Dynatrace reported fiscal third-quarter earnings and revenue early Thursday that topped Wall Street targets. Dynatrace stock wavered as investors mulled guidance amid currency exchange rates and a strong U.S. dollar.
For the quarter ending Dec. 30, Dynatrace earnings were 37 cents a share on an adjusted basis, up 15% from a year earlier. Revenue climbed 19% to $436 million, the company said.
Analysts had estimated adjusted profit of 33 cents on revenue of $426.4 million. Waltham, Mass.-based Dynatrace reported before the market open.
"In our view, highlights from the quarter included subscription revenue growth and strong consumption trends for DPS (Dynatrace Platform Subscription ) customers," said Jake Roberge, William Blair analyst in a report. "Management highlighted that DPS customers are consuming at roughly double the rate of non-DPS customers, which is benefiting subscription revenue as customers consume on-demand."
The software maker's computer network monitoring tools measure and analyze the performance of business-critical applications. In the "observability" market, Dynatrace and others also monitor application performance over cloud-computing infrastructure.
ARR Key Financial Metric
Annual recurring revenue, or ARR, is a key financial metric for many software companies. Dynatrace said fiscal Q3 ARR from subscriptions rose 16% to $1.657 billion, in line with estimates.
The company forecast March quarter revenue in a range of $432 million to $437 million, above estimates of $427.5 million. EPS guidance of 30 cents was roughly in line.
"We now expect foreign exchange to be a headwind of approximately $38 million on ARR and approximately $17 million on revenue for fiscal 2025," the company said.
On the stock market today, Dynatrace stock was up 0.6% to 57.67 in midday trades.
Heading into the Dynatrace earnings report, the enterprise software stock was up 5% in 2025. Shares are in a long cup-with-handle base with a 59.80 buy point.
Dynatrace Stock Technical Rating
From a technical view, Dynatrace owns a Relative Strength Rating of 77 out of a best-possible 99, according to IBD Stock Checkup.
Dynatrace competes with Datadog and others.
Meanwhile, Dynatrace hosts an investor day on Feb. 5.
"After a transition year in 2024, investor debate centers around DT's ability to revamp and execute on its new go-to-market strategy," said Jefferies analyst Brent Thill in a recent report.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
