Dynatrace Q2 FY3/25 Earnings Review

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Ageing Gracefully

By Alex King, CEO, Cestrian Capital Research, Inc.

Dynatrace, like DataDog, is maturing but remains a very well managed enterprise software company. If you were the sole owner of this company and your retirement depended upon it, you would sleep easy. This thing now comes with >$1bn in net cash and an order book worth 1.5x the prior twelve months' revenue. Growth is holding in the 20% zone for now and cashflow margins in the 30% zone. This business was designed and created in a leveraged buyout shop's boardroom, and it shows. (I am somewhat surprised it wasn't bought back into private hands during the bear market - perhaps that opportunity lies ahead for DT shareholders).

Let's take a look at the Q2 report and Q3 guide, together with our chart analysis, valuation analysis, and stock rating.

Financial Summary

Here's the headlines.

Now, for our paying subscribers of all tiers here, we go on to look at financial fundamentals, valuation analysis, our rating and price targets.