Key Highlights

  • DT shares fell 14.76% pre-market to $47.01 after fiscal second-quarter results.
  • ARR rose 16% to $2.21 billion, with Revenue of $579.9 million.
  • Full-year non-GAAP EPS guidance was lowered to $1.88 to $1.90.

Dynatrace (NYSE:DT) shares fell 14.76% to $47.01 in pre-market today, down $8.14 from the prior close of $55.15. The company reported fiscal second-quarter 2027 results with non-GAAP Earnings of $0.54 per share against an estimate of $0.49 and revenue of $579.9 million, up 17%, against an estimate of about $568 million. The decline followed a lower full-year profit outlook.

Dynatrace is a Boston-based enterprise software company, founded in 2005, that provides an AI-powered observability platform for hybrid and multicloud environments. It earns revenue mostly from recurring subscriptions, about 96% of its roughly $2.0 billion in fiscal 2026 revenue.

Second-Quarter Results and Platform Metrics

Total ARR was $2,207 million, up 16%. Subscription revenue was $553 million, up 17%. GAAP income from operations was $96 million and non-GAAP income from operations was $184 million, for operating margins of 16% and 32%. GAAP Net Income was $0.23 per diluted share, compared with $0.54 on a non-GAAP basis.

Platform consumption grew in excess of 20%, with AI customer cohorts consuming at more than twice the rate of other customers. Log management grew well over 100%, and infrastructure management passed $500 million in annualized consumption. More than 1,100 customers use Dynatrace agents for autonomous operations, up from more than 800 last quarter, and the company closed 14 deals above $1 million in annual contract value. It also announced a Partnership with CrowdStrike (NASDAQ:CRWD) and completed its Arize Acquisition on October 1, 2026.

Guidance Changes: Higher Revenue, Lower Profit

Fiscal 2027 revenue guidance rose to $2,330 million to $2,340 million from $2,306 million to $2,320 million, and ARR guidance is $2,393 million to $2,413 million. Non-GAAP Operating Margin guidance fell to 28% to 28.25% from 29.5% to 29.75%, and non-GAAP EPS guidance fell to $1.88 to $1.90 from $1.97 to $1.99. The guidance reflects about 200 basis points of ARR growth accretion and 175 basis points of dilution to non-GAAP operating margin from Arize.

Third-quarter non-GAAP EPS is guided to $0.44 to $0.45, compared with an estimate of about $0.50. Management attributed part of the margin change to the Arize acquisition.

Capital Return and the February Investor Day

In the quarter Dynatrace spent $246 million to repurchase 5.2 million shares at an average price of $47.38. The board authorized an incremental $1 billion, bringing remaining capacity to about $1.3 billion. The company held $2,075.6 million of cash and cash equivalents. Dynatrace will hold an Investor Day on February 16, 2027 in Las Vegas to detail its roadmap toward a Rule of 50 profile in fiscal 2029. Shares have a 52-week range of $31.64 to $66.30.

Arize Integration and the Third-Quarter Report Are the Next Markers

Dynatrace reported higher ARR, revenue and EPS alongside a lower non-GAAP profit outlook tied partly to the Arize acquisition. The next items to follow are the conference call today, delivery against the third-quarter EPS range of $0.44 to $0.45, and the February 16, 2027 Investor Day.