Dynatrace Stock Plunges Despite Upbeat Q1 Performance, Strong Outlook: By The Numbers

Dynatrace, Inc (NYSE: DT) reported first-quarter FY24 revenue growth of 25% year-on-year to $332.9 million (CC), beating the consensus of $326.9 million. 

Annual Recurring Revenue ("ARR") increased 25% Y/Y. Revenues from Subscription rose 27% Y/Y to $316.5 million (CC).

The non-GAAP operating margin expanded by 500 basis points to 28%. Non-GAAP EPS of $0.27 beat the consensus of $0.22.

Dynatrace generated $123.6 million in free cash flow during the quarter. It held $700.7 million in cash and equivalents.

"Dynatrace's first quarter results exceeded guidance across all our key metrics, demonstrating the powerful combination of growth and profitability," said Rick McConnell, Chief Executive Officer. 

"We believe hypermodal AI and developer observability will be catalysts for incremental future growth as they are expected to extend our reach to a wider range of users and accelerate the creation of even more workloads."

Outlook: Dynatrace sees Q2 FY24 revenue of $343 million- $346 million (consensus $338.6 million).

Dynatrace sees Q2 non-GAAP EPS of $0.26 - $0.27 (consensus $0.25).

For FY24, Dynatrace raised its revenue outlook to $1.400 billion - $1.415 billion (prior $1.388 billion - $1.406 billion), vs. the consensus of $1.400 billion.

Dynatrace expects non-GAAP EPS of $1.03 - $1.06 (prior $0.98 - $1.02) vs. the consensus of $1.00.

Price Action: DT shares traded lower by 9.77% at $45.80 on the last check Wednesday.