Dynatrace Q1 Earnings: Revenue Up 19.6%, EPS Beats Estimates

Dynatrace reported Q1 revenue of $477.35 million, up 19.6% YoY, beating the Zacks consensus estimate of $467.68 million. EPS came in at $0.42, compared to $0.33 in the year-ago quarter. Annual Recurring Revenue (ARR) totaled $1.82 billion, exceeding the average estimate of $1.78 billion. Revenues from services and subscriptions also exceeded expectations, with services revenue up 12.5% YoY and subscriptions revenue up 19.9% YoY.

Dynatrace Inc. (DT) reported its first-quarter (Q1) fiscal year 2026 results, demonstrating robust performance across multiple financial metrics. The company's quarterly earnings per share (EPS) of $0.42 surpassed the Zacks consensus estimate of $0.38 per share, marking a 10.53% earnings surprise. This performance compares favorably to the year-ago quarter, where EPS was $0.33 per share [1].

Revenue for the quarter totaled $477.35 million, a 20% increase year-over-year (YoY), significantly exceeding the Zacks consensus estimate of $467.68 million. The company's annual recurring revenue (ARR) stood at $1.82 billion, surpassing the average estimate of $1.78 billion. Subscription revenue, a key indicator of recurring revenue, grew by 19% YoY to $458 million, while services revenue increased by 12.5% YoY [3].

Dynatrace's strong financial performance was driven by a series of 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. The company also expanded its platform with agentic AI capabilities, designed to prevent issues and optimize resources autonomously. Additionally, Dynatrace 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 stock has experienced a mixed performance this year, losing about 7% since the beginning of 2025 compared to the S&P 500's gain of 7.1%. The stock's future performance will largely depend on the company's ability to sustain its earnings growth and meet or exceed market expectations [1].

References:
[1] https://finance.yahoo.com/news/dynatrace-dt-q1-earnings-revenues-114003357.html
[2] https://www.marketscreener.com/news/dynatrace-q1-revenue-profit-beat-analyst-estimates-ce7c5ed9dc8ef123
[3] https://ir.dynatrace.com/news-events/press-releases/detail/389/dynatrace-reports-first-quarter-fiscal-year-2026-financial-results