In-Line F4Q; Strong FY27 Guidance, Skepticism Will Need To Be Proven Wrong

Research evidence excerpt

In-Line F4Q; Strong FY27 Guidance, Skepticism Will Need To Be Proven Wrong

Software

Dynatrace

TD SECURITIES (USA) LLC EARNINGS UPDATE

May 13, 2026

Price: $39.21 (05/12/2026) In-Line F4Q; Strong FY27 Guidance,

Price Target: $45.00 (Prior $50.00) Skepticism Will Need To Be Proven Wrong

BUY (1)

ESG SCORE: 62/100

Andrew Sherman, CFA THE TD COWEN INSIGHT

617 946 3728

NNARR of $81m in-line w/ Street of $80m & grew 9% Y/Y, breaking a streak of solid beats. FY27

andrew.sherman@tdsecurities.com

guide of +15.5-16.5% cc ARR above Street of ~15%, implying cc NNARR growth of ~20%, above

Derrick Wood, CFA our +8% est. While this requires an acceleration, there is no change to guide practice & DT

415 646 7370 does see a fair amount of quarterly NNARR volatility. At ~13x EV/CY27E FCF we see attractive

derrick.wood@tdsecurities.com

valuations.

Cole Erskine

646 562 1467 Our Key Take

cole.erskine@tdsecurities.com

■The initial reaction to the guide was a positive one, but when paired with just an in-line 4Q

Jared Jungjohann on cc NNARR, created concerns that guidance is aggressive. This is the frustrating reality

646 562 1416 that small changes in NNARR (a fraction of the >$2b total ARR base), which is inherently

jared.jungjohann@tdsecurities.com volatile quarterly, can move the stock more than it perhaps should. Mgmt guided FY27

Key Data cc ARR of +15.5-16.5% vs. Street of ~15%, implying cc NNARR of ~$330m up ~20% Y/Y. This

Symbol NYSE: DT is a big step-up from the 4Q exit rate, thus driving investor concerns that guidance is

Beta: 0.70 aggressive. Mgmt indicated there is no change to its guide philosophy. Last year, mgmt

52-Week Range: $56.64-$32.36 guided total ARR growth of +13-14% cc and ended up at +16% (the year before that was

Market Cap: $11.7B 100bp of upside).