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Dynatrace Reports Second Quarter of Fiscal Year 2020 Financial Results

October 30, 2019

WALTHAM, Mass.--(BUSINESS WIRE)--Oct 30, 2019--

Dynatrace (NYSE: DT), a market-leading software intelligence platform, purpose-built for the enterprise cloud, today released financial results for the second quarter of its fiscal 2020 ended September 30, 2019.

“Dynatrace reported strong second quarter results, highlighted by 37% year-over-year growth in subscription and services revenue, now 98% of our revenue mix,” said John Van Siclen, Chief Executive Officer. “The Dynatrace platform is resonating with customers, evidenced by accelerating logo growth and a solid net expansion rate, which comfortably exceeded 120% for the 6th straight quarter. We are running a well-balanced business, a unique combination of growth and profitability at scale, that we believe provides Dynatrace with an attractive and sustainable business model over the long term.”

Second Quarter Fiscal 2020 and Other Recent Business Highlights:

Financial Highlights:

Dynatrace®Platform Highlights:

Business Highlights:

Second Quarter 2020 Financial Highlights

(Unaudited – In thousands, except per share amounts)

 

 

Three Months Ended September 30,

 

2019

 

2018

Annualized recurring revenue

$

470,905

 

 

$

326,439

 

Year-over-Year Increase

44

%

 

 

 

 

 

 

Revenues:

 

 

 

Total revenue

$

129,378

 

 

$

101,887

 

Year-over-Year Increase

27

%

 

 

 

 

 

 

Subscription and services revenue

$

126,633

 

 

$

92,225

 

Year-over-Year Increase

37

%

 

 

 

 

 

 

Non-GAAP operating income (*)

$

29,396

 

 

$

17,294

 

Non-GAAP operating margin (*)

23

%

 

17

%

 

 

 

 

Non-GAAP net income (*)

$

17,275

 

 

$

7,423

 

 

 

 

 

Non-GAAP net income per share

$

0.06

 

 

$

0.03

 

 

 

 

 

Shares outstanding used in computing Non-GAAP per share amounts - diluted

269,985

 

 

236,275

 

 

 

 

 

Unlevered Free Cash Flow (*)

$

27,159

 

 

$

24,327

 

* Use of Non-GAAP Financial Measures

In our earnings press releases, conference calls, slide presentations, and webcasts, we may use or discuss non-GAAP financial measures, as defined by Regulation G. The GAAP financial measure most directly comparable to each non-GAAP financial measure used or discussed, and a reconciliation of the differences between each non-GAAP financial measure and the comparable GAAP financial measure, are included in this press release after the consolidated financial statements. Our earnings press releases containing such non-GAAP reconciliations can be found in the Investors section of our website at https://ir.dynatrace.com.

Financial Outlook

Based on information available, as of October 30, 2019, Dynatrace is issuing guidance for the third quarter and full year fiscal 2020 as follows:

Third Quarter of Fiscal Year 2020:

Full Year Fiscal 2020:

Reconciliation of non-GAAP operating income, non-GAAP net income and non-GAAP net income per share guidance to the most directly comparable GAAP measures is not available without unreasonable efforts on a forward-looking basis due to the high variability, complexity and low visibility with respect to the charges excluded from these non-GAAP measures; in particular, the measures and effects of stock-based compensation expense specific to equity compensation awards that are directly impacted by future hiring, turnover and retention needs, as well as unpredictable fluctuations in our stock price. We expect the variability of the above charges to have a significant, and potentially unpredictable, impact on our future GAAP financial results.

These statements are forward-looking and actual results may differ materially. Refer to the section under the heading Forward-Looking Statements below for information on the factors that could cause our actual results to differ materially.

Conference Call and Webcast Information

Dynatrace will host a conference call today, October 30, 2019, to discuss its results at 5:00 p.m. Eastern Time. The call will be accessible by telephone at 866-211-4694 (domestic) or 647-689-6731 (international). The call will also be available live via webcast on the Company’s website at https://ir.dynatrace.com. A telephone replay of the conference call will be available at 800-585-8367 or 416-621-4642 (access code 8498802) until November 13, 2019. A webcast replay will be available at https://ir.dynatrace.com.

The company has used, and intends to continue to use, the investor relations portion of its website as a means of disclosing material non-public information and for complying with disclosure obligations under Regulation FD.

Non-GAAP Financial Measures & Key Metrics

In addition to disclosing financial measures prepared in accordance with GAAP, this press release and the accompanying tables contain certain non-GAAP financial measures.

Non-GAAP financial measures do not have any standardized meaning and are therefore unlikely to be comparable to similarly titled measures presented by other companies. Dynatrace considers these non-GAAP financial measures to be important because they provide useful indicators of its performance and liquidity measures. These are key measures used by our management and board of directors to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget and to develop short and long-term operational plans. In addition, investors often use similar measures to evaluate the performance of a company. Non-GAAP financial measures are presented for supplemental informational purposes only for understanding the company’s operating performance. The non-GAAP financial measures should not be considered a substitute for financial information presented in accordance with GAAP, and may be different from non-GAAP financial measures presented by other companies. The GAAP financial measure most directly comparable to each non-GAAP financial measure used or discussed, and a reconciliation of the differences between each non-GAAP financial measure and the comparable GAAP financial measure, are included in this press release after the consolidated financial statements.

Adjusted EBITDA is defined as Net Income(loss) adjusted by removing the impact of our capital structure (net interest income or expense from our outstanding debt), asset base (depreciation and amortization), tax consequences, restructuring and other gains and losses, transaction and sponsor related costs, gains and losses on foreign currency and stock-based compensation.

Annual Recurring Revenue “ARR” is defined as the daily revenue of all subscription agreements that are actively generating revenue as of the last day of the reporting period multiplied by 365. We exclude from our calculation of Total ARR any revenues derived from month-to-month agreements and/or product usage overage billings.

Dynatrace Dollar-Based Net Expansion Rate is defined as the Dynatrace® ARR at the end of a reporting period for the cohort of Dynatrace® accounts as of one year prior to the date of calculation, divided by the Dynatrace® ARR one year prior to the date of calculation for that same cohort. This calculation excludes the benefit of Dynatrace® ARR resulting from the conversion of Classic products to the Dynatrace® platform, as well as any upsell generated at the time of conversion.

Dynatrace customers are defined as accounts, as identified by a unique account identifier, that generate at least $10,000 of Dynatrace® ARR as of the reporting date. In infrequent cases, a single large organization may comprise multiple customer accounts when there are distinct divisions, departments or subsidiaries that operate and make purchasing decisions independently from the parent organization. In cases where multiple customer accounts exist under a single organization, each customer account is counted separately based on a mutually exclusive accounting of ARR.

TTM Adjusted EBITDA/Net Debt Leverage Ratio is defined as our Net Debt divided by our trailing twelve month Adjusted EBITDA. Net Debt is defined as total principal less cash and cash equivalents.

Unlevered Free Cash Flow is defined as net cash provided by (used in) operating activities and adjusted to exclude cash paid for interest (net of tax), non-recurring restructuring and acquisition related costs, along with costs associated with one-time offerings and filings, less cash used in investing activities for acquisition of property and equipment. However, given our debt obligations, unlevered free cash flow does not represent residual cash flow available for discretionary expenses.

About Dynatrace

Dynatrace provides software intelligence to simplify enterprise cloud complexity and accelerate digital transformation. With AI and complete automation, our all-in-one platform provides answers, not just data, about the performance of applications, the underlying infrastructure and the experience of all users. That’s why many of the world’s largest enterprises trust Dynatrace to modernize and automate enterprise cloud operations, release better software faster, and deliver unrivalled digital experiences. Curious to see how you can simplify your enterprise cloud? Let us show you. Visit our trial page for a free 15-day Dynatrace trial. To learn more about how Dynatrace can help your business, visit https://www.dynatrace.com, visit our blog and follow us on Twitter @dynatrace.

Cautionary Language Concerning Forward-Looking Statements

This press release includes certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding management’s expectations of future financial and operational performance and operational expenditures, expected growth, and business outlook, including our financial guidance for the third fiscal quarter and full year 2020, and statements regarding the size of our market and our positioning for capturing a larger share of our market. These forward-looking statements include, but are not limited to, plans, objectives, expectations and intentions and other statements contained in this press release that are not historical facts and statements identified by words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates” or words of similar meaning. These forward-looking statements reflect our current views about our plans, intentions, expectations, strategies and prospects, which are based on the information currently available to us and on assumptions we have made. Although we believe that our plans, intentions, expectations, strategies and prospects as reflected in or suggested by those forward-looking statements are reasonable, we can give no assurance that the plans, intentions, expectations or strategies will be attained or achieved. Furthermore, actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of risks and factors that are beyond our control including, without limitation, our ability to maintain our subscription revenue growth rates in future periods, our ability to service our substantial level of indebtedness, market adoption of software intelligence solutions for application performance monitoring, digital experience monitoring and infrastructure monitoring, continued spending on and demand for software intelligence solutions, our ability to successfully convert and upsell our customers as they convert from our Classic products to the Dynatrace ® platform, our ability to maintain and acquire new customers, our ability to differentiate our platform from competing products and technologies; our ability to successfully recruit and retain highly-qualified personnel; the price volatility of our common stock, and other risks set forth under the caption “Risk Factors” in our Form 10-Q filed on September 5, 2019 and our other SEC filings. We assume no obligation to update any forward-looking statements contained in this document as a result of new information, future events or otherwise.

DYNATRACE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited – In thousands, except per share amounts)

 

 

Three Months Ended
September 30,

 

Six Months Ended
September 30,

 

2019

 

2018

 

2019

 

2018

Revenue:

 

 

 

 

 

 

 

Subscription

$

115,805

 

 

$

82,389

 

 

$

223,933

 

 

$

160,313

 

License

2,745

 

 

9,662

 

 

6,529

 

 

20,741

 

Service

10,828

 

 

9,836

 

 

21,466

 

 

19,054

 

Total revenue

129,378

 

 

101,887

 

 

251,928

 

 

200,108

 

Cost of revenue:

 

 

 

 

 

 

 

Cost of subscription

23,456

 

 

14,256

 

 

39,633

 

 

27,388

 

Cost of service

11,847

 

 

7,522

 

 

20,656

 

 

14,417

 

Amortization of acquired technology

4,243

 

 

4,558

 

 

8,800

 

 

9,222

 

Total cost of revenue

39,546

 

 

26,336

 

 

69,089

 

 

51,027

 

Gross profit

89,832

 

 

75,551

 

 

182,839

 

 

149,081

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

Research and development

46,596

 

 

19,690

 

 

72,255

 

 

37,586

 

Sales and marketing

99,966

 

 

44,883

 

 

158,181

 

 

87,392

 

General and administrative

86,953

 

 

25,211

 

 

118,835

 

 

45,092

 

Amortization of other intangibles

10,061

 

 

11,964

 

 

20,203

 

 

24,013

 

Restructuring and other

779

 

 

73

 

 

894

 

 

483

 

Total operating expenses

244,355

 

 

101,821

 

 

370,368

 

 

194,566

 

Loss from operations

(154,523

)

 

(26,270

)

 

(187,529

)

 

(45,485

)

Interest expense, net

(14,534

)

 

(17,495

)

 

(33,720

)

 

(28,182

)

Other income (expense), net

146

 

 

(439

)

 

240

 

 

2,424

 

Loss before income taxes

(168,911

)

 

(44,204

)

 

(221,009

)

 

(71,243

)

Income tax (expense) benefit

(248,423

)

 

4,266

 

 

(245,480

)

 

7,749

 

Net loss

$

(417,334

)

 

$

(39,938

)

 

$

(466,489

)

 

$

(63,494

)

Net loss per share:

 

 

 

 

 

 

 

Basic and diluted

$

(1.58

)

 

$

(0.17

)

 

$

(1.86

)

 

$

(0.27

)

Weighted average shares outstanding:

 

 

 

 

 

 

 

Basic and diluted

264,127

 

 

235,215

 

 

251,412

 

 

235,217

 

 

UNAUDITED SHARE-BASED COMPENSATION

 

 

Three Months Ended
September 30,

 

Six Months Ended
September 30,

 

2019

 

2018

 

2019

 

2018

Cost of revenues

$

12,720

 

 

$

1,906

 

 

$

16,029

 

 

$

2,990

 

Research and development

27,379

 

 

4,163

 

 

34,506

 

 

6,581

 

Sales and marketing

56,781

 

 

7,998

 

 

71,885

 

 

12,461

 

General and administrative

57,866

 

 

8,963

 

 

73,751

 

 

14,196

 

Total share-based compensation expense

$

154,746

 

 

$

23,030

 

 

$

196,171

 

 

$

36,228

 

 

DYNATRACE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

 

September 30, 2019

 

March 31, 2019

 

(unaudited)

 

 

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

211,696

 

 

$

51,314

 

Accounts receivable, net of allowance for doubtful accounts

85,602

 

 

115,431

 

Deferred commissions, current

35,094

 

 

27,705

 

Prepaid expenses and other current assets

23,166

 

 

18,768

 

Total current assets

355,558

 

 

213,218

 

Property and equipment, net

24,664

 

 

17,925

 

Goodwill

1,270,163

 

 

1,270,120

 

Other intangible assets, net

229,880

 

 

259,123

 

Deferred tax assets, net

10,806

 

 

10,678

 

Deferred commissions, non-current

26,154

 

 

31,545

 

Other assets

8,117

 

 

7,649

 

Receivable from related party

7,480

 

 

1,108

 

Total assets

$

1,932,822

 

 

$

1,811,366

 

 

 

 

 

Liabilities and shareholders' equity / member's deficit

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

10,532

 

 

$

6,559

 

Accrued expenses, current

78,704

 

 

64,920

 

Current portion of long-term debt

 

 

9,500

 

Deferred revenue, current

291,857

 

 

272,772

 

Payable to related party

 

 

597,150

 

Total current liabilities

381,093

 

 

950,901

 

Deferred revenue, non-current

77,630

 

 

92,973

 

Accrued expenses, non-current

18,028

 

 

98,359

 

Deferred tax liabilities

 

 

47,598

 

Long-term debt, net of current portion

569,789

 

 

1,011,793

 

Total liabilities

1,046,540

 

 

2,201,624

 

Commitments and contingencies

 

 

 

Shareholders' equity / member's deficit:

 

 

 

Common shares, $0.001 par value, 600,000,000 shares authorized, 280,509,056 shares issued and outstanding at September 30, 2019

281

 

 

 

Common units, no par value, 100 units authorized, issued and outstanding at March 31, 2019

 

 

 

Additional paid-in capital

1,547,051

 

 

(184,546

)

Accumulated deficit

(642,491

)

 

(176,002

)

Accumulated other comprehensive loss

(18,559

)

 

(29,710

)

Total shareholders' equity / member's deficit

886,282

 

 

(390,258

)

Total liabilities and shareholders' equity / member's deficit

$

1,932,822

 

 

$

1,811,366

 

 

DYNATRACE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited – In thousands)

 

 

Six Months Ended
September 30,

 

2019

 

2018

Cash flows from operating activities:

 

 

 

Net loss

$

(466,489

)

 

$

(63,494

)

Adjustments to reconcile net loss to cash (used in) provided by operations:

 

 

 

Depreciation

3,971

 

 

3,585

 

Amortization

29,810

 

 

36,697

 

Share-based compensation

196,171

 

 

36,228

 

Deferred income taxes

(48,566

)

 

(9,437

)

Other

3,690

 

 

278

 

Net change in operating assets and liabilities:

 

 

 

Accounts receivable

29,578

 

 

51,350

 

Deferred commissions

(2,196

)

 

(2,203

)

Prepaid expenses and other assets

(888

)

 

(5,071

)

Accounts payable and accrued expenses

27,230

 

 

9,981

 

Deferred revenue

9,461

 

 

18,246

 

Net cash (used in) provided by operating activities

(218,228

)

 

76,160

 

 

 

 

 

Cash flows from investing activities:

 

 

 

Purchase of property and equipment

(9,758

)

 

(3,261

)

Capitalized software additions

(564

)

 

(782

)

Net cash used in investing activities

(10,322

)

 

(4,043

)

 

 

 

 

Cash flows from financing activities:

 

 

 

Proceeds from initial public offering, net of underwriters' discounts and commissions

590,297

 

 

 

Settlement of deferred offering costs

(5,000

)

 

 

Proceeds from term loans

 

 

1,120,000

 

Debt issuance costs

 

 

(16,288

)

Repayment of term loans

(455,189

)

 

 

Payments to related parties

 

 

(1,177,021

)

Contribution for tax associated with reorganization

265,000

 

 

 

Equity repurchases

(145

)

 

(647

)

Installments related to acquisition

(4,694

)

 

(3,653

)

Net cash provided by (used in) financing activities

390,269

 

 

(77,609

)

 

 

 

 

Effect of exchange rates on cash and cash equivalents

(1,337

)

 

(2,356

)

 

 

 

 

Net increase (decrease) in cash and cash equivalents

160,382

 

 

(7,848

)

 

 

 

 

Cash and cash equivalents, beginning of period

51,314

 

 

77,581

 

Cash and cash equivalents, end of period

$

211,696

$

69,733

 

 

DYNATRACE, INC.

GAAP to Non-GAAP Reconciliations

(Unaudited - In thousands)

 

 

Three Months Ended September 30, 2019

 

GAAP

 

Share-based compensation

 

Amortization of other intangibles

 

Restructuring & other

 

Non-GAAP

Non-GAAP operating income:

 

 

 

 

 

 

 

 

 

Cost of revenues

$

39,546

 

 

$

(12,720

)

 

$

(4,243

)

 

$

 

 

$

22,583

 

Gross profit

89,832

 

 

12,720

 

 

4,243

 

 

 

 

106,795

 

Gross margin

69

%

 

 

 

 

 

 

 

83

%

Research and development

46,596

 

 

(27,379

)

 

 

 

 

 

19,217

 

Sales and marketing

99,966

 

 

(56,781

)

 

 

 

 

 

43,185

 

General and administrative

86,953

 

 

(57,866

)

 

 

 

(14,090

)

 

14,997

 

Amortization of other intangibles

10,061

 

 

 

 

(10,061

)

 

 

 

 

Restructuring and other

779

 

 

 

 

 

 

(779

)

 

 

Operating (loss) income

(154,523

)

 

154,746

 

 

14,304

 

 

14,869

 

 

29,396

 

Operating margin

(119

)%

 

 

 

 

 

 

 

23

%

 

Three Months Ended September 30, 2018

 

GAAP

 

Share-based compensation

 

Amortization of other intangibles

 

Restructuring & other

 

Non-GAAP

Non-GAAP operating income:

 

 

 

 

 

 

 

 

 

Cost of revenues

$

26,336

 

 

$

(1,906

)

 

$

(4,558

)

 

$

 

 

$

19,872

 

Gross profit

75,551

 

 

1,906

 

 

4,558

 

 

 

 

82,015

 

Gross margin

74

%

 

 

 

 

 

 

 

80

%

Research and development

19,690

 

 

(4,163

)

 

 

 

 

 

15,527

 

Sales and marketing

44,883

 

 

(7,998

)

 

 

 

 

 

36,885

 

General and administrative

25,211

 

 

(8,963

)

 

 

 

(3,939

)

 

12,309

 

Amortization of other intangibles

11,964

 

 

 

 

(11,964

)

 

 

 

 

Restructuring and other

73

 

 

 

 

 

 

(73

)

 

 

Operating (loss) income

(26,270

)

 

23,030

 

 

16,522

 

 

4,012

 

 

17,294

 

Operating margin

(26

)%

 

 

 

 

 

 

 

17

%

 

DYNATRACE, INC.

GAAP to Non-GAAP Reconciliations

(Unaudited - In thousands, except per share amounts)

 

 

Three Months Ended September 30,

 

2019

 

2018

Non-GAAP net income:

 

 

 

Net loss

$

(417,334

)

 

$

(39,938

)

Tax expense (benefit)

248,423

 

 

(4,266

)

Cash paid for tax

(262,020

)

 

(3,981

)

Tax associated with reorganization

254,242

 

 

 

Related party tax

7,310

 

 

 

Interest expense

14,534

 

 

17,495

 

Cash paid for interest

(11,653

)

 

(5,890

)

Share-based compensation

154,746

 

 

23,030

 

Amortization of other intangibles

10,061

 

 

11,964

 

Amortization of acquired technology

4,243

 

 

4,558

 

Transaction and sponsor related costs

14,090

 

 

3,939

 

Restructuring and other

779

 

 

73

 

(Gain) loss on currency translation

$

(146

)

 

$

439

 

Non-GAAP net income

$

17,275

 

 

$

7,423

 

 

 

 

 

Share count:

 

 

 

Weighted-average shares outstanding - basic

264,127

 

 

235,215

 

Weighted-average shares outstanding - diluted

264,127

 

 

235,215

 

 

 

 

 

Shares used in non-GAAP per share calculations:

 

 

 

Weighted-average shares outstanding - basic

264,127

 

 

235,215

 

Weighted-average shares outstanding - diluted

269,985

 

 

236,275

 

 

 

 

 

Net income (loss) per share:

 

 

 

Net loss per share - basic

$

(1.58

)

 

$

(0.17

)

Net loss per share - diluted

$

(1.58

)

 

$

(0.17

)

Non-GAAP net income per share - basic

$

0.07

 

 

$

0.03

 

Non-GAAP net income per share - diluted

$

0.06

 

 

$

0.03

 

 

DYNATRACE, INC.

GAAP to Non-GAAP Reconciliations

(Unaudited - In thousands)

 

 

Three Months Ended September 30,

 

Trailing Twelve
Months Ended
September 30, 2019

 

2019

 

2018

 

Adjusted EBITDA:

 

 

 

 

 

Net loss

(417,334

)

 

(39,938

)

 

$

(519,189

)

Income tax expense (benefit)

248,423

 

 

(4,266

)

 

229,512

 

Interest expense, net

14,534

 

 

17,495

 

 

75,383

 

Amortization

14,729

 

 

18,354

 

 

65,905

 

Depreciation

1,937

 

 

1,642

 

 

7,705

 

Restructuring and other

779

 

 

73

 

 

2,174

 

Transaction and sponsor related costs

14,090

 

 

3,939

 

 

25,225

 

(Gain) loss on currency translation

(146

)

 

439

 

 

(457

)

Share-based compensation

154,746

 

 

23,030

 

 

231,094

 

Adjusted EBITDA

31,758

 

 

20,768

 

 

$

117,352

 

 

Three Months Ended September 30,

 

2019

 

2018

Unlevered Free Cash Flow ("uFCF") (After tax adjustment):

 

 

 

Net cash (used in) provided by operating activities

$

(252,395

)

 

$

17,600

 

Cash paid for interest expense

11,653

 

 

5,890

 

Restructuring and other

779

 

 

73

 

Purchase of property, plant, and equipment

(5,607

)

 

(1,702

)

Transaction and sponsor related costs

14,090

 

 

3,939

 

Tax associated with reorganization

254,242

 

 

 

Related party tax

7,310

 

 

 

Total uFCF

30,072

 

 

25,800

 

Interest tax adjustment

(2,913

)

 

(1,473

)

uFCF (After tax adjustment)

$

27,159

 

 

$

24,327

 

 

September 30, 2019

Adjusted EBITDA/Net Debt Leverage Ratio:

 

Long-term debt

$

569,789

 

Cash

211,696

 

Net debt

358,093

 

 

 

TTM Adjusted EBITDA

$

117,352

 

Leverage Ratio

3.1

x

 

DYNATRACE, INC.

GAAP to Non-GAAP Reconciliations

(Unaudited - In thousands, except per share amounts)

 

 

Six Months Ended September 30, 2019

 

GAAP

 

Share-based compensation

 

Amortization of other intangibles

 

Restructuring & other

 

Non-GAAP

Non-GAAP operating income:

 

 

 

 

 

 

 

 

 

Cost of revenues

$

69,089

 

 

$

(16,029

)

 

$

(8,800

)

 

$

 

 

$

44,260

 

Gross profit

182,839

 

 

16,029

 

 

8,800

 

 

 

 

207,668

 

Gross margin

73

%

 

 

 

 

 

 

 

82

%

Research and development

72,255

 

 

(34,506

)

 

 

 

 

 

37,749

 

Sales and marketing

158,181

 

 

(71,885

)

 

 

 

 

 

86,296

 

General and administrative

118,835

 

 

(73,751

)

 

 

 

(17,954

)

 

27,130

 

Amortization of other intangibles

20,203

 

 

 

 

(20,203

)

 

 

 

 

Restructuring and other

894

 

 

 

 

 

 

(894

)

 

 

Operating (loss) income

(187,529

)

 

196,171

 

 

29,003

 

 

18,848

 

 

56,493

 

Operating margin

(74

)%

 

 

 

 

 

 

 

22

%

 

Six Months Ended September 30, 2018

 

GAAP

 

Share-based compensation

 

Amortization of other intangibles

 

Restructuring & other

 

Non-GAAP

Non-GAAP operating income:

 

 

 

 

 

 

 

 

 

Cost of revenues

$

51,027

 

 

$

(2,990

)

 

$

(9,222

)

 

$

 

 

$

38,815

 

Gross profit

149,081

 

 

2,990

 

 

9,222

 

 

 

 

161,293

 

Gross margin

75

%

 

 

 

 

 

 

 

81

%

Research and development

37,586

 

 

(6,581

)

 

 

 

 

 

31,005

 

Sales and marketing

87,392

 

 

(12,461

)

 

 

 

 

 

74,931

 

General and administrative

45,092

 

 

(14,196

)

 

 

 

(5,272

)

 

25,624

 

Amortization of other intangibles

24,013

 

 

 

 

(24,013

)

 

 

 

 

Restructuring and other

483

 

 

 

 

 

 

(483

)

 

 

Operating (loss) income

(45,485

)

 

36,228

 

 

33,235

 

 

5,755

 

 

29,733

 

Operating margin

(23

)%

 

 

 

 

 

 

 

15

%

 

DYNATRACE, INC.

GAAP to Non-GAAP Reconciliations

(Unaudited - In thousands, except per share amounts)

 

 

Six Months Ended September 30,

 

2019

 

2018

Non-GAAP net income:

 

 

 

Net loss

$

(466,489

)

 

$

(63,494

)

Income tax expense (benefit)

245,480

 

 

(7,749

)

Cash paid for tax

(264,072

)

 

(2,077

)

Tax associated with reorganization

254,242

 

 

 

Related party tax

7,310

 

 

 

Interest expense

33,720

 

 

28,182

 

Cash paid for interest

(27,391

)

 

(5,890

)

Share-based compensation

196,171

 

 

36,228

 

Amortization of other intangibles

20,203

 

 

24,013

 

Amortization of acquired technology

8,800

 

 

9,222

 

Transaction and sponsor related costs

17,954

 

 

5,272

 

Restructuring and other

894

 

 

483

 

(Gain) on currency translation

$

(240

)

 

$

(2,424

)

Non-GAAP net income

$

26,582

 

 

$

21,766

 

 

 

 

 

Share count:

 

 

 

Weighted-average shares outstanding - basic

251,412

 

 

235,217

 

Weighted-average shares outstanding - diluted

251,412

 

 

235,217

 

 

 

 

 

Shares used in non-GAAP per share calculations:

 

 

 

Weighted-average shares outstanding - basic

251,412

 

 

235,217

 

Weighted-average shares outstanding - diluted

258,043

 

 

235,931

 

 

 

 

 

Net (loss) income per share:

 

 

 

Net loss per share - basic

$

(1.86

)

 

$

(0.27

)

Net loss per share - diluted

$

(1.86

)

 

$

(0.27

)

Non-GAAP net (loss) income per share - basic

$

0.11

 

 

$

0.09

 

Non-GAAP net (loss) income per share - diluted

$

0.10

 

 

$

0.09

 

 

DYNATRACE, INC.

GAAP to Non-GAAP Reconciliations

(Unaudited - In thousands)

 

 

Six Months Ended September 30,

 

2019

 

2018

Adjusted EBITDA:

 

 

 

Net loss

$

(466,489

)

 

$

(63,494

)

Income tax expense (benefit)

245,480

 

 

(7,749

)

Interest expense, net

33,720

 

 

28,182

 

Amortization

29,810

 

 

36,697

 

Depreciation

3,971

 

 

3,585

 

Restructuring and other

894

 

 

483

 

Transaction and sponsor related costs

17,954

 

 

5,272

 

(Gain) on currency translation

(240

)

 

(2,424

)

Share-based compensation

196,171

 

 

36,228

 

Adjusted EBITDA

$

61,271

 

 

$

36,780

 

 

Six Months Ended September 30,

 

2019

 

2018

Unlevered Free Cash Flow ("uFCF") (After tax adjustment):

 

 

 

Net cash (used in) provided by operating activities

$

(218,228

)

 

$

76,160

 

Cash paid for interest expense

27,391

 

 

5,890

 

Restructuring and other

894

 

 

483

 

Purchase of property, plant, and equipment

(9,758

)

 

(3,261

)

Transaction and sponsor related costs

17,954

 

 

5,272

 

Tax associated with reorganization

254,242

 

 

 

Related party tax

7,310

 

 

 

Total uFCF

79,805

 

 

84,544

 

Interest tax adjustment

(6,848

)

 

(1,473

)

uFCF (After tax adjustment)

$

72,957

 

 

$

83,071

 

 

View source version on businesswire.com:https://www.businesswire.com/news/home/20191030005906/en/

CONTACT: Marc P. Griffin

646-277-1290

Marc.Griffin@ICRinc.comMichael Bowen

203-682-8299

Michael.Bowen@ICRinc.comMedia Relations

Jack Murphy

646-677-1834

Jack.Murphy@ICRinc.comMike Maciag

Dynatrace

Mike.Maciag@dynatrace.com

650-279-3655

KEYWORD: MASSACHUSETTS UNITED STATES NORTH AMERICA

INDUSTRY KEYWORD: SOFTWARE TECHNOLOGY MOBILE/WIRELESS DATA MANAGEMENT

SOURCE: Dynatrace Investor Relations

Copyright Business Wire 2019.

PUB: 10/30/2019 04:05 PM/DISC: 10/30/2019 04:06 PM

http://www.businesswire.com/news/home/20191030005906/en