2026 Credit Facility (as defined below). As of September 30, 2026, we had $2,075.6 million of cash and cash equivalents, $102.1 million of unrestricted marketable securities, 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 $500.0 million available under our 2026 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.

Current wording

We have historically financed our operations primarily through payments by our customers for use of our product offerings and related services. We also completed our recent issuance of the 2031 Notes.

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, 2026, total contractual commitments were $719.8 million, with $178.9 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, 2026, total contractual cash commitments were $667.6 million, with $132.5 million committed within the next 12 months.

Previous wording

In December 2022, we entered into a senior secured revolving credit facility in an aggregate amount of $400.0 million (as amended to date, the “Credit Facility”). As of June 30, 2026, we had $398.9 million available under the Credit Facility with $1.1 million of letters of credit outstanding. As of June 30, 2026, we were in compliance with all applicable covenants pertaining to the Credit Facility. The Credit Facility is discussed further in Note 8, Long-term Debt, of the condensed consolidated financial statements included in this Quarterly Report.

Current wording

In September 2026, we entered into a Credit Agreement for a senior secured revolving credit facility (the “2026 Credit Facility”) in an aggregate amount of $500.0 million. As of September 30, 2026, we had $500.0 million available under the 2026 Credit Facility as no amounts were outstanding and there were no letters of credit outstanding. As of September 30, 2026, we were in compliance with all applicable covenants pertaining to the 2026 Credit Facility.

Previous wording

For the three months ended June 30, 2026 and 2025, we repurchased and retired 7.1 million and 0.9 million shares of our common stock for a repurchased cost, excluding unpaid excise taxes, of $275.5 million and $45.0 million, respectively. As of June 30, 2026, $573.1 million remained available for future repurchases. For additional information, please see Part II, Item 2 of this Quarterly Report.

Current wording

For the three months ended September 30, 2026 and 2025, we repurchased and retired 5.2 million and 1.0 million shares of our common stock for a repurchased cost, excluding accrued excise taxes, of $245.6 million and $50.0 million, respectively. For the six months ended September 30, 2026 and 2025, we repurchased and retired 12.3 million and 1.9 million shares of our common stock for a repurchased cost, excluding accrued excise taxes, of $521.1 million and $95.0 million, respectively. For additional information, please see Part II, Item 2 of this Quarterly Report.

Previous wording

Net cash provided by operating activities was $306.2 million during the three months ended June 30, 2026 as compared to $269.7 million during the three months ended June 30, 2025. The $36.5 million increase in net cash provided by operating activities was primarily due to higher collections driven by revenue growth.

Current wording

Net cash provided by operating activities was $347.3 million during the six months ended September 30, 2026 as compared to $301.7 million during the six months ended September 30, 2025. The $45.6 million increase in net cash provided by operating activities was primarily due to higher collections driven by revenue growth.

Previous wording

Net cash used in investing activities was $72.9 million during the three months ended June 30, 2026 as compared to $8.4 million during the three months ended June 30, 2025. The $64.5 million increase in net cash used in investing activities was primarily driven by $99.5 million paid for the Bindplane acquisition, partially offset by a $30.5 million increase in proceeds from sales and maturities of investments, net of purchases, and a $4.3 million decrease in the purchases of property and equipment.

Current wording

Net cash used in investing activities was $85.2 million during the six months ended September 30, 2026 as compared to $6.5 million during the six months ended September 30, 2025. The $78.7 million increase in net cash used in investing activities was primarily driven by $99.1 million paid for the Bindplane acquisition, partially offset by a $16.7 million increase in proceeds from sales and maturities of investments, net of purchases, and a $3.4 million decrease in the purchases of property and equipment.

Previous wording

There have been no significant changes in our critical accounting policies and estimates during the three months ended June 30, 2026, as compared to the critical accounting policies and estimates disclosed within “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Annual Report.

Current wording

There have been no significant changes in our critical accounting policies and estimates during the six months ended September 30, 2026, as compared to the critical accounting policies and estimates disclosed within “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Annual Report.