News

Dynatrace DT is set to report fourth-quarter fiscal 2024 results on May 15.

For the fiscal fourth quarter, non-GAAP earnings are projected between 26-28 cents per share.

Revenues are estimated to be between $372 million and $377 million, indicating an 18-19% increase at constant currency.

The Zacks Consensus Estimate for fiscal fourth-quarter earnings has been unchanged at 27 cents per share in the past 30 days, suggesting a 12.9% decline from the figure reported in the year-ago quarter.

Dynatrace, Inc. Price and EPS Surprise

The consensus mark for revenues is pegged at $375.2 million, indicating an increase of 19.31% from the year-ago quarter’s reported figure.

Dynatrace’s earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 23.19%.

Let’s see how things have shaped up prior to the upcoming announcement.

Factors at Play for Q4 Results

Dynatrace’s fiscal fourth-quarter performance is expected to have benefited from strong demand for its unified observability and security platform and an expanding clientele.

DT’s growing AI capabilities and multi-cloud ecosystem to drive real-time insights and automation and strong adoption of its unified platform are expected to have boosted subscription revenues in the fiscal fourth quarter.

Subscription revenues are expected in the range of $353-$358 million, indicating 20-22% year-over-year growth. The Zacks Consensus Estimate for fiscal fourth-quarter Subscription revenues is pegged at $356 million, indicating a 21.5% increase year over year.

Dynatrace’s continuous efforts to expand its product portfolio by introducing capabilities and enhancements are likely to have been key growth drivers. Continuous investment in security expansion and go-to-market initiatives are expected to have driven its net expansion rate and contributed to ARR growth.

The company’s expanding partner base, which includes the likes of Alphabet’s GOOGL, Google Cloud, Amazon’s AMZN cloud arm, Amazon Web Services (AWS) and Lloyds Banking Group LYG, is likely to have contributed to its fiscal fourth-quarter performance.

In April, Dynatrace announced an expanded go-to-market partnership with Google Cloud, enhancing AI-powered analytics and automation for customers' cloud-native environments to drive digital transformation worldwide. This is expected to have bolstered the company’s performance in the quarter under review.

In the third quarter of fiscal 2024, Dynatrace earned the AWS Security Competency, showcasing its advanced capabilities to address vulnerabilities and defend against threats in AWS environments proactively. This is likely to have acted as a tailwind for the company.

In January, Dynatrace collaborated with Lloyds Banking Group to develop Dynatrace Carbon Impact, aiding in measuring and reducing the environmental carbon impact of LYG’s IT ecosystem and aligning with sustainability goals.

However, anticipated seasonal expenses in the fourth quarter, including increased spending for the Perform customer conference and a structural reset of payroll taxes alongside macroeconomic volatility, are expected to have hurt top-line growth.

Dynatrace currently has a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.