Q1 2025 Dynatrace Inc Earnings Call Transcript
Key Points
- Annual Recurring Revenue (ARR) grew 20% year-over-year in constant currency.
- Subscription revenue increased 21% year-over-year in constant currency.
- Free cash flow was 30% of revenue on a trailing 12-month basis.
- Dynatrace Inc (DT) added 162 new logos in Q1, up 5% from the year-ago quarter.
- The company's DPS licensing model continues to see strong traction, with over 900 DPS customers representing more than 20% of the customer base and over 40% of ARR.
- The dynamic macro environment and current market choppiness continue to pose challenges.
- The growing trend of larger observability architecture and vendor consolidation deals comes with increased timing variability.
- The evolution of the go-to-market strategy will take time to settle in and mature.
- Despite the positive results, the company is maintaining a prudent approach to guidance due to economic uncertainties.
- Net retention rate, while improved to 112%, still reflects a cautious outlook for future quarters.
Greetings. Welcome to the Dynatrace fiscal first quarter 2025 earnings call. (Operator Instructions) Please note this conference is being recorded. I will now turn the conference over to your host, Noelle Faris, the Vice President of Investor Relations. You may begin.
Good morning, and thank you for joining Dynatrace's First Quarter Fiscal 2025 Earnings Conference Call. Joining me today are Rick McConnell, Chief Executive Officer; and Jim Benson, Chief Financial Officer.
Before we get started, please note that today's comments include forward-looking statements such as statements regarding revenue, earnings guidance and economic conditions. Actual results may differ materially from our expectations due to a number of risks and uncertainties discussed in Dynatrace's SEC filings, including our most recent quarterly report on Form 10-Q that we filed earlier today. The forward-looking statements contained in this call represent the company's views on August 7, 2024.
We assume no obligation to update these
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