Benzinga | Jul 28, 2021 12:41PM EDT

Dynatrace Beats On Q1 Earnings, Issues Strong Q2 Guidance

* Dynatrace Inc (NYSE:DT) reported first-quarter FY22 revenue growth of 35% year-on-year to $209.7 million, beating the analyst consensus of $203.4 million. Total ARR increased 37% Y/Y to $823 million.

* The unique value of combining the broadest cloud observability with powerful automation and AIOps capabilities continues to resonate with customers as they accelerate their digital transformation and current cloud initiatives, CEO John Van Siclen stated.

* Revenues from Subscription rose 36% Y/Y to $19.5 million, License declined 92.2% Y/Y to $0.05 million, Service increased 25.3% Y/Y to $13.2 million.

* The non-GAAP gross margin remained flat at 85%, while the non-GAAP operating margin contracted 700 basis points to 26%.

* Non-GAAP EPS of $0.16 beat the analyst consensus of $0.15.

* Dynatrace generated $83.5 million in operating cash flow and held $387.2 million in cash and equivalents.

* Outlook: Dynatrace sees Q2 revenue of $219 million- $221 million, above the analyst consensus of $215.6 million.

* It sees non-GAAP EPS of $0.15 - $0.16 compared to the analyst consensus of $0.15.

* Price action: DT shares traded lower by 1.07% at $61.82 on the last check Wednesday.