Q1 2027 Dynatrace, Inc Earnings Call Transcript

Aug 5, 2026 / 12:00 PM GMT

Release Date Price: €43.6 (+10.66%)

Transcript 10-Q8-K

Key Points

Positve

Total ARR grew 17% year-over-year, with net new ARR of $85 million, up 66% and 41% organically, exceeding expectations.
Record new logo growth of more than 160%, with an average land size of nearly $285,000, indicating strong market traction.
Log management consumption nearly doubled to $200 million annualized, becoming the fastest-growing product category.
AI-driven monetization is expanding, with over 1,000 customers using Dynatrace for AI observability and 800 for agentic capabilities, driving 1.5x higher consumption growth.
Non-GAAP operating margin of 29% exceeded guidance by 100 basis points, and the company raised full-year revenue and EPS guidance.
Adjusted free cash flow of $309 million in Q1, with a trailing 12-month margin of 28%, reflecting strong cash generation.
Gartner named Dynatrace a leader in the observability platform Magic Quadrant for the 16th consecutive year, validating its architecture.

Negative

Foreign exchange headwinds are expected to reduce ARR by $14 million and revenue by $4 million, an incremental impact of $23 million and $19 million, respectively.
The company maintained its full-year ARR growth guidance despite strong Q1, signaling caution about sustaining momentum.
Net retention rate (NRR) remained at 110%, with no improvement expected until the back half of the year due to light renewal periods in Q1 and Q2.
The CFO's planned retirement introduces leadership transition uncertainty, which could impact strategic execution.
The company has not decided on premium pricing for on-demand consumption, leaving potential revenue upside untapped.
Dependence on large deals creates quarterly variability in net new ARR, as evidenced by the exceptional Q1 performance that may not be repeatable.
The AI observability market is still nascent, with most enterprises in early adoption phases, limiting near-term revenue contribution.

Refinitiv StreetEvents Event Transcript
E D I T E D V E R S I O N

DT.N - Dynatrace, Inc
Q1 2027 Dynatrace, Inc Earnings Call
Aug 05, 2026 / 12:00PM GMT

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Presentation
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Unidentified_1 [1]
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Greetings and welcome to the Dynatrace first quarter fiscal 2027 earnings conference call.

At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press *0 on your telephone keypad. Please note, this conference is being recorded. I will now turn the conference over to Noelle Farris, VP of Investor Relations.

Thank you. You may begin.

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Unidentified_2 [2]
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