Key Highlights

● First-quarter fiscal 2027 revenue was US$554.5 million, up 16% year on year.

● Annual recurring revenue reached US$2,136 million, up 17%.

● Fiscal 2027 non-GAAP earnings per share guidance rose to US$1.97 to US$1.99.

● Chief financial officer Jim Benson plans to retire and will resign by 31 March 2027.

Latest verified development

Dynatrace, Inc. (NYSE:DT), the observability software provider, reported first-quarter fiscal 2027 results on 5 August 2026 for the quarter ended 30 June. Total revenue was US$554.5 million, up 16% (15% in constant currency), while subscription revenue rose 16% to US$530.3 million. Annual recurring revenue (ARR) reached US$2,136 million, up 17%.

Profitability was solid on a non-GAAP basis. Non-GAAP operating income was US$161.6 million, a 29% margin, and non-GAAP diluted earnings per share were US$0.48. GAAP operating income was US$71.5 million, a 13% margin, with GAAP diluted earnings per share of US$0.12. Chief executive Rick McConnell said demand continues to strengthen as enterprises expand cloud-native workloads, and that the company is increasingly confident in the opportunity ahead. Those are management statements rather than independent measures of demand.

The gap between the two profit measures is worth noting. Non-GAAP figures exclude items such as share-based compensation, so the GAAP margin of 13% is the more conservative reading of earnings power, even though the non-GAAP margin is the figure management emphasises and guides to.

Guidance and the details behind it

The company guided the second quarter to revenue of US$565 million to US$570 million and non-GAAP earnings per share of US$0.48 to US$0.49. For fiscal 2027 it now expects revenue of US$2,306 million to US$2,320 million and ARR of US$2,359 million to US$2,379 million. The release said both were lowered from prior guidance, mainly because of foreign exchange; the revenue midpoint fell by about US$13 million.

At the same time, fiscal 2027 non-GAAP earnings per share guidance was raised to US$1.97 to US$1.99 from US$1.93 to US$1.95, and adjusted free cash flow is expected at US$610 million to US$615 million. Dynatrace also changed its free cash flow definition this quarter and recast prior periods, so comparisons with earlier disclosures need care. The second-quarter revenue guidance implies growth of 15% to 16% in constant currency, broadly in line with the first-quarter outturn of 15%, which suggests management expects a steady rather than accelerating pace.

Cash generation and capital returns

Adjusted free cash flow in the quarter was US$309.2 million, a 56% margin. Dynatrace spent US$275 million repurchasing 7.1 million shares at an average price of US$38.88.

According to index coverage at the time, Dynatrace was added to the S&P MidCap 400 on 19 September 2022.

CFO succession and constant-currency growth

The release also disclosed that chief financial officer Jim Benson plans to retire and will resign by the fiscal year-end on 31 March 2027. The company has started a search for a successor.

The first-quarter constant-currency revenue growth rate of 15% compares with fiscal 2027 ARR guidance of 15.5% to 16.5% in constant currency, a modest step up that depends partly on how foreign exchange moves reported figures.