Dynatrace (DT) 7 Aug 242025 Q1 Earnings call transcript

Greetings. Welcome to the Dynatrace Fiscal First Quarter 2025 Earnings Call. [Operator Instructions] Please note this conference is being recorded. I will now turn the conference over to your host, Noelle Faris, the Vice President of Investor Relations.

You may begin.

you Call. Dynatrace's thank XXXX Quarter and Conference Earnings morning, for First joining Fiscal Good

today Rick me Chief Joining are Financial Jim Officer; Officer. Benson, and McConnell, Chief Executive

statements report the forward-looking note amounts The information, statements Before and new started, company's assume rates are economic are uncertainties Form of today SEC today. growth share expectations as X, constant conditions. on differ Dynatrace's revenue, that in due statements may no forward-looking on We basis. and such noted, of filings, results result future contained we discussed most growth from today's earnings we in on the discuss we events guidance as please this recent that call including XXXX. risks comments and filed materially reflecting get these diluted Actual per to a non-GAAP, regarding statements views or represent number obligation circumstances. quarterly a include currency XX-Q our update our a to otherwise August Unless earlier

in presentation, section To let are discuss Executive And me earnings also call. over on our press Rick today's call to and to reconciliations and that, please between financial Chief of Officer, non-GAAP release our supplemental measures IR will other GAAP posted today's Results non-GAAP both measures, We the with see Financial refer which website. turn the McConnell.

joining call. good us Thanks, today's Thank for for Noel, and morning, you everyone.

free was in revenue Our example a ARR year-over-year basis. revenue exceptional customer year-over-year value. trailing currency. in of XX% constant XX% execution currency. flow first our delivering increased quarter on are XX% focus and results a compelling on Subscription dedicated disciplined of XX-month cash grew And team's constant

to a demonstrate ability These line top combination powerful growth results and profitability. deliver of to continue our

has outages impact. given industry-wide helping mandatory globally, end of users have ever, observability than minimize more Now billions become impacted software in that recent organizations

maximize to they the performance a like deliver the business with market to in of platform well more believe why software resilience. our moment. are mission-critical customers I share meantime, The on win. we Jim QX look our resonates the observability end-to-end our of thoughts will evolution I'd availability my In strength positioned as and about and share to details

To is fueled growing organizations migration digital security application $X.X is of AI. and large competitive start, to to years. and market and and the next the IDC observability seek The businesses AI estimated as observability X tailwinds growing, continue trillion promise of over by billion more ways transformation than and be efforts new to the CIOs toward the cloud $XX TAM budgets of expects IT to the build spend on prioritize advantage. market

organizations and drive a in But manage as in user effectively. performance generative visibility confront increase required to experience problems, issues an significant the of lack explosion challenges. create massive AI often efforts cloud resulting cybersecurity cloud These of solutions needed modernization to are and provide data threats. visibility environments Observability often complexity, proper they initiatives, application and into

include an approach consistent end-to-end experience. reduced to to platform. user advantages monitoring security tools an observability customers such continue consolidate standardize on more we Moreover, a increased siloed improve The looking and typically see of and costs, productivity,

asked, my is win? get does response twofold. often why Dynatrace I And

end-to-end value. our First is relentless customer the commitment our power second to extraordinary of delivering platform. And is

combination leadership of automation. and customers contextual platform, analytics, Dynatrace data-driven AI for frequently our Regarding choose a delivering

generative only We real enabling precise AI also provide and observability power leveraging automated we uniquely context, store, action but in to fully integrated in predictive rapid of leverage X types then techniques to for response. powerful correction, causal predictive near all that time. analytics data call not answers approach our apply a captures AI, We allowing GRA, incident data and

help also not facilitate differentiators but productivity. increased they better business customers revenue, our improved these time, same higher efficiencies such the cost successful transformation, and drive At as outcomes only digital

We by the our on Kubernetes vulnerabilities platform the security we we expanded with innovation. app, focus posture and Site with security for and extended Last the Davis example, our quarter, a Reliability continuous Guardian, existing detection are addition anomaly capabilities driven launch of management. of

Over coming is more much to the come. there months,

With to strength commitment we in financial value and us our invest proven because tangible our Our affords ongoing to leadership delivery, to capabilities success the maintain with strengthen win flexibility R&D purposefully of these ROI. to position. customer respect

a are it that on reliance outages and worldwide world's recent the software software is how of as stark critical The works reminder intended.

works the in criticality outages platform software perfectly, Our years an enabling of just resiliency. a been all vision world achieve the These substantially that we end-to-end customers greater deploying helps unwavering as where expect. major business has over highlight further observability

the and platform identify greatest business impact. More ability incidents, those where and solution. remediate need root the pinpoint able leveraging identify we're ecosystem rapidly. during is The our to not the to Customers prioritize in these their remediation and arose cause, issues critical to areas quickly prioritize actions is with data

processes not Manual do scale.

to from us capabilities needed quickly thank they provide Many the to with insights the help us information critical their out AI provided set and Our CrowdStrike competitors. prioritize customers deliver that apart outage we our value, work this reached stabilize them the recovery to following environments. needed the

efforts focus the as U.S. log identify airline their leveraged their get identify quickly. enabling notebook air Dynatrace their A the Grail affected, able enabling airport and outcome. availability and which stack, query us health overall positive that an integral provide within well on Dynatrace were issues recovery back team care of kiosks were company they a to language A in recovery high part their as features, process. potential to them and U.S.-based rail infrastructure major Leveraging to customers the was told to

if indirectly that before problem. the the them advanced than earlier its impacted allowed execute on through warning ticketing had contingency plan to of the system. was hours third provider insurance to the waited This they the determined party AI were for An cause Davis the notify vendor impacted. party announced they a third much provider side, third-party root

the their This systems. IT a With world's able hosts Directors recovery customer one X,XXX they of at of had piece recover the over companies critical unavailable. key effort the set hours. those less most in Dynatrace, largest of hosts Dynatrace to than were initially biotech And XX was all of

provided is we capture areas. strength go-to-market success, question, to This platform to we of update next leads changes, Last optimal doing customer the given and this are including our quarter, which and that X what the the strategy on our go-to-market to commitment ensure innovation opportunity? focal I an to have

While progress the driving. leadership still year, with team our are with pleased earlier along in the we

customer is segmentation. First

the beginning we increased our to the Global fiscal But year, to strategic that ARR. the focus highest continue accounts productivity sales potential enterprise of our force on We target of overall. the largest Global have the the the XX,XXX in accounts with drive at XXX

Territory and leverage changes account completed accordingly. executing in were and April, we are

to successful investment to We mapping outline these expansion. resources adoption in our for segmentation customer success and deployment, also increased

to Second, partners. the of we continue emphasize criticality

we already Partners our than them influenced more than they deal can deliver believe of do more we far origination but X/X to today. ARR, scale

go and We are making impactful to especially investments most across all focused and easier GSIs on partners. it us our make strategic highest market hyperscalers, with to to priority partners, are we and including

friction drive engine enablement as remove an well to collaboration. as economic closer investments include expanded These and a model simplified partner

we we effective expand we application our tremendous and is sales land cases. in customers' rely go-to-market have today. and one with on a success our had expand continue our performance lead and focused we an strategy, aligned set motion where around across workloads. Finally, have extremely with Traditionally, This engagements of to use approach

complete reduce we insights. evolving. have is the as And time, opportunities cloud sprawl observability efforts DevOps in tools include in teams resolve for we which end-to-end actionable scale. if not are case. broadened development increasingly of faster at looking visibility and data the enables targeting how incidents release happening same to their from market modernization are customers and platform them This first At well software prevent of approach organization's responsible to And organizations gain the to engineers as our for requires

to to of Last the recognize important X-year our turn I a marked moment Dynatrace. the anniversary Jim, call I to wanted an IPO. week milestone take for Before over

years, achieved milestones. past the several have Over we X important

have X,XXX in over transformation their We empowered initiatives. organizations digital

billion of of exceeded cash revenue public free with $X We of $X along billion, of than software $X cumulative cumulative flow generating companies than more revenue, only are more billion. X% in X now that have

today proud am the that truly time and behalf worldwide. Dynatracers now. of really of achieved FY I and customers I'm of beyond. start balance We shareholders enthusiastic our our a off believe on about the our highly team partners, we collectively 'XX to to we are that year, and the is do great closing, and have successes In

we the actionable rapid believe with insights our end-to-end believe the strengths in observability incident difference. moving and prevention. strength Jim, resolution makes you. market And need playing over all increasingly our toward a of to to to platform leading for AI-powered is the fewer solutions We

everyone. to line and a QX indeed Thank our strong again, high Once profitability you, top Rick, was good and metrics. start of fiscal guidance surpassed growth we end the XXXX. morning,

and to a market, Our continued balance we is product proposition in the the and continues ability a durability to of environment customers our in model growing this ongoing testament the dynamic and security to that differentiation, profitability. our execute macro value growth application criticality strong of to and successfully provide observability the of business platform deliver

Annual note the an the and will results currency, in detail. is This mentioned the compared Now otherwise increase million Please stated. $XXX ARR, year-over-year. year. quarter constant year-over-year last billion, $X.XX recurring of same revenue, period was or up review let's unless first in more growth be rates XX% to

In added X% XXX year currency new ago year-over-year. to ARR the a basis platform, up million, net constant Dynatrace we on quarter. new QX, from was QX XX% logos $XX up the

per quality in QX, have and $XXX,XXX new QX. with on came propensity trailing XX-month basis target new that average ARR greater to a expand. to continue a In consistent roughly logo logos at We

Dynatrace platform. business end-to-end that and existing proposition their to our customers and consolidation and to They are are with breadth depth, or enterprise Our outgrowing value solutions. automation seeking continues tooling for value tool the observability of coming commercial resonate DIY

customers to of they are platform, the their the Dynatrace Once benefits expand usage. quick experience

highlighting per rates from rate gross in the retention and to while XXX% our Our QX. best-in-class full continues customer we Churn the customers. improvement net increase approaching $XXX,XXX, a to in came low, in average value industry, quarter, at ARR retention continues with mid-XXs, mission-critical provide first to in the slight be is stable

We our roughly in globally XX% traction. strong over see ARR. customer to bringing over to closed continues than model XX% XXX base licensing customers representing QX, more deals DPS total of XXX our DPS DPS and Our of

NRR we buying predictable we process and As in as shared and transparent encounter solutions, to have model licensing friction our the customers less newer believe the further time pricing. contribute flexible, access over can more DPS immediately will in past, enjoy simplified cross-platform

customers. GRAIL One should to the All of platform with of log hotel lead opportunity of a deliver which XXX with DPS DPS business licensing of to leading example solutions. is consumption trial on and adoption provided Fortune logs their capabilities flexibility to on existing to value platform to legacy them it and The management compare more broader international the brand. more

in resulted deal by monitoring incumbent provided in value X-figure QX, our The expansion displacing DPS the a log analytics provider. log

to XX% high year-over-year and quarter $XXX Moving Total quarter on guidance for million. revenue for million, our the the first exceeding and was the of revenue up was revenue. $XXX end by million $X subscription both

the upside. quarter range non-GAAP income XXX the to by was $X and quarter year. line operations million end from up top high a Non-GAAP margin above Non-GAAP exceeding our for first basis in of margin the million, XX%, slightly range, resulted the first end driven of margins. points. the roughly guidance Shifting This the prior the operating top XX%, quarter guidance from for of $XXX gross was by prior

or of flow by cash income. per million, end $X.XX was more $XXX This than share. quarter, XX% in first year primarily million full Non-GAAP generated $XX the our net revenue and $X.XX income We higher high our the representing of driven above upside diluted of range, the was guidance guidance. interest free

view free and and bookings. we was billings is flow with cash a it variability growth Due quarter-to-quarter, to elevated particularly cash robust seasonality period. XX-month best flow from QX trailing over QX renewal believe in associated strong to collections

basis, $XXX was XX% flow trailing cash revenue. free or XX-month of a On million

on a basis revenue XXX As basis points flow was year-over-year. XX% to trailing of cash a cash reminder, up XX-month includes XX% impact of and related taxes. this free Pretax

value. opportunistically for repurchase QX, buy $XXX We brief based plan million million update we shares to program. long-term in our business, the underscoring Finally, shares to confidence repurchased million. continue market In shareholder conditions, the X.X a share our roughly approximately opportunities delivering $XX to our in ahead conviction commitment on and back significant on

healthy. and Moving demand guidance. now pipeline to environment The remain

of set broad and capabilities competitive platform differentiate position. end-to-end us in Our us strong and a put

execute Our teams continue to well.

come a due earnings our market prudent to trend However, are growing factors: to settle approach and of level second, third, variability; larger as the first, architecture choppiness; increased the observability go-to-market strategy guidance a taking and macro timing last our vendor take X call, time of environment of current dynamic evolution with consolidation in to deals and mature. on will the and we an shared we

in quarter last would May, on the this quarter second update We of less the in is booked of typically of fiscal our we where than booked seasonality historical in that our the half XX% full net remains That business, ARR year in second earnings makes new our sense plan. through first the XX% ARR year. and call is On we our our earnings believe indicated call November. current prudent approach guidance

have earnings go-to-market Waiting discussed changes economic QX better IT recent assess until the of getting we and on a to with spending the the last we from sense any potential time uncertainty. impact traction are us gives quarter call

we year such, are As for ARR, free guidance operating maintaining margin, revenue, and EPS our flow. fiscal cash 'XX non-GAAP full

of like share I'd purposes. to color for There few underlying a are modeling elements

half XX% on ARR, XX% On and year representing we to million roughly on no in foreign guidance. roughly foreign land and as half. land continue headwind to ARR first new rates full ARR revenue the million our to $XX and approximately approximately the incremental in of seasonality exchange expect to back change headwind Based net expect we XX, compared fiscal of roughly to XXXX prior $X exchange the July million be on the of to of to $XX of revenue, an ARR

our due in significantly of year seasonality than and expect timing and the cash And May quarters in billings for expected on payments. free call, cash earnings cash levels free we flow the lower flow, lower shared as third we tax to second and prior

cash are, however, full maintaining We flow. our for year free guidance

From to be million operations be we to and to expected million. million Looking million. $XXX between QX, XX% revenue profit non-GAAP be Subscription standpoint, revenue. a expect $XXX expected $XXX XX.X% is from at million revenue million is $XXX or total between income of $XXX $XXX to to to

per Non-GAAP XXXX diluted is summary, quarter EPS to be expected first are $X.XX In $X.XX fiscal share. our with performance. to pleased we

have consistent We of a proven track record execution.

business optimistic growth to our the approach prudent near-term front the we to about 'XX the of that, the we open in questions. ability with a taking with fiscal are outlook, and remain ongoing discipline. we While opportunity Operator? will And us manage line for

Patrick Our the first of Instructions] Scotia with [Operator question from Bank. line comes Colville

investors will business? set really if remediating levers to I'm ask helpful the top kind incident, at was you critical talking the that But on color incremental I Dynatrace sure mind a be for on there? the And Congrats in of major so, provided how kind thinking results. I the Rene of as good will customers issue. possibly guess the drive would your about very line, of this CrowdStrike about the about contrary want call, of to you

Rick. is, share The was getting from we what to of It's mean, wouldn't customers incident. helped accelerate avoid overwhelmingly customers nature feedback did ARR positive. that. incident. form I would take and absolutely that customers say we But to the given have growth It's materially it's the future But premature the attribute incident is I'll I Patrick. this clear particular for any short CrowdStrike Thanks, the which enabling what the rapidly criticality are and evidence I be is rapidly. of that prepared of up is outages workloads across these observability was software on it just this by online consistent say, I back mission our in feedback them And point Last this, prioritize the very why most software. to their to brought simply needed further and wanted to board, remarks. would

board, it using customers to us to typically cases are on software weren't what back running speed customers, longer took end In even they with more where get was found up their that to end. or and workloads, we

where the And complete some were analytics. the at when saw best their did we we And have observant of that flow, captured a not end-to-end that's results. workloads in so data customers across were looking

Our next the question with Pinjalim comes of JPMorgan. Bora line from

XXX% quite suggest rate likely one Great. NRR you. to retention maybe the a Jim, for the that improved sequentially. bit seems question in-quarter

So or you year that. the drivers in the about wondering workloads color if metric? would any of kind the of a be customers of the ago inclusion Any Have that can of newer change helping added of the you modules? Is talk great. new adoption seen DPS pace pace of some of

Sure. It's with improvement QX. it modest a was I'd question, a from good Pinjalim. start

XXX of effectively with from XXX. XXX. very of to and pleased rounds we're But going to up kind be change it's frank, that kind to something So

things while customer remarks pleased we quarter. So And And the contracting of to had which the start suggest said means customers future get don't ARR. than improve XX% we NRR more going our our to guide consuming we're one that interest significant expansion is suggest quarters. customers a obviously, does And of to over Having that continue vehicle, want and we're see about in the are see customers. in more not those this represents platform of we prepared a I strong very to think now non-EPS much at that. we that, talked in DPS our rate now

hopefully, in in we we see, should we're So see consumption. growth starting will if NRR. be thesis to the start out, see itself in for to a stabilization And then acceleration consumption to if NRI. able trends one, proves it manifest the continue, And an

on case one just with QX and early can it example expansion. It try I tried ultimately that case, DPS. it's a they're shared think very with they any did kind our as They I module. about significant chain talk a I pleased log something. the hotel a we're example. it So specifically days, customers a of is wasn't of I'd particular say it's reason being solution and performance. In great when landed very, logs great large The

I'd effectively further. newer across so the solutions board, to say it's in starting expand and even to are but interest starting And the see we customers

Our next question line comes Baird. Will the of from Power with

nice want And just comment like to changes. large year QX results. of looks given respect light probably prudence on the with sounds in could circle year of the principally and timing. Jim, the full you I on upside, just terms the anything guidance wonder it's I good. had back it Congratulations guidance just to you're in early macro, I of in you're of some changes seeing mean if you've But sales deal that. seeing some on QX

I think you've started in. already to bake

So some timing and over trends impacts. of you might to on reported changes guidance? that impacting been I the any with macro months, Have be X respect guess, last since there questions last those

theme talked across X solid good hasn't considering outlined for actually, is don't about said, we cycles better. was to disruption. And year. macro tool Thanks we the then that ago has we either. seeing that months good driver of of our quarter months from question. it's his going had believe means hey, start other no gotten have very hey, consolidation deal changed little is happens, a we And changed a perspective, shared That's changes. X business certainly, customers had is Rick less the of all We we than remarks, gotten multiple we year seen a changed, a change. our None levels hasn't question, market the ago. has secondly, Nothing was that in thing from expect ARR. in the approval. Will. the certainly it's initiatives. worse, take new the that when say you've didn't net from we certainly news it of And a metrics. these longer. And the that bit XX% customers the And first said, of I'd What Nothing talked has it We worsened, growing to of about actually a that lastly, but go-to-market our regard prepared are

much in just the trying quarter more see the settling have the made And the on We'll that measured year felt So year. another to back are visibility it changes given half side. traction in. we that to of certainly we're be it's of better to sense go-to-market the early go-to-market

guide a you call on just prudence So maintained read into we with than seeing update being I the of we're wouldn't of November in continued that time. other the and what building will anything at level that kind

of Our next the comes question Matt from RBC. line Hedberg with

offer I of And accounts my the and guess, Global for for of close changes. congrats have I double-clicking do intended internally as to I'll sales go-to-market been I better just of that target changes. result have all you think you, Great. XXX. go-to-market how the may year guess, able about risk promote guess on you hire team. And again executives you've the to guess to as the I -- a progresses the been the reassigned those rates some either

that? Do take I

Go.

So complete. we say changes made I would are the that

effectively we've assigned the all So accounts.

more to is year. continue I'd sales to we'll the going back in substantively the hiring while say happen of So do half of reps, the hiring

So In cases, place had call strategic been settling traction as in though talked perspective it, about that I in a And we're account with very last accounts. I the good of reassignment large, accounts from on to remind an in reps. most a ARR in even we it we reps in. quarter. those significant pipeline IT XXX particular, significant as the or there's and either not think were But just far you, think

customer our talked wasn't reps from kind of in had moving accounts from about to XX these huge X risk So those of those segmentation had or there perspective, accounts a some accounts. we that

they Now to X accounts. have X

spend, but to in. huge accounts were accounts we the significant have moved they accounts traction were that that a So had that not propensity

spend see We're now worried X of encouraged in new back is being And accounts moving the in the you'll traction given year. half cycles have to disruption months, manifest accounts. we actually from kind ability that of not other. our an rep to the of those there about deeper that accounts, reps we're So X one the time more those to go sales for itself with expectation with are

Matt, very They of excited I ready scale. would that ready the take prime are sales and just marketing the to very, leadership to and teams. add, level about time next for our company

exciting. point, that's Jim's And risk. to So on

forth very part go-to-market upon that's manageable think the I much of parameters changes. as set the based we that

line question comes from next the Stanley. of Singh Morgan Sanjit Our with

Congrats revenue. on to on any net sort of wanted another DPS of accounting that interested are there's the quarter see the Lagunillas are Is positive customers imagine you becoming of are I capabilities need come I pretty to that provided, turning AR to terms But sort modules capabilities there DPS? popular. any of for back of popular. upon more growth. XX% guys update now if of pattern in sort we to or moving that other

you of that, you of sales just of customers team that guys go customers a down? there a up sort sort sales being from of as sort leave perspective, addition on And customer? playbook Or prefer a opinionated or that the are to on that in how motion capabilities? sort the you turn Is to

I'll take questions. good X that. That's

we're to assess So in interest to customers on pleased move call the move stack land DPS, and in at. trying we XX% and But workloads, Obviously, they're moving. new modules, logos, where Relative particular, new and their to the roughly It's they're existing been customers to would get of more logos very been to more traction, continue say it, full significant at that norm continue application where of for DPS looking do that, to logs, becoming vary. significant there's security. our with and interest on it observability. relative to I they to want there's in does we're

first that that growth new we the then, advantage amount workloads, there's we at existing what's that fair workloads. with might to the way, foremost, to what probably of oh, capabilities new that, of. want see certainly, take want a they So look and by And

And pain to application on interest that playbook also So benefit model they're customer although applications. relative a say we and about things certainly particular in land-and-expand I'd varies to precise But the the quarter, playbook. every bit DPS become in with of go-to-market point a the playbook, necessarily, it's is not with. we've currently dealing security. logs The talked last based one does unique the more much largely was that in significant DPS before

now to from play. sales is application is that try you defined observability X which owner, still land find there. So the after and being a expand POC effective application one, a an you'd That plays, very for you'd leadership

The is other to end-to-end in player in interested area. on because observability a that area, traction see we started more more that

more we're So at in looking there to then Dynatrace, not maybe are be that and in running IT we're plays new ops environments on persona. end-to-end area observability. getting heavy on modernization that we there's customers' tend cloud plays personas And the that running into you're maybe developer leveraging the

of DPS. So plays there is very bit a precise plays. Those do play strength the

significant leverage contract flexibility a want, want. what trial get DPS vehicle, and a what You they have to they customers they on

way pleased of getting very And what level And a growing to we're pleased the so with sophistication would I the going area. market. is in say sales is with traction we're that we're very actually, in

from question Barclays. with Raimo next comes of Our Lenschow line the

ecosystem. maybe Jim is for partner as or Rick around the me question well. as me The from well. Congrats

You it's are X/X think on, the how of more involved talked partners about I a ARR. lot

towards decision kind more partners Or partner If et drive on strategic you still a more can do APM you. think they of do in cetera? they're it you? themselves about the broad hence, evolution and that and you you terms optimality also positioning want to whole infrastructure, the of a Is dealing they what how with with of that see space becomes that into the

some opportunistic, on -- if partner. more you're Raimo, to be looking the that contract it I'll The that. that take say at in. built tends would origination depends I vehicle hyperscalers, with

movement have various elements. looking looking reengineering, managed partners typically services, other they're and ranging deployment, GSIs, in larger observability And focused cloud on providers at we migration, they're If from transactions. cloud-native end-to-end then And between at deals, you're process others. services to

we're that So This end-to-end but deliver to we call we our morning theme increment say on around you value the in that structure the partners, customers, services believe a provide the and heard that end-to-end deployments. most it in and is observability. is loads success promoting is this the observability for this because access they services would organizations generally, most helping around I can partner where the material depends where

line Cikos Needham Our from Mike the next question Company. with comes & of

that just question, partners but theme bit I of want Raimo's on to And a here a continue X-parter. the following

or you Or originating as around model about, any second or partner can on you economic there deals relation that you since help that we XX% out Any is color far point? with are Dynatrace so. either be an are have ecosystem? would now the partners seen have the economic the in changed noticeable The we're the partners as those And to number still of items first, still acceleration is hanging then us point seeing changes of beneficial? overhauled model, guys this potentially think in entering at changed partner

take that, Mike. I'll

So put say at the fiscal of only that I in the model year. will we economic side our that on partner place beginning

XX we're of in. So kind days

already you bunch that were in deals imagine, of can you flight. had As a probably

in It and customers the model. paid. that how probably traction provides would -- probably model. get we're more significant going are getting I them insincere with say partner say certainty I'd economic it's happy they're around qualitatively for be the change So much the very economic to to because what of

level see So the the deal above in We satisfaction partner we've seasonally customer our year. in did the changes we've made. quarter that the lightest in quarter. is significant there uptick that with It XX% of historically regard, an had origination is qualitatively,

a trend. So I hate that to call

we of promising I removed on front. reps the think had the that to we the partner that made leverage partners it's in wanting direct I past. friction what removed think than we've in the We've for some do some friction sense in changes

have now with with manage then say we GSIs provides other are partner And hyperscale different around more different, economic you partner before driving to our very one than a what in that is partners navigated partners. agreements than fits model you of all. to work partners think they're bit plans work with new think leader this get how going we've and to that approach And partners work how is for developing different I'd was you having for that better specific the how say is actually I certainty paid. teaming much there regional I work I'd size are place a and partners.

of need points made And not this I'd getting more that proof traction, that but we've or to say are continues early say are I think changes. bit we lot out. see to whether the play So we time I'd little a a

the of Our with Blair. next comes from question Roberge William Jake line

platform? are landing But logs of on know or Great just new rail that Dynatrace to the for to the the logs expansion hear that large example over customer. with customers Grail for today. workloads moving I most the fully type take actually of uplift process get to how solutions, the that is subset of competing migration long running? large for up how customers that And and to and that replace starting are rip does typical

So take that. I'll

I think it varies.

production was think before, and there's journey talked a logs production usually you're and then successful, for start bigger that's the lighter moving in I with they where workloads we've in then assuming starch existing. in that workloads with POC, particular logs

think I point supplier. their on and the based existing having varies they're with log pain customer it

can so you quickly -- able part And scaling no pretty there's that challenge that. our up do ramp on being so to

it's ability move. just and think to to move a I desire customer's

they by more that varies a to of So ramp mentioned, but because What's it in can customer. to were that, I case, allows offerings contracting customer, DPS customers And that customers were particular And do vehicle, it helping that. get I services you long teams journey up trial in just DPS teams trialing don't able our more like about, our our as they log can it were pretty recall the customer. I'd vehicles great and bunch the a leverage they before trial customers things. when success can we then how in and they And around solution, different our on customer the they we say for quickly have.

terms Jake, of just well growth. nicely. to logs add It's the consumption answer onto I to consumption year-over-year in that our would above grow say XXX% very

an log to of kind expecting exciting metric watch. front that's see we're we on So do of the grant. And traction that out the

of from Our comes next Fatima question with the line Bolani Citi.

for the acquisition I the This zero in on and quarter. both is new to Jim. wanted in logo Rick

sort more growth, and what of And first the maybe you're logo had contributing been for what your I in we've think we've force the has I of that quarter? to up return X% year-on-year, snaps new to some of seen sense trends that So seeking that and new rehabilitate quarters initiatives growth especially of specific the believe. last are deliberate And down. efforts get where the continue couple growth? in was local to to I wanted

question. new with traction. Yes, the Thank our pleased very are you we logo for

that roughly kind units nature to just had we've going we bit I logo pleased. before think were from I quarter. of But vary new We the mentioned think, pipeline. the new in a logos of quarter-to-quarter, XXX, are

I are more multiple X%. right, new You're said is we're really I'd on up logo notably this on the and really quality say focusing lands. of calls, we the focusing, And

if at on more land a $XXX,XXX those We north have expand that much clip. you of average, rapid found customers

pleased even just at the them So isn't sure with equally we're that's logos, want just the landing of right it also to a though we number we're important. It's new size. make number. It

tool new cases, workload was for won a airline weren't a vendors. being a deal. it's global in certainly so outlined X with last literally we do a And We landed and I a you very Dynatrace owner, that say plays the mentioned not are for they're cases, monitored. be a consolidation the is we a The running have logo that there application sales customer other similar could an of that And very quarter, that that in particular and landing they that customer is POC we a I'd you plays. large team before need and many even

about a a little it's about expansions, the X. And point still XX% net talk to new [indiscernible] from I'm take sales of actually or our give vary, the new part from is more I focused while quality happy so the -- bit on units, it with about does the number I'm which And why units. of ARR logos of XX% or of plays. come and expect We

what So continues new to want we is it's to -- motion we want attract I that think customers.

X,XXX have customers We over today.

XX,XXX top the targeted companies. we've global However,

So we go runway to as a have of lot well.

refine. a motion to to that going So it's continue we're

for of once have manifest you're to traction, that itself us going additional work with we logos some drive that doing, think able as be we're well. partners the I partner to more see new

lands land see I the say Just each see it or dots, cases that cases these new discussed Fatima, that And in in remarks. on. would it cases that in sales and it We I logo connect of to use we We expand. use prepared have the the cloud we sales see focused team in go-to-market the modernization. are at end-to-end see observability. the We use

Our from James. the next question with comes line Adam Raymond Tindle of

new ask to net a on wanted ARR. question I

congrats Looking at It the over and QX, data grew on XX% in financial table. that.

the understand that updating you're sense. year, For not of the and makes rest I today

from And the us asking year something So impacted understand that. expectations. But there remaining I are more may the of the some wondering the reasonable for maybe in state ARR. here quarters. from secondly, to in or could set made set on be impacting you down be of sales would rest have we I'm now. would cause maintain touch be pipeline year because deals potentially the you here assumption Would as sounds of it it's rest if we'd to but this, those to year-over-year on were reflected a done large were in that are I If on why on maybe net impact pipeline. those perspective. digits like tracking I'm a for try that And Curious changes level the double -- the you, new that April. QX

read a it's remainder Adam, the guide of year. the question. anything So the into I very wouldn't fair for

was You're up ARR solid in year. We new Net absolutely right. to very XX%. had a the start constant currency

call to We do the maintain of math just fair imply a half year. the back that -- -- we're we're going guidance then And kind your for are year? this that way start comment if you said just the worried year. the about of simplicity, no. does We increase is it. is going certainly to And we is, the said doubt, not answer quarter, we through XX% to the we're it, good the of no or So that the

qualitatively don't in we that front I in think to want we that ourselves. of of ahead approach we market. a in convey our to we to And get are us. want remarks level that choppy a here to want tried still make on it maintain the our we prudence opportunities is But of bullish sure

I The quite more it any other And that so that. are I that's remains have and they bullish, of to in think pipeline the healthy. on would to And point, than are remains healthy. customers reminder -- we the read though, us. issues are hopefully Demand opportunities I that into outages detect a ability still Rick's front issues. To need recent wouldn't environment prevent say to an

the in solution Our that is purpose-built for enterprise.

prudent the I'd So guided we to just very say we're about we're the term. optimistic that near make bit sure we opportunities. in a little want

comes the next question of Kash Goldman Rangan Sachs. from line with Our

Congratulations well. as

growth, customer aspirational was So of plus each when I growth formula target. the That it to existing kind XX% to the potentially at customer of you XX%. look XX% new old think XX% was

the What that you formula changes we old in product existing back adding to coverage like? expanded to the from go-to-market each at XX and that to and the DPS think do customers, does look footprint, you new path to improvements could customers As get and look points when the XX reacceleration? of

Thanks, getting Kash. early Thanks us. up for for

elements in some as logos movement partner as in, update the increase customer toward simply long-term believe go-to-market all growth the going future. we to our and acceleration What elements for in around In terms year, of that we then it well cases any observability. year the of of to new elements the We end-to-end is as that stabilized which during both segmentation, other not use of sort I'm expect that. the lean expectation contribute such this like ARR say we would guidance, NRR. is worth I provide on of changes these

is And that leaning in. expectation so we the are

effort to in end-to-end an what coming and of we absorbability industry, the have than in a is our toward opportunity outlined drive that plays way, that objectives to that we're precisely doing substantial. is focused our platform growth. that any We you our the suggested We better market increased other believe competitors

of America. Our next Ikeda the line of from Koji Bank question comes with

to did growth to come with around this as these solutions. better the $XXX App Did with question do much move the of after those realize quarter? AppSec consumption X target, this in the to maybe X I it in And trends update is it first logs. quarter? go did are as circle wanted a fiscal and contributors back to expected, consumption second milestone but the for emerging you somewhat logs products moving how than expected, million Any

logs that, growing logs security. Logs which security, we had not good both given leverage given the we application QX. we're journey customers very QX application with But and than surprising growth consumption I'd we mentioned. Yes, ended how faster and say in nature rates is with logs is pleased in that continued that in and the that I of the QX very in again,

at real So a those very I'd change particular rate. in say grow rapid areas continue no Those to areas.

of BMO line Markets. Keith Our comes next Capital the question with from Bachman

on wanted that that And want did drill a to even to modestly. I than certainly I were up acknowledge DBNR bit. thinking first only was was if it better we down

ARR, bit know, was while your were And it is terms is mentioned we versus we existing target retention a if net the the new was customers, superimpose to we about closer below. better number certainly net think I'm retention in net looked I Rick, of either new it logo. you rate to little subdued on the so understand like thinking. if trying last year rate If still the existing XX-XX not software. And of than was in relatively a just breadth fiscal It the

about serve a of specific thinking just at customers markets that I'm last even in are and market the quarter. is a, Dynatrace I so you be prioritizing factors dynamics it XXX areas a And asked so reflection Will more other is, there in about something impacting

you correctly for a that, great. be workloads Is That commodity price. guess, mentioned finish And that's more more thought I to that that anything XXX think to should hurting about -- talk I competitive about bit think heard retention flattish net be over that's you I know as for you number. quarters? little next we be just these from I could there lot. is just solutions could impacting of a would rate a source the share said, If just broadly Jim, want dynamics and or thought what I or couple confirm leakage you helping open the that that would levels? on the

and start comment. maybe then Yes, Rick can I'll

guide, So would mean Actually, imply if I the it from to that the guy I didn't the you thought will levels. here. it current suggest from look flat at would be moderate actually that

fuel And that. a want which great is, to is contracting to a have to year. customers My do, think do point on you clear be leverage catalysts way the able to more as products, I we stabilize this NRR we be think that. that I of of the So the for think platform, do which that. our Obviously, to one have vehicle, to kind a of have is will be DPS goal we

over clarify where to NRR we're your moderation that. fair. say on a just is So at in there is I observation has But time. would been

is to healthy. got environment say to you environment, I would You before demand the stabilize the demand relative accelerate.

maybe customers, operate. of customers existing customers renewal at to versus new tend logos, close do look -- just expansion does you a what how when However, existing That's nature the an period. to

very close or so tend to And a to expansions coincide closely a renewal. with renewal

to of when first in move of you a level renewal in if don't don't metric be material expansions there's just have you only say the to we because huge I'd customers going happen. going a volume -- the in activity. not the significant quarter, way renewal a there's And have those even quarter, because it's So component have of the variability expansion for

see a anything offer. QX have we more little But these being say renewal I'd if don't of color. set that provides Again, So is you and at expectation and grow position back Rick, our half in good have traction bit cautious. of could I we're know a continue that And be year, substantive we to consumption expansion. much more Hopefully, for a the trends else in of in that the we if activity QX, to

open of source haven't would from we to at seen point, this the open on I Keith, pressure speak Just any really juncture. say price source

is pressure broadly, infra, there serve, whether on Rick, it's what just, you And pricing have ATM, markets pressure the you? pricing incremental on

not, say, is basis, no. specific generally a a No. in broader Yes. But it. deal-specific on I obviously sense, a can would Keith. -- you deal say It would in periodically see I

as 'XX of call to the particular, enthusiastic the toward and FY half all a with go-to-market year. we land So out of and second the year the to look And observability We're in the of believe with our drive strengths Thanks start QX. the these and about market playing and in to that balance just close to changes opportunity very speaking terms much quarter. end-to-end absolutely forward our road experience. it look very all benefits the to the containment we cost end provides We is on user joining. for you to in productivity, this great

at disconnect And Thank time. this participation. and for this concludes today's conference, you your may you your lines