Dynatrace (DT) AI Stock Analysis

Company Guidance

Guidance summary: For FY‑27 Dynatrace maintained constant‑currency ARR growth guidance of 15.5%–16.5% and raised constant‑currency total and subscription revenue growth to 14.5%–15.0% (up 25 bps at the midpoint); it increased the high end of full‑year non‑GAAP operating margin guidance to 29.75% (up 25 bps) and raised non‑GAAP EPS to $1.97–$1.99 (up $0.04 at the midpoint) assuming 295–297M diluted shares and an 18.5% effective cash tax rate, while keeping adjusted free cash flow margin guidance at 26.5% (reflecting a revised adjusted FCF definition). Management expects an FX headwind of $14M to ARR and $4M to revenue (an incremental headwind of $23M to ARR and $19M to revenue), will revisit ARR at the fiscal midpoint, and modeled Q2 at revenue growth of 15%–16%, non‑GAAP operating margin of 29.5%–30% and non‑GAAP EPS of $0.48–$0.49. Q1 results that underpinned the update included ARR of $2.14B (+17% YoY), net new ARR of $85M (66% YoY, 41% organic excl. $13M from Bindplane), total revenue $555M and subscription revenue $530M (+15%, ~100 bps above the high end of guidance), non‑GAAP operating margin 29%, non‑GAAP net income $140M ($0.48/sh), adjusted FCF of $309M (T‑12M adjusted FCF $579M, 28% of revenue).