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Dynatrace’s (DT - Free Report) third-quarter fiscal 2021 adjusted earnings of 17 cents per share beat the Zacks Consensus Estimate by 30.8%. Moreover, the figure surged 70% from the year-ago quarter.
Further, revenues of $182.9 million trumped the consensus mark by 6.2%. The top line improved 27.6% year over year as well. At constant currency (cc), revenues increased 25% year over year.
Solid demand for Dynatrace’s robust portfolio of AI capabilities and automation, led by the accelerated digital transformation across enterprises, was a major growth driver in the reported quarter.
Top-Line Details
Subscription revenues jumped 32.5% year over year to $170.3 million. At cc, subscription revenues climbed 30% year on year.
Service revenues increased 13.4% from the year-ago quarter to $12.3 million.
Moreover, license revenues plummeted 93.4% from the year-ago quarter to $0.3 million.
Total annual recurring revenues (“ARR”) at the end of the fiscal third quarter increased 35.1% year over year to $722 million. At cc, ARR jumped 32% to $703.6 million.
Moreover, the net expansion rate remained more than 120% for the 11th consecutive quarter.
Operating Details
Gross margin expanded 160 basis points (bps) year over year to 85.2% in the reported quarter.
Research & development (R&D) expenses flared up 24.5% year on year to $25.2 million. However, as a percentage of revenues, R&D expenses shrunk 30 bps to 13.8%.
Sales & marketing (S&M) expenses were $58.1 million, up 27.2% year over year. However, as percentage of revenues, S&M expenses contracted 10 bps to 31.7%.
General & administrative (G&A) expenses went up 18.2% year over year to $19.1 million. As a percentage of revenues, G&A decreased 80 bps to 10.5%.
Non-GAAP operating margin improved to 29.2% compared with the year-ago quarter’s 26.3%.
Balance Sheet & Other Details
As of Dec 31, 2020, Dynatrace had cash and cash equivalents worth $299.5 million compared with $248.4 million as of Sep 30, 2020.
Long-term debt, as of Dec 31, 2020, was $451.4 million compared with $480.9 million as of Sep 30, 2020.
The company’s quarterly unlevered free cash flow came in at $74 million compared with free cash flow of $13.3 million witnessed in the year-ago quarter.
Guidance
For fourth-quarter fiscal 2021, revenues are projected between $190 million and $192 million, suggesting a 26-28% increase year over year.
The Zacks Consensus Estimate for the ongoing quarter’s revenues is currently pegged at $175.9 million, indicating 16.8% growth from the figure reported in the year-ago quarter.
Subscription revenues are estimated between $178 million and $180 million, calling for a 32-33% increase year over year.
Non-GAAP operating income is expected between $44 million and $46 million (23.2-24% of revenues).
Non-GAAP earnings are anticipated between 13 cents and 14 cents per share. The consensus mark for current-quarter earnings is pegged at 12 cents per share, suggesting 9.1% growth from the figure reported in the year-ago quarter.
For fiscal 2021, revenues are projected between $697 million and $699 million (down from the previous guided range of $721-$727 million), indicating a 28% year-over-year jump.
The Zacks Consensus Estimate for the current fiscal year’s revenues is pegged at $672.3 million, indicating a rise of 23.2% from the year-earlier reported number.
Subscription revenues are estimated in the range of $650-$652 million (up from previous guidance range of $624- $630 million), calling for growth of 33-34%.
Total ARR is projected between $756 million and $760 million (up from $721- $727 million).
Non-GAAP operating income is envisioned between $202 million and $204 million (up from the prior guided range of $186-$191 million).
Moreover, non-GAAP earnings are anticipated between 61 cents and 62 cents per share (up from the previous guided range of 55-57 cents per share). The consensus mark for current-year earnings stands at 56 cents per share, suggesting an 80.7% surge from the figure reported in the year-ago period.
Further, unlevered free cash flow is predicted in the band of $220-$225 million (up from $192-$200 million).
Zacks Rank & Stocks to Consider
Dynatrace currently carries a Zacks Rank #3 (Hold).
Perion and Vishay are scheduled to report their quarterly earnings on Feb 9, while Cohu will report on Feb 11.
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Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
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Dynatrace (DT) Q3 Earnings Beat Estimates, Revenues Rise Y/Y
Dynatrace’s (DT - Free Report) third-quarter fiscal 2021 adjusted earnings of 17 cents per share beat the Zacks Consensus Estimate by 30.8%. Moreover, the figure surged 70% from the year-ago quarter.
Further, revenues of $182.9 million trumped the consensus mark by 6.2%. The top line improved 27.6% year over year as well. At constant currency (cc), revenues increased 25% year over year.
Solid demand for Dynatrace’s robust portfolio of AI capabilities and automation, led by the accelerated digital transformation across enterprises, was a major growth driver in the reported quarter.
Top-Line Details
Subscription revenues jumped 32.5% year over year to $170.3 million. At cc, subscription revenues climbed 30% year on year.
Dynatrace, Inc. Price, Consensus and EPS Surprise
Dynatrace, Inc. price-consensus-eps-surprise-chart | Dynatrace, Inc. Quote
Service revenues increased 13.4% from the year-ago quarter to $12.3 million.
Moreover, license revenues plummeted 93.4% from the year-ago quarter to $0.3 million.
Total annual recurring revenues (“ARR”) at the end of the fiscal third quarter increased 35.1% year over year to $722 million. At cc, ARR jumped 32% to $703.6 million.
Moreover, the net expansion rate remained more than 120% for the 11th consecutive quarter.
Operating Details
Gross margin expanded 160 basis points (bps) year over year to 85.2% in the reported quarter.
Research & development (R&D) expenses flared up 24.5% year on year to $25.2 million. However, as a percentage of revenues, R&D expenses shrunk 30 bps to 13.8%.
Sales & marketing (S&M) expenses were $58.1 million, up 27.2% year over year. However, as percentage of revenues, S&M expenses contracted 10 bps to 31.7%.
General & administrative (G&A) expenses went up 18.2% year over year to $19.1 million. As a percentage of revenues, G&A decreased 80 bps to 10.5%.
Non-GAAP operating margin improved to 29.2% compared with the year-ago quarter’s 26.3%.
Balance Sheet & Other Details
As of Dec 31, 2020, Dynatrace had cash and cash equivalents worth $299.5 million compared with $248.4 million as of Sep 30, 2020.
Long-term debt, as of Dec 31, 2020, was $451.4 million compared with $480.9 million as of Sep 30, 2020.
The company’s quarterly unlevered free cash flow came in at $74 million compared with free cash flow of $13.3 million witnessed in the year-ago quarter.
Guidance
For fourth-quarter fiscal 2021, revenues are projected between $190 million and $192 million, suggesting a 26-28% increase year over year.
The Zacks Consensus Estimate for the ongoing quarter’s revenues is currently pegged at $175.9 million, indicating 16.8% growth from the figure reported in the year-ago quarter.
Subscription revenues are estimated between $178 million and $180 million, calling for a 32-33% increase year over year.
Non-GAAP operating income is expected between $44 million and $46 million (23.2-24% of revenues).
Non-GAAP earnings are anticipated between 13 cents and 14 cents per share. The consensus mark for current-quarter earnings is pegged at 12 cents per share, suggesting 9.1% growth from the figure reported in the year-ago quarter.
For fiscal 2021, revenues are projected between $697 million and $699 million (down from the previous guided range of $721-$727 million), indicating a 28% year-over-year jump.
The Zacks Consensus Estimate for the current fiscal year’s revenues is pegged at $672.3 million, indicating a rise of 23.2% from the year-earlier reported number.
Subscription revenues are estimated in the range of $650-$652 million (up from previous guidance range of $624- $630 million), calling for growth of 33-34%.
Total ARR is projected between $756 million and $760 million (up from $721- $727 million).
Non-GAAP operating income is envisioned between $202 million and $204 million (up from the prior guided range of $186-$191 million).
Moreover, non-GAAP earnings are anticipated between 61 cents and 62 cents per share (up from the previous guided range of 55-57 cents per share). The consensus mark for current-year earnings stands at 56 cents per share, suggesting an 80.7% surge from the figure reported in the year-ago period.
Further, unlevered free cash flow is predicted in the band of $220-$225 million (up from $192-$200 million).
Zacks Rank & Stocks to Consider
Dynatrace currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector are Perion Network (PERI - Free Report) , Vishay Intertechnology (VSH - Free Report) and Cohu (COHU - Free Report) . All three stocks carry a Zacks Rank #2 (Buy), at present. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Perion and Vishay are scheduled to report their quarterly earnings on Feb 9, while Cohu will report on Feb 11.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
See the 5 high-tech stocks now>>