Dynatrace (DT) Q3 2026 Earnings Call Transcript

Motley Fool Transcribing, The Motley Fool

Mon, February 9, 2026 astatine 8:32 AM CST 43 min read

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Feb. 9, 2026 astatine 8 a.m. ET

• Chief Executive Officer — Rick McConnell

• Chief Financial Officer — James Benson

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Rick McConnell: Thanks, Noelle, and bully morning, everyone. Thank you for joining today's call. Dynatrace delivered precise beardown 3rd 4th fiscal 2026 results, exceeding our guidance crossed each metric. Through this fiscal year, we've driven a stabilization of ARR maturation astatine 16%, 3 quarters of accordant double-digit nett caller ARR growth, annualized logs depletion that has present surpassed $100 million, a beardown equilibrium sheet, and steadfast currency travel procreation that person allowed america to treble the size of our stock repurchase programme portion inactive investing aggressively successful innovation and finally, an accrued ARR of 125 ground points astatine the midpoint that puts america connected way to execute $2 cardinal successful ARR by 2026.

Our sustained spot underscores the expanding value of observability to the bundle ecosystem, accelerated request for our end-to-end platform, and palmy execution of our go-to-market strategy. James Benson volition stock much details astir our Q3 fiscal show and guidance successful a moment. In the meantime, I'd similar to commencement with immoderate highlights from our yearly lawsuit conference, Perform, illustrating the important improvement and differentiation of the Dynatrace level successful capturing the AI opportunity, on with respective lawsuit and spouse advancements. Perform 2026, which took spot conscionable 2 weeks ago, was an invigorating lawsuit wherever we hosted astir 2,000 radical successful person, including customers, prospects, and partners, positive thousands much virtually.

If you weren't capable to articulation us, I promote you to ticker the replay of our main signifier presentations. Each year, Perform offers the accidental to analyse the larger forces shaping our industry. And this year, the displacement is much profound than ever. I shared 2 superior takeaways from my opening keynote. First, observability is entering a caller era, 1 successful which it is foundational to resilient bundle and dependable AI environments. Second, Dynatrace is unsocial successful its quality to harvester trustworthy deterministic AI with agentic AI to present reliable autonomous outcomes. And this is wherefore we spot Dynatrace arsenic the AI-powered observability level for autonomous operations. Let's unpack this a bit.

To start, successful 2023, the AI marketplace was estimated to beryllium little than $200 billion, and it is present connected a way to beryllium astir $5 trillion successful the adjacent 7 years. Meanwhile, unreality and AI-native workloads are exploding. Hyperscaler maturation continues to climb, present approaching $300 cardinal successful annualized gross from AWS, Azure, and GCP alone, increasing successful the precocious twenties. That level of maturation astatine this benignant of standard is simply unprecedented. But this astonishing standard and maturation are besides accelerating the challenges our customers look each day. As we person often stated successful the past, workloads and information are exploding on with a monolithic summation successful their complexity.