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 September 30, 2026 and the interim condensed consolidated statements of operations, statements of comprehensive income, and statements of shareholders’ equity for the three and six months ended September 30, 2026 and 2025, statements of cash flows for the six months ended September 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 September 30, 2026, and its results of operations for the three and six months ended September 30, 2026 and 2025, and its cash flows for the six months ended September 30, 2026 and 2025 are in accordance with GAAP. The results for the three and six months ended September 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 receivable and contract assets. The Company adopted ASU 2025-05 on a prospective basis on April 1, 2026 and the adoption of this ASU did not have a material impact on the Company’s condensed consolidated financial statements.

In September 2025, the FASB issued ASU 2025-07, Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606): Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract, which clarifies the application of derivative accounting to certain contracts and refines the guidance for share-based noncash consideration received from customers. ASU 2025-07 introduces a scope exception for contracts that are non exchange-traded and whose underlying is tied to operations or activities specific to one party. The Company early adopted ASU 2025-07 on a prospective basis on April 1, 2026 and the adoption of this ASU 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 and six months ended September 30, 2026 and 2025, the United States was the only country that represented more than 10% of the Company’s revenue, constituting $263.9 million and 46% and $229.0 million and 46% of total revenue during the three months ended September 30, 2026 and 2025, respectively, and $519.5 million and 46% and $451.4 million and 46% of total revenue during the six months ended September 30, 2026 and 2025, respectively.

Revenue recognized during the three months ended September 30, 2026 and 2025, which was included in the deferred revenue balance at the beginning of each respective period, was $481.1 million and $429.0 million, respectively. Revenue recognized during the six months ended September 30, 2026 and 2025, which was included in the deferred revenue balance at the beginning of each respective period, was $837.4 million and $749.3 million, respectively.

Remaining performance obligations

As of September 30, 2026, the aggregate amount of the transaction price allocated to remaining performance obligations was $3,489.9 million, which consists of both billed consideration in the amount of $1,104.7 million and unbilled consideration in the amount of $2,385.2 million that the Company expects to recognize as subscription and service revenue. The Company expects to recognize 52% of the total remaining performance obligations as revenue over the next 12 months and the remainder thereafter.

Contract assets

As of September 30, 2026 and March 31, 2026, contract assets of $26.3 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 purchase consideration consisted of $100.2 million of cash paid at closing and a $0.4 million receivable for purchase price adjustments that was received during the three months ended September 30, 2026.

In connection with the acquisition, the Company issued $3.3 million of restricted stock units (“RSUs”) to Bindplane employees, which will vest based on future service periods. During the three and six months ended September 30, 2026, $0.5 million and $0.8 million were recognized as share-based compensation expense, respectively.

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 the 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, which are not material, have been included in the Company’s condensed consolidated statements of operations.

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 September 30, 2026 represent credit losses.

As of September 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 $3.5 million and $2.2 million of mutual funds that are associated with this plan and were classified as restricted trading securities as of September 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 Company recorded interest income from its cash, cash equivalents, and marketable securities of $13.1 million and $13.5 million for the three months ended September 30, 2026 and 2025, respectively, and $22.2 million and $26.0 million for the six months ended September 30, 2026 and 2025, respectively.

The following tables present the Company’s financial assets that have been measured at fair value on a recurring basis as of September 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 fair value of the exchangeable notes is determined based on quoted prices in inactive markets, which is considered a Level 2 valuation input. See Note 8, Long-term Debt, for further details.

6. Goodwill and Other Intangible Assets, Net

Changes in the carrying amount of goodwill for the six months ended September 30, 2026 consisted of the following (in thousands):

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

Amortization of intangible assets totaled $3.1 million and $1.4 million for the three months ended September 30, 2026 and 2025, respectively, and $6.1 million and $2.8 million for the six months ended September 30, 2026 and 2025, respectively.

As of September 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 September 30, 2026 was 36.7% compared to 34.3% for the three months ended September 30, 2025. The increase in the effective tax rate for the three months ended September 30, 2026 was primarily due to an increase in the net controlled foreign corporation tested income (“NCTI”) inclusion, 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.

The Company’s effective tax rate for the six months ended September 30, 2026 was 44.4% compared to 37.6% for the six months ended September 30, 2025. The increase in the effective tax rate for the six months ended September 30, 2026 was primarily due to an increase in 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 increase 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.

8. Long-term Debt

2031 Exchangeable Senior Notes

In August 2026, Dynatrace LLC, an indirect wholly owned subsidiary of the Company, issued $1,437.5 million aggregate principal amount of Exchangeable Senior Notes (the “2031 Notes”). The 2031 Notes mature on September 1, 2031, unless earlier exchanged, redeemed, or repurchased. The 2031 Notes do not bear regular interest and the principal amount of the 2031 Notes does not accrete. The 2031 Notes were issued pursuant to an indenture dated as of August 20, 2026 (the “Indenture”), among Dynatrace LLC, the Company, and U.S. Bank Trust Company, National Association, as trustee. The 2031 Notes are senior, unsecured obligations of Dynatrace LLC and are fully and unconditionally guaranteed on an unsecured and unsubordinated basis by the Company.

The Company accounts for the 2031 Notes as a liability at amortized cost, as no embedded features require bifurcation or other separate accounting. Costs of $26.9 million incurred in connection with the issuance of the 2031 Notes are reported net with the liability and are amortized using the effective interest rate method over the term of the 2031 Notes.

The 2031 Notes are exchangeable at an initial exchange rate of 15.5585 shares of the Company’s common stock per $1,000 principal amount of 2031 Notes, which is equivalent to an initial exchange price of $64.27 per share and represents approximately 22.4 million shares of the Company’s common stock. The initial exchange price represented an exchange premium of approximately 35% above the last reported sale price of $47.61 per share of the common stock on The New York Stock Exchange on August 17, 2026. The exchange rate of the 2031 Notes is subject to adjustment as provided in the Indenture.

Prior to the close of business on the business day immediately preceding June 1, 2031, holders may exchange all or any portion of the 2031 Notes only upon the occurrence of one or more of the following circumstances:

•during any calendar quarter commencing after the calendar quarter ending on December 31, 2026 (and only during such fiscal quarter), if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ended on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 150% of the exchange price on each applicable trading day;

•during thefive business day period after any 10 consecutive trading day period in which the trading price per $1,000 principal amount of 2031 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s common stock and the exchange rate on each such trading day;

•if Dynatrace LLC calls any 2031 Notes for redemption, at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date, but only with respect to the 2031 Notes called (or deemed called, in the case of an optional redemption) for redemption; or

•upon the occurrence of specified corporate events, as set forth in the Indenture.

On or after June 1, 2031 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may exchange all or any portion of their 2031 Notes at any time regardless of the foregoing circumstances. Upon exchange of the 2031 Notes, Dynatrace LLC will pay or deliver, as the case may be, cash, shares of the Company’s common stock or a combination of both, at Dynatrace LLC’s election.

Dynatrace LLC may not redeem the 2031 Notes prior to September 6, 2029, except in the event of a Cleanup Redemption (as defined below). On or after September 6, 2029 and prior to the 21 st scheduled trading day immediately preceding the maturity date, Dynatrace LLC may redeem for cash all or any portion of the 2031 Notes (subject to a partial redemption limitation set forth in the Indenture), at its option, if the last reported sale price of the Company’s common stock has been at least 130% of the exchange price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which Dynatrace LLC provides notice of redemption (an “Optional Redemption”). In addition, subject to certain conditions, Dynatrace LLC may redeem for cash all, but not less than all, of the 2031 Notes at any time prior to the 21 st scheduled trading day immediately preceding the maturity date if the aggregate principal amount of the 2031 Notes that remains outstanding at such time is less than $100 million (a “Cleanup Redemption”). The redemption price for any 2031 Notes called for Optional Redemption or Cleanup Redemption will be equal to 100% of the principal amount of the 2031 Notes to be redeemed, plus accrued and unpaid special interest, if any, to, but excluding, the related redemption date. No sinking fund is provided for the 2031 Notes.

Subject to certain conditions, holders of the 2031 Notes will have the right to require Dynatrace LLC to repurchase all or a portion of their Notes upon the occurrence of a fundamental change (as defined in the Indenture) at a repurchase price of 100% of their principal amount plus any accrued and unpaid special interest, if any. In connection with certain corporate events or if Dynatrace LLC calls any 2031 Notes for redemption, Dynatrace LLC will, under certain circumstances, increase the exchange rate for holders who elect to exchange their 2031 Notes in connection with any such corporate event or exchange their 2031 Notes called for redemption.

The following table presents the net carrying value and fair value of the 2031 Notes as of September 30, 2026 (in thousands):

(1)The fair value was determined based on the closing quoted price of the 2031 Notes on the last trading day of the period and is classified as Level 2 in the fair value hierarchy, because the 2031 Notes are not actively traded in the market.

Exchangeable note hedge and warrant transactions

In connection with the 2031 Notes, Dynatrace LLC and the Company entered into exchangeable note hedge transactions (the “2031 Exchangeable Note Hedges”) for an aggregate premium of $412.6 million. The 2031 Exchangeable Note Hedges are expected to reduce the potential dilution to the Company’s common stock if the 2031 Exchangeable Notes are exchanged and/or offset any cash payments the Company may be required to make in excess of the principal amount.

The 2031 Exchangeable Note Hedges cover approximately 22.4 million shares of the Company’s common stock at an initial strike price of $64.27 per share, subject to anti-dilution adjustments substantially similar to those applicable to the 2031 Notes. The 2031 Exchangeable Note Hedges will expire upon the maturity of the 2031 Notes, if not earlier exercised or terminated.

Separately from the 2031 Exchangeable Note Hedges and in connection with the 2031 Notes, the Company entered into warrant transactions (the “2031 Warrants”) to acquire up to 22.4 million shares of the Company’s common stock at an initial strike price of $107.12 per share, subject to certain adjustments under the terms of the 2031 Warrants. The Company received proceeds of $244.8 million from the issuance of the 2031 Warrants. The 2031 Exchangeable Note Hedges and 2031 Warrants will generally have the effect of increasing the exchange price of the 2031 Notes to the 2031 Warrants strike price of $107.12 per share.

The Company determined that the 2031 Exchangeable Note Hedges and 2031 Warrants meet the criteria for equity classification, because they are indexed to the Company's common stock and the Company has the option to settle both in shares of common stock or in cash. The 2031 Exchangeable Note Hedges and 2031 Warrants are not remeasured as long as they continue to meet the criteria for equity classification. The Company recognized the purchase of the 2031 Exchangeable Note Hedges as a decrease in additional paid-in capital and the 2031 Warrants as an increase in additional paid-in capital.

The Company structured the 2031 Exchangeable Note Hedges as tax integrated for federal income tax purposes pursuant to applicable U.S. Treasury Regulations. Accordingly, the $412.6 million cost of the 2031 Exchangeable Note Hedges will be deductible for income tax purposes over the life of the hedges. As a result, the Company established a deferred income tax asset of $94.3 million at inception, with a corresponding offset in additional paid-in capital.

2022 Credit Facility

In August 2026, in connection with the 2031 Notes, Dynatrace LLC terminated its senior secured revolving credit facility in an aggregate amount of $400.0 million, which had been originally entered into in December 2022 (the “2022 Credit Facility”) and recognized unamortized debt issuance costs of $0.7 million within “Interest income, net” in the condensed consolidated statements of operations. No amounts were outstanding under the 2022 Credit Facility upon termination. The 2022 Credit Facility had 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 2022 Credit Facility was due to mature on December 2, 2027.

The debt issuance costs incurred in connection with the 2022 Credit Facility were included within “Other assets” in the condensed consolidated balance sheets and were amortized into interest expense over the contractual term of the 2022 Credit Facility.

2026 Credit Facility

In September 2026, Dynatrace LLC entered into a new Credit Agreement for a senior secured revolving credit facility (the “2026 Credit Facility”) in an aggregate amount of $500.0 million. The 2026 Credit Facility has sublimits for swing line loans of up to $30.0 million and for the issuance of standby letters of credit in a face amount of up to $45.0 million. As of September 30, 2026, there was $500.0 million of availability under the 2026 Credit Facility asno amounts were outstanding and there wereno letters of credit issued thereunder.

The 2026 Credit Facility is scheduled to mature on June 24, 2031 with the option fortwo one-year extensions. However, if an aggregate principal amount greater than $300.0 million on the 2031 Notes remains outstanding on June 2, 2031, the 2026 Credit Facility will instead mature on such date.

Borrowings under the 2026 Credit Facility are available in U.S. dollars, Euros, Pounds Sterling, and Canadian Dollars subject to an aggregate $100.0 million cap on non-U.S. dollar denominated borrowings. Borrowings under the 2026 Credit Facility will accrue interest at (i) the Term Secured Overnight Financing Rate, (ii) the Euro Interbank Offer Rate, (iii) the Adjusted Term Canadian Overnight Repo Rate, (iv) Daily Simple Sterling Overnight Index Average, or (v) the base rate as defined per the 2026 Credit Facility, in each case, plus an applicable margin as defined by the 2026 Credit Facility. Interest payments are due quarterly, or more frequently, based on the terms of the 2026 Credit Facility.

The 2026 Credit Facility fees include (i) a commitment fee at the rate per annum equal to the applicable margin, as defined by the 2026 Credit Facility, times the actual daily amount by which the aggregate revolving credit commitments exceeds the principal amount of revolving loans and line of credit obligations then outstanding, (ii) a fronting fee equal to 0.125% of the face amount of each letter of credit, (iii) a participation fee at a rate per annum equal to the applicable margin, as defined per the 2026 Credit Facility, in effect during each day of such quarter applied to the daily average face amount of letters of credit outstanding during such quarter, and (iv) customary administrative fees.

Debt issuance costs of $2.1 million were incurred in connection with the 2026 Credit Facility. The debt issuance costs are included within “Other assets” in the consolidated balance sheets and are being amortized into interest expense over the contractual term of the 2026 Credit Facility. There were $2.1 million of unamortized debt issuance costs as of September 30, 2026.

Pursuant to the 2026 Credit Facility, obligations owed thereunder are secured by a first priority lien on certain assets of Dynatrace LLC, including a pledge of the equity interests of certain subsidiaries. Under certain circumstances, the guarantees may be released without action by, or consent of, the administrative agent of the 2026 Credit Facility. The 2026 Credit Facility contains customary representations and warranties, events of default and affirmative and negative covenants, including financial covenants that require the Company to maintain specified financial ratios. At September 30, 2026, the Company was in compliance with all applicable covenants.

Interest expense

Interest expense, including amortization of debt issuance costs, was $0.7 million and $0.2 million for the three months ended September 30, 2026 and 2025, respectively, and $0.8 million and $0.4 million for the six months ended September 30, 2026 and 2025, respectively.

9. Leases

The Company leases office space under non-cancelable operating leases which expire at various dates from fiscal 2027 to 2037. As of September 30, 2026, the weighted average remaining lease term was 7.6 years and the weighted average discount rate was 4.0%. The Company did not have any finance leases as of September 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 September 30, 2026, remaining maturities of lease liabilities were as follows (in thousands):

As of September 30, 2026, the Company had a commitment of $4.0 million for an operating lease that has not yet commenced, and therefore is not included in the right-of-use assets or operating lease liabilities. This operating lease is expected to commence later in fiscal 2027 with a lease term offive 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 Programs

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.

The following table summarizes share repurchase activity during the three and six months ended September 30, 2026 and 2025 (in thousands):

(1) Includes commissions paid.

As of September 30, 2026, $327.5 million remained available for future repurchases. On November 3, 2026, the Company announced a new share repurchase program under which it is authorized to purchase up to $1 billion of common stock. Refer to Note 15, Subsequent Events, for further details.

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 September 30, 2026,68,476,722 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 six months ended September 30, 2026:

RSUs outstanding as of September 30, 2026 were comprised of 11.9 million RSUs with only service conditions and 1.2 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 September 30, 2026, the total unrecognized compensation expense related to unvested RSUs was $535.6 million and is expected to be recognized over a weighted average period of 2.3 years. As of September 30, 2026, the total unrecognized compensation expense related to unvested RSAs was $0.9 million and is expected to be recognized over a weighted average period of 0.4 years.

Stock options

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

As of September 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 six months ended September 30, 2026,352,344 shares of common stock were purchased under the ESPP. As of September 30, 2026,23,311,662 shares of common stock were available for future issuance under the ESPP.

As of September 30, 2026, there was $1.7 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 and six months ended September 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 include interest income, net; other (expense) income, net; and income tax expense, as reported in the condensed consolidated statements of operations. Other segment items also include $4.7 million and $12.4 million of acquisition-related, restructuring, and other non-recurring or unusual items for the three and six months ended September 30, 2026, respectively. There wereno acquisition-related, restructuring, and other non-recurring or unusual items for the three and six months ended September 30, 2025.

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):

15. Subsequent Events

Acquisition of Arize AI, Inc. (“Arize”)

On October 1, 2026, the Company acquired all of the outstanding equity of Arize, an AI observability and evaluation platform delivering continual learning for agents. This acquisition will enable the Company’s customers to evaluate, operate, and continuously improve AI applications from development through production at scale.

The Company acquired Arize for consideration of $815.9 million of cash paid at closing and an aggregate 1.8 million shares of restricted common stock and RSUs, valued at $98.2 million as of the execution date. The shares of restricted stock are subject to release in the future and the RSUs will vest based on future service periods. These shares of restricted stock and RSUs will be recognized as share-based compensation over their respective future service periods. At closing, the Company also issued $26.0 million of additional RSUs to Arize employees which will vest based on future service periods.

The Company is in the process of allocating the purchase consideration over the fair value of identifiable assets and liabilities assumed. The financial results of Arize will be included in the Company’s condensed consolidated financial statements from the date of acquisition.

Authorization of New Share Repurchase Program

On November 3, 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. Share repurchases under the new authorization may commence upon full utilization of the Company’s share repurchase authorization that began on February 11, 2026. 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.