Dynatrace's Q3 sales beat estimates on ARR growth, raises guidance

Dynatrace,

09/02/2026 11:40

Overview

AI observability platform's Q3 revenue and adjusted EPS beat analyst expectations

Company announced new $1 bln share repurchase program

Company achieved 16% ARR growth on constant currency basis

Outlook

Dynatrace raises FY26 ARR guidance to $2.053 bln - $2.061 bln

Company expects FY26 total revenue of $2.005 bln - $2.010 bln

Dynatrace anticipates FY26 non-GAAP EPS of $1.67 - $1.69

Result Drivers

ARR GROWTH - Dynatrace reported a 16% increase in annual recurring revenue on a constant currency basis, driven by enterprise adoption of its observability platform

PRODUCT INNOVATIONS - The company launched Dynatrace Intelligence, an AI-powered operations system, and expanded cloud-native integrations, enhancing its platform capabilities

STRATEGIC DEALS - Dynatrace closed 12 deals over $1 mln in ARR, with significant partner collaboration and new logos, boosting new logo ARR

Key Details

Metric
Beat/Miss
Actual
Consensus Estimate
Q3 Revenue
Beat
$515 mln
$505.78 mln (31 Analysts)
Q3 Adjusted EPS
Beat
$0.44
$0.41 (32 Analysts)
Q3 EPS
$0.13
Q3 Adjusted Operating Income
$153 mln
Q3 Annual Recurring Revenue
$1.97 bln
Q3 Operating Income
$73 mln


Analyst Coverage

The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 26 "strong buy" or "buy", 8 "hold" and no "sell" or "strong sell"

The average consensus recommendation for the it services & consulting peer group is "buy"

Wall Street's median 12-month price target for Dynatrace Inc is $57.00, about 69.1% above its February 6 closing price of $33.71

The stock recently traded at 19 times the next 12-month earnings vs. a P/E of 29 three months ago

Press Release: ID:nBw5CKV54a

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)