Dynatrace Q1 Revenue Rises 20%, Raises Full-Year Outlook

Dynatrace reported Q1 revenue of $477 million, a 20% increase YoY, but missed analyst expectations. Annual recurring revenue reached $1.82 billion, up 18% from the prior year. Subscription revenue grew 20%. The company raised its full-year outlook for FY2026, guiding total revenue to $1.97-$1.985 billion and Non-GAAP EPS to $1.58-$1.61.

Dynatrace Inc. (DT) reported its first-quarter (Q1) fiscal year 2026 results, showcasing robust financial performance. The company's Q1 revenue reached $477.35 million, marking a 20% year-over-year (YoY) increase, but it missed analyst expectations [1]. Annual Recurring Revenue (ARR) totaled $1.82 billion, up 18% from the prior year, while subscription revenue grew by 20% YoY [2].

Key highlights include:
- Revenue Growth: Total revenue grew by 20% YoY, surpassing the Zacks consensus estimate of $467.68 million.
- ARR Growth: ARR reached $1.82 billion, exceeding the average estimate of $1.78 billion.
- Subscription Revenue: Subscription revenue, a key indicator of recurring revenue, grew by 20% YoY to $458 million.
- EPS: Quarterly earnings per share (EPS) of $0.42 surpassed the Zacks consensus estimate of $0.38 per share, representing a 10.53% earnings surprise [1].

Dynatrace's strong performance was driven by strategic initiatives and partnerships. The company reported closing 12 expansion deals greater than $1 million in annual contract value (ACV) in the quarter, with 10 of these deals in collaboration with partners. Additionally, Dynatrace expanded its platform with agentic AI capabilities and announced a new collaboration with NVIDIA to integrate its full-stack, AI, and LLM observability solution with NVIDIA’s Enterprise AI Factory [3].

Looking ahead, Dynatrace expects its Q2 revenue to range between $484.0 million and $489.0 million, with adjusted EPS expected to range between $0.40 and $0.41. The company's full-year outlook for fiscal 2026 has been raised, guiding total revenue to $1.97-$1.985 billion and Non-GAAP EPS to $1.58-$1.61 [2].

References:
[1] https://www.ainvest.com/news/dynatrace-q1-earnings-revenue-19-6-eps-beats-estimates-2508/
[2] https://www.stocktitan.net/news/DT/dynatrace-reports-first-quarter-fiscal-year-2026-financial-i9a8vch6zkyi.html
[3] https://ir.dynatrace.com/news-events/press-releases/detail/389/dynatrace-reports-first-quarter-fiscal-year-2026-financial-results