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What changed in Dynatrace, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Dynatrace, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+414 added−385 removedSource: 10-K (2025-05-22) vs 10-K (2024-05-23)

Top changes in Dynatrace, Inc.'s 2025 10-K

414 paragraphs added · 385 removed · 291 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

53 edited+30 added−28 removed19 unchanged
Biggest changeThe Dynatrace Platform The Dynatrace platform delivers analytics and automation for observability and security at scale and comprises several solutions, including the following: • Infrastructure Observability provides complete visibility into a customer’s IT infrastructure layer across public and private clouds and hybrid, multicloud environments, including AWS, Azure, GCP, VMware Tanzu, Red Hat OpenShift, and Kubernetes. • Application Observability monitors the full stack (i.e., front-end and back-end technologies) through APM, distributed tracing, and profiling across public and private clouds and hybrid, multicloud environments. • Security Protection automatically and continuously detects runtime vulnerabilities in applications, libraries, and code.
Biggest changeThe Dynatrace Platform The Dynatrace platform comprises several solutions, including the following: • Infrastructure Observability provides complete visibility into a customer’s IT infrastructure layer across public and private clouds and hybrid, multicloud environments, including AWS, Azure, GCP, VMware Tanzu, Red Hat OpenShift, and Kubernetes. • Application Observability monitors the full stack (i.e., front-end and back-end technologies) through APM, distributed tracing, and profiling across public and private clouds and hybrid, multicloud environments. • AI Observability provides observability to improve the performance, resilience, explainability, and compliance of generative AI applications, large language models (LLMs), and agentic systems. • Digital Experience allows customers to monitor user experiences across channels with real-user and synthetic monitoring and session replays and encompasses mobile and web applications. • Log Analytics provide a unified approach to unlock the value of log data in the Dynatrace platform and can be developed for different use cases with enterprise-grade extensibility and customization. • Application Security automatically and continuously detects runtime vulnerabilities in applications, libraries, and code.
We work closely with a number of strategic GSIs, including Accenture, Deloitte, DXC, and Kyndryl, to help customers digitally transform their businesses and reduce cloud complexity. We continue to see a robust technical readiness investment from our key strategic GSIs resulting in hundreds of individuals trained or certified on the Dynatrace platform.
We work closely with a number of strategic GSIs, including Accenture, Atos, Deloitte, DXC, and Kyndryl, to help customers digitally transform their businesses and reduce cloud complexity. We continue to see a robust technical readiness investment from our key strategic GSIs resulting in hundreds of individuals trained or certified on the Dynatrace platform.
Grail allows organizations to interconnect and analyze large volumes of different types of data quickly and cost effectively in context, without the overhead, expense, and limitation of storage tiering, re-indexing, and rehydration imposed by alternative solutions. • Receive answer-centric insights and automation with hypermodal AI .
Grail allows organizations to interconnect and analyze large volumes of different types of data quickly and cost effectively in context, without the overhead, expense, and limitation of storage tiering, re-indexing, and rehydration imposed by alternative solutions. • Receive answer-centric insights and automation with AI .
Under the DPS model, a customer makes a minimum annual spend commitment at the platform level and then consumes that commitment based on actual usage and a straightforward rate card. Any platform capability can be used in any quantity at any time based on the customer’s evolving needs.
Under the DPS licensing model, a customer makes a minimum annual spend commitment at the platform level and then consumes that commitment based on actual usage and a straightforward rate card. Any platform capability can be used in any quantity at any time based on the customer’s evolving needs.
We believe our company has a significant market opportunity based on the technical differentiation of our platform, our ability to integrate successfully into customers’ cloud ecosystems, and the trust that we have built within our customer base and partner ecosystem.
We also believe our company has a significant market opportunity based on the technical differentiation of our platform, our ability to integrate successfully into customers’ cloud ecosystems, and the trust that we have built within our customer base and partner ecosystem.
We believe many organizations want a platform with broad-based situational awareness that can automatically identify, repair, and remediate issues and maximize application performance by optimizing the code, underlying infrastructure resources, and software delivery processes. Dynatrace OneAgent ® uses automation to discover hybrid, multicloud environments, dynamically instruments applications, and consistently learns and updates without human scripting and user configuration.
We believe many organizations want a unified platform with broad-based situational awareness that can automatically identify, analyze, repair, and remediate issues and maximize application performance by optimizing the code, underlying infrastructure resources, and software delivery processes. Dynatrace OneAgent ® uses automation to discover hybrid, multicloud environments, dynamically instruments applications, and consistently learns and updates without human scripting and user configuration.
Our principal competitors include Cisco (which now includes AppDynamics and Splunk), Datadog, and New Relic. We also face potential competition from vendors in adjacent markets that may offer capabilities that overlap with ours. We may also face competition from companies entering our market, including large technology companies that could expand their platforms or acquire one of our competitors.
Our principal competitors include Cisco (which includes AppDynamics and Splunk), Datadog, Elastic, and New Relic. We also face potential competition from vendors in adjacent markets that may offer capabilities that overlap with ours. We may also face competition from companies entering our market, including large technology companies that could expand their platforms or acquire one of our competitors.
Research and Development We have a strong research and development (“R&D”) organization that is responsible for designing, developing, testing, and operating all aspects of our offerings, including addressing new use cases, adding new innovative capabilities, extending the scale and scope of our technology, and embracing modern cloud and AI technologies while maintaining high quality.
Research and Development We have a strong research and development organization that is responsible for designing, developing, testing, and operating all aspects of our offerings, including addressing new use cases, adding new innovative capabilities, extending the scale and scope of our technology, and embracing modern cloud and AI technologies while maintaining high quality.
This Annual Report includes our trademarks and trade names, including, without limitation, Dynatrace, OneAgent ® , Smartscape ® , PurePath ®, Davis ® and Grail TM which are our property and are protected under applicable intellectual property laws. Other trademarks and trade names referred to in this Annual Report are the property of their respective owners.
This Annual Report includes our trademarks and trade names, including, without limitation, Dynatrace, OneAgent ® , Smartscape ® , PurePath ®, Davis ® and Grail TM which are our property and are protected under applicable IP laws. Other trademarks and trade names referred to in this Annual Report are the property of their respective owners.
We also provide options to deploy our platform in customer-provisioned infrastructure, which we refer to as Dynatrace Managed. This offering allows customers the flexibility to maintain control of the environment where their data resides, whether in the cloud or on-premises, combining the simplicity of SaaS with the ability to adhere to their own data security and sovereignty requirements.
We also provide options to deploy our platform in customer-provisioned infrastructure, which we call Dynatrace Managed. This offering allows customers the flexibility to maintain control of the environment where their data resides, whether in the cloud or on-premises, combining the simplicity of SaaS with the ability to adhere to their own data security and sovereignty requirements.
See the “Risk Factors” section of this Annual Report for a discussion of risks related to our intellectual property. Competition The market for observability, analytics, and application security is evolving, complex, and defined by rapidly changing technology and customer needs. As we have expanded our platform capabilities, we increasingly compete with a wider range of vendors.
See the “Risk Factors” section of this Annual Report for a discussion of risks related to our IP. Competition The market for observability, analytics, and application security is evolving, complex, and defined by rapidly changing technology and customer needs. As we have expanded our platform capabilities, we increasingly compete with a wider range of vendors.
Available Information Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K, including amendments and exhibits to these reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are available free of charge on the Investor Relations section of our website at https://ir.dynatrace.com as soon as reasonably practicable after we file or furnish such material with the Securities and Exchange Commission (“SEC”).
Available Information Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K, including amendments and exhibits to these reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are available free of charge on the Investor Relations section of our website at https://ir.dynatrace.com as soon as reasonably practicable after we file or furnish such material with the U.S.
Dynatrace Deployment and Operations Dynatrace provides out-of-the-box configuration for the leading cloud platforms, such as AWS, Azure, GCP, Red Hat OpenShift, and SAP, as well as Kubernetes and coverage for traditional on-premises systems, including mainframe and monolithic applications in a single, easy-to-use, intelligent platform.
Dynatrace Deployment and Operations Dynatrace provides out-of-the-box configuration for the leading cloud platforms, such as AWS, Azure, GCP, Red Hat OpenShift, and SAP, the leading AI and agentic AI frameworks and platforms, as well as Kubernetes and coverage for traditional on-premises systems, including mainframe and monolithic applications in a single, easy-to-use, intelligent platform.
Dynatrace University is our global online, self-service education program that provides several learning options for customers and partners to develop their skills around monitoring, managing, integrating, and analyzing multicloud environments and application workloads with Dynatrace. Customer Support We have an innovative onboarding and support service that is focused on simplifying and streamlining customer experience.
Dynatrace University is our global online, self-service education program that provides several learning options for customers and partners to develop their skills around monitoring, managing, integrating, and analyzing multicloud environments and application workloads with Dynatrace. 9 Table of Contents Customer Support We have an innovative onboarding and support service that is focused on simplifying and streamlining customer experience.
As organizations collect and maintain more data, AI embedded in end-to-end observability and security solutions is often required for reliable analysis, accurate insights, prevention of issues and problems, and quick identification and resolution when they arise.
As organizations collect and maintain more data, AI embedded in end-to-end observability and related solutions is often required for reliable prediction and analysis, accurate insights, prevention of issues and problems, and quick identification and resolution when they arise.
Business, development, security, and operations teams can collaborate and innovate faster with greater security and smarter answers. • Visualize and understand environments in near real time . Smartscape automatically identifies and maps interactions and relationships between applications and the underlying IT infrastructure and uses that map to enrich and contextualize data.
Business, development, security, and operations teams can collaborate and innovate faster with greater security and smarter answers. 7 Table of Contents • Visualize and understand environments in near real time . Smartscape automatically identifies and maps interactions and relationships between applications and the underlying IT infrastructure and uses that map to enrich and contextualize data.
We do this primarily through our digital online channels, such as the Dynatrace blog, Dynatrace Community, and Dynatrace University, as well as our customer event series ‘Perform’ and ‘Innovate.’ 9 Table of Contents Partners We develop and maintain partnerships that help us market and deliver our offerings to our customers around the world.
We do this primarily through our digital online channels, such as the Dynatrace blog, Dynatrace Community, and Dynatrace University, as well as our customer event series ‘Perform’ and ‘Innovate.’ Partners We develop and maintain partnerships that help us market and deliver our offerings to our customers around the world.
The principal competitive factors in our markets are: • AI capabilities; • automation; • product features, functionality, and reliability; • ease and cost of deployment, use, and maintenance; • deployment options and flexibility; • customer, technology, and platform support; • ability to easily integrate with customers’ software application and IT infrastructure environments; • the quality of data collection and correlation; • interoperability and ease of integration; and • brand recognition.
The principal competitive factors in our markets are: • product features, functionality, and reliability; • AI capabilities; • automation; • ease and cost of deployment, use, and maintenance; • deployment options and flexibility; • customer, technology, and platform support; • ability to easily integrate with customers’ software application and IT infrastructure environments; • the quality of data collection and correlation; • interoperability and ease of integration; • pricing (including ease of pricing) and perceived value of offerings; and • brand recognition.
Saving for the future: compensation and benefits - Our compensation program is designed to attract, reward, and retain talented individuals who possess the skills necessary to support our business, contribute to our strategic goals, and create long-term value for our stockholders.
Our compensation program is designed to attract, reward, and retain talented individuals who possess the skills necessary to support our business, contribute to our strategic goals, and create long-term value for our stockholders.
In addition, we believe the ease of implementation of Dynatrace provides us with the opportunity to expand adoption within our existing enterprise customers, across new customer applications, and into additional business units or divisions.
In addition, we believe the ease of implementation of Dynatrace provides us with the opportunity to expand adoption within our existing enterprise customers, across new customer applications, with cloud-native and development teams, and into additional business units or divisions.
This provides near real-time end-to-end awareness that we believe is not possible to replicate without a unified data store with equivalent capabilities. • The Dynatrace platform is powered by hypermodal AI . For over a decade, Dynatrace customers have relied on the predictive and causal AI capabilities of our AI engine, Davis ® .
This provides near real-time end-to-end awareness of an organization’s IT ecosystem that we believe is not possible to replicate without a unified data store with equivalent capabilities. • The Dynatrace platform is AI-powered . For over a decade, Dynatrace customers have relied on the causal and predictive AI capabilities of our AI engine, Davis ® .
We also use these channels to disclose information about the company, our planned financial and other announcements, attendance at upcoming investor and industry conferences, and for complying with our disclosure obligations under Regulation FD. The information we post through these channels may be deemed material. Accordingly, we encourage investors to review the information we make available through these channels.
We also use these channels to disclose information about the company, our planned financial and other announcements, attendance at upcoming investor and industry conferences, and for complying with our disclosure obligations under Regulation FD. The information we post through these channels may be deemed material.
Information contained on, or that can be accessed through, our websites is not incorporated by reference into this Annual Report and should not be considered to be part of this Annual Report, and inclusions of our website addresses in this Annual Report are inactive textual references only.
Our website is www.dynatrace.com and our Investor Relations website is https://ir.dynatrace.com. Information contained on, or that can be accessed through, our websites is not incorporated by reference into this Annual Report and should not be considered to be part of this Annual Report, and inclusions of our website addresses in this Annual Report are inactive textual references only.
Our issued patents expire at various dates through November 2042. 10 Table of Contents We have registered “Dynatrace” and the “Dynatrace” logo as trademarks in the United States and other jurisdictions for our name and our product as well as certain other words and phrases that we use in our business, including “OneAgent,” “PurePath,” “Smartscape,” and “Davis”.
Our issued patents expire at various dates through July 2043. We have registered “Dynatrace” and the “Dynatrace” logo as trademarks in the United States and other jurisdictions for our name and our product as well as certain other words and phrases that we use in our business, including “OneAgent,” “PurePath,” “Smartscape,” and “Davis”.
We intend to maintain our position as the market-leading unified observability and security platform through increased investment in research and development, and innovation. We plan to expand the functionality of our end-to-end Dynatrace platform and invest in capabilities that address new market opportunities. We also plan to evolve our AI capabilities to drive differentiation.
We intend to maintain our position as a leading AI-powered observability platform through increased investment in research and development, and innovation. We plan to expand the functionality of our end-to-end Dynatrace platform and invest in capabilities that address new market opportunities.
We believe the Dynatrace platform’s integrated approach reduces or eliminates the need for organizations to maintain a variety of disparate and siloed tools, enabling them to: • improve the reliability and performance of their infrastructure and applications, which can help optimize the experience of their own users; • improve organizational productivity, decision making and innovation, while also increasing transparency and collaboration between IT, development teams, and other business functions; • reduce operating costs; and • mitigate risk.
Our focus on agentic AI is expected to increase the level and types of automation within the Dynatrace platform. 6 Table of Contents We believe the Dynatrace platform’s integrated approach reduces or eliminates the need for organizations to maintain a variety of disparate and siloed tools, enabling them to: • improve the reliability and performance of their infrastructure and applications, which can help optimize the experience of their own users; • improve organizational productivity, decision making and innovation, while also increasing transparency and collaboration between IT, development teams, and other business functions; • reduce operating costs; and • mitigate risk.
We have registered numerous Internet domain names related to our business. We also license software from third parties for integration into our applications and utilize open-source software. We enter into agreements with our employees, contractors, customers, partners, and other parties with which we do business to limit access to and disclosure of our confidential and proprietary information.
We also license software from third parties for integration into our applications and utilize open-source software. 10 Table of Contents We enter into agreements with our employees, contractors, customers, partners, and other parties with which we do business to limit access to and disclosure of our confidential and proprietary information.
We also offer an extra level of success and support services for customers that want to accelerate their adoption of our platform, increase their access to support globally 24/7, and extend their hours of expert coverage.
We also offer an extra level of success and support services for customers that want to accelerate their adoption of our platform, increase their access to support globally 24/7, and extend their hours of expert coverage. Our Growth Strategy Key elements of our growth strategy include: Extend our technology and market leadership position.
Intellectual Property We rely on a combination of patent, copyright, trademark, trade dress, and trade secret laws, as well as confidentiality procedures and contractual restrictions, to establish and protect our proprietary rights. As of March 31, 2024, we had 128 issued patents, 86 of which are U.S. patents, and 63 pending applications, of which 40 are U.S. applications.
IP We rely on a combination of patent, copyright, trademark, trade dress, and trade secret laws, as well as confidentiality procedures and contractual restrictions, to establish and protect our proprietary rights. As of March 31, 2025, we had 161 issued patents, 94 of which are U.S. patents, and 82 pending applications, of which 48 are U.S. applications.
Our Smartscape ® technology continuously updates topological dependencies as the 6 Table of Contents application or operating environment evolves, providing the Dynatrace platform with a representation of relationships between all elements within an environment. We believe this is especially critical during business-impacting threats or incidents.
Our Smartscape ® technology continuously updates topological dependencies as the application or operating environment evolves, providing the Dynatrace platform with a representation of relationships between all elements within an environment. We believe this is especially critical during business-impacting threats or incidents. AppEngine and AutomationEngine enable our customers to create custom automations of workflows and processes.
Our sales and marketing organizations seek to promote the Dynatrace brand, our platform capabilities, and develop partnerships to drive revenue growth. We utilize a variety of go-to-market strategies, including search-engine optimization, online advertising, free software trials, events, online webinars, and broad content marketing strategies. We nurture our existing customer base through ongoing education, and training, including expansion opportunities.
We utilize a variety of go-to-market strategies, including search-engine optimization, online advertising, free software trials, events, online webinars, and broad content marketing strategies. We nurture our existing customer base through ongoing education, and training, including expansion opportunities.
We intend to drive new customer growth through a focus on the largest 15,000 global enterprise accounts, which generally have annual revenues in excess of $1 billion and more complex IT ecosystems and cloud environments. In particular, we are increasing the focus of our sales force on the largest 500 global companies and strategic enterprise accounts.
We are focused on the largest 15,000 global enterprise accounts, which generally have annual revenues in excess of $1 billion and more complex IT ecosystems and cloud environments. At the start of our fiscal 2025, we increased the focus of our sales force on the largest 500 global companies and strategic enterprise accounts.
It also provides near real-time detection and blocking to help protect against third-party cyber-attacks that can exploit critical vulnerabilities. • Security Analytics enable AI and runtime-enhanced detection, investigation, and response to cybersecurity events. 7 Table of Contents • Digital Experience allows customers to monitor user experiences across channels with real-user and synthetic monitoring and session replays and encompasses mobile and web applications. • Business Analytics unifies data flowing through the Dynatrace platform to provide precise, near real-time answers that enable teams to understand how the performance of their digital services affects critical key performance indicators and provides insights to improve user experiences. • Automations leverage observability and security data to drive workflow automations created with a visual workflow creator or automation-as-code. • Custom Solutions can also be developed for different use cases with enterprise-grade extensibility and customizations.
It also provides near real-time detection and blocking to help protect against third-party cyber-attacks that can exploit critical vulnerabilities. • Threat Observability enables AI and runtime-enhanced detection, investigation, and response to cybersecurity events. • Software Delivery leverages observability and security data to drive workflow automations created with a visual workflow creator or automation-as-code. • Business Analytics unify data flowing through the Dynatrace platform to provide precise, near real-time answers that enable teams to understand how the performance of their digital services affects critical key performance indicators and provides insights to improve user experiences.
The contents of our Global Impact Reports are not incorporated into this Annual Report and inclusion of the website address above is an inactive textual reference only. 11 Table of Contents Human Capital Management Our company’s vitality comes from the talent, enthusiasm, and innovative spirit of our employees (who we call “Dynatracers”) across the more than 30 countries where we operate.
The contents of our Sustainability Reports are not incorporated into this Annual Report and inclusion of the website address above is an inactive textual reference only. Human Capital Management Our company’s vitality is fueled by our employees (who we call “Dynatracers”) who represent the more than 35 countries in which we operate.
While still in its early stages, we also believe that our DPS licensing model will drive further expansion opportunities for customers that prefer the flexibility and predictability of pricing under that model. Grow our customer base.
We also believe that our DPS licensing model will drive broader consumption of the Dynatrace platform and further expansion opportunities for customers that prefer the flexibility and predictability of pricing under that model.
We automatically upgrade all Dynatrace instances and offer on-premises cluster customers auto-deployment options that suit their specific enterprise management processes. During our fiscal 2024, we introduced a n ew version of the Dynatrace Platform Subscription (“DPS”) licensing model which provides customers with more modern pricing with flexibility and transparency.
We automatically upgrade all Dynatrace instances and offer on-premises cluster customers auto-deployment options that suit their specific enterprise management processes. The Dynatrace Platform Subscription (“DPS”) licensing model provides customers with a flexible, scalable, and transparent subscription for the modern cloud.
The SEC maintains a website at www.sec.gov that contains our SEC filings and other information regarding us and other companies that file materials with the SEC electronically. Investors and others should note that we announce material financial information to our investors using our Investor Relations website, press releases, SEC filings and public conference calls and webcasts.
Investors and others should note that we announce material financial information to our investors using our Investor Relations website, press releases, SEC filings and public conference calls and webcasts.
We believe this strategy will enable new growth opportunities and allow us to deliver differentiated high-value outcomes to our customers. Expand and strengthen our relationships with existing customers. We plan to establish new and deeper relationships within our existing customers’ organizations (notably, development teams) and expand the breadth of our platform capabilities to provide for expansion opportunities.
Expand and strengthen our relationships with existing customers. We plan to establish new and deeper relationships within our existing customers’ organizations and expand the breadth of our platform capabilities to provide for expansion opportunities.
Existing Dynatrace 8 Table of Contents customers can also license individual capabilities in a subscription model. We provide customers with a near real-time view of licensed product consumption, with historical analysis at the daily or hourly level. Customers As of March 31, 2024, we had approximately 4,000 customers in over 100 countries.
Existing Dynatrace customers can also license individual capabilities in a subscription model. Through a suite of tools in the Dynatrace Account Management portal, we provide customers with a near real-time view of licensed product consumption, with historical analysis at the daily or hourly level.
We are making our generative AI capabilities available on the Dynatrace platform through Davis CoPilot, bringing the platform to a much wider array of end users and extending the capabilities of the Dynatrace platform.
During our fiscal 2025, we made generative AI capabilities available on the Dynatrace platform through Davis CoPilot, bringing the platform to a much wider array of end users and extending the capabilities of the Dynatrace platform. We believe we have architected our combination of causal, predictive, and generative AI to make AI techniques iteratively more intelligent.
Davis, our AI engine at the core of the platform, combines predictive, causal, and generative AI to deliver answers, insights, automation, and recommendations, and detect, identify, remediate, and prevent issues. • Create and share custom applications and automations to support all business needs . AutomationEngine supports advanced workflow automation, and AppEngine allows organizations to create and share custom, data-driven applications.
Davis, our AI engine at the core of the platform, combines causal, predictive, and generative AI to deliver answers, insights, automation, and recommendations, and detect, identify, remediate, and prevent issues.
Sales and Marketing We take Dynatrace to market through a combination of our global direct sales team and a network of partners, including GSIs, cloud providers, resellers, and technology alliance partners. We target the largest 15,000 global enterprise accounts, which generally have annual revenues in excess of $1 billion, which we believe see more value from our integrated full-stack platform.
We target the largest 15,000 global enterprise accounts, which generally have annual revenues in excess of $1 billion, which we believe see more value from our integrated full-stack platform. Our sales and marketing organizations seek to promote the Dynatrace brand, our platform capabilities, and develop partnerships to drive revenue growth.
None of our employees are represented by a labor union; some of our employees outside of the United States are represented by a works council. We have not experienced any work stoppages due to labor disputes. We believe that our relations with our employees and works councils are strong.
We have not experienced any work stoppages due to labor disputes. We believe that our relations with our employees and works councils are strong. We have prioritized a number of initiatives as part of our human capital management strategy.
Key Differentiators We believe our approach is different from other offerings in three critical ways: • Dynatrace is an end-to-end platform that enables contextual analysis . We store all data types, including logs, traces, metrics, real user data, and business events, in an integrated, highly performant and massively scalable data store called Grail TM .
We store all data types, including logs, traces, metrics, real user data, and business events, in an integrated, highly performant and massively scalable data lakehouse called Grail TM, , which is the core of the Dynatrace platform.
We utilize an agile development process with 100% test automation to deliver major software releases throughout the year and hundreds of minor releases, fixes and updates. We believe the full stack monitoring required by dynamic multicloud environments requires a highly efficient and agile process to enable high-performing software across the diverse, dynamic cloud ecosystems of our customers.
We utilize an agile development process with 100% test automation to deliver major software releases throughout the year and hundreds of minor releases, fixes and updates.
In addition, we continue to foster relationships with a network of regional systems integrators that help joint customers integrate our offerings into their multicloud ecosystems. These partners extend our scale and reach and collaborate with our direct sales teams, bringing domain expertise in technologies and industries along with additional offerings powered by Dynatrace. • Cloud providers.
These partners extend our scale and reach and collaborate with our direct sales teams, bringing domain expertise in technologies and industries along with additional offerings powered by Dynatrace. • Cloud providers. We work with the major cloud providers to increase awareness of our offerings and make it easy for customers to access our software.
Our customers are also able to procure our software through leading marketplaces, such as AWS, Azure, SAP, and Google. • Resellers. Our resellers market and sell our offerings throughout the world and provide a go-to-market channel in countries and regions where we do not have a direct presence. • Technology alliance partners.
In addition, our resellers provide a go-to-market channel in countries and regions where we do not have a direct presence. • Technology alliance partners.
See the “Risk Factors” section of this Annual Report for a discussion of risks related to competition. Sustainability Overview We believe advancing and strengthening our sustainability strategy are paramount to our success and are our responsibility as a global company.
See the “Risk Factors” section of this Annual Report for a discussion of risks related to competition. Sustainability Overview We believe that focusing on sustainability is part of our responsibility as a global company. We group our material sustainability topics into three key pillars: sustaining our environment; people, culture, and community; and governance and ethics.
In fiscal 2024, we strengthened and expanded our approach to human capital development. We identified and implemented new and better ways to transform our people, culture, and community initiatives as Dynatrace has expanded its global footprint and continued to focus on long-term growth.
In fiscal 2025, we continued to transform our people, culture, and community initiatives while expanding our global footprint and focusing on long-term growth.
Corporate Information Our principal executive offices are located at 1601 Trapelo Road, Suite 116, Waltham, Massachusetts 02451 and our telephone number is (781) 530-1000. Our website is www.dynatrace.com and our Investor Relations website is https://ir.dynatrace.com.
Corporate Information Our principal executive offices are located at 1601 Trapelo Road, Suite 116, Waltham, Massachusetts 02451 and our telephone number is (781) 530-1000. In July 2025, we plan to relocate our principal executive offices to 280 Congress Street, Boston, Massachusetts 02210, as discussed in Part I, Item 2 of this Annual Report.
The findings from this survey and our other initiatives have highlighted a number of strengths and also have provided focus areas for future refinements. The Dynatrace Work Model, which has hybrid and remote options, supports increased connection and collaboration, driving cultural vibrancy and supporting innovation, all while enabling a flexible work approach.
Inspiring employee engagement – The Dynatrace Work Model, which has hybrid and remote options, is designed to support increased connection and collaboration, driving cultural vibrancy and supporting innovation, all while enabling a flexible work approach. We continually evaluate this model to balance these objectives.
With these issues at the forefront, we have embedded our sustainability strategy in our business priorities, mission, purpose, vision, and values. During our fiscal 2024, we issued our inaugural Global Impact Report, a copy of which is posted on our website at www.dynatrace.com/company/sustainability/ .
During our fiscal 2025, we continued to develop and implement programs that drive progress on our sustainability initiatives, which we shared in our annual Sustainability Report in December 2024. A copy of our most recent Sustainability Report is posted on our website at www.dynatrace.com/company/sustainability/ .
We work with the major cloud providers to increase awareness of our offerings and make it easy for customers to access our software. Our software is developed to run in and integrate with leading cloud providers, such as AWS, Azure, and GCP.
Our software is developed to run in and integrate with leading cloud providers, such as AWS, Azure, and GCP. Our customers are also able to procure our software through leading marketplaces, such as AWS, Azure, SAP, and Google. • Resellers. Our resellers market, sell and deliver our offerings throughout the world. Our resellers often have a dedicated practice around observability.
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ITEM 1. BUSINESS Overview Our vision is a world where software works perfectly. Dynatrace offers the only end-to-end platform that combines broad and deep observability and continuous runtime application security with advanced artificial intelligence (“AI”) for IT operations to provide answers and intelligent automation from data at an enormous scale.
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ITEM 1. BUSINESS Overview Dynatrace is advancing observability for today’s digital businesses, helping to transform the complexity of modern digital ecosystems into powerful business assets. By leveraging AI-powered insights, Dynatrace enables organizations to analyze, automate, and innovate faster to drive their business forward. Our vision is a world where software works perfectly.
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Our comprehensive solutions help IT, development, security, and business operations teams at global organizations modernize and automate cloud operations, deliver software faster and more securely, and provide significantly improved digital experiences. Many of the world’s largest organizations trust the Dynatrace ® platform to accelerate digital transformation.
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The Dynatrace platform combines broad and deep observability, continuous runtime application security, and advanced AI to support IT operations, development, security, business, and executive teams. This comprehensive approach enables organizations to optimize cloud and IT operations, accelerate secure software delivery, and improve digital performance.
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We have been seeing increased demand for large, strategic deals in which customers’ business criteria drive broader technology architecture decisions. At the same time, workloads continue migrating to the cloud as customers seek the agility, flexibility, and rapid technology advancements that can prove elusive in on-premises data center environments.
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The Dynatrace platform is built to scale, integrating seamlessly into hybrid, multicloud ecosystems, including major hyperscalers such as Amazon Web Services (“AWS”), Microsoft Azure (“Azure”), and Google Cloud Platform (“GCP”), as well as traditional on-premises and mainframe solutions. Our customer base includes some of the largest global enterprises.
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AI has been sweeping across industries and exploding in relevancy and criticality as organizations desire significant advancements in innovation, productivity, and performance. The escalating cybersecurity threat landscape is also increasing the need for more sophisticated protection.
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These organizations rely on the Dynatrace platform as part of their plans to accelerate the adoption of cloud-native and AI-native initiatives and to address the related challenges of increasing workloads, dynamic environments, and evolving cybersecurity threats. Our ability to provide sophisticated analytics and our advanced automation capabilities support their operational goals in environments characterized by rapid technological changes.
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The confluence of these megatrends in dynamic hybrid, multicloud environments brings a scale and frequency of change that is exponentially greater than that of just a few years ago.
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Cloud modernization and the dramatic growth in the use of AI have resulted in an explosion of data and a massive increase in its scale and complexity that are untenable for many organizations to manage as they previously did.
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These trends also bring an explosion of data, a massive increase in complexity exacerbated by tool sprawl and siloed data, and a need for better analytics to prevent issues, instead of reacting to them. We believe that traditional approaches for developing, operating, monitoring, and securing software cannot keep pace with modern cloud environments.
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As a result, we believe the need for comprehensive end-to-end observability, such as the Dynatrace platform, has become mandatory, especially for larger organizations building resiliency into ever more complex environments.
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Applications are no longer monolithic and have become fragmented into thousands, potentially millions, of microservices, written in multiple software languages and extending across environments offered through hyperscaler vendor solutions such as Amazon Web Services (“AWS”), Microsoft Azure (“Azure”), and Google Cloud Platform (“GCP”), and more traditional data center solutions, such as mainframe environments.
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Key Differentiators We believe our approach is different from other offerings in three critical ways: • Dynatrace is an end-to-end platform that enables contextual analysis .
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Organizations are increasingly seeing the need to move from manual processes, siloed dashboards, rudimentary AI, and after-the-fact remediating to solutions such as Dynatrace that deliver vastly improved and deeper insights, advanced analytics, answers, and automation.
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Our AI capabilities drive differentiation, with an increasing focus on evolving into an agentic AI platform that can act autonomously to plan, make decisions, and take actions without human intervention.
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As enterprises and public sector institutions embrace modern cloud environments as the underlying foundation of their business and digital transformations, we believe that the scale, growing complexity, and dynamic nature of these environments are rapidly making solutions such as the Dynatrace platform mandatory instead of optional for many organizations.
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Davis CoPilot democratizes use of the Dynatrace platform to more of our customers’ teams by enabling interaction in natural language to tap into the full power of the platform. • Create and share custom applications and automations to support all business needs . AutomationEngine supports advanced workflow automation, and AppEngine allows organizations to create and share custom, data-driven applications.
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We believe we have architected our combination of predictive, causal, and generative AI (which we refer to collectively as hypermodal AI) to make AI techniques iteratively more intelligent.
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If a customer consumes more than their minimum annual spend commitment, they are not charged a penalty-style overage and they can continue to use the platform on an on-demand basis, billed monthly at the same rates as pre-paid consumption. Customers can alternatively increase their commitment spend to attain a higher discount.
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Our customers reflect diverse industries including, but not limited to, banking and financial services, government, insurance, retail and wholesale, transportation, and software. No organization or customer accounted for more than 10% of our revenue for the fiscal years ended March 31, 2024, 2023, and 2022. Our Growth Strategy Extend our technology and market leadership position.
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In addition to raw data, these tools also provide customers with forecasting, alerting, and drilldowns that provide insights into their usage patterns. Customers As of March 31, 2025, we had approximately 4,100 customers in over 105 countries. Our customers reflect diverse industries including, but not limited to, banking and financial services, government, insurance, retail and wholesale, transportation, and software.
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Our strategy focuses on areas where we can make our business and the communities in which we operate more equitable and sustainable. We group our material sustainability topics into three key pillars: sustaining our environment; people, culture and community; and governance and ethics.
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For the year ended March 31, 2025, one channel partner accounted for 10% of revenue. No channel partners accounted for more than 10% of revenue for the years ended March 31, 2024 and 2023. There were no end-customers who represented more than 10% of revenue for the years ended March 31, 2025, 2024, and 2023.
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Among other things, our Global Impact Report included our baseline greenhouse gas emissions data and an expanded scope of diversity, equity, inclusion, and belonging (“DEIB”) data for our fiscal 2023. Over the last year, we continued to develop and implement programs that drive progress on our sustainability initiatives.
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We believe the full stack monitoring required by dynamic multicloud environments requires a highly efficient and agile process to enable high-performing software across the diverse, dynamic cloud ecosystems of our customers. 8 Table of Contents Sales and Marketing We take Dynatrace to market through a combination of our global direct sales team and a network of partners, including GSIs, cloud providers, resellers, and technology alliance partners.
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Later this year, we plan to share our progress in a new Global Impact Report.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

141 edited+28 added−18 removed218 unchanged
Biggest changeSome of the important factors that may cause our operating results to fluctuate from quarter to quarter or year to year include: • fluctuations in the demand for our solutions, the timing of purchases by our customers, and the length of the sales cycles, particularly for larger purchases; • fluctuations in the rate of utilization by customers of the cloud to manage their business needs, or a slowdown in the migration of enterprise systems to the cloud; • the impact of recessionary pressures or uncertainties in the global economy, or in the economies of the countries in which we operate, on our customers’ purchasing decisions and the length of our sales cycles: • our ability to attract new customers and retain existing customers; • our ability to expand into new geographies and markets, including the business intelligence, data analytics, and application security markets; • the budgeting cycles and internal purchasing priorities of our customers; • changes in go-to-market strategy, customer renewal rates, churn, and our ability to cross-sell additional solutions to our existing customers and our ability to up-sell additional quantities of previously purchased offerings to existing customers; • the seasonal buying patterns of our customers; • the payment terms and contract term length associated with our product sales and their effect on our billings and free cash flow; • changes in customer requirements or market needs; • the emergence of significant privacy, data protection, systems and application security or other threats, regulations, or requirements applicable to the use of enterprise systems or cloud-based systems that we are not prepared to meet or that require additional investment by us; • changes in the demand and growth rate of the markets for observability, application security, analytics, and AI-enabled solutions; • our ability to anticipate or respond to changes in the competitive landscape, or improvements in the functionality of competing solutions that reduce or eliminate one or more of our competitive advantages; • our ability to timely develop, introduce and gain market acceptance for new solutions and product enhancements; • our ability to adapt and update our offerings and solutions on an ongoing and timely basis in order to maintain compatibility and efficacy with the frequently changing and expanding variety of software and systems that our offerings are designed to monitor; • our ability to maintain and expand our relationships with strategic technology partners who own, operate, and offer the major platforms on which applications operate, with which we must interoperate and remain compatible, and from which we must obtain certifications and endorsements in order to maintain credibility and momentum in the market; • our ability to control costs, including our operating expenses; • our ability to efficiently complete and integrate any acquisitions or business combinations that we may undertake in the future; • general economic, industry, and market conditions, both domestically and in our foreign markets, including regional or geopolitical conflicts or other disruptions to commerce; • the emergence of new technologies or trends in the marketplace, or a change in the trends that are important to our strategy and the value of our platform in the marketplace; • foreign currency exchange rate fluctuations; • the timing of revenue recognition for our customer transactions, and the effect of the mix of subscriptions and services on the timing of revenue recognition; • extraordinary expenses, such as litigation or other dispute-related settlement payments; and • future accounting pronouncements or changes in our accounting policies. 14 Table of Contents Any one of the factors referred to above or the cumulative effect of some of the factors referred to above may result in our operating results being below our expectations and the expectations of securities analysts and investors and any guidance that we may provide or may result in significant fluctuations in our quarterly and annual operating results, including fluctuations in our key performance indicators.
Biggest changeSome of the important factors that may cause our operating results to fluctuate from quarter to quarter or year to year include: • fluctuations in the demand for our solutions, the timing of purchases by our customers, and the length of the sales cycles, particularly for larger purchases; • fluctuations in the rate of utilization by customers of the cloud to manage their business needs, or a slowdown in the migration of enterprise systems to the cloud; • the impact of recessionary pressures or uncertainties in the global economy, or in the economies of the countries in which we operate, on our customers’ purchasing decisions and the length of our sales cycles: • our ability to attract new customers and retain existing customers; • our ability to expand into new geographies and markets, including the application security and logs markets; • the budgeting cycles and internal purchasing priorities of our customers; • changes in go-to-market strategy, customer renewal rates, churn, and our ability to cross-sell additional solutions to our existing customers and our ability to up-sell additional quantities of previously purchased offerings to existing customers; • the seasonal buying patterns of our customers; • the payment terms and contract term length associated with our product sales and their effect on our billings and free cash flow; • changes in customer requirements or market needs; 13 Table of Contents • the emergence of significant privacy, data protection, systems and application security or other threats, regulations, or requirements applicable to the use of enterprise systems or cloud-based systems that we are not prepared to meet or that require additional investment by us; • changes in the demand and growth rate of the markets for observability, application security, analytics, and AI-enabled solutions; • our ability to anticipate or respond to changes in the competitive landscape, or improvements in the functionality of competing solutions that reduce or eliminate one or more of our competitive advantages; • our ability to timely develop, introduce and gain market acceptance for new solutions and product enhancements; • our ability to adapt and update our offerings and solutions on an ongoing and timely basis in order to maintain compatibility and efficacy with the frequently changing and expanding variety of software and systems that our offerings are designed to monitor; • our ability to maintain and expand our relationships with strategic technology partners that own, operate, and offer the major platforms on which applications operate, with which we must interoperate and remain compatible, and from which we must obtain certifications and endorsements in order to maintain credibility and momentum in the market; • our ability to control costs, including our operating expenses; • our ability to efficiently complete and integrate any acquisitions or business combinations that we may undertake in the future; • general economic, industry, and market conditions, both domestically and in our foreign markets, including regional or geopolitical conflicts, potential changes in the U.S. and foreign laws and regulations on international trade ( e.g. , export controls, import tariffs and trade agreements), or other disruptions to commerce; • the U.S. federal government cancelling, consolidating, or not awarding contracts to us or our customers or suppliers; • the emergence of new technologies or trends in the marketplace, or a change in the trends that are important to our strategy and the value of our platform in the marketplace; • foreign currency exchange rate fluctuations; • the timing of revenue recognition for our customer transactions, and the effect of the mix of subscriptions and services on the timing of revenue recognition; • extraordinary expenses, such as litigation or other dispute-related settlement payments; and • future accounting pronouncements or changes in our accounting policies.
We believe that we must continue to dedicate significant resources to our research and development efforts, including significant resources to developing new solutions and solution enhancements before knowing whether the market will accept them. For example, we have made significant investments in our new application security offering and in developing our Grail TM core technology, AutomationEngine, and AppEngine.
We believe that we must continue to dedicate significant resources to our research and development efforts, including significant resources to developing new solutions and solution enhancements before knowing whether the market will accept them. For example, we have made significant investments in our application security offering and in developing our Grail TM core technology, AutomationEngine, and AppEngine.
Our customer retention and expansion rates may decline or fluctuate as a result of a number of factors, including our customers’ satisfaction with our solutions platform, our customer support and professional services, changes to our go-to-market strategy, our prices and pricing plans, the competitiveness of other software products and services, reductions in our customers’ spending levels, customer concerns about macroeconomic trends, user adoption of our solutions, deployment success, utilization rates by our customers, new product releases and changes to our product offerings.
Our customer retention and expansion rates may decline or fluctuate as a result of a number of factors, including our customers’ satisfaction with our platform, our customer support and professional services, changes to our go-to-market strategy, our prices and pricing plans, the competitiveness of other software products and services, reductions in our customers’ spending levels, customer concerns about macroeconomic trends, user adoption of our solutions, deployment success, utilization rates by our customers, new product releases and changes to our product offerings.
Federal Trade Commission, state, local, or foreign regulators (e.g., a European Union-based data protection authority) or private litigants, and breach of contract. While we believe that we maintain a sufficient amount of insurance to cover certain data security-related risks and incidents, our insurance coverage may not always cover all costs or losses.
Federal Trade Commission, state, local, or foreign regulators (e.g., a European Union-based data protection authority) or private litigants, and breach of contract. While we believe that we maintain a sufficient amount of insurance to cover certain risks and incidents related to data security, our insurance coverage may not always cover all costs or losses.
Any security breach, incident, or compromise or loss of system control caused by hacking, which involves efforts to gain unauthorized access to information or systems, or to cause intentional malfunctions or loss, modification, or corruption of data, software, hardware or other computer equipment and the inadvertent transmission of computer malware could harm our business, operating results, and financial condition, and expose us to claims arising from loss or unauthorized disclosure of confidential or personal information or data and the related breach of our contracts with customers or others, or of privacy or data security laws.
Any security breach, incident, or compromise or loss of system control caused by hacking, which involves efforts to gain unauthorized access to information or systems, or to cause intentional malfunctions or loss, modification, or corruption of data, software, hardware or other computer equipment and the transmission of computer malware could harm our business, operating results, and financial condition, and expose us to claims arising from loss or unauthorized disclosure of confidential or personal information or data and the related breach of our contracts with customers or others, or of privacy or data security laws.
You should carefully consider the risks and uncertainties described below, together with all of the other information in this Annual Report on Form 10-K, including the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our condensed consolidated financial statements and related notes, before making a decision to invest in our common stock.
You should carefully consider the risks and uncertainties described below, together with all of the other information in this Annual Report on Form 10-K, including the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes, before making a decision to invest in our common stock.
We also have partnerships with GSIs, including Accenture, Deloitte, DXC, and Kyndryl, and hyperscalers such as AWS, GCP, and Azure, on which many of our customers depend, and through which our customers may be able to procure and deploy our solutions. We are dependent on these partner relationships to contribute to enabling our sales growth.
We also have partnerships with GSIs, including Accenture, Atos, Deloitte, DXC, and Kyndryl, and hyperscalers such as AWS, GCP, and Azure, on which many of our customers depend, and through which our customers may be able to procure and deploy our solutions. We are dependent on these partner relationships to contribute to enabling our sales growth.
As our business has grown, we have become increasingly subject to the risks arising from adverse changes in the domestic and global economies. Uncertainty in the macroeconomic environment and associated global economic conditions, as well as geopolitical disruption, may result in extreme volatility in credit, equity, and foreign currency markets.
As our business has grown, we have become increasingly subject to the risks arising from adverse changes in the domestic and global economies. Uncertainty in the macroeconomic environment and associated global economic conditions, as well as geopolitical disruption, have and may continue to result in extreme volatility in credit, equity, and foreign currency markets.
Anti-Bribery Act, and a heightened risk of unfair or corrupt business practices in certain geographies, and of improper or fraudulent sales arrangements that may impact financial results and result in restatements of, or irregularities in, financial statements; • compliance with privacy, data protection, and data security laws of many countries and jurisdictions, including the EU’s GDPR and the CCPA; • limited or uncertain protection of intellectual property rights in some countries and the risks and costs associated with monitoring and enforcing intellectual property rights abroad; • greater difficulty in enforcing contracts and managing collections in certain jurisdictions, as well as longer collection periods; • management communication and integration problems resulting from cultural and geographic dispersion; • difficulties hiring local staff, differing employer/employee relationships, and the potential need for country-specific benefits, programs, and systems; • social, economic, and political instability, epidemics and pandemics, terrorist attacks, wars, geopolitical conflicts, disputes and security concerns in general; and • potentially adverse tax consequences.
Anti-Bribery Act, and a heightened risk of unfair or corrupt business practices in certain geographies, and of improper or fraudulent sales arrangements that may impact financial results and result in restatements of, or irregularities in, financial statements; • compliance with privacy, data protection, and data security laws of many countries and jurisdictions, including the EU’s GDPR and the CCPA; • limited or uncertain protection of IP rights in some countries and the risks and costs associated with monitoring and enforcing IP rights abroad; • greater difficulty in enforcing contracts and managing collections in certain jurisdictions, as well as longer collection periods; • management communication and integration problems resulting from cultural and geographic dispersion; • difficulties hiring local staff, differing employer/employee relationships, and the potential need for country-specific benefits, programs, and systems; • social, economic, and political instability, epidemics and pandemics, terrorist attacks, wars, geopolitical conflicts, disputes and security concerns in general; and • potentially adverse tax consequences.
The cost of compliance with, or failure to comply with, such laws and regulations could result in increased compliance costs, and any untimely or inaccurate disclosure could adversely affect our reputation, business, or financial performance. ITEM 1B. UNRESOLVED STAFF COMMENTS None.
The cost of compliance with, or failure to comply with, such laws, rules, and regulations could result in increased compliance costs, and any untimely or inaccurate disclosure could adversely affect our reputation, business, or financial performance. ITEM 1B. UNRESOLVED STAFF COMMENTS None.
Our sales to government entities are subject to a number of challenges and risks. We sell our solutions to U.S. federal and state and foreign governmental agency customers, often through our resellers, and we may increase sales to government entities in the future.
Our sales to government entities are subject to a number of challenges and risks. We sell our solutions to U.S. federal and state and foreign governmental agency customers, often through our distributors and resellers, and we may increase sales to government entities in the future.
Our ability to increase sales to existing customers depends on several factors, including their experience with implementing and using our platform and the existing solutions they have implemented, their ability to integrate our solutions with existing technologies, and our pricing models, including our new DPS licensing model.
Our ability to increase sales to existing customers depends on several factors, including their experience with implementing and using our platform and the existing solutions they have implemented, their ability to integrate our solutions with existing technologies, and our pricing models, including our DPS licensing model.
Factors that could cause fluctuations in the trading price of our common stock include the following: • announcements of new products, offerings or technologies, commercial relationships, acquisitions, or other events by us or our competitors; • changes in how customers perceive the benefits of our platform; • shifts in the mix of billings and revenue attributable to SaaS subscriptions, licenses and services from quarter to quarter; • departures of our Chief Executive Officer, Chief Financial Officer, other executive officers, senior management or other key personnel; • price and volume fluctuations in the overall stock market from time to time; • fluctuations in the trading volume of our shares or the size of our public float; • sales of large blocks of our common stock; • actual or anticipated changes or fluctuations in our operating results; • whether our operating results meet the expectations of securities analysts or investors; • changes in actual or future expectations of investors or securities analysts; • litigation, data breaches, or security incidents involving us, our industry or both; • regulatory developments in the United States, foreign countries or both; 32 Table of Contents • general economic conditions and trends; and • major catastrophic events in our domestic and foreign markets.
Factors that could cause fluctuations in the trading price of our common stock include the following: • announcements of new products, offerings or technologies, commercial relationships, acquisitions, or other events by us or our competitors; • changes in how customers perceive the benefits of our platform; • shifts in the mix of billings and revenue attributable to SaaS subscriptions, licenses and services from quarter to quarter; • departures of our Chief Executive Officer, Chief Financial Officer, other executive officers, senior management or other key personnel; • price and volume fluctuations in the overall stock market from time to time; 32 Table of Contents • fluctuations in the trading volume of our shares or the size of our public float; • sales of large blocks of our common stock; • actual or anticipated changes or fluctuations in our operating results; • whether our operating results meet the expectations of securities analysts or investors; • changes in actual or future expectations of investors or securities analysts; • litigation, data breaches, or security incidents involving us, our industry or both; • regulatory developments in the United States, foreign countries or both, including changes to tariffs or trade agreements; • general economic conditions and trends; and • major catastrophic events in our domestic and foreign markets.
Any failure or perceived failure by us, or any third parties with which we do business, to comply with our posted privacy policies and product documentation or privacy laws or regulations, changing consumer expectations, evolving laws, rules, and regulations, industry standards, or contractual obligations to which we or such third parties are or may become subject, may result in actions or other claims against us by governmental entities or private actors, the expenditure of substantial costs, time and other resources or the imposition of significant fines, penalties or other liabilities, which could, individually or in the aggregate, materially and adversely affect our business, financial condition, and results of operations.
Any failure or perceived failure by us, or any third parties with which we do business, to comply with our posted privacy policies and product documentation or privacy laws or regulations, changing consumer expectations, evolving laws, rules, and regulations, industry standards, or contractual obligations to which we or such third parties are or may become subject, may result in actions or other claims against us by governmental entities or private actors, the expenditure of substantial costs, time and other 26 Table of Contents resources or the imposition of significant fines, penalties or other liabilities, which could, individually or in the aggregate, materially and adversely affect our business, financial condition, and results of operations.
Additionally, in certain circumstances, and particularly among large technology companies that have complex and large software application and IT infrastructure environments, customers may elect to build in-house solutions to address their observability and security needs. Any such in-house solutions could leverage open source software, and therefore be made generally available at little or no cost.
Additionally, in certain circumstances, and particularly among large technology companies that have complex and large software application and IT infrastructure environments, customers may elect to build in-house solutions to address their observability and related needs. Any such in-house solutions could leverage open source software, and therefore be made generally available at little or no cost.
The long-term effects of climate change on the global economy and the technology industry in particular are unclear. However, there are inherent climate-related risks such as natural disasters, floods, fire, infrastructure disruptions, and geopolitical instability that have the potential to disrupt and impact our business and the third parties with which we conduct business.
The long-term effects of climate change on the global economy and the technology industry in particular are unclear. However, there are inherent climate-related risks such as natural disasters, infrastructure disruptions, and geopolitical instability that have the potential to disrupt and impact our business and the third parties with which we conduct business.
In general, security incidents, breaches, and compromises have increased in sophistication and have become more prevalent across industries and may occur on our systems; on the systems of third parties that we use to host our solutions or SaaS solutions that we use in the operation of our business; on the systems or libraries of third parties that we use to develop our products; or on third party hosting platforms on which our customers’ host their systems.
In general, security incidents, breaches, and compromises have increased in sophistication and have become more prevalent across industries and may occur on our systems; on the systems of third parties that we use to host our solutions or SaaS solutions that we use in the operation of our business; on the systems or libraries of third parties that we use to develop our products; or on third-party hosting platforms on which our customers host their systems.
If an actual or perceived security incident, breach, or compromise occurs, the market perception of the effectiveness of our security controls could be harmed, our brand and reputation could be damaged, we could lose customers, and we could suffer financial exposure due to such events or in connection with remediation efforts, investigation costs, regulatory fines, including fines assessed under the European General Data Protection Regulation (“GDPR”) or other privacy laws, private lawsuits, and changed security control, system architecture, and system protection measures.
If an actual or perceived security incident, breach, or compromise occurs, the market perception of the effectiveness of our security controls could be harmed, our brand and reputation could be damaged, we could lose customers, and we could suffer 21 Table of Contents financial exposure due to such events or in connection with remediation efforts, investigation costs, regulatory fines, including fines assessed under the European General Data Protection Regulation (“GDPR”) or other privacy laws, private lawsuits, and changed security control, system architecture, and system protection measures.
Weak or turbulent global economic conditions or a reduction in observability and security spending, even if general economic conditions remain unaffected, could adversely impact our business, operating results and financial condition in a number of ways, including longer sales cycles, lower prices for our solutions, reduced subscription renewals, and lower revenue.
Weak or turbulent global economic conditions or a reduction in observability and related spending, even if general economic conditions remain unaffected, could adversely impact our business, operating results and financial condition in a number of ways, including longer sales cycles, lower prices for our solutions, reduced subscription renewals, and lower revenue.
If we fail to innovate and do not continue to develop and effectively market solutions that anticipate and respond to the needs of our customers, our business, operating results, and financial condition may suffer. The markets for observability and security solutions are characterized by constant change and innovation, and we expect them to continue to rapidly evolve.
If we fail to innovate and do not continue to develop and effectively market solutions that anticipate and respond to the needs of our customers, our business, operating results, and financial condition may suffer. The markets for observability and related solutions are characterized by constant change and innovation, and we expect them to continue to rapidly evolve.
Our charter also contains a provision that provides us with protections similar to Section 203 of the Delaware General Corporation Law, and prevents us from engaging in a business combination, such as a merger, with an interested stockholder (i.e., a person or group who acquires at least 15% of our voting stock) for a period of three years from the date such person became an interested stockholder, unless (with certain exceptions) the business combination or the transaction in which the person became an interested stockholder is approved in a prescribed manner.
Our charter also contains a provision that provides us with protections similar to Section 203 of the Delaware General Corporation Law, and prevents us from engaging in a business combination, such as a merger, with an interested stockholder (i.e., a person or group who acquires at least 15% of our voting stock) for a period of three years from the date such person became an interested stockholder, unless (with certain exceptions) the business combination or the transaction in which the person became an interested 34 Table of Contents stockholder is approved in a prescribed manner.
As of March 31, 2024, we had $399.2 million available under the credit facility with $0.8 million of letters of credit outstanding. The actual amounts of our debt servicing payments vary based on the amounts of indebtedness outstanding, the applicable interest accrual periods, and the applicable interest rates and fee margins, which vary based on prescribed formulas.
As of March 31, 2025, we had $399.2 million available under the Credit Facility with $0.8 million of letters of credit outstanding. The actual amounts of our debt servicing payments vary based on the amounts of indebtedness outstanding, the applicable interest accrual periods, and the applicable interest rates and fee margins, which vary based on prescribed formulas.
Additionally, our agreements with customers and partners include indemnification provisions, under which we agree to indemnify them for losses suffered or incurred as a result of allegations of intellectual property infringement and, in some cases, for damages caused by us to property or persons or other third-party allegations.
Additionally, our agreements with customers and partners include indemnification provisions, under which we agree to indemnify them for losses suffered or incurred as a result of allegations of IP infringement and, in some cases, for damages caused by us to property or persons or other third-party allegations.
Government entities may have statutory, contractual, or other legal rights to terminate contracts with our distributors and resellers for convenience, non-appropriation, or due to a default. Any of these risks relating to our sales to governmental entities could adversely impact our future sales and operating results.
Government entities, including DOGE, may have statutory, contractual, or other legal rights to terminate contracts with our distributors and resellers for convenience, non-appropriation, or due to a default. Any of these risks relating to our sales to governmental entities could adversely impact our future sales and operating results.
We operate in over 30 countries around the world and, as a multinational corporation, we are subject to income and non-income taxes, including payroll, sales, use, value-added, net worth, property, and goods and services taxes, in both the United States and various non-U.S. jurisdictions.
We operate in over 35 countries around the world and, as a multinational corporation, we are subject to income and non-income taxes, including payroll, sales, use, value-added, net worth, property, and goods and services taxes, in both the United States and various non-U.S. jurisdictions.
In an economic downturn or during periods of economic or political instability, we believe that our customers or prospects may reduce their operating or IT budgets, which could cause them to defer or forego purchases of observability and security solutions, including ours.
In an economic downturn or during periods of economic or political instability, we believe that our customers or prospects may reduce their operating or IT budgets, which could cause them to defer or forego purchases of observability and related solutions, including ours.
While we believe that our tax estimates are reasonable and we have complied with all applicable income tax laws, there can be no assurance that a governing tax authority will not have a different interpretation and require us to pay additional taxes.
While we believe that our tax estimates, assumptions, and judgments are reasonable and we have complied with all applicable income tax laws, there can be no assurance that a governing tax authority will not have a different interpretation and require us to pay additional taxes.
In addition, any negative economic effects or instability resulting from changes in the political environment and international relations in the United States or other key markets as well as resulting regulatory or tax policy changes may adversely affect our business and financial results.
In addition, any negative economic effects or instability resulting from changes in the political environment and international relations in the United States or other key markets as well as resulting regulatory or tax policy changes may adversely affect our business, operating results, and financial condition.
These security incidents or compromises may be caused by, or result in, but are not limited to, security breaches, computer malware or malicious software, ransomware, phishing attacks, computer hacking, denial of service attacks, security system control failures in our own systems or from vendors that we or our customers use, software vulnerabilities, social engineering, sabotage, malicious downloads, and the errors or malfeasance of our own or our customers’ or vendors’ employees.
These security incidents or compromises may be caused by, or result in, but are not limited to, security breaches, computer malware or malicious software, ransomware, phishing attacks, computer hacking, denial of service attacks, security system control failures in our own systems or vendor systems that we or our customers use, software vulnerabilities, social engineering, sabotage, malicious downloads, and the errors or malfeasance of our own or our customers’ or vendors’ employees.
The successful promotion of the Dynatrace brand and the market’s awareness of our solutions and platform will depend largely upon our ability to continue to offer and market enterprise-grade observability and security solutions, share our thought leadership, and continue to successfully differentiate our solutions from those of our competitors.
The successful promotion of the Dynatrace brand and the market’s awareness of our solutions and platform will depend largely upon our ability to continue to offer and market enterprise-grade observability and related solutions, share our thought leadership, and continue to differentiate our solutions successfully from those of our competitors.
In addition, if any of the third-party SaaS solutions that we use were to experience a significant or prolonged outage or security breach, our business could be adversely affected. We currently host our Dynatrace solutions on cloud infrastructure hyperscaler providers, such as AWS, Azure and GCP. Our Dynatrace solutions reside on hardware operated by these providers.
In addition, if any of the third-party SaaS solutions that we use were to experience a significant or prolonged outage or security breach, our business could be adversely affected. 22 Table of Contents We currently host our Dynatrace solutions on cloud infrastructure hyperscaler providers, such as AWS, Azure and GCP. Our Dynatrace solutions reside on hardware operated by these providers.
The existence of comprehensive privacy laws in different states in the country, if enacted, will add additional complexity, variation in requirements, restrictions, and potential legal risk, require additional investment of resources in compliance programs, impact strategies and the availability of previously useful data, and has resulted in and will result in increased compliance costs and/or changes in business practices and policies. • Outside of the United States, virtually every jurisdiction in which we operate has established its own privacy, data protection and/or data security legal framework with which we or our customers must comply, including, but not limited to, the European Union (“EU”). ◦ In the EU, data protection laws are stringent and continue to evolve, resulting in possible significant operational costs for internal compliance and risk to our business.
The existence of comprehensive privacy laws in different states in the country will add additional complexity, variation in requirements, restrictions, and potential legal risk, require additional investment of resources in compliance programs, impact strategies and the availability of previously useful data, and has resulted in and will result in increased compliance costs and/or changes in business practices and policies. • Outside of the United States, virtually every jurisdiction in which we operate has established its own privacy, data protection and/or data security legal framework with which we or our customers must comply, including, but not limited to, the European Union (“EU”). 25 Table of Contents ◦ In the EU, data protection laws are stringent and continue to evolve, resulting in possible significant operational costs for internal compliance and risk to our business.
Furthermore, we have agreed in certain instances to defend our partners against third-party claims asserting infringement of certain intellectual property rights, which may include patents, copyrights, trademarks, or trade secrets, and to pay judgments entered on such assertions. Large indemnity payments could harm our business, operating results, and financial condition.
Furthermore, we have agreed in certain instances to defend our partners against third-party claims asserting infringement of certain IP rights, which may include patents, copyrights, trademarks, or trade secrets, and to pay judgments entered on such assertions. Large indemnity payments could harm our business, operating results, and financial condition.
Accordingly, investors must rely on sales of their common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investments. 33 Table of Contents Our charter and bylaws contain anti-takeover provisions that could delay or discourage takeover attempts that stockholders may consider favorable.
Accordingly, investors must rely on sales of their common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investments. Our charter and bylaws contain anti-takeover provisions that could delay or discourage takeover attempts that stockholders may consider favorable.
If we do not respond to the rapidly changing needs of our customers by 15 Table of Contents developing and making available new solutions and solution enhancements that can address evolving customer needs on a timely basis, our competitive position and business prospects will be harmed, and our revenue growth and margins could decline.
If we do not respond to the rapidly changing needs of our customers by developing and making available new solutions and solution enhancements that can address evolving customer needs on a timely basis, our competitive position and business prospects will be harmed, and our revenue growth and margins could decline.
In addition, we are experiencing, and we may continue to experience, an increase in the number of large, 19 Table of Contents strategic deals where customers are looking to make broader observability architecture decisions. These deals come with a higher degree of variability, longer sales cycles, greater uncertainty of completing the sale, and specially negotiated terms.
In addition, we are experiencing, and we may continue to experience, an increase in the number of large, strategic deals where customers are looking to make broader observability architecture decisions. These deals come with a higher degree of variability, longer sales cycles, greater uncertainty of completing the sale, and specially negotiated terms.
If expectations for our business turn out to be inaccurate, our revenue growth may be adversely affected over time and we may not be able to adjust our cost structure on a timely basis and our cash flows and results of operations may suffer. Our ability to succeed depends on the experience and expertise of our senior management team.
If expectations for our business turn out to be inaccurate, our revenue growth may be adversely affected over time and we may not be able to adjust our cost structure on a timely basis and our cash flows and results of operations may suffer. 19 Table of Contents Our ability to succeed depends on the experience and expertise of our senior management team.
Furthermore, it is possible that our patent applications may not result in issued patents, that the scope of the claims in our issued patents will be insufficient or not have the coverage originally sought, that our issued patents will not provide us with any competitive advantages, and that our issued patents and other intellectual property rights may be challenged by others or invalidated through administrative process or litigation.
Furthermore, it is possible that our patent applications may not result in issued patents, that the scope of the claims in our issued patents will be insufficient or not have the coverage originally sought, that our issued patents will not provide us with any competitive advantages, or that our issued patents and other IP rights may be challenged by others or invalidated through administrative process or litigation.
In particular, because we utilize a multi-tenant platform, any security breach, incident, or compromise could potentially affect a significant amount of our customers. The consequences of a security breach, incident, or compromise may be more severe if customers have chosen to configure our platform to collect and store confidential, personal, sensitive, or proprietary information.
In particular, because we utilize a multi-tenant platform for our SaaS solution, any security breach, incident, or compromise could potentially affect a significant amount of our customers. The consequences of a security breach, incident, or compromise may be more severe if customers have chosen to configure our platform to collect and store confidential, personal, sensitive, or proprietary information.
Based on the guidance available thus far, we do not expect this legislation to have a material impact on our consolidated financial statements, but we will continue to evaluate it as additional guidance and clarification becomes available. We are subject to a number of risks associated with global sales and operations.
Based on the guidance available thus far, we do not expect this legislation to have a material impact on our consolidated financial statements, but we will continue to evaluate it as additional guidance and clarification becomes available. 27 Table of Contents We are subject to a number of risks associated with global sales and operations.
Our participation in open source initiatives may limit our ability to enforce our intellectual property rights in certain circumstances. As part of our strategy to broaden our target markets and accelerate adoption of our offerings, we contribute software program code to certain open source projects managed by organizations such as Microsoft, Google, and Cloud Native Computing Foundation.
Our participation in open source initiatives may limit our ability to enforce our IP rights in certain circumstances. As part of our strategy to broaden our target markets and accelerate adoption of our offerings, we contribute software program code to certain open source projects managed by organizations such as Microsoft, Google, and Cloud Native Computing Foundation.
Any one of these factors or the cumulative effects of certain of these 18 Table of Contents factors may result in significant fluctuations in our revenues, billings, gross margin, and operating results. This variability and unpredictability could result in our failure to meet internal expectations or those of securities analysts or investors for a particular period.
Any one of these factors or the cumulative effects of certain of these factors may result in significant fluctuations in our revenues, billings, gross margin, and operating results. This variability and unpredictability could result in our failure to meet internal expectations or those of securities analysts or investors for a particular period.
Any such default could have a material adverse effect on our liquidity, financial condition, and results of operations. Risks Related to Information Technology, Intellectual Property, and Data Security and Privacy Security breaches, computer malware, computer hacking attacks, and other security incidents or compromises could harm our business, reputation, brand, and operating results.
Any such default could have a material adverse effect on our liquidity, financial condition, and results of operations. Risks Related to Information Technology, IP, and Data Security and Privacy Security breaches, computer malware, computer hacking attacks, and other security incidents or compromises could harm our business, reputation, brand, and operating results.
We have received, and may in the future receive, notices alleging that we have misappropriated, misused, or infringed other parties’ intellectual property rights, including allegations made by our competitors, and, to the extent we gain greater market visibility, we face a higher risk of being the subject of intellectual property infringement assertions.
We have received, and may in the future receive, notices alleging that we have misappropriated, misused, or infringed other parties’ IP rights, including allegations made by our competitors, and, to the extent we gain greater market visibility, we face a higher risk of being the subject of IP infringement assertions.
It is possible that released source code could reveal some of our trade secrets and impact our competitive advantage. Some license provisions protecting against unauthorized use, copying, transfer, reverse engineering, and disclosure of our technology may be unenforceable under the laws of certain jurisdictions and foreign countries.
It is possible that released source code could reveal some of our trade secrets, create security risks, and impact our competitive advantage. Some license provisions protecting against unauthorized use, copying, transfer, reverse engineering, and disclosure of our technology may be unenforceable under the laws of certain jurisdictions and foreign countries.
We cannot predict the timing, strength, or duration of any economic slowdown, instability, or recovery, generally or within the technology industry. If macroeconomic or geopolitical conditions deteriorate or if the pace of recovery slows or is uneven, our overall results of operations could be adversely affected. We continue to invest in our international operations.
We cannot predict the timing, strength, or duration of any economic slowdown, instability, or recovery, generally or within the technology industry. If macroeconomic or geopolitical conditions deteriorate or if the pace of recovery slows or is uneven, our overall results of operations could be adversely affected. 28 Table of Contents We continue to invest in our international operations.
Assertions by third parties of infringement or other violations by us of their intellectual property rights, or other lawsuits brought against us, could result in significant costs and substantially harm our business, operating results, and financial condition. Patent and other intellectual property disputes are common in the markets in which we compete.
Assertions by third parties of infringement or other violations by us of their IP rights, or other lawsuits brought against us, could result in significant costs and substantially harm our business, operating results, and financial condition. Patent and other IP disputes are common in the markets in which we compete.
Some companies in the markets in which we compete, including some of our competitors, own large numbers of patents, copyrights, trademarks, and trade secrets, which they may use to assert claims of infringement, misappropriation, or other violations of intellectual property rights against us, our partners, our technology partners, or our customers.
Some companies in the markets in which we compete, including some of our competitors, own large numbers of patents, copyrights, trademarks, and trade secrets, which they may use to assert claims of infringement, misappropriation, or other violations of IP rights against us, our partners, our technology partners, or our customers.
We attempt to protect our intellectual property under patent, trademark, copyright, and trade secret laws, and through a combination of confidentiality procedures, contractual provisions, internal policies and other methods, all of which offer only limited protection. However, the steps we take to protect our intellectual property may be inadequate.
We attempt to protect our IP under patent, trademark, copyright, and trade secret laws, and through a combination of confidentiality procedures, contractual provisions, internal policies and other methods, all of which offer only limited protection. However, the steps we take to protect our IP may be inadequate.
In expanding our international activities, our exposure to unauthorized copying and use of our technology and proprietary information may increase. In addition, the use of other companies’ generative AI tools by our employees or contractors in a manner that violates our internal policies may compromise some of our proprietary or intellectual property rights.
In expanding our international activities, our exposure to unauthorized copying and use of our technology and proprietary information may increase. In addition, the use of other companies’ generative AI tools by our employees or contractors in a manner that violates our internal policies may compromise some of our proprietary or IP rights.
Further, the laws of some countries do not protect proprietary rights to the same extent as the laws of the United States, and in some countries, there may not be sufficient legal processes available to us, in a timely fashion or at all, to enable us to effectively protect our intellectual property.
Further, the laws of some countries do not protect proprietary rights to the same extent as the laws of the United States, and in some countries, there may not be sufficient legal processes available to us, in a timely fashion or at all, to enable us to effectively protect our IP.
The legal and regulatory frameworks for privacy, data protection and security issues worldwide are rapidly evolving and as a result, implementation standards, potential fines, enforcement practices, and litigation risks are likely to remain uncertain for the foreseeable future. 25 Table of Contents • In the United States, state legislatures continue to propose and pass comprehensive privacy legislation, including data breach notification laws, personal data privacy laws, and consumer protection laws.
The legal and regulatory frameworks for privacy, data protection and security issues worldwide are rapidly evolving and as a result, implementation standards, potential fines, enforcement practices, and litigation risks are likely to remain uncertain for the foreseeable future. • In the United States, state legislatures continue to propose and pass comprehensive privacy legislation, including data breach notification laws, personal data privacy laws, and consumer protection laws.
Accordingly, in the event of revenue shortfalls, we are generally unable to mitigate the negative impact on margins in the short term. Market adoption of the solutions that we offer is relatively new and may not grow as we expect, which may harm our business and prospects.
Accordingly, in the event of revenue shortfalls, we are generally unable to mitigate the negative impact on margins in the short term. Market adoption of the solutions that we offer may not grow as we expect, which may harm our business and prospects.
For example, changes in tax laws, rules, regulations, treaties, rates, changing interpretation of existing laws or regulations, the impact of accounting 27 Table of Contents for share-based compensation, the impact of accounting for business combinations, changes in our international organization, and changes in overall levels of income before tax, can increase our or our stockholders’ tax liability.
For example, changes in tax laws, rules, regulations, treaties, rates, changing interpretation of existing laws or regulations, the impact of accounting for share-based compensation, the impact of accounting for business combinations, changes in our international organization, and changes in overall levels of income before tax, can increase our or our stockholders’ tax liability.
Moreover, policing unauthorized use of our technologies, solutions, and intellectual property is difficult, expensive, and time-consuming, particularly in foreign countries where the laws may not be as protective of intellectual property rights as those in the United States and where mechanisms for enforcement of intellectual property rights may be weak.
Moreover, policing unauthorized use of our technologies, solutions and IP is difficult, expensive, and time-consuming, particularly in foreign countries where the laws may not be as protective of IP rights as those in the United States and where mechanisms for enforcement of IP rights may be weak.
The regulatory framework both in the United States and internationally governing the collection, processing, storage, use and sharing of certain information, particularly financial and other personal information, is rapidly evolving and is likely to continue to be subject 26 Table of Contents to uncertainty and varying interpretations.
The regulatory framework both in the United States and internationally governing the collection, processing, storage, use and sharing of certain information, particularly financial and other personal information, is rapidly evolving and is likely to continue to be subject to uncertainty and varying interpretations.
Our customers determine, through their configuration, the nature of the customer data processed by Dynatrace, and accordingly the content of the notices that they provide to 21 Table of Contents data subjects as well as the consents that they obtain, if they do in fact, obtain consent.
Our customers determine, through their configuration, the nature of the customer data processed by Dynatrace, and accordingly the content of the notices that they provide to data subjects as well as the consents that they obtain, if they do, in fact, obtain consent.
Failure to protect and enforce our proprietary technology and intellectual property rights could substantially harm our business, operating results, and financial condition. The success of our business depends on our ability to protect and enforce our proprietary rights, including our patents, trademarks, copyrights, trade secrets, and other intellectual property rights, throughout the world.
Failure to protect and enforce our proprietary technology and IP rights could substantially harm our business, operating results, and financial condition. The success of our business depends on our ability to protect and enforce our proprietary rights, including our patents, trademarks, copyrights, trade secrets, and other IP rights, throughout the world.
The EU has adopted the GDPR, which imposes robust obligations upon covered companies, including heightened notice and consent requirements, greater rights of data subjects (e.g., the “right to be forgotten”), increased data portability for EU consumers, additional data breach notification and data security requirements, requirements for engaging third-party processors, and increased fines for non-compliance.
The EU has adopted the GDPR, which imposes robust obligations upon covered companies, including heightened notice and consent requirements, greater rights of data subjects (e.g., the “right to be forgotten”), increased accountability measures, additional data breach notification and data security requirements, requirements for engaging third-party processors, and increased fines for non-compliance.
Our business is subject to regulation by various U.S. federal, state, local, and foreign governmental agencies, including agencies responsible for monitoring and enforcing employment and labor laws, workplace safety, product safety, environmental laws, consumer protection laws, privacy, cybersecurity and data protection laws, anti-bribery laws, trade controls, federal acquisition regulations and guidelines, federal securities laws, and tax laws and regulations.
Our business is subject to regulation by various U.S. federal, state, local, and foreign governmental agencies, including agencies responsible for monitoring and enforcing employment and labor laws, workplace safety, product safety, environmental laws, consumer protection laws, AI, privacy, cybersecurity and data protection laws, anti-bribery laws, trade controls, public procurement regulations and guidelines, federal securities laws, and tax laws and regulations.
From time to time, legal action by us may be necessary to enforce our patents and other intellectual property rights, to protect our trade secrets, to determine the validity and scope of the intellectual property rights of others, or to defend against allegations of infringement or invalidity.
From time to time, legal action by us may be necessary to enforce our patents and other IP rights, to protect our trade secrets, to determine the validity and scope of the IP rights of others, or to defend against allegations of infringement or invalidity.
Risks Related to Our Business and Industry We have experienced rapid revenue growth in recent periods, which may not be indicative of our future growth. We have experienced rapid revenue growth in recent periods. Our annual revenue grew 23%, 25%, and 32% in the years ended March 31, 2024, 2023, and 2022, r espectively, compared to the prior year.
Risks Related to Our Business and Industry We have experienced rapid revenue growth in recent periods, which may not be indicative of our future growth. We have experienced rapid revenue growth in recent periods. Our annual revenue grew 19%, 23%, and 25% in the years ended March 31, 2025, 2024, and 2023, r espectively, compared to the prior year.
We may also face competition from companies entering our market, which has a relatively low barrier to entry in some segments, including large technology companies that could expand their platforms or acquire one of our competitors. For example, Cisco acquired Splunk earlier this year.
We may also face competition from companies entering our market, which has a relatively low barrier to entry in some segments, including large technology companies that could expand their platforms or acquire one of our competitors. For example, Cisco acquired Splunk in 2024.
These conditions, including changes in inflationary pressures, rising interest rates, lower consumer confidence or uneven or lower spending, volatile capital markets, financial and credit market fluctuations, political turmoil, natural catastrophes, epidemics, warfare (including the ongoing conflicts in Ukraine, and in Israel and surrounding areas), and terrorist attacks on the United States or elsewhere, may also adversely affect the buying patterns of our customers and prospective customers, including the size of transactions and length of sales cycles, which would 28 Table of Contents adversely affect our overall pipeline as well as our revenue growth expectations.
These conditions, including changes in inflationary pressures, increased tariffs, rising interest rates, lower consumer confidence or uneven or lower spending, volatile capital markets, financial and credit market fluctuations, trade wars or trade conflicts, political turmoil, natural catastrophes, epidemics, warfare (including the ongoing conflicts in Ukraine, and in Israel and surrounding areas), and terrorist attacks on the United States or elsewhere, may also adversely affect the buying patterns of our customers and prospective customers, including the size of transactions and length of sales cycles, which would adversely affect our overall pipeline as well as our revenue growth expectations.
We believe our future success will depend in large part on the growth, if any, in the demand for observability and security solutions that utilize analytics and automation at their core, particularly the demand for enterprise-wide solutions and our ability to provide solutions that meet such ever-evolving needs.
We believe our future success will depend in large part on the growth, if any, in the demand for observability and related solutions that utilize analytics and AI at their core, particularly the demand for enterprise-wide solutions and our ability to provide solutions that meet such ever-evolving needs.
Th e process of obtaining patent protection is expensive and time consuming, and we may not be able to prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner. We may choose not to seek patent protection for certain innovations and may choose not to pursue patent protection in certain jurisdictions.
Th e process of obtaining patent protection is expensive and time consuming, and we may not be able to successfully prosecute patent applications at a reasonable cost or in a timely manner. We may choose not to seek patent protection for certain innovations and may choose not to pursue patent protection in certain jurisdictions.
Many existing and potential competitors enjoy substantial competitive advantages, such as: • greater brand recognition and longer operating histories; • longer-term and more extensive relationships with existing and potential customers, and access to larger customer bases, which often provide incumbency advantages; • broader global distribution and presence; • larger sales and marketing budgets and resources; • the ability to integrate or bundle competitive offerings with other products, offerings and services; • lower labor and development costs; • greater resources to make acquisitions; • larger and more mature intellectual property portfolios; and • substantially greater financial, technical, management and other resources.
Many existing and potential competitors enjoy substantial competitive advantages, such as: • greater brand recognition and longer operating histories; • longer-term and more extensive relationships with existing and potential customers, and access to larger customer bases, which often provide incumbency advantages; 17 Table of Contents • broader global distribution and presence; • larger sales and marketing budgets and resources; • the ability to integrate or bundle competitive offerings with other products, offerings and services; • lower labor and development costs; • greater resources to make acquisitions; • larger and more mature IP portfolios; and • substantially greater financial, technical, management and other resources.
Competition in our industry is intense, and often leads to significant increased compensation and other personnel costs. In addition, competition for employees with experience in our industry can be intense, particularly in Europe, where our research and development operations are concentrated and where other technology companies compete for management and engineering talent.
Competition in our industry is intense, and can lead to increased compensation and other personnel costs. In addition, competition for employees with experience in our industry can be intense, particularly in Europe, where our research and development operations are concentrated and where other technology companies compete for management and engineering talent.
As a result, unauthorized access to, security breaches, incidents, or compromises of, or denial-of-service attacks against our platform could result in the unauthorized access to, or use of, and/or loss of, such data, as well as loss of intellectual property, customer data, employee data, trade secrets, or other confidential or proprietary information.
As a result, unauthorized access to, security breaches, incidents, or compromises of, or denial-of-service attacks against our platform could result in the unauthorized access to, or use of, and/or loss of, our data, as well as loss of IP, customer data, employee data, trade secrets, or other confidential or proprietary information.
If any amounts that we ultimately pay to a tax authority differ materially from amounts that we previously recorded, it could negatively affect our financial results and operations for the period at issue and on an ongoing basis.
If any amounts that we ultimately pay to a tax authority differ materially from amounts that we previously recorded or if we experience any unanticipated tax consequences, it could negatively affect our financial results and operations for the period at issue and on an ongoing basis.
For customers who purchase a subscription to our Dynatrace platform, whether they purchase a SaaS subscription, or a term license, we generally recognize revenue ratably over the term of their subscription. For customers who purchase a perpetual license, we generally recognize the license revenue ratably over three years.
For customers who purchase a subscription to our Dynatrace platform, whether they purchase a SaaS subscription, or a term license, we generally recognize revenue ratably over the term of their subscription.
In 2022, we suspended all business in Russia and Belarus. Although we do not have material operations in Ukraine, Russia, or Belarus, geopolitical instability in the region, new sanctions, and enhanced export controls has and may continue to impact our ability to sell or export our platform in Ukraine, Russia, Belarus and surrounding countries.
Although we do not have material operations in Ukraine, Russia, or Belarus, geopolitical instability in the region, new sanctions, and enhanced export controls has and may continue to impact our ability to sell or export our platform in Ukraine, Russia, Belarus and surrounding countries.
An adverse outcome of a dispute may require us to take several adverse steps such as pay substantial damages, including potentially treble damages, if we are found to have willfully infringed a third party’s patents or copyrights; cease making, using, selling, licensing, importing, or otherwise commercializing solutions that are alleged to infringe or misappropriate the intellectual property of others; expend additional development resources to attempt to redesign our solutions or otherwise to develop non-infringing technology, which may not be successful; enter into potentially unfavorable royalty or license agreements in order to obtain the right to use necessary technologies or intellectual property rights or have royalty obligations imposed by a court; or indemnify our customers, partners, and other third parties.
They may also make such assertions against our customers or partners. 23 Table of Contents An adverse outcome of a dispute may require us to take several adverse steps such as pay substantial damages, including potentially treble damages, if we are found to have willfully infringed a third party’s patents or copyrights; cease making, using, selling, licensing, importing, or otherwise commercializing solutions that are alleged to infringe or misappropriate the IP of others; expend additional development resources to attempt to redesign our solutions or otherwise to develop non-infringing technology, which may not be successful; enter into potentially unfavorable royalty or license agreements in order to obtain the right to use necessary technologies or IP rights or have royalty obligations imposed by a court; or indemnify our customers, partners, and other third parties.
We cannot assure you that we are not infringing or otherwise violating any third-party intellectual property rights. Furthermore, companies that bring allegations against us may have the capability to dedicate substantially greater resources to enforce their intellectual property rights and to defend against similar allegations that may be brought against them than we do.
We cannot assure you that we are not infringing or otherwise violating any third-party IP rights. Furthermore, third parties that bring allegations against us may have the capability to dedicate substantially greater resources to enforce their IP rights and to defend against similar allegations that may be brought against them than we do.
Thus, substantially all of the revenue that we report in each quarter from the Dynatrace platform is derived from the recognition of revenue relating to contracts entered into during previous quarters. For the three months ended March 31, 2024, revenue recognized from deferred revenue at the beginning of the period was $319 million.
Thus, substantially all of the revenue that we report in each quarter from the Dynatrace platform is derived from the recognition of revenue relating to contracts entered into during previous quarters. For the three months ended March 31, 2025, revenue recognized from deferred revenue at the beginning of the period was $351.9 million.
The decreased use of our solutions or limitation on our ability to export or sell our solutions could adversely affect our business, while violations of these export and import control and economic sanctions laws and regulations could have negative consequences for us and our personnel, including government investigations, administrative fines, civil and criminal penalties, denial of export privileges, incarceration, and reputational harm.
The decreased use of our solutions or limitation on our ability to export or sell our solutions could adversely affect our business, while violations of these export and import control and economic sanctions laws and regulations could have negative consequences for us and our personnel, including government investigations, administrative fines, civil and criminal penalties, denial of export privileges, suspension or debarment from government contracts for a time, incarceration, and reputational harm.
One of our historically largest shareholders, the Thoma Bravo Funds, sold approximately 53.4 million shares of our common stock during our fiscal 2024, and an additional approximately 6.5 million shares in the first quarter of our fiscal 2025, bringing their beneficial ownership below 5% of our common stock as of May 20, 2024.
For example, one of our historically largest shareholders, the Thoma Bravo Funds, sold approximately 53.4 million shares of our common stock during our fiscal 2024, and an additional approximately 6.5 million shares in the first quarter of our fiscal 2025, bringing their beneficial ownership below 5% of our common stock.
In addition, any such sales, or the possibility that these sales may occur, could make it more difficult for us to sell shares of our common stock in the public market in the future. Our issuance of additional capital stock in connection with financings, acquisitions, investments, our stock incentive plans, or otherwise will dilute all other stockholders.
Future substantial sales, or the perception that such sales may occur, could make it more difficult for our stockholders or us to sell shares of our common stock in the public market in the future. Our issuance of additional capital stock in connection with financings, acquisitions, investments, our stock incentive plans, or otherwise will dilute all other stockholders.
Customers may delay or cancel IT projects or seek to lower their costs by renegotiating vendor contracts or renewals. To the extent purchases of observability and security solutions are perceived by existing customers and potential customers to be discretionary, our revenue may be disproportionately affected by delays or reductions in general IT spending.
Customers may delay or cancel IT projects or seek to lower their costs by renegotiating their vendor contracts or renewals, such as contracts with us. To the extent purchases of observability and related solutions are perceived by existing customers and potential customers to be discretionary, our revenue may be disproportionately affected by delays or reductions in general IT spending.
We may be unable to determine the extent of any unauthorized use or infringement of our solutions, technologies, or intellectual property rights.
We may be unable to determine the extent of any unauthorized use or infringement of our solutions, technologies, or IP rights.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThese trainings cover a wide range of topics, including, but not limited to, ransomware, impersonation attacks, data handling and privacy, fraud, phishing, and identity theft. From time to time, we also require supplemental training depending on an individual’s role or job responsibilities. Our CISO also periodically presents on cybersecurity matters at company-wide meetings and with individual business and corporate functions.
Biggest changeFrom time to time, we also require supplemental training depending on an individual’s role or job responsibilities. Our CISO also periodically presents on cybersecurity matters at company-wide meetings and with individual business and corporate functions. Governance Board oversight – Our Board of Directors, as a whole and through its committees, has responsibility for the oversight of our risk management.
We proactively employ multiple methods at different layers of our systems which are designed to defend against intrusion and attack and protect our data. We also consider the threats and challenges that we and other companies face as cybersecurity attacks grow in frequency and complexity.
We proactively employ multiple methods at different layers of our systems which are designed to defend against intrusions and attacks and protect our data. We also consider the threats and challenges that we and other companies face as cybersecurity attacks grow in frequency and complexity.
Incident response planning - We have an incident response plan that sets forth a structured process and approach for how we assess, respond to, and remediate cybersecurity incidents.
Incident response planning - We have an incident response plan that sets forth a structured process and approach for how we assess, respond to, recover from, and remediate cybersecurity incidents.
Our internal audit team and our company’s independent auditors periodically assess the effectiveness of certain of our cybersecurity-related controls. From time to time, we also engage external consultants and advisors to perform independent security testing and assessments and to assist with aspects of our cybersecurity program.
Our internal audit team and our company’s independent auditors periodically assess the effectiveness of certain of our cybersecurity-related controls. From time to time, we also engage external consultants and advisors to 36 Table of Contents perform independent security testing and assessments and to assist with aspects of our cybersecurity program.
For example, our CISO collaborates with the Chief Technology Officer and the Chief Legal Officer on cybersecurity measures throughout the organization and the CISO works with the Chief Product Officer in connection with the introduction or updating of security features for the Dynatrace platform and our services.
For example, our CISO collaborates with the Chief 37 Table of Contents Technology Officer and the Chief Legal Officer on cybersecurity measures throughout the organization and the CISO works with the Chief Product Officer in connection with the introduction or updating of security features for the Dynatrace platform and our services.
The Information Security Office is comprised of professionals who collectively have significant experience in a wide range of cybersecurity matters, including threat assessment and detection, incident response, and risk management.
The Information Security Office is comprised of professionals who collectively have significant experience in a wide range of cybersecurity matters, including threat assessment and detection, incident response and secure software development, and risk management.
The Information Security Office works with Dynatrace’s other business and corporate functions and keeps the CISO informed and updated regarding key cybersecurity-related matters in accordance with our internal reporting processes. 37 Table of Contents
The Information Security Office works with Dynatrace’s other business and corporate functions and keeps the CISO informed and updated regarding key cybersecurity-related matters in accordance with our internal reporting processes.
We also utilize automated technology that alerts our security team of unusual activity in our corporate systems, product platform, and public-facing 36 Table of Contents systems. As part of our processes, we require applicable internal approvals for changes to security-critical aspects of our product platform and services.
We also utilize automated technology that alerts our security team of unusual activity in our corporate systems, product platform, and public-facing systems as well as automated security vulnerability scanning for our code base. As part of our processes, we require applicable internal approvals for changes to security-critical aspects of our product platform and services.
Our CISO has worked in information technology and cybersecurity roles for more than three decades and has led our program since 2018. As part of his role, our CISO is responsible for communicating and coordinating cybersecurity-related matters with the Board and the Cybersecurity Committee (as discussed above) and our executive leadership team.
As part of his role, our CISO is responsible for communicating and coordinating cybersecurity-related matters with the Board and the Cybersecurity Committee (as discussed above) and our executive leadership team.
The Board has a standalone Cybersecurity Committee that is responsible for managing oversight of our cybersecurity-related investments, programs, plans, controls, and policies. The Cybersecurity Committee also provides feedback on cybersecurity-related matters, including, but not limited to, strategies, objectives, capabilities, initiatives, and policies. The Cybersecurity Committee meets during the year with the CISO and other members of our executive leadership team.
The Cybersecurity Committee also provides feedback on cybersecurity-related matters, including, but not limited to, strategies, objectives, capabilities, initiatives, and policies. The Cybersecurity Committee meets during the year with the CISO and other members of our executive leadership team. In between meetings, the CISO periodically provides the Cybersecurity Committee with a written report on cybersecurity matters.
In between meetings, the CISO periodically provides the Cybersecurity Committee with a written report on cybersecurity matters. The Board’s Audit Committee oversees our ERM program, which includes cybersecurity risk management as a focus area. The full Board also receives periodic reports from management on the ERM program.
The Board’s Audit Committee oversees our ERM program, which includes cybersecurity risk management as a focus area. The full Board also receives periodic reports from management on the ERM program. The Chairs of the Cybersecurity Committee and the Audit Committee periodically update the full Board on specific committee-level topics and discussions.
Governance Board oversight – Our Board of Directors, as a whole and through its committees, has responsibility for the oversight of our risk management. The Board is responsible to satisfy itself that the risk management processes designed and implemented by management are adequate and functioning as designed.
The Board is responsible to satisfy itself that the risk management processes designed and implemented by management are adequate and functioning as designed. The Board has a standalone Cybersecurity Committee that is responsible for managing oversight of our cybersecurity-related investments, programs, plans, controls, and policies.
We review and test the plan from time to time to enhance management and Board preparedness in the event of a potential cybersecurity incident and to identify areas of continuous improvement. Training and education - We require employees and contractors to complete data protection and security awareness training in connection with onboarding and annually thereafter.
We review and test our incident response plan from time to time through tabletop exercises and other scenario planning to enhance management and Board preparedness in the event of a potential cybersecurity incident and to identify areas of continuous improvement.
From time to time, the CISO and other members of our executive leadership team discuss cybersecurity-related matters with the full Board at its scheduled meetings. Outside of scheduled meetings, management also periodically notifies or updates the Cybersecurity Committee or the Board, as appropriate, regarding certain types of cybersecurity incidents and matters.
This enables the Board and its committees to coordinate the risk oversight role, particularly with respect to risk interrelationships. From time to time, the CISO and other members of our executive leadership team discuss cybersecurity-related matters with the full Board at its scheduled meetings.
Management’s role – Management is responsible for assessing and managing our material cybersecurity risks, practices and policies on a day-to-day basis. Our CISO, who reports to the Chief Financial Officer, leads the Information Security Office and our cybersecurity program.
Outside of scheduled meetings, management also periodically notifies or updates the Cybersecurity Committee or the Board, as appropriate, regarding certain types of cybersecurity incidents and matters. Management’s role – Management is responsible for assessing and managing our material cybersecurity risks, practices and policies on a day-to-day basis.
Removed
The Chairs of the Cybersecurity Committee and the Audit Committee periodically update the full Board on specific committee-level topics and discussions. This enables the Board and its committees to coordinate the risk oversight role, particularly with respect to risk interrelationships.
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We categorize third parties in tiers based on the services that they provide to our company, the information and data that they have access to, and our overall assessment of the significance and risk of their operations to Dynatrace. We focus more detailed reviews and more frequent assessments on third parties that are in our highest tier.
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As part of our incident response processes, we maintain disaster recovery plans and we prepare for any required external disclosures or reporting related to cybersecurity incidents.
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We believe that our planning and related processes, reviews, and testing help minimize the potential impacts to our company from cybersecurity incidents and help us recover from them as quickly as possible. Training and education - We require employees and contractors to complete data protection and security awareness training in connection with onboarding and annually thereafter.
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These trainings cover a wide range of topics, including, but not limited to, ransomware, impersonation attacks, data handling and privacy, fraud, phishing, and identity theft. We conduct phishing simulation tests during the year to educate, train, and assess our employees’ ability to identify malicious emails and employees who do not follow our protocol are provided with additional follow-up training.
Added
Our CISO, who reports to the Chief Financial Officer, leads the Information Security Office and our cybersecurity program. Our CISO has worked in information technology and cybersecurity roles for more than three decades and has led our program since 2018.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. PROPERTIES Our corporate headquarters is located in Waltham, Massachusetts and consists of approximately 60,000 square feet of space under a lease that expires in 2027. Our primary research and development facility is located in Linz, Austria and consists of approximately 93,000 square feet of space under a lease that expires in 2036.
Biggest changeOur primary research and development facility is located in Linz, Austria and consists of approximately 93,000 square feet of space under a lease that expires in 2036. In 2026, we plan to expand our Linz campus by an additional 187,000 square feet of space.
In 2026, we plan to expand our Linz campus by an additional 187,000 square feet of space. We also lease other facilities in the United States and internationally, the largest of which in the United States are in Denver, Colorado and Detroit, Michigan, and the largest of which internationally are in Vienna, Austria and Gdansk, Poland.
We also lease other facilities in the United States and internationally, the largest of which in the United States are in Denver, Colorado and Detroit, Michigan, and the largest of which internationally are in Vienna, Austria and Gdansk, Poland.
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ITEM 2. PROPERTIES Our corporate headquarters is currently located in Waltham, Massachusetts and consists of approximately 60,000 square feet. We have agreed to terminate this lease, and in July 2025, we plan to relocate our corporate headquarters to Boston, Massachusetts where our office will consist of approximately 25,000 square feet of space under a lease that expires in 2032.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

3 edited+3 added−1 removed6 unchanged
Biggest changeBase Period 8/1/2019 3/31/2020 3/31/2021 3/31/2022 3/31/2023 3/31/2024 Dynatrace, Inc. $ 100.00 $ 99.96 $ 202.26 $ 197.48 $ 177.36 $ 194.72 S&P 500 $ 100.00 $ 87.51 $ 134.51 $ 153.39 $ 139.13 $ 177.90 S&P 500 Information Technology $ 100.00 $ 100.32 $ 165.35 $ 198.19 $ 187.19 $ 271.04 Unregistered Sales of Equity Securities None.
Biggest changeBase Period 3/31/2020 3/31/2021 3/31/2022 3/31/2023 3/31/2024 3/31/2025 Dynatrace, Inc. $ 100.00 $ 202.35 $ 197.57 $ 177.43 $ 194.80 $ 197.78 S&P 500 $ 100.00 $ 153.71 $ 175.29 $ 158.99 $ 203.30 $ 217.13 S&P 500 Information Technology $ 100.00 $ 164.81 $ 197.55 $ 186.58 $ 270.16 $ 284.23 Unregistered Sales of Equity Securities None.
Holders of Record As of May 20, 2024, there were 41 stockholders of record of our common stock. We believe a substantially greater number of beneficial owners hold shares through brokers, banks or other nominees. Dividend Policy We have never declared or paid any cash dividend on our common stock.
Holders of Record As of May 20, 2025, there were 27 stockholders of record of our common stock. We believe a substantially greater number of beneficial owners hold shares through brokers, banks or other nominees. Dividend Policy We have never declared or paid any cash dividend on our common stock.
The performance graph below compares the cumulative total stockholder return on our common stock with the cumulative total return on the S&P 500 Index and the S&P 500 Information Technology Index. The graph assumes $100 was invested at the market close on August 1, 2019, which was our initial trading date, in our common stock.
The performance graph below compares the cumulative total stockholder return on our common stock with the cumulative total return on the S&P 500 Index and the S&P 500 Information Technology Index. The graph assumes $100 was invested at the market close on March 31, 2020 in our common stock.
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Use of Proceeds None. Issuer Purchases of Equity Securities None. Please see the “Overview - Recent Developments” section of Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Annual Report for information regarding the share repurchase program that we announced on May 15, 2024. ITEM 6. RESERVED Not applicable. 39 Table of Contents
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Use of Proceeds None. 39 Table of Contents Issuer Purchases of Equity Securities Share repurchase activity during the three months ended March 31, 2025 was as follows (in thousands, except shares and per share data): Period (1) (a) Total Number of Shares Purchased (b) Average Price Paid per Share (2) (c ) Total Number of Shares Purchased as Part of Publicly Announced Plan or Programs (d) Approximate Dollar Value of Shares that may Yet be Purchased Under Plans or Programs (3) January 1, 2025 - January 31, 2025 192,814 $ 53.63 192,814 $ 359,555 February 1, 2025 - February 28, 2025 224,301 60.14 224,301 346,061 March 1, 2025 - March 31, 2025 370,150 50.44 370,150 327,382 Total 787,265 $ 53.99 787,265 (1) Information is based on trade dates of share repurchase transactions.
Added
(2) Excludes commissions paid and any estimated excise taxes payable on share repurchases. (3) On May 15, 2024, we announced a share repurchase program for up to $500 million of shares of our common stock. Our share repurchase program does not have a time limit.
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For additional information, please see Note 14, Shareholders’ Equity, of the consolidated financial statements in this Annual Report. ITEM 6. RESERVED Not applicable. 40 Table of Contents

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

71 edited+56 added−46 removed39 unchanged
Biggest changeThese tax effects are dependent on our share price, which we do not control, and a decline in our share price could significantly increase our effective tax rate and adversely affect our financial results. 43 Table of Contents Results of Operations The following tables set forth our results of operations for the periods presented: Fiscal Year Ended March 31, 2024 2023 2022 Amount Percent Amount Percent Amount Percent (in thousands, except percentages) Revenue: Subscription $ 1,359,354 95 % $ 1,083,330 94 % $ 870,439 94 % Service 71,176 5 % 75,200 6 % 59,006 6 % Total revenue 1,430,530 100 % 1,158,530 100 % 929,445 100 % Cost of revenue: Cost of subscription 184,765 13 % 144,445 12 % 111,646 12 % Cost of service 65,423 5 % 62,882 6 % 45,717 5 % Amortization of acquired technology 16,265 1 % 15,564 1 % 15,513 2 % Total cost of revenue (1) 266,453 19 % 222,891 19 % 172,876 19 % Gross profit 1,164,077 81 % 935,639 81 % 756,569 81 % Operating expenses: Research and development (1) 304,739 21 % 218,349 19 % 156,342 17 % Sales and marketing (1) 534,233 37 % 448,015 39 % 362,116 39 % General and administrative (1) 174,412 12 % 150,172 13 % 126,647 14 % Amortization of other intangibles 22,293 2 % 26,292 2 % 30,157 3 % Total operating expenses 1,035,677 842,828 675,262 Income from operations 128,400 9 % 92,811 8 % 81,307 9 % Interest income (expense), net 37,284 (3,409) (10,192) Other (expense) income, net (10,769) 565 544 Income before income taxes 154,915 89,967 71,659 Income tax (expense) benefit (283) 17,992 (19,208) Net income $ 154,632 $ 107,959 $ 52,451 _________________ (1) Includes share-based compensation expense as follows: Fiscal Year Ended March 31, 2024 2023 2022 (in thousands) Cost of revenue $ 26,622 $ 18,383 $ 12,863 Research and development 69,543 41,406 21,316 Sales and marketing 65,762 51,147 35,957 General and administrative 46,969 35,938 29,400 Total share-based compensation expense $ 208,896 $ 146,874 $ 99,536 44 Table of Contents Fiscal Years Ended March 31, 2024 and 2023 Revenue Fiscal Year Ended March 31, Change 2024 2023 Amount Percent (in thousands, except percentages) Subscription $ 1,359,354 $ 1,083,330 $ 276,024 25 % Service 71,176 75,200 (4,024) (5 %) Total revenue $ 1,430,530 $ 1,158,530 $ 272,000 23 % Subscription Subscription revenue increased by $276.0 million, or 25%, for the year ended March 31, 2024, as compared to the year ended March 31, 2023, primarily due to the growing adoption of the Dynatrace platform by new customers combined with existing customers expanding their use of our solutions.
Biggest changeFiscal Year Ended March 31, 2025 2024 2023 Amount Percent Amount Percent Amount Percent (in thousands, except percentages) Revenue: Subscription $ 1,622,163 95 % $ 1,359,354 95 % $ 1,083,330 94 % Service 76,520 5 % 71,176 5 % 75,200 6 % Total revenue 1,698,683 100 % 1,430,530 100 % 1,158,530 100 % Cost of revenue: Cost of subscription 233,299 14 % 184,765 13 % 144,445 12 % Cost of service 73,631 4 % 65,423 5 % 62,882 6 % Amortization of acquired technology 13,262 1 % 16,265 1 % 15,564 1 % Total cost of revenue (1) 320,192 19 % 266,453 19 % 222,891 19 % Gross profit 1,378,491 81 % 1,164,077 81 % 935,639 81 % Operating expenses: Research and development (1) 384,572 23 % 304,739 21 % 218,349 19 % Sales and marketing (1) 605,599 36 % 534,233 37 % 448,015 39 % General and administrative (1) 195,347 11 % 174,412 12 % 150,172 13 % Amortization of other intangibles 13,540 1 % 22,293 2 % 26,292 2 % Total operating expenses 1,199,058 1,035,677 842,828 Income from operations 179,433 11 % 128,400 9 % 92,811 8 % Interest income (expense), net 48,281 37,284 (3,409) Other (expense) income, net (4,285) (10,769) 565 Income before income taxes 223,429 154,915 89,967 Income tax benefit (expense) 260,255 (283) 17,992 Net income $ 483,684 $ 154,632 $ 107,959 _________________ (1) Includes share-based compensation expense as follows: Fiscal Year Ended March 31, 2025 2024 2023 (in thousands) Cost of revenue $ 36,924 $ 26,622 $ 18,383 Research and development 100,866 69,543 41,406 Sales and marketing 77,336 65,762 51,147 General and administrative 56,577 46,969 35,938 Total share-based compensation expense $ 271,703 $ 208,896 $ 146,874 47 Table of Contents Fiscal Years Ended March 31, 2025 and 2024 Revenue Fiscal Year Ended March 31, Change 2025 2024 Amount Percent (in thousands, except percentages) Subscription $ 1,622,163 $ 1,359,354 $ 262,809 19 % Service 76,520 71,176 5,344 8 % Total revenue $ 1,698,683 $ 1,430,530 $ 268,153 19 % Subscription Subscription revenue increased by $262.8 million, or 19%, in fiscal 2025 compared to fiscal 2024, primarily due to the growing adoption of the Dynatrace platform by new customers combined with existing customers expanding their use of our solutions.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes appearing elsewhere in this Annual Report on Form 10-K.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the consolidated financial statements and related notes appearing elsewhere in this Annual Report on Form 10-K.
Income Tax (Expense) Benefit Our income tax expense, deferred tax assets and liabilities, and liabilities for unrecognized tax benefits reflect management’s best assessment of estimated current and future taxes to be paid. We are subject to income taxes in both the United States and numerous foreign jurisdictions. Significant judgments and estimates are required in determining the consolidated income tax expense.
Income Tax Benefit (Expense) Our income tax expense, deferred tax assets and liabilities, and liabilities for unrecognized tax benefits reflect management’s best assessment of estimated current and future taxes to be paid. We are subject to income taxes in both the United States and numerous foreign jurisdictions. Significant judgments and estimates are required in determining the consolidated income tax expense.
We generate revenue primarily by selling subscriptions, which we define as SaaS agreements, term-based licenses, perpetual licenses, and maintenance and support agreements. The majority of our customers deploy Dynatrace as a SaaS solution to get the latest Dynatrace features and updates with greatly reduced administrative effort. We also provide options to deploy our platform in customer-provisioned infrastructure.
We generate revenue primarily by selling subscriptions, which we define as SaaS agreements, term-based licenses, and maintenance and support agreements. The majority of our customers deploy Dynatrace as a SaaS solution to get the latest Dynatrace features and updates with greatly reduced administrative effort. We also provide options to deploy our platform in customer-provisioned infrastructure.
Cost of Revenue Fiscal Year Ended March 31, Change 2024 2023 Amount Percent (in thousands, except percentages) Cost of subscription $ 184,765 $ 144,445 $ 40,320 28 % Cost of service 65,423 62,882 2,541 4 % Amortization of acquired technology 16,265 15,564 701 5 % Total cost of revenue $ 266,453 $ 222,891 $ 43,562 20 % Cost of subscription Cost of subscription increased by $40.3 million, or 28%, for the year ended March 31, 2024 as compared to the year ended March 31, 2023.
Cost of Revenue Fiscal Year Ended March 31, Change 2024 2023 Amount Percent (in thousands, except percentages) Cost of subscription $ 184,765 $ 144,445 $ 40,320 28 % Cost of service 65,423 62,882 2,541 4 % Amortization of acquired technology 16,265 15,564 701 5 % Total cost of revenue $ 266,453 $ 222,891 $ 43,562 20 % Cost of subscription Cost of subscription increased by $40.3 million, or 28%, in fiscal 2024 compared to fiscal 2023.
Operating Expenses Fiscal Year Ended March 31, Change 2024 2023 Amount Percent (in thousands, except percentages) Operating expenses: Research and development $ 304,739 $ 218,349 $ 86,390 40 % Sales and marketing 534,233 448,015 86,218 19 % General and administrative 174,412 150,172 24,240 16 % Amortization of other intangibles 22,293 26,292 (3,999) (15 %) Total operating expenses $ 1,035,677 $ 842,828 $ 192,849 23 % Research and development Research and development expenses increased $86.4 million, or 40%, for the year ended March 31, 2024 as compared to the year ended March 31, 2023.
Operating Expenses Fiscal Year Ended March 31, Change 2024 2023 Amount Percent (in thousands, except percentages) Operating expenses: Research and development $ 304,739 $ 218,349 $ 86,390 40 % Sales and marketing 534,233 448,015 86,218 19 % General and administrative 174,412 150,172 24,240 16 % Amortization of other intangibles 22,293 26,292 (3,999) (15 %) Total operating expenses $ 1,035,677 $ 842,828 $ 192,849 23 % Research and development Research and development expenses increased by $86.4 million, or 40%, in fiscal 2024 compared to fiscal 2023.
We record uncertain tax positions on a two-step process in which (i) we determine whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (ii) for those tax positions that meet the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is more than 50% likely to be realized upon 52 Table of Contents ultimate settlement with the related tax authority.
We record uncertain tax positions on a two-step process in which (i) we determine whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (ii) for those tax positions that meet the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is more than 50% likely to be realized upon ultimate settlement with the related tax authority.
Under this method, deferred tax assets and liabilities are determined based on the differences between the consolidated financial statements and income tax bases of assets and liabilities and net operating loss and tax credit carryforwards using enacted tax rates in effect for the year in which the differences are expected to reverse.
Under this method, deferred tax assets and liabilities are determined based on the differences between the consolidated financial statements and 54 Table of Contents income tax bases of assets and liabilities and net operating loss and tax credit carryforwards using enacted tax rates in effect for the year in which the differences are expected to reverse.
We recognize these expenses as they are incurred. Cost of service . Cost of service revenue includes salaries, bonuses, benefits, share-based compensation, and related expenses such as employer taxes for our services organization, allocated overhead for depreciation of equipment, facilities, and IT. We recognize these expenses as they are incurred. Amortization of acquired technology .
Cost of service . Cost of service revenue includes salaries, benefits, bonuses, share-based compensation and related expenses such as employer taxes, and allocated overhead for depreciation, facilities, and IT. We recognize these expenses as they are incurred. Amortization of acquired technology .
In addition, we believe the ease of implementation of Dynatrace provides us with the opportunity to expand adoption within our existing enterprise customers, across new customer applications, and into additional business units or divisions.
In addition, we believe the ease of implementation of Dynatrace provides us with the opportunity to expand adoption within our existing enterprise customers, across new customer applications, with cloud-native and development teams, and into additional business units or divisions.
Key Factors Affecting Our Performance Our historical financial performance has been, and we expect our financial performance in the future to be, driven by our ability to: • Extend our technology and market leadership position. We intend to maintain our position as the market-leading unified observability and security platform through increased investment in research and development, and innovation.
Key Factors Affecting Our Performance Our historical financial performance has been, and we expect our financial performance in the future to be, driven by our ability to: • Extend our technology and market leadership position. We intend to maintain our position as a leading AI-powered observability platform through increased investment in research and development, and innovation.
Cost of subscription revenue includes all direct costs to deliver and support our subscription products, including salaries, benefits, bonuses, share-based compensation and related expenses such as employer taxes, third-party hosting fees related to our cloud services, allocated overhead for depreciation of equipment, facilities, and IT, and amortization of internally developed capitalized software technology.
Cost of subscription revenue includes all direct costs to deliver and support our subscription products, including salaries, benefits, bonuses, share-based compensation and related expenses such as employer taxes, third-party hosting fees related to our cloud services, allocated overhead for depreciation, facilities, and IT, and amortization of internally developed capitalized software technology. We recognize these expenses as they are incurred.
The decrease in gross profit and gross margin was primarily due to higher personnel and share-based compensation expense.
The decrease in gross profit and gross margin was primarily due to increased personnel costs and share-based compensation expense.
Our billings and revenue mix may vary over time due to a number of factors, including the mix of subscriptions and services and the contract length of our customer agreements. Such variability in the timing and amounts of our billings could impact the timing of our cash collections from period to period.
Our billings may vary over time due to a number of factors, including the mix of subscription and service revenue, the contract length of our customer agreements, and the timing of customer contracts, including renewals. Such variability in the timing and amounts of our billings could impact the timing of our cash collections from period to period.
Subscription gross margin decreased from 87% to 86% of total gross margin during the years ended March 31, 2024 and March 31, 2023. The increase in gross profit was primarily due to the growth of the Dynatrace platform by new customers combined with existing customers expanding their use of our solutions.
Subscription gross margin decreased from 87% to 86% of total gross margin in fiscal 2024 compared to fiscal 2023. The increase in gross profit was primarily due to the growth of the Dynatrace platform by new customers combined with existing customers expanding their use of our solutions.
In the ongoing dynamic macroeconomic landscape, we continue to factor a challenging climate. We have seen resiliency in our industry and we remain confident in our ability to execute in this environment.
In the ongoing dynamic macroeconomic landscape, we have seen resiliency in our industry and we remain confident in our ability to execute in this environment.
Also contributing to the increase were higher professional fees of $7.9 million and higher IT expenses of $6.3 million. Amortization of other intangibles Amortization of other intangibles decreased by $4.0 million, or 15%, for the year ended March 31, 2024 as compared to the year ended March 31, 2023.
Also contributing to the increase were higher professional fees of $7.9 million and higher IT expenses of $6.3 million. Amortization of other intangibles Amortization of other intangibles decreased by $4.0 million, or 15%, in fiscal 2024 compared to fiscal 2023.
The increase was primarily due to increased personnel and other costs to expand our product offerings of $51.8 million, and higher share-based compensation expense of $28.1 million. Also contributing to the increase were higher cloud-based hosting costs of $7.2 million.
The increase was primarily due to increased personnel and other costs to expand our product offerings of $51.8 million, and higher share-based compensation expense of $28.1 million.
This law change increases our U.S. federal and state cash taxes and reduces cash flows in fiscal year 2024 and future years. Share-based compensation The tax effects of the accounting for share-based compensation may significantly impact our effective tax rate from period to period.
This law change has increased our U.S. federal and state cash taxes and reduced cash flows since fiscal year 2024. Share-based compensation The tax effects of the accounting for share-based compensation may significantly impact our effective tax rate from period to period.
Changes in foreign currency exchange rates positively impacted our revenue by $14.1 million. Service Service revenue decreased by $4.0 million, or 5%, for the year ended March 31, 2024, as compared to the year ended March 31, 2023. The decrease was primarily due to timing of delivery of services.
Changes in foreign currency exchange rates negatively impacted our revenue by $14.1 million. Service Service revenue decreased by $4.0 million, or 5%, in fiscal 2024 compared to fiscal 2023. The decrease was primarily due to timing of delivery of services.
Service revenue consists of revenue from helping our customers deploy our software in highly complex operational environments and training their personnel. We recognize the revenues associated with these professional services on a time and materials basis as we deliver the services or provide the training.
See the section titled “Critical Accounting Policies and Estimates-Revenue Recognition” for more information. Service. Service revenue consists of revenue from helping our customers deploy our software in highly complex operational environments and training their personnel. We recognize the revenues associated with these professional services on a time and materials basis as we deliver the services or provide the training.
For the year ended March 31, 2023, the net reduction of the valuation allowance recorded against global deferred tax assets results in a benefit of $32.6 million.
In fiscal 2023, the net reduction of the valuation allowance recorded against global deferred tax assets results in a benefit of $32.6 million.
Also contributing to the increase was higher commission expense of $14.4 million and increased advertising costs of $8.8 million. 46 Table of Contents General and administrative General and administrative expenses increased by $24.2 million, or 16%, for the year ended March 31, 2024, as compared to the year ended March 31, 2023, primarily due to higher share-based compensation expense of $11.0 million.
Also contributing to the increase was higher commission expense of $14.4 million, and increased advertising costs of $8.8 million. General and administrative General and administrative expenses increased by $24.2 million, or 16%, in fiscal 2024 compared to fiscal 2023, primarily due to higher share-based compensation expense of $11.0 million.
Over the past three years, cash flows from customer collections have increased. However, operating expenses have also increased as we have invested in growing our business. Our operating cash requirements may increase in the future as we continue to invest in the strategic growth of our company.
However, operating expenses have also increased as we have invested in growing our business. Our operating cash requirements may increase in the future as we continue to invest in the strategic growth of our company.
Amortization of acquired technologies For the years ended March 31, 2024 and 2023, amortization of acquired technologies was primarily related to amortization expense for technology acquired in connection with Thoma Bravo’s acquisition of our company in 2014. 45 Table of Contents Gross Profit and Gross Margin Fiscal Year Ended March 31, Change 2024 2023 Amount Percent (in thousands, except percentages) Gross profit: Subscription $ 1,174,589 $ 938,885 $ 235,704 25 % Service 5,753 12,318 (6,565) (53 %) Amortization of acquired technology (16,265) (15,564) (701) 5 % Total gross profit $ 1,164,077 $ 935,639 $ 228,438 24 % Gross margin: Subscription 86 % 87 % Service 8 % 16 % Amortization of acquired technology (100 %) (100 %) Total gross margin 81 % 81 % Subscription Subscription gross profit increased by $235.7 million, or 25%, during the year ended March 31, 2024 compared to the year ended March 31, 2023.
Gross Profit and Gross Margin Fiscal Year Ended March 31, Change 2024 2023 Amount Percent (in thousands, except percentages) Gross profit: Subscription $ 1,174,589 $ 938,885 $ 235,704 25 % Service 5,753 12,318 (6,565) (53 %) Amortization of acquired technology (16,265) (15,564) (701) 5 % Total gross profit $ 1,164,077 $ 935,639 $ 228,438 24 % Gross margin: Subscription 86 % 87 % Service 8 % 16 % Amortization of acquired technology (100) % (100 %) Total gross margin 81 % 81 % Subscription Subscription gross profit increased by $235.7 million, or 25%, in fiscal 2024 compared to fiscal 2023.
Recent Accounting Pronouncements See Note 2, Significant Accounting Policies, of our audited consolidated financial statements included in this Annual Report for a description of recently issued accounting pronouncements.
Recent Accounting Pronouncements For a description of recent accounting pronouncements, and the impact of these pronouncements on our consolidated financial statements, see Note 2, Significant Accounting Policies, of our audited consolidated financial statements included in this Annual Report.
Income Tax (Expense) Benefit Income tax benefit decreased by $18.3 million resulting in an expense of $0.3 million for the year ended March 31, 2024, as compared to a benefit of $18.0 million for the year ended March 31, 2023. For the year ended March 31, 2024, a reversal of uncertain tax position resulted in a benefit of $14.8 million.
Income Tax (Expense) Benefit Income tax benefit decreased by $18.3 million resulting in an expense of $0.3 million in fiscal 2024 compared to a benefit of $18.0 million in fiscal 2023. In fiscal 2024, a reversal of uncertain tax position resulted in a benefit of $14.8 million.
We recognize interest and penalties related to unrecognized tax benefits on the income tax expense line the accompanying consolidated statement of operations. Accrued interest and penalties are included on the related tax liability line in the consolidated balance sheet.
We recognize interest and penalties related to unrecognized tax benefits on the income tax expense line the accompanying consolidated statement of operations. Accrued interest and penalties are included on the related tax liability line in the consolidated balance sheet. During the year ended March 31, 2025, we completed the IP Transfer.
The change was primarily the result of higher interest rates on our cash, cash equivalents, and investments coupled with lower interest expense due to the repayment of outstanding debt in fiscal year 2023. Other (Expense) Income, Net Other expense, net, increased by $11.3 million for the year ended March 31, 2024 as compared to the year ended March 31, 2023.
Interest Income (Expense), Net Interest income, net, was $37.3 million in fiscal 2024 compared to an expense of $3.4 million in fiscal 2023. The change was primarily the result of higher interest rates on our cash, cash equivalents, and investments coupled with lower interest expense due to the repayment of outstanding debt in fiscal year 2023.
Amortization of acquired technologies For the years ended March 31, 2023 and 2022, amortization of acquired technologies was primarily related to amortization expense for technology acquired in connection with Thoma Bravo’s acquisition of our company in 2014.
Amortization of acquired technologies In fiscal 2024 and 2023, amortization of acquired technologies was primarily related to amortization expense for technology acquired in connection with Thoma Bravo’s acquisition of our company in 2014.
These strategic partners continually work with their customers to help them digitally transform their businesses and reduce cloud complexity. By working more closely with strategic partners, our objective is to participate in digital transformation projects earlier in the purchasing cycle and enable customers to establish more resilient cloud deployments from the start.
By working more closely with strategic partners, our objective is to participate in digital transformation projects earlier in the purchasing cycle and enable customers to establish more resilient cloud deployments from the start.
Our material cash requirements from known contractual and other obligations consist of our rent payments required under operating lease agreements and non-cancelable purchase obligations for cloud hosting support. As of March 31, 2024, total contractual commitments were $421.4 million, with $156.2 million committed within the next 12 months.
Our material cash requirements from known contractual and other obligations consist of our rent payments required under operating lease agreements and non-cancelable purchase obligations entered into in the ordinary course of business, primarily for cloud hosting support. As of March 31, 2025, total contractual commitments were $782.8 million, with $126.5 million committed within the next 12 months.
We intend to drive new customer growth through a focus on the largest 15,000 global enterprise accounts, which generally have annual revenues in excess of $1 billion and more complex IT ecosystems and cloud environments. In particular, we are increasing the focus of our sales force on the largest 500 global companies and strategic enterprise accounts.
We are focused on the largest 15,000 global enterprise accounts, which generally have annual revenues in excess of $1 billion and more complex IT ecosystems and cloud environments. At the start of our fiscal 2025, we increased the focus of our sales force on the largest 500 global companies and strategic enterprise accounts.
The increase was primarily due to higher personnel costs of $15.5 million to support the growth of our subscription cloud-based and higher share-based compensation expense of $7.0 million. Also contributing to the increase were higher cloud-based hosting costs and subscriptions of $12.2 million to support the growth of the business and related infrastructure and higher depreciation expense of $3.1 million.
The increase was primarily due to higher personnel costs of $15.5 million to support the growth of our subscription cloud-based and higher share-based compensation expense of $7.0 million.
Cost of service Cost of service increased by $2.5 million, or 4%, for the year ended March 31, 2024 as compared to the year ended March 31, 2023. The increase was primarily the result of increased professional fees of $2.7 million and higher share-based compensation expense of $1.3 million. Slightly offsetting this increase were third-party professional services of $1.5 million.
The increase was primarily the result of increased professional fees of $2.7 million and higher share-based compensation expense of $1.3 million. Slightly offsetting this increase were third-party professional services of $1.5 million.
The change was primarily the result of foreign currency realized and unrealized gains and losses related to the impact of transactions denominated in a foreign currency, including balances between subsidiaries.
Other (Expense) Income, Net Other expense, net, increased by $11.3 million in fiscal 2024 compared to fiscal 2023. The change was primarily the result of foreign currency realized and unrealized gains and losses related to the impact of transactions denominated in a foreign currency, including balances between subsidiaries.
While still in its early stages, we also believe that our DPS licensing model will drive further expansion opportunities for customers that prefer the flexibility and predictability of pricing under that model. • Grow our customer base.
We also believe that our DPS licensing model will drive broader consumption of the Dynatrace platform and further expansion opportunities for customers that prefer the flexibility and predictability of pricing under that model.
Interest Income (Expense), Net Interest income (expense), net, consists primarily of interest income primarily from money market funds, bank deposits, debt securities held as investments and certificates of deposits, interest expense on our former term loan facility, fees on our revolving credit facility, loss on debt extinguishment and amortization of debt issuance costs.
Interest Income (Expense), Net Interest income (expense), net, consists primarily of interest income from money market funds, bank deposits, debt securities held as investments, and certificates of deposits, partially offset by interest expense associated with fees on our Credit Facility (as defined later in this section) and amortization of debt issuance costs.
Our income tax rate varies from the U.S. federal statutory rate mainly due to (1) the foreign derived intangibles deduction, (2) the generation of U.S. foreign tax credits, and (3) share-based compensation windfalls, partially offset by (4) foreign withholding taxes, (5) nondeductible executive compensation, and (6) foreign earnings taxed at rates higher than the U.S. statutory rate.
Our income tax rate varies from the U.S. federal statutory rate mainly due to (1) recognition of a deferred tax benefit for the IP Transfer (as defined below), (2) the foreign derived intangibles deduction, and (3) the generation of U.S. foreign tax credits, partially offset by (4) foreign withholding taxes and (5) nondeductible executive compensation.
The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the period that includes the enactment date. We have the ability to permanently reinvest any earnings in our foreign subsidiaries and therefore do not record a deferred tax liability on any outside basis differences in our investments in subsidiaries.
The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the period that includes the enactment date. We assert that the earnings of certain foreign subsidiaries are indefinitely reinvested and therefore we do not recognize any deferred tax liabilities that arise from outside basis differences in those subsidiaries.
As of March 31, 2024, we were in compliance with all applicable covenants pertaining to the Credit Facility. The Credit Facility is discussed further in Note 11, Long-term Debt, of our audited consolidated financial statements included in this Annual Report.
The Credit Facility is discussed further in Note 11, Long-term Debt, of our audited consolidated financial statements included in this Annual Report.
Sales and marketing Sales and marketing expenses increased by $86.2 million, or 19%, for the year ended March 31, 2024, as compared to the year ended March 31, 2023, primarily driven by increased personnel costs of $50.4 million and higher share-based compensation expense of $14.6 million.
Also contributing to the increase were higher cloud-based hosting costs of $7.2 million. 51 Table of Contents Sales and marketing Sales and marketing expenses increased by $86.2 million, or 19%, in fiscal 2024 compared to fiscal 2023, primarily driven by increased personnel costs of $50.4 million and higher share-based compensation expense of $14.6 million.
Fiscal Years Ended March 31, 2023 and 2022 Revenue Fiscal Year Ended March 31, Change 2023 2022 Amount Percent (in thousands, except percentages) Subscription $ 1,083,330 $ 870,439 $ 212,891 24 % Service 75,200 59,006 16,194 27 % Total revenue $ 1,158,530 $ 929,445 $ 229,085 25 % Subscription Subscription revenue increased by $212.9 million, or 24%, for the year ended March 31, 2023, as compared to the year ended March 31, 2022, primarily due to the growing adoption of the Dynatrace platform by new customers combined with existing customers expanding their use of our solutions.
Fiscal Years Ended March 31, 2024 and 2023 Revenue Fiscal Year Ended March 31, Change 2024 2023 Amount Percent (in thousands, except percentages) Subscription $ 1,359,354 $ 1,083,330 $ 276,024 25 % Service 71,176 75,200 (4,024) (5 %) Total revenue $ 1,430,530 $ 1,158,530 $ 272,000 23 % Subscription Subscription revenue increased by $276.0 million, or 25%, in fiscal 2024 compared to fiscal 2023, primarily due to the growing adoption of the Dynatrace platform by new customers combined with existing customers expanding their use of our solutions.
Summary of Cash Flows Fiscal Year Ended March 31, 2024 2023 2022 (in thousands) Net cash provided by operating activities (1) $ 378,109 $ 354,885 $ 250,917 Net cash used in investing activities (193,048) (21,540) (30,890) Net cash provided by (used in) financing activities 50,663 (232,344) (80,664) Effect of exchange rate changes on cash and cash equivalents (12,089) (8,620) (1,358) Net increase in cash and cash equivalents $ 223,635 $ 92,381 $ 138,005 _________________ (1) Net cash provided by operating activities includes cash payments for interest and tax as follows: 50 Table of Contents Fiscal Year Ended March 31, 2024 2023 2022 (in thousands) Cash paid for interest $ 851 $ 7,109 $ 8,375 Cash paid for tax (received from), net $ 81,360 $ (14,311) $ 24,247 Operating Activities For the year ended March 31, 2024, cash provided by operating activities was $378.1 million as a result of net income of $154.6 million, and adjusted by non-cash charges of $215.1 million and a change of $8.3 million in our operating assets and liabilities.
Summary of Cash Flows Fiscal Year Ended March 31, 2025 2024 2023 (in thousands) Net cash provided by operating activities (1) $ 459,419 $ 378,109 $ 354,885 Net cash used in investing activities (69,315) (193,048) (21,540) Net cash (used in) provided by financing activities (151,630) 50,663 (232,344) Effect of exchange rate changes on cash and cash equivalents (418) (12,089) (8,620) Net increase in cash and cash equivalents $ 238,056 $ 223,635 $ 92,381 _________________ (1) Net cash provided by operating activities includes cash payments for interest and tax as follows: Fiscal Year Ended March 31, 2025 2024 2023 (in thousands) Cash paid for interest $ 753 $ 851 $ 7,109 Cash paid for (received from) tax, net $ 117,979 $ 81,360 $ (14,311) Operating Activities Net cash provided by operating activities was $459.4 million in fiscal 2025 compared to $378.1 million in fiscal 2024.
During our fiscal 2024, we introduced a new version of the DPS licensing model which provides customers with more modern pricing with flexibility and transparency. Under the DPS model, a customer makes a minimum annual spend commitment at the platform level and then consumes that commitment based on actual usage and a straightforward rate card.
The Dynatrace Platform Subscription (“DPS”) licensing model provides customers with a flexible, scalable, and transparent subscription for the modern cloud. Under the DPS licensing model, a customer makes a minimum annual spend commitment at the platform level and then consumes that commitment based on actual usage and a straightforward rate card.
We plan to expand the functionality of our end-to-end Dynatrace platform and investing in capabilities that address new market opportunities. We also plan to evolve our AI capabilities to drive differentiation. We believe this strategy will enable new growth opportunities and allow us to deliver differentiated high-value outcomes to our customers. • Expand and strengthen our relationships with existing customers.
We believe this strategy will enable new growth opportunities and allow us to deliver differentiated high-value outcomes to our customers. • Expand and strengthen our relationships with existing customers. We plan to establish new and deeper relationships within our existing customers’ organizations and expand the breadth of our platform capabilities to provide for expansion opportunities.
Our fiscal year ends on March 31. Our historical results are not necessarily indicative of the results that may be expected for any period in the future.
Our fiscal year ends on March 31. Our historical results are not necessarily indicative of the results that may be expected for any period in the future. Overview Dynatrace is advancing observability for today’s digital businesses, helping to transform the complexity of modern digital ecosystems into powerful business assets.
Cash from operations could be affected by various risks and uncertainties, including, but not limited to, the risks detailed in the section titled “Risk Factors” included under Part I, Item 1A.
For further information regarding our contractual commitments, see Note 13, Commitments and Contingencies, of our audited consolidated financial statements included in this Annual Report. 52 Table of Contents Cash from operations could be affected by various risks and uncertainties, including, but not limited to, the risks detailed in the section titled “Risk Factors” included under Part I, Item 1A of this Annual Report.
Treasury securities that have maturities between one and 28 months, and $399.2 million available under our revolving credit facility. We have historically financed our operations primarily through payments by our customers for use of our product offerings and related services and, to a lesser extent, the net proceeds we have received from sales of equity securities.
We have historically financed our operations primarily through payments by our customers for use of our product offerings and related services and, to a lesser extent, the net proceeds we have received from sales of equity securities. Over the past three years, cash flows from customer collections have increased.
In addition, we plan to expand our reach internationally to what we believe are large, mostly untapped markets for our company, while leveraging our sector specialization globally. • Leverage our strategic partner ecosystem. We intend to invest in our strategic partner ecosystem, with a particular emphasis on building cloud-focused, loyal and comprehensive partnerships with GSIs and hyperscaler cloud providers.
In addition, we plan to expand our reach internationally to what we believe are large, mostly untapped, markets for our company, while leveraging our sector specialization globally. 42 Table of Contents • Leverage our strategic partner ecosystem.
We exclude from our calculation of ARR any revenues derived from month-to-month agreements and/or product usage overage billings, where customers are billed in arrears based on product usage. 41 Table of Contents Dollar-based Net Retention Rate: We define the dollar-based net retention rate as the Dynatrace ARR at the end of a reporting period for the cohort of Dynatrace accounts as of one year prior to the date of calculation, divided by the Dynatrace ARR one year prior to the date of calculation for that same cohort.
Dollar-based net retention rate: We define the dollar-based net retention rate as the ARR at the end of a reporting period for the cohort of Dynatrace accounts as of one year prior to the date of calculation, divided by the ARR one year prior to the date of calculation for that same cohort.
Any platform capability can be used in any quantity at any time based on the customer’s evolving needs. The Dynatrace platform has been commercially available since 2016 and is the primary offering we sell.
Any platform capability can be used in any quantity at any time based on the customer’s evolving needs.
We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ significantly from the estimates made by our management.
The preparation of consolidated financial statements also requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, costs and expenses and related disclosures. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ significantly from our estimates.
Service Service gross profit decreased by $6.6 million, or 53%, during the year ended March 31, 2024 compared to the year ended March 31, 2023. Service gross margin decreased from 16% to 8% of total gross margin during the year ended March 31, 2024 compared to the year ended March 31, 2023.
Service Service gross profit decreased by $6.6 million, or 53%, in fiscal 2024 compared to fiscal 2023. Service gross margin decreased from 16% to 8% of total gross margin in fiscal 2024 compared to fiscal 2023. The decrease in gross profit and gross margin was primarily due to the higher personnel and share-based compensation costs.
This decrease was primarily due to a $32.6 million net reduction to the valuation allowance recorded against global deferred tax assets. 49 Table of Contents Liquidity and Capital Resources We have historically maintained a disciplined and balanced approach to optimizing costs and improving the efficiency and profitability of our business, while continuing to invest in future growth opportunities that we expect will drive long-term value.
Liquidity and Capital Resources We have historically maintained a disciplined and balanced approach to optimizing costs and improving the efficiency and profitability of our business, while continuing to invest in future growth opportunities that we expect will drive long-term value. Our principal sources of liquidity are cash and cash equivalents, marketable securities (investments) and cash provided by operating activities.
We typically invoice SaaS subscription fees and term licenses annually in advance and recognize subscription revenue ratably over the term of the applicable agreement, provided that all other revenue recognition criteria have been satisfied. Fees for our Dynatrace perpetual licenses are generally billed up front. See the section titled “Critical Accounting Policies and Estimates—Revenue Recognition” for more information. Service.
Subscription. Our subscription revenue consists of (i) SaaS agreements, (ii) term-based licenses which are recognized ratably over the contract term, and (iii) maintenance and support agreements. We typically invoice SaaS subscription fees and term licenses annually in advance and recognize subscription revenue ratably over the term of the applicable agreement, provided that all other revenue recognition criteria have been satisfied.
Investing Activities Cash used in investing activities during the year ended March 31, 2024 was $193.0 million as a result of purchases of investments of $104.2 million, cash paid for business combination acquisitions of $57.1 million, purchases of property and equipment of $26.5 million, and capitalized software additions of $5.3 million.
The $171.5 million increase in net cash used in investing activities was driven by a $104.2 million increase in purchases of investments and a $57.1 million increase in cash paid for business combination acquisitions.
The increase was primarily due to higher personnel costs to support the growth of our subscription cloud-based offering of $17.1 million and higher cloud-based hosting costs and subscriptions of $6.2 million. Also contributing to the increase were higher share-based compensation expense of $4.6 million and increased allocated overhead costs of $3.2 million.
The increase was primarily due to increased personnel costs of $23.2 million, inclusive of a $7.6 million increase in share-based compensation, largely due to headcount growth to support our growing customer base. Also contributing to the increase were increased cloud-based hosting costs of $21.7 million related to our growing cloud-based subscription revenue.
The increase was primarily due to increased personnel and other costs to expand our product offerings of $29.2 million, and higher share-based compensation expense of $20.1 million. Also contributing to the increase were higher allocated overhead costs of $9.8 million, higher travel expenses of $1.6 million, and increased cloud-based hosting costs of $1.5 million.
The increase was primarily due to increased personnel costs of $52.5 million, inclusive of an $11.6 million increase in share-based compensation. Also contributing to the increase were marketing program, professional fees, and partner costs of $7.8 million and travel and entertainment expenses of $3.9 million.
We also incur other non-personnel costs, such as an allocation of our general overhead expenses, including depreciation of equipment, facilities, IT, and other costs. During the fourth quarter of fiscal 2023, we refined our methodology used to allocate depreciation expense for certain property and equipment to better align the expense with the related use of the property and equipment.
We also incur other non-personnel costs, such as an allocation of our general overhead expenses, including depreciation, facilities, IT, and other costs. Research and development . Research and development expenses primarily consist of the cost of programming personnel.
General and administrative General and administrative expenses increased by $23.5 million, or 19%, for the year ended March 31, 2023, as compared to the year ended March 31, 2022, primarily due to increased personnel costs of $19.9 million and higher share-based compensation expense of $6.5 million.
General and administrative General and administrative expenses increased by $20.9 million, or 12%, in fiscal 2025 compared to fiscal 2024. The increase was primarily the result of increased personnel costs of $23.3 million, inclusive of a $9.6 million increase in share-based compensation.
Income Tax Benefit (Expense) Income tax expense decreased by $37.2 million resulting in a benefit of $18.0 million for the year ended March 31, 2023, as compared to an expense of $19.2 million for the year ended March 31, 2022.
Income Tax Benefit (Expense) Income tax expense decreased by $260.5 million resulting in a benefit of $260.3 million in fiscal 2025 compared to an expense of $0.3 million in fiscal 2024.
Our principal sources of liquidity are cash and cash equivalents, marketable securities (investments) and cash provided by operating activities. From time to time, we may borrow under our revolving credit facility. As of March 31, 2024, we had $779.0 million of cash and cash equivalents, $104.2 million in investments, consisting of U.S.
From time to time, we may borrow under our Credit Facility. As of March 31, 2025, we had $1,017.0 million of cash and cash equivalents, $147.8 million of investments, primarily consisting of U.S. Treasury securities, corporate debt securities, commercial paper, and U.S. agency securities that have maturities between one and 30 months, and $399.2 million available under our Credit Facility.
Our Credit Facility In December 2022, we entered into a senior secured revolving credit facility in an aggregate amount of $400.0 million (the “Credit Facility”). As of March 31, 2024, w e h ad $399.2 million ava ilable under the Credit Facili ty with $0.8 million of letters of credit outstanding.
For additional information, please see Part II, Item 5 of this Annual Report. Our Credit Facility In December 2022, we entered into a senior secured revolving credit facility in an aggregate amount of $400.0 million (as amended to date, the “Credit Facility”).
Amortization of acquired technology includes amortization expense for technology acquired in the Thoma Bravo Funds’ acquisition of our company in 2014, business combinations and asset acquisitions. To the extent significant future acquisitions are consummated, we expect that our amortization of acquired technologies may increase due to additional non-cash charges associated with the amortization of intangible assets acquired.
Amortization of acquired technology includes amortization expense for technology acquired when our former controlling stockholder (the Thoma Bravo Funds) acquired our company in 2014 and from business combinations and asset acquisitions.
Interest Expense, Net Interest expense, net, was $3.4 million for the year ended March 31, 2023 compared to $10.2 million for the year ended March 31, 2022. The decline was primarily the result of higher interest income on cash and cash equivalents and lower interest expense due to the reduction in debt.
Interest Income, Net Interest income, net, was $48.3 million in fiscal 2025 compared to $37.3 million in fiscal 2024. The increase in interest income was primarily the result of increased cash, cash equivalent, and investment balances. Other Expense, Net Other expense, net, was $4.3 million in fiscal 2025 compared to $10.8 million in fiscal 2024.
For the year ended March 31, 2023, cash provided by operating activities was $354.9 million as a result of net income of $108.0 million, and adjusted by non-cash charges of $148.9 million and a change of $92.1 million in our operating assets and liabilities.
Net cash provided by operating activities was $378.1 million in fiscal 2024 compared to $354.9 million in fiscal 2023. The $23.2 million increase in net cash provided by operating activities was driven by increased net income, adjusted for non-cash charges, of $106.9 million, partially offset by unfavorable working capital changes of $83.7 million.
Amortization of other intangibles primarily consists of amortization of customer relationships and capitalized software and tradenames.
Amortization of other intangibles primarily consists of amortization of customer relationships and tradenames acquired when our former controlling stockholder (the Thoma Bravo Funds) acquired our company in 2014 and from business combinations.
Also contributing to the increase were increased advertising costs of $1.3 million, increased allocated overhead costs of $1.2 million, and higher share-based compensation expense of $0.9 million.
Also contributing to the increase were higher cloud-based hosting costs and subscriptions of $12.2 million to support the growth of the business and related infrastructure and higher depreciation expense of $3.1 million. 50 Table of Contents Cost of service Cost of service increased by $2.5 million, or 4%, for the fiscal 2024 compared to the fiscal 2023.
We plan to establish new and deeper relationships within our existing customers’ organizations (notably, development teams) and expand the breadth of our platform capabilities to provide for expansion opportunities.
We plan to expand the functionality of our end-to-end Dynatrace platform and invest in capabilities that address new market opportunities.
Gross Profit and Gross Margin Fiscal Year Ended March 31, Change 2023 2022 Amount Percent (in thousands, except percentages) Gross profit: Subscription $ 938,885 $ 758,793 $ 180,092 24 % Service 12,318 13,289 (971) (7 %) Amortization of acquired technology (15,564) (15,513) (51) — % Total gross profit $ 935,639 $ 756,569 $ 179,070 24 % Gross margin: Subscription 87 % 87 % Service 16 % 23 % Amortization of acquired technology (100) % (100 %) Total gross margin 81 % 81 % Subscription Subscription gross profit increased by $180.1 million, or 24%, during the year ended March 31, 2023 compared to the year ended March 31, 2022.
The decrease was primarily the result of certain acquired technology becoming fully amortized during fiscal 2025. 48 Table of Contents Gross Profit and Gross Margin Fiscal Year Ended March 31, Change 2025 2024 Amount Percent (in thousands, except percentages) Gross profit: Subscription $ 1,388,864 $ 1,174,589 $ 214,275 18 % Service 2,889 5,753 (2,864) (50 %) Amortization of acquired technology (13,262) (16,265) 3,003 (18 %) Total gross profit $ 1,378,491 $ 1,164,077 $ 214,414 18 % Gross margin: Subscription 86 % 86 % Service 4 % 8 % Amortization of acquired technology (100 %) (100 %) Total gross margin 81 % 81 % Subscription Subscription gross profit increased by $214.3 million, or 18%, in fiscal 2025 compared to fiscal 2024 and subscription gross margin remained consistent at 86%.
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Overview Dynatrace offers the only end-to-end unified platform that combines broad and deep observability and continuous runtime application security with advanced AI for IT operations to provide answers and intelligent automation from data at an enormous scale.
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By leveraging AI-powered insights, Dynatrace enables organizations to analyze, automate, and innovate faster to drive their business forward. Our vision is a world where software works perfectly. The Dynatrace platform combines broad and deep observability, continuous runtime application security, and advanced AI to support IT operations, development, security, business, and executive teams.
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Our comprehensive solutions help IT, development, security, and business operations teams at global organizations modernize and automate cloud operations, deliver software faster and more securely, and provide significantly improved digital experiences. Many of the world’s largest organizations trust the Dynatrace platform to accelerate digital transformation.
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This comprehensive approach enables organizations to optimize cloud and IT operations, accelerate secure software delivery, and improve digital performance. Our customer base includes some of the largest global enterprises.
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We have been seeing increased demand for large, strategic deals in which customers’ business criteria drive broader technology architecture decisions. At the same time, workloads continue migrating to the cloud as customers seek the agility, flexibility, and rapid technology advancements that can prove elusive in on-premises data center environments.
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These organizations rely on the Dynatrace platform as part of their plans to accelerate the adoption of cloud-native and AI-native initiatives and to address the related challenges of increasing workloads, dynamic environments, and evolving cybersecurity threats. Our ability to provide sophisticated analytics and our advanced automation capabilities support their operational goals in environments characterized by rapid technological changes.
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AI has been sweeping across industries and exploding in relevancy and criticality as organizations desire significant advancements in innovation, productivity, and performance. The escalating cybersecurity threat landscape is also increasing the need for more sophisticated protection.
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Cloud modernization and the dramatic growth in the use of AI have resulted in an explosion of data and a massive increase in its scale and complexity that are untenable for many organizations to manage as they previously did.
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The confluence of these megatrends in dynamic hybrid, multicloud environments brings a scale and frequency of change that is exponentially greater than that of just a few years ago.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

6 edited+0 added−0 removed7 unchanged
Biggest changeWe do not enter into investments for trading or speculative purposes. Our investments are exposed to market risk due to fluctuations in interest rates, which may affect our interest income and fair value of our investments.
Biggest changeThese interest-earning instruments carry a degree of interest rate risk. We do not enter into investments for trading or speculative purposes and have not used any derivative financial instruments to manage our interest rate risk exposure.
The Credit Facility bears interest based on (i) the Term Secured Overnight Financing Rate plus 0.10%, (ii) the Adjusted Euro Interbank Offer Rate, (iii) the Canadian Dollar Offered Rate, (iv) the Base Rate, as defined per the Credit Facility, or (v) the Sterling Overnight Index Average, in each case plus an applicable margin, as defined in the Credit Agreement.
The Credit Facility bears interest based on (i) the Term Secured Overnight Financing Rate plus 0.10%, (ii) the Adjusted Euro Interbank Offer Rate, (iii) the Canadian Overnight Repo Rate Average, (iv) the Base Rate, as defined per the Credit Facility, or (v) the Sterling Overnight Index Average, in each case plus an applicable margin, as defined in the Credit Agreement.
A hypothetical 10% change in interest rates during any of the periods presented would not have had a material impact on our consolidated financial statements. 54 Table of Contents
A hypothetical 10% change in interest rates during any of the periods presented would not have had a material impact on our consolidated financial statements. 56 Table of Contents
Fluctuations in foreign currencies impact the amount of total assets, liabilities, earnings and cash flows that we report for our foreign subsidiaries upon the translation of these amounts into U.S. dollars.
Fluctuations in foreign currencies impact 55 Table of Contents the amount of total assets, liabilities, earnings and cash flows that we report for our foreign subsidiaries upon the translation of these amounts into U.S. dollars.
Interest Rate Risk As of March 31, 2024, we had cash and cash equivalents of $779.0 million, consisting of bank deposits, commercial paper, money market funds and highly liquid investments with an original maturity of three months or less, and U.S. Treasury security investments of $104.2 million. Our investments are made for capital preservation purposes.
Interest Rate Risk As of March 31, 2025, we had cash and cash equivalents of $1,017.0 million, consisting primarily of money market funds, bank deposits, and highly liquid investments with an original maturity of three months or less, and investments of $147.8 million, primarily consisting of U.S. Treasury securities, corporate debt securities, commercial paper and U.S. agency securities.
We have not used any derivative financial instruments to manage our interest rate risk exposure. 53 Table of Contents As of March 31, 2024, we also had the Credit Facility in place, with availability of $399.2 million.
A hypothetical 10% change in interest rates during any of the periods presented would not have had a material impact on our consolidated financial statements. As of March 31, 2025, we also had the Credit Facility- in place, with availability of $399.2 million.

Other DT 10-K year-over-year comparisons