Shares of Dynatrace Inc (NYSE: DT) climbed in early trading on Monday after the U.S. software-observability company reported third-quarter fiscal 2026 results that exceeded its own guidance and lifted full-year targets.
Dynatrace, listed on the New York Stock Exchange, closed at about $33.76 per share in the most recent session, up from the prior day, reflecting an intraday gain following the release of quarterly results. Extended trading showed further upward movement. Data as of the latest market close indicate the stock up roughly mid-single digits on the day.
As of the latest closing price, Dynatrace’s market capitalization stood near $10.2 billion.
Quarterly Results
For the third quarter ended December 31, 2025, Dynatrace reported total revenue of $515.47 million, representing an 18% increase year-over-year. On a constant currency basis, revenue growth was 16%. Total annual recurring revenue (ARR) reached $1.972 billion, a 20% increase from the prior year, or 16% in constant currency.
The company reported a non-GAAP net income of $135 million, or $0.44 per diluted share, which exceeded the consensus estimate of $0.41 per share. Under GAAP, the operating margin stood at 14%, while the non-GAAP operating margin reached 30%, which the company attributed to revenue upside and operational efficiencies.
In terms of segment performance, subscription revenue increased by 18% year-over-year to $493 million. The company maintained a trailing twelve-month net expansion rate of 111%, consistent with the previous quarter. Dynatrace also reported a trailing twelve-month free cash flow of $463 million, representing 24% of total revenue.
Business & Operations Update
Dynatrace announced that its Board of Directors has authorized a new $1 billion share repurchase program. This follows the substantial completion of a prior $500 million authorization, under which the company repurchased 3.5 million shares for $160 million during the third quarter.
Operationally, the company introduced “Dynatrace Intelligence,” a new operations system that integrates deterministic and agentic artificial intelligence to automate enterprise workflows. The company also expanded its cloud-native integrations with Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform (GCP). Specific technical developments included the launch of the Dynatrace MCP Server and integrated visibility for Amazon Bedrock agents. Additionally, the company completed the acquisition of DevCycle to enhance its feature management capabilities.
Guidance & Outlook
Dynatrace also raised its fiscal 2026 outlook. Updated guidance projects full-year ARR in a range of about $2.053 billion to $2.061 billion and total revenue of approximately $2.005 billion to $2.010 billion, with non-GAAP EPS now expected between $1.67 and $1.69. Fourth-quarter fiscal 2026 revenue is expected in a range of roughly $518 million to $523 million with diluted earnings per share of about $0.38 to $0.39.
Equity Analyst Commentary
Institutional research coverage following the report focused on the company’s AI-driven product adoption. BTIG reiterated its assessment of the stock, noting that artificial intelligence is providing tailwinds for the core Application Performance Monitoring (APM) segment. Analysts at RBC Capital noted that the company’s ARR growth of 20% exceeded consensus expectations of 15.7%.
According to reports from Reuters and Dow Jones, several firms adjusted their financial models following the update. KeyBanc Capital Markets and Rosenblatt Securities recently adjusted price objectives, while maintaining their existing ratings. Analysts highlighted that the adoption of the Dynatrace Platform Subscription (DPS) model is contributing to higher renewal rates and customer consolidation on the platform.
Performance Summary
Dynatrace’s stock rose after earnings and guidance updates. Revenue for Q3 rose 18 per cent to about $515 million. Subscription and recurring revenue metrics remained central. ARR grew to about $1.97 billion. Latest guidance raised full-year revenue and earnings expectations. Authorization of a new $1 billion buyback was announced. Equity research showed mixed institutional response. Shares moved higher in early trading, reflecting the headline results.