Dynatrace (DT) 7 Nov 242025 Q2 Earnings call transcript

Greetings. Welcome to the Dynatrace Fiscal Second Quarter 2025 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce Noelle Faris, Vice President of Investor Relations. Thank you.

begin. now may You

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

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

quarterly forward-looking please guidance factors earnings economic and on of Dynatrace's earlier expectations conditions. report differ in today's get due regarding may and note SEC results uncertainties our from we as statements today. discussed that started, comments Before most XX-Q filings, risk include we materially statements Actual to such revenue, number recent that Form including our a filed

forward-looking represent per We on we discuss The diluted noted, share statements update result company's and contained non-GAAP obligation events are a basis. no today information, call in these XXXX. otherwise constant the or X, new growth as currency Unless growth a this amounts of the November rates to reflecting on statements views are assume future circumstances.

other and will please non-GAAP in non-GAAP both the between financial discuss today's posted today's financial see presentation, reconciliations on measures earnings which and press GAAP section website. our are We IR supplemental also release of call. measures results to refer To

And call our Executive over Rick turn me Chief with McConnell. to let Officer, that, the

Thank everyone. Thanks, Noelle. us call. for today's for Good morning, you joining

we delivering well to results and point. grew Our cash ARR free our XX% our of the in was the XX-month is year-over-year. offer decade, ability XX% to market second great quarter first revenues been and our a strengths strong believe result for proof margin half and trailing market. performance Subscription which observability, strength a our increasingly XX%. a fiscal the to in platform is of a QX I the year. dynamic execute year-over-year flow effectively delivered over AI-driven playing We increased have

modernization to the details reliance than market, first, we're innovation, moments. our commitment discuss financial the required [indiscernible]. downtime business is our Jim driving need resilience seeing in for observability manage finally, a on like our the cripple more and struggling will I'd evolution go-to-market recruit resources and wins and top hold world's And trends mind for for Innovation, increased guidance we the software But To in of ongoing share [indiscernible], experiences, businesses. accountable to of customer all and performance them. companies Organizations instability begin, to key a we their to expect customer about productivity. leaders, business are few the delivering and and are strategy. exceptional greater

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is observability to to to Dynatrace. platform Rather, end-to-end why organizations answers an turn able issues need to organizations be from This action trust automatically.

and massively to enables began with differentiated innovation us observability believe a apply performing X a maintain of to ongoing analyze absurdly on we dashboards. in highly just and deliver highly Grail called data AI substantive one then business processing, AI-driven importantly, value. deliver focused and data data a maniacally all power data to events that context. points interconnected to We user unmatched data logs, are just metrics, parallel store traces, visibility uniquely not billions We delivers answers, of platform, to not really Grail business

data our and In understand its world insights to guess is correlated the issues analyzes criticality points our works. generative responses in AI important We like leverage Rather, AI, find context which in of it how data. isolates particular to Causal analytics precise incidents. based AI evaluates Finally, haystack. to deliver we software and a to AI, automated AI contextual and to response. trying begin the doesn't needle enables help an causal benefits it to and clarify with answers automate and This observability. based of on billions on avoid harness power wide-ranging points expand the of in help I'd infrastructure. data how to X causation to AI

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customer This is can value. how Dynatrace truly maximize

recognized Dynatrace by time analyst was that Magic This named reports across cases #X a Dynatrace in digital were of formation humbled highest observability have recently Dynatrace Ops Quadrant transformation. the continue X Gartner that were named the Gartner leader. to experience digital in leader Observability Quadrant and XXXX for driving to is and Gartner or the shortlist recognizing XXth leader. in a AI XXXX has leader Gartner in third-party consecutive or performance digital monitoring. XXXX platform And We use be Constellation ranked the Magic We the the Critical positioned furthest Capabilities [indiscernible], Dynatrace platforms. XXXX support. inaugural a We in execution as as named a we X management,

single I'd few wins customers. X-figure We this with they're U.K.'s closed deal also to looking as one expansion A leading with be are digital platform their than and IT to underlying to struggled bank, customer an ecosystem, an a that AI-driven X-figure excellence important that DPS the source a share They to mean like minutes quarter power a illustrate less helped over of were and they provide the from providing They blind banks with we're reduce services. hour lack the aspiring from business top their observability. past across Dynatrace TCV center resolution truth U.S. the end-to-end signed the time to U.K. major of tools standardizing to visibility value across to transformational provide X insights airline spots. with expansion. on of multiple

dollars. had platform the provide expansion management production visibility chose their they leading production By Dynatrace this customer collaboration were value. layer estimated logs. hundreds occurring our X-figure in of thousands substantive closed displace with from them business customer and We layer, observability that dashboards, limited thousands these traces This a into to by caused extending Dynatrace's to infrastructure tools DXC, AI-driven and platform. visibility partner, resultant finance legacy environment, the a In incidents costing including environment. the application noise with into the gain reduce and They incidents of their their of

East. the benefits customers highlights transformational our an team observability from And government larger platform. of strategic evolution X-figure the for a in of Middle sales with are examples with finally, emerging logo deal agency end-to-end These in represented markets a new looking a transactions that all

rolled primary areas. X to like go-to-market the to I'd turn on year the we at beginning out of changes Next, focused this that fiscal

First, to our attention increase IT customer on we larger accounts adjusted drive more heightened to to XXX segmentation focus to and This plans. accounts. us transformative platform enables strategic

it through partners closed Second, involved effective we over make to Dynatrace in more anchor deals with XX% work to a partner. of quarter in with easier the leaned enablement have

and motion beyond application performance expanded include have modernization. go-to-market we cloud end-to-end Third, our observability to

of use At I same we're still pipeline Overall, development including pleased progress quarters a view these the the are stages. in Several adjustments with sales with as arming being of force early these a are the set benefit direct X just recent of we broader areas. the into only go-to-market ourselves wins and in deals some noted. we our time, customer cases

streaming several locations support in and across thousands event, [ several increased and with on ] partners featured tuned around in Last customer go-to-market our Power to multiple customers highlighting continue We BT DXC. success which Possible venues. customer initiatives and We focused included world innovations opportunities awareness and stories, of the engagement to month, our like watch areas.

in automation. brings simplified involved power to their streamlined dashboards users and dramatically access Dynatrace analyze the wider updated drive dive These into to with data, First that of to audience. it it they is intelligent advancements a navigation user insights a interface the experience and for easier make need context an

and is analytics. Second management log next-generation

without types cloud advanced now automatically logs deeper and teams enormous such expanded simpler metrics workloads. these and the insights. and it and Customers solutions, our manage as for analyze in SREs context capabilities setup With third, and ingest faster manual operations, enriches engineering value observability greater languages, need teams ability logs for access without make integrating are at to to other insights scale. to with that logs derive teams can query And platform able understand from data AI-driven dramatically cloud traces within native

teams operations stand through development These enhancements Dynatrace apps hyperscaler purpose-built left enable to observability. Kubernetes to the for organizations platform cross leverage to and from

past allow actions regional to maintain global. by partners future locations more others addition, better resilient with reliable prioritize and And the across ensure months, GitHub, from attend and who events and to over finally, we capabilities these automated use X had our developers our In we build customers to GitLab hearing through AWS, drive X,XXX These software. X us directly and innovate investments. always over make best conferences platform integrations

of power had moving need playing observability enthusiastic solutions with fewer to enormous AI-driven growing believe visibility. up, and about our an strong our a actionable toward a the you. first difference. we market by half, ahead. the opportunity And Jim, We over insights we wrap and the we believe remain makes To end-to-end is platform highly to strengths for

Thank we you, was Dynatrace profitability of everyone. end the execution as morning, guidance the growth surpassed of Rick, another again once and quarter high QX and our good all line metrics. top consistent by team

growing in the environment market. in Our ability is a dynamic criticality successfully to to of testament observability execute macro this the

Our business and model with demonstrate platform, the business highly to differentiated observability and team's of global strength and healthy ability customers growth exceptional to balanced our our profitability. durability AI-driven value our

unless Now revenue, solid above related is million referenced $X.XX our move quarter more sales compensation to Annual XX% will period constant year and to results and bookings, X-month This increase particularly in our up expansion billion recurring of $XXX in note currency, booking and was improvement rates ARR, let or an be the otherwise by seasonality to the compared expectations Europe to driven you same year-over-year an cycles. the Please second detail. in year-over-year. in growth stated. last

a QX, XXX currency added million X% net Dynatrace QX of year-over-year. on basis to new ARR In first XX% in up net bringing XXXX constant fiscal up $XX the to logos ARR year-over-year, the platform. new million, new half was $XXX we

our at target per a As trailing that high-quality on in logo we the roughly past, size. basis, in greater a QX, landing average to logos in land shared came new line new In ARR $XXX,XXX XX-month propensity we have target with have expand.

been has propensity the over greatest customers Our expand. to have that that experience $XXX,XXX land

tooling mentioned, As our for Rick commercial to that observability or customers platform. and to and attract outgrown coming to solutions existing automation standardize are depth, on Dynatrace. we breadth Dynatrace are end-to-end the continue of enterprise They've looking their DIY

in mid-XXs, now Turning the customer retention. Net in early to in inherent demonstrating above the stable expectations, offerings. remained came Gross move value our X-month driven expansions rate strong the to by incentivized quarter, slightly compensation in rate by XXX% sales retention our cycle. retention at second

QX. an in DPS trial traction. to and gaining We model our access deals DPS nearly Total with XX% base compared DPS DPS rapidly twice IT capabilities within a the retention accretion. believe should and to XXX environments. and of faster platform And to our capabilities Our signs of lead rate ARR. This closed early XX% net at playing out We seeing our future earlier is more growing customers adopt with we're broadly DPS customers rate consumption of roughly our and possibly customers. amount of customers licensing [indiscernible] are globally more leveraging platform full represent SKU-based this Dynatrace consumption now customer will expansion

We also and catalyst adjacent for see a emerging DPS customers our as solutions. adopting

data DPS The a through to their were which other to airline expansion DPS signed types. existing immediate management open tools. Rick from U.S. As their led and across to logs DPS to major decision Grail, delivered log this contract, end-to-end contextual on source Dynatrace they X-figure their trial highlighted, original flexibility deploy Through and a value analytics quarter. having able trial displace

DPS revenue the the subscription up year-over-year XX% high commitments end strong exceeding on by to up second for reaching their $XX the from driven $XXX the by revenue million. The million, quarter on-demand customers year-over-year and was revenue and $XXX $XX spend annual a Moving modest performance quarter revenue. bookings guidance was upside guidance Total for for by and million, end and consumption was exceeding million, of XX% early. high of benefit

second a prior guidance and guidance was $XXX Shifting $X.XX range. XX%, was net or operations gross quarter spend upside the with points. XXX by exceeding quarter This the by was second $X.XX million, share. the above non-GAAP with than margin income high the the year. per end was timing million driven line prior revenue high of our payroll Non-GAAP the $XX hiring from XX%, margin end range in to operating the income of margins. for for the million top Non-GAAP of and of guidance quarter basis our in the quarter. end resulted more This associated above in $XXX range diluted Non-GAAP of lower

over On We of we cash of billings free variability basis, in second to to trailing cash believe generated free it was flow is or XX-month flow quarter. a in view $XXX $XX million Due free quarter-to-quarter, seasonality revenue. trailing best period. the a and cash million flow XX% XX-month

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

Finally, a update brief $XXX our million repurchase share on program.

ahead In share XXX,XXX in QX, $XX we for We million $XX.XX. underscoring price repurchased conditions, program shares opportunity $XX our for share shares to at opportunistically in to the million continue confidence September the long-term based of through of business, back average of the price million average May XX, to X.X value. inception at Since $XX.XX. shares on an shareholder XXXX market our in repurchased conviction buy and the delivering commitment plan an we

Moving now guidance. to

assumptions key guidance. insights of through underpinning walk some the Let and updated me our

do a in material we environment. assume the change macro not First,

environment continue healthy, be to spending. enterprises demand their cautious observability remains in the While

Second, continue the consolidation trend from growing observability benefit architecture deals. vendor we and large to of

with past, As equally timing we deals variability. these the have an level increased said in come of

as how most half, and we pleased our with we go-to-market maturation continue of work changes. first through executed importantly, we from a disruption Through perspective, has year. at of we fiscal Third go-to-market these minimizing the the the made are the while beginning to the adjustments team implemented

Having an progression. is ongoing said this that, still

more positively takes establish and accounts We to sales it impact are sales time to transition mindful of relationships XX% that than and new our reps, performance.

a of compensation an This sales sales in bookings compared but of half the first historic less to magnitude it's impact year. higher have less X-month introduced changes, unclear fiscal resulted acceleration back part in cycles. resulted in the these half, in new levels. we as tenured go-to-market of mix the semiannual plans our of has improvement reps therefore, in the sales productive Further, seasonality addition, will and In hiring of capacity the

all changes is year an updated with these of of and we rates growth with it until ahead the productivity. posture prudent with full for believe in ourselves best benefits manifest currency. constant not that, maintain Factoring in, in in on start sales let's ARR improvement to get And the our this guidance a guidance

of our to XX% maintaining year-over-year. ARR growth billion, are $X.XXX representing guidance We billion to $X.XX XX%

new we net of consistent expect ARR, half than XXXX. second For be QX, QX to higher with the fiscal

in We our our second revenue are points raising basis guidance performance. the for XXX strength to account quarter by

$X.X million growth changes full revenue to to midpoint material in by guidance of at approximately at we to ARR guidance. guidance to now revenue October our billion total XX% $X.XX to $X.XX as exchange no by raising revenue million subscription billion midpoint and are factors in rates This are our the $XX $XX to the billion, $X.XX raising billion, foreign We resulting both representing prior year XX% year-over-year. XX, compared and

The bottom our in our are model ongoing of performance. line. evident our to and Turning financial margin strength resilience

to opportunities invest efficiencies growth in finding while other areas. future continue in We

to our areas prioritize and and demand investments capacity. innovation, go-to-market activities this margin non-GAAP as to customer full sales XX $X by our generation R&D range. of basis targeted million. in income we to With in mind, partnerships, continue the translates year at guidance strategic end the of points non-GAAP We up operating are high success raising GSI operating XX.X%, guidance roughly such XX% This

program. share EPS of representing guidance range. QX million on excludes are of $X.XX This increase of impact opportunistic We to to per repurchases our and QX XXX at the to share of diluted count in the EPS EPS XXX due This midpoint shares. non-GAAP any count share million a nature and an $X.XX is the non-GAAP the $X.XX based diluted raising guidance share, of to

$X.X the guidance $XXX midpoint cash margin revenue. free cash million of We flow of at million XX.X% representing flow of an million, to $XXX are to XX% a free increase to raising

margin Excluding XX% point the taxes, expected pretax this free a to represents XXX basis flow cash cash XX.X%. from impact of

fourth our being to reminder, and tend cash-generating lowest. seasonally quarters first quarters with strongest third a As our quarters be our second our and

timing due free flow be third We than levels cash payments. to to of expect tax historic cash quarter and lower billings

total Looking a non-GAAP to is and and million. between expected at is operations standpoint, $XXX be revenue from $X.XX QX, are is $XXX between million million. EPS revenue. to expected quarter we be between From to $XXX share. income $XXX revenue profit million be XX.X% $XXX Subscription to performance. second In our with pleased XX% to we diluted $XXX fiscal be XXXX or summary, million million $X.XX expect Non-GAAP to expected per of to

We record have track execution. of consistent a proven

While in we it. opportunity be prudent of after approach in our the about outlook, our the to front we and optimistic evolution remain to near-term to us of growth go the continue maturation go-to-market

with open questions. the And that, we for Operator? line will

[Operator the line first And Pinjalim with Bora is question from Instructions] of our JPMorgan.

about Congrats solid a not decision guide. to wanted ARR a the ARR I on more little just or Jim, quarter. bit to raise learn the

sequentially stands, completed like second on bit sales pretty half QX. it you're unbilled I kind the the despite a a all sounds of seems good. cautious but the having looking things more understand massive. side had It of are like the solid little first about You RPO prudence changes seems and half build the the

cycle, Anything there quota structure? -- the second you're pipeline helpful. pull-forward from to half is that understand maybe you color deals half any something there was I of of So into second a rates the wanted QX or conversion would half sales gives yearly the seeing because the that for be just [indiscernible] if in

one. opening tried that in had that strong We a question, remarks a very Thanks to with. outline start an of We for Pinjalim. a very just provide bit I'll the kind of QX. of had I half strong the

the changes. Our seen from sales go-to-market We've has well. executed no disruption team very

been have So go-to-market there's seen gone disruption. certainly, through companies changes you've that where

executed we've months made. well X changes the very think of first I the through we've that

with pleased that. very So

with outlined, while disruption, Relative accounts do to I reps only position we there's these had X prudent, would months. more, no have really guide, changes new maintaining we for the being made, been as they've I just it lot accounts. much that that a of And as these

made, new reps are new we that of more made the lot changes the in introduced these changes some a reps company that with have that accounts. in now We strategic we

we whereas believe we some more, historically compensation perspective, a receive got mention the benefit X have seasonality we XX% X-year from plans. And and So to than kind benefit new benefit moved an also to And X-month our plans. we tenured second did happens have. did call of that reps from ARR of, in that a first [indiscernible] was area that we I half, to and X-month linearity net we think you half moving X X it, some normally do do

difficult completely we say It's ahead size. to to get would But ourselves. of want I just don't

a cautious. the about, optimistic one, we've us. very opportunities bit in to just being not worried. are the that just cautious. made front are changes We're We We're of that We're being

customers I look adoption your If Can Just kind does how related portfolio? maybe a of talk follow-up. have and you of the consumption like core the curve products? to for Understood. can the across logs DPS understand about the to curve trying AppSec

think I the platform one significantly -- with on our is shared that this growing than total ARR faster in growth. we consumption So before we

So consumption aggregate is in healthy. very

emerging than As faster expect, for that. consumption significantly growing you products can is the

number. Now admittedly, a it's on smaller

then very So we good in aggregate. products, good growth. emerging our And have traction within

logs, doesn't security our we our which that now customer significantly application We products. are logs in base of surprise an us, nearly faster growing on XX% have

once about seeing benefit We're see some adoption logs the customers then announce for log that advanced and log more small curve the a are We've they start customers of We number building with our talked did our analytics spending of solutions. grow. products. that of on

of a customers model new announced want for it as have that think all-you-can-eat -- model. pricing of We of more an kind

And emerging the in with particular, think gain us in we So the products. market, to for we're ripe very, is logs particular, very optimistic share.

with line from The Brent next Thill of Jefferies. the question

you've Global changes, would on [indiscernible] for guess covering the like Any for the on changes sort XXX and lot to be segment Thill. there, for rest for there? right ratio about addressed talked were to gaps account maybe I on one -- the below any go-to-market color the rep of is segment. account segment. This the first Brent the slightly still what that productivity that made need be you that a But below

Yes.

I resources changes talked accounts into -- X% to with changes depth accounts that now we the you that made have we don't the remind that segment, with a our ago, about to area XX%. can pyramid that we more installed that the in about think about that couple that which penetrate. rep quarters more but to that of per in customers that so With go we some the or rep, base made to X per X and number penetration just we ratio in top the be XXX is think we of the to get cases, the customers have we of adding right IT of used

account rep much Relative hasn't top it of the accounts still that accounts of have model. account-based more per of accounts fundamentally territory is at And you oriented to fewer pyramid, you a that that, the can -- below a changed per below account-focused more number of the plan model. It's model then rep. an

below than DSI, So leveraging in the through IT but market you're to partners, below partners certainly other us working that look XXX of to help as when with that what regional us our get partners well. changes more broader and XXX IT and segment is the the tracking can to get the some in help say no continue the we other and I even of to that fundamental would hard penetration

just those of the that made. some are changes we So

this is go-to-market of is that some package that like XXX motions end-to-end remarks, putting focus application this Yes. enterprise X performance oriented I in segmentation mentioned across as course, as around well IT in native. go-to-market as observability a as areas, worth include portfolio, motions. the the We're the monitoring elements place we mean we're on well accounts. cloud And prepared partners the and really go-to-market highlighting of accounts as motion, I

But are customer feedback on the your customers. question how on customers ARR? pick customers net separately, side, And then the DPS. received on larger I DPS up DPS logo impact feedback who any spending seen DPS, any early on is to among the guess or been landing has have for new consumption the average And from you've

Yes. DPS honest. expectations, be continues outpace to to

launched ARR DPS. last XX% our customers, of We have now just We year. it April of XX% on of in

it relative we our XX half model, on which and growth ARR order pricing driving to our around based. And on of Xx the is you deployment consumption of are legacy So is DPS. of in months

we're very adoption pick the consume gives It with DPS more So more capabilities faster excited much less to and see customers rapidly to more friction. up. deploy flexibility and

DPS So evolution. with the we're delighted

your only thing that XX% DPS. The Yes. land of logos about our point to I'd with logos add still last new we average new about

evolution last it's That where of the So important X.X in. of organization it's would Rick's we I going a what they're are of we that SKU-based for is tell years getting size point, still land. an say have land model, way a function a year, to April much from or a what I'd had model go journey in. We a a this to investors sales -- or to logos know is that interested they're of comfortable started -- selling isn't again, very And that at the contracting. through non-DPS. kind percentage is in high kind is more to of of completely new selling different And higher lower because customers you landing DPS with

the organization news the muscle sell And is, for good sales to DPS. is memory now it

doing proficient or that. curve more they're at quite obstacles learning that no there's So

with contracting can we we faster. land to the the is DPS, find common demonstration shown And likely look that that So if again, this be at they vehicle. of they expand is what we've

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

stick to DPS wanted on again. I

sort You of months XX launch. into mentioned we've the that it's --

DPS that In that expansion the trend are year in an of underlying sort that there when under experience you sort to lines on of given full start resulting consumption get pricing. renewing first Any terms renew, sort trend the is trend? DPS, of of uplift what stronger seen lines customers of after of you've customers

that is we have It's a DPS non-DPS that. rates than customers the And customers higher with will start for answer great question. that expansion

of So just classes maybe your from DPS have QX customers aggregate, our the cohort that, were about at QX that comment Those -- and year. we in expand found greater significantly rate. last a

we're finding Now a that having the it customers skewed sample a bit over are we've that more customers faster. But and DPS things, the balanced expanded of have that seen form, said be things. they're to leveraging the we're move have trying And more already sense trialing I customers that, expanding that that, they're certainly that to significantly would that in of customers anyways. were more that initially, capabilities that -- said size means Dynatrace love you is probably it's we're having which importantly,

a remarks quarter remarks our ability a logs having expansions. sales to without the We couple the ultimately in on logs. go the a led about prepared few talked mentioned for in call. I for has to one on We cycle, prepared trial them larger through in we -- last the where in mentioned cases the things to And think

the with the and very DPS with for is that traction do right contracting vehicle believe we're So pleased this customers. most

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

plans, a of lower-than-normal half? the more those sales the on into still that growing do QX like a X-month back plan. pipeline was into deals causing healthy to just may front. healthy you QX change anything the to heading were new wanted pretty comp result pulled double-click feel be Would Just is in the pipeline comp Or that

to takes that. around the puts trying and Just understand

healthy. say a that it's environment is question. quite would demand the I great No, still

half size a made. cycles been incentive I before it changes I we half We look moved. do a we it matter of of my we think our of the have think for the sales think, of when first seasonality we I a ourselves. in half to to the otherwise have did cautious back a that commentary, kind made result of see been from very accelerated believe difficult X ahead as think in say change the we're that. was of pipeline pipeline ratios, year. in into would kind I for X know the they're consistent other don't benefit to at just which the that the mature deals So all sales X one reasons as we would versus the was second a as cycles. of certainly result confident said view . It's organization an do X-month we half because booked sales X. this moving half have first But model to as specifically of But certainly were get being move. really the a with and you the what I very we're right seen because in every half X-month coverage pipeline the of Don't a there's moves. We segmentation why do changes and is It's allowing right benefit would deal in bit with historically

Just -- sorry, I drivers. might pipeline comment add just on a overall

year alluded land into we've model, One to we of be with new of maturity have And the wraps number reps an XX reps. the of above less. see for lower we have typically, now, as lean with XX% or account place this of about that added Jim tenure. biggest our X the we And pipeline year, and our lower drivers this to productivity which essentially reps in earlier, execs segmentation we is going

cycle, productivity pipeline. develop to the as to we as reps well more those increase get tenure As would beyond X-year then expect

earlier the is movement precisely plan in we're putting that game year. go-to-market associated this this the place in that we with So made

of to XX% hear close And helpful. That's to great then Okay. now influence deals. partners

partner X/X uptick last starting and about front how to the that's about actually on think year. deals what from funnel? of they're through the more lead talk you -- those if deals seeing I sourced you're Could

it's I'd early. say Yes,

X/X half we've of of about the I by the partner the this forced half. historically, quite were that number partner. first the closer In deals not to of seen half half think year, first was

we seeing of sourced increasing So an deals. number are

partners make the Obviously, an become partner I the about I to that think maturation So the and board. the plays that their traction the getting goal changes Rick with that flywheel increase and for think changes, a our of motions across the go-to-market more and source talking accelerant growth the we're of or to again, segmentation company. outlined is sure continues sales partners in

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

speak can you And [Technical Difficulty] Perfect. is on what to the

you, lost We Raimo.

next Stifel. the question with to gentlemen, and ladies from on, Reback move We'll Brad

is contribution the Jim, can in you there all think back consumption guidance, at upside? give we us that is much from half a sense there all? as about . Or

guidance? for When the -- say revenue you

going Yes. to was Well, NRR. I say as in well as both

how is Just all that the captured in P&L?

of So obviously, benefit already DPS our the seen results. in we've

QX a other for actually, through than was change you QX, XXX call relatively and stable was QX. it, in you bps, call few saw when it -- So it,

kind of XXX. we're Now

the consuming that just seeing already is faster. just customers of benefits NRR are consuming EPS, So not and of more some but

again, half. the point So about second to going your

get apply on I think, that anyone the be of I ahead to to being cautious, call we that we're Brad, half. back ourselves. don't we're to about honest, worried the don't to want just want

a function we The of to made changes we maintaining to guidance sales of is the bit more just to ahead a allow continue less get want season we've ourselves.

we're that roles, their better want of to ramp. just And we it it it's XX%. sure take in make XX% we we want going mature. half. we've in It's to prudence Obviously, building point, to are that do two, to to level that make objective So is don't does and more And Rick's our we're one, so of to sure that changes to matter we while that what we poor we a think not to some made, back than reps a allow disappoint. be outlining that have a just new is the

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Grail all by Well, customers. our to start, cloud-based used of essentially is

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definition. So expand DPS, with they're I'd more just have especially using they if Grail across apart like any who customers are associated selection have capabilities to use on more Grail any the for portfolio. then because it SaaS-based customers They and piece to by broadly to they're election or more capabilities

have really of they're and IT the your to breadth say get that back to it and access would already broadly to the notion to organic all question, deploy They departments. the able expansion on portfolio, the Grail. developers of So they're from it inclusive way is used central to based I

enables the here expansion the about. So kind talking precisely that setup you're of

coming Next the question Barclays. is from line of with Raimo Lenschow

Perfect.

Let I stay me try to want subject. on again. that that

If you seeing there of guys? the you your the customer you seeing in What log as is you momentum already there [indiscernible] part was terms a towards are you lot in of more there think more things traction February, of one because obviously what of conference will kind likely that different -- for are seeing see you're that on logs. Like get kind from you with with innovating of a vendor that that log more more conversations Do are unhappiness the now the main of that? entity. out where

I question, this one. point Australia. The believe, earlier Jim's literally log bank absolutely very disruption. love for Raimo. large area, had to I the we much a I'll of take is out ripe

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second which in from perspective, many a piece control. of customer is cases The is cost out then

it pricing excitement this line. of for So provide customers. through a do point period much predictable And time, essentially there of in of basically is more is another from the cost essentially can included our what new we queries some models which makes gets and

we are we see we in -- what the log space. So like overall,

XX% for mentioned, our more Jim quarter-over-quarter fray, area Dynatrace bring in see sequentially customer look and opportunity ahead we're at. As significantly base. into This now of we about we logs, is a about logs in as this to the XX% up at us, for huge

did new for terms in on Perfect. Like you And quarter? logos anything then was new of maybe one there Okay. see logo maybe Jim, for momentum? out what to call this

a that logos the sales still say not going the new through still going so of we to not little kind -- bit would people I surprising that segmentation your that phase. are you're traction that if these I going the would to surprising were because transition is segmentation changes base, be light it's I'm when made new logos and logos characterize you're in get changes, first with about But it. new installed the for balanced accounts as not prospecting much

land to experience say we is So faster. size that at customers know I'd decent lands. I'd which propensity has tend we to those that expand, good believe land if is news the expand continue to say the we from over that a highest $XXX,XXX, we

And changes little light. sales think a so I and on good bit logos maturation were of just that's the land sizes. a I'd But a bit new the the again, model function the of of unit say of the pipeline. side building

Andrew the Cowen. of TD The is question line Sherman with from next

about this reps than on reps more tenure. X-year fairly having to expense Has a talked is churn you because just over marketing lot the Rick, Jim, been newer your sales of Congrats stable? Anything there? of hiring was the Or out less call And tenured quarters? quarter. few the and down with past more quarter-over-quarter.

Yes, a I'll question. take that. good It's

IT the So been not someone selling the That's kind in I account -- that. is different not accounts XXX in very hiring. at new attrition. that's would had and we've this do of of say more lot when a is this the below of seen a it's these segmentation churn changes to we We've into what It's sense that that all. a sells of for uptick strategic skill profile made been someone a

reps fill new more to up could to capacity largely area that was added capacity some So But that existing that. adding in the We certainly capacity. move of kind roles. do from had we

of So change there. that's kind the

they that we'll improves. Seasonally, optimism marketing that selling productivity they're good fact we with room that the So QX improvement. that seasonally. sales bit a it accounts down. marketing rich there's to have I'd into. QX and say very sales force The some see sales have we're spend a that and as position. a spend, for to that Relative productivity that goes again, shown that, fact obviously And happens less couple you tenured they in we've of progress

We have one. event kind the of quarter kickoff being first our sales notable our in

year. not a other still what expense low and We else occurs. expect have for probably And so in matter the of it's the marketing sales that's than XXs seasonally, anything to

there feel then you year? last flush out flush And what Great. does it the perspective How a -- in for Okay. budget December? from assuming versus are budget enterprise

Yes.

We are year. this any flush material expecting budget not

with kind flush, probably So guidance assumes last we've -- -- our consistent year. budget happened what of muted this

is next with line John question DiFucci Guggenheim from Securities. of Our the

last deal your year. could of expansion cautious back in describe effect. you've for back is relative change relative And closures? I half Jim, the the those deals a -- the [ understand about for the the clear renewal ] in expectations? Howard as part months is closed by more of intended on in there that X avenues half about John. is if This anything end-tobservability expansions, half, thinking Ma is far, deals But how so also the what was the at of been to that would the there timing in And about of those comp to that's you quality in deals? you make look timing the first And cycle, would to you driven you're lead step-up to which more

in a how question. the that from it's thought Yes, first what good they say first I the I half the about deals I wouldn't half of seen different kind historically. hadn't been they're deals materially of in I've guess the -- kind they've are

then back half the little maybe for than to weighted been reasons And expansions, kind we've year. bit relative more of So that other of we're before maybe a on the outlined. I than the

which a of kind of level that just think we're I've I around we're is expecting, building about talked what cautiousness. length at

sales relative changes of there's wary certainly We're to certainly mature getting But the there's let a the We're don't not not that I because optimistic convey of just It's the wary. being matter cautious just want with with let's changes, we've that ourselves changes. made. to ahead more.

that guides. Let's in the benefit improvements productivity wait before of start these of improving see kind we we to see when reflecting

earlier. seen little we've in to which I They done, transactions. bit end-to-end go-to-market longer and accelerated strategic that about that do have bit a deals, tend motion because add larger observability of take a seen is get simply that we the might are an I increase an to that we number increase talked

coming That's on how much really in If of the follow journey, to slip as migrations? at could new a from encouraging. I to -- point is DPS in growth logos expansions DPS this organic and deal of seeing compared to any And the migration, of size I see Xx, of consumption the a uptick the point starting more uplift So are you at point at but understand of are there? you the migration?

it were still bit from journey that good earlier on front logo had both. the to new you new that expansions been we on little in a it, other, say and we're equally. but customers it's back seeing Relative logos. say about in sizes both because for the on less. We're I'd QX It's one healthy the building the seeing good more that a QX we're question. not existing and -- would if where surprisingly versus I we're Yes, think seeing expansions

I think . we'll try one and more it we'll to out. then in squeeze question close

the from That coming [indiscernible] will with line of be Sure. BNP Paribas.

tweaks hiring and sales Or Have there the the Andrew. to was be This is on guys fully for you more to done go-to-market. the is sales staffed [indiscernible] year? for in I the wondering sitting rest of just like org? the

we mentioned of where first can year. you capacity the year staffed adding incremental the But So I our expect half investment envelope optionality I for the part will as ending the half we're of into remarks, built back prepared of the we expected in and be to certainly mean, to that be that.

good and ongoing Okay. Well, and We ahead. events look enthusiastic end. you. strong very the over you brings was Thank all for as all IR you weeks, to with first fiscal we usual. we're day. you opportunity close, and questions it connecting To a half about of a your at wish the us support forward coming that XXXX, Thank to engaged the

does participation. you your teleconference. This you. thank We Thank for today's

disconnect You this time. may at now