Start here if you're new
what it is
Dynatrace sells software that watches your apps, flags trouble, and helps teams fix systems before customers feel the mess.
how it gets paid
Last year Dynatrace made $1.7B in revenue. observability subscriptions was the main engine at $1.05B, or 62% of sales.
why it's growing
Revenue grew 18.7% last year. The strong performance was underpinned by accelerating adoption of cloud and ai workflows and.
what just happened
Dynatrace beat with $494M in revenue, up 18% vs. prior year.
At a glance
B+ balance sheet — decent shape, but not bulletproof
30/100 earnings predictability — expect surprises
59.5x trailing p/e — you're paying up for this one
8.5% return on capital — nothing to write home about
xvary composite: 55/100 — below average
What they do
Dynatrace sells software that watches your apps, flags trouble, and helps teams fix systems before customers feel the mess.
Dynatrace sits inside 4,000 customer systems. That makes leaving painful, because your alerts, fixes, and monitoring live in one place. Nearly $1.9B in annual recurring revenue means customers keep paying while the next quarter happens.
How they make money
$1.7B
annual revenue · their business grew +18.7% last year
observability subscriptions
$1.05B
security modules
$0.28B
ai automation
$0.22B
professional services
$0.15B
The products that matter
application and infrastructure monitoring
Dynatrace Platform
$1.7B total revenue · 100% of sales
it's the whole business. all $1.7B in reported revenue runs through this platform, which is why retention matters more here than product diversification.
the story
cloud-native monitoring tools
Cloud Infrastructure Monitoring
part of a business growing +18.7% · no separate revenue disclosed
management ties demand to cloud and ai workloads, but dynatrace does not break this piece out separately in the page data. you know it matters inside a $1.7B platform. you just don't get the exact mix here.
important, not disclosed
security layered into observability
Application Security
part of nearly $1.9B arr · no separate revenue disclosed
security is part of the upsell pitch: sell more tools into the same customer relationship. useful strategically, but the page data is not detailed enough to tell you how much revenue it adds on its own.
wallet-share bet
Key numbers
$1.00
fy2026 eps est
$2B
fy2026 rev est
59.5x
trailing p/e
81.8%
gross margin
Gross profit kept about 81.8% of each revenue dollar.
Financial health
B+
strength
- balance sheet grade B+ — solid but not elite
- risk rank 3 — safer than 50% of stocks
- price stability 35 / 100
- net profit margin 12.5% — keeps 12 cents of every dollar in revenue
- return on equity 8% — $0.08 profit for every $1 investors have put in
B+ — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in DT 3 years ago → it's now worth $11,950.
The index would have given you $13,920.
source: institutional data · total return
What just happened
beat estimates
Dynatrace beat with $494M in revenue, up 18% vs. prior year.
EPS rose to $0.19, and annual recurring revenue climbed to nearly $1.9B. The company is still growing fast enough to keep the market interested.
$0.49B
revenue
$0.19
eps
81.8%
gross margin
the number that mattered
The $494M quarter mattered most. It was up 18% and showed the subscription model still grows without drama.
-
dynatrace reported solid results for the fiscal second quarter (year ends march 31, 2026).
-
revenues of $494 million jumped around 18% vs. prior year, while earnings of $0.19 per share improved 27%.
-
both figures modestly topped consensus expectations.the strong performance was underpinned by accelerating adoption of cloud and ai workflows and, as a result, increased demand for observability and security for these applications.
-
in addition, total annual recurring revenues rose 17% versus the previous-year period, to nearly $1.9 billion.
-
meanwhile, operating margin expansion is slated to persist.consequently, we are adding $15 million and $0.05 to our current fiscal-year revenue and earnings calls, to $1.98 billion and $0.75 per share, respectively.
source: company earnings report, 2026
Get this snapshot in your inbox
This page, delivered free — plus weekly updates when the numbers change. plain english, no spam.
weekly updates
earnings alerts
plain english
no spam
What could go wrong
the top threat is renewal or expansion weakness inside a one-platform revenue base.
med
all the revenue concentration is in one platform
dynatrace reported $1.7B in revenue last year, and 100% of it came from the same platform. that's elegant when customers keep expanding. it's unforgiving if renewal rates soften.
impact: weakness here does not pressure one segment. it pressures nearly all of the business, including almost $1.9B in annual recurring revenue.
med
the multiple still assumes clean execution
at 59.5x trailing earnings and roughly 44.6x this year's EPS estimate, dynatrace is not priced like a normal mid-growth software stock. it is priced like the story stays neat.
impact: if growth slips meaningfully below the recent 18–19% range, valuation compression can do more damage than a small earnings miss.
med
competition and product mix are harder to read than they should be
the company talks about observability, cloud monitoring, and security together. rivals like datadog and new relic keep pricing and feature pressure alive, and this page does not provide segment-level revenue to show which pieces are truly winning.
impact: you can see $494M in quarterly revenue and nearly $1.9B in arr. you cannot cleanly see which product lines are driving the next leg of growth.
all $1.7B of reported revenue and nearly $1.9B of annual recurring revenue depend on the same platform staying sticky enough to justify a premium multiple.
source: institutional data · regulatory filings · risk analysis
Pay attention to
earnings
the next arr update
revenue can look fine for a quarter. recurring revenue tells you whether customers are actually staying and expanding.
metric
whether revenue can clear the $2B mark
analysts are looking for about $2B this year. if dynatrace gets there, high-teens growth is still intact.
trend
margin expansion versus valuation drift
the company says margins should keep improving. the stock says that improvement needs to show up quickly enough to defend the multiple.
risk
retention inside tighter enterprise budgets
one-platform revenue concentration works until customers decide to consolidate spend elsewhere. watch renewal language carefully.
Analyst rankings
short-term outlook
average
momentum score 3. in human-speak, analysts are not seeing a strong near-term edge either way.
risk profile
average
stability score 3. this sits near the middle — not especially safe, not a chaos stock either.
chart momentum
average
technical score 3. the chart is not giving you a clean trend to lean on.
earnings predictability
30 / 100
predictability is low. translation: you should expect the story to look bumpier than the platform pitch suggests.
source: institutional data
Institutional activity
institutions have been net buying for 3 consecutive quarters — 353 buyers vs. 273 sellers in 3q2025. total institutional holdings: 0.3B shares. net buying for 3 quarters.
source: institutional data
Price targets
3-5 year target range
$36
$76
$45
current price
$56
target midpoint · +26% from current · 3-5yr high: $95 (+115% · 21% ann'l return)
Want the deeper analysis?
The full deep dive: dcf model, scenario analysis, competitive moat breakdown, and quarterly tracking — everything on this page, taken further.
see plans from $5/moThe deep dive