Dynatrace earnings and revenue for the September-quarter topped consensus estimates but Dynatrace stock fell on mixed guidance.
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Waltham-Mass.-based Dynatrace (DT) reported fiscal second-quarter earnings before the market open on Wednesday.
Dynatrace earnings came in at 22 cents a share, up 22% from a year earlier, while revenue rose 23% to $279 million, the company said.
Analysts had estimated profit of 18 cents on revenue of $272.5 million.
Annual recurring revenue, or ARR, came in at $1.065 billion, below analyst estimates for $1.07 billion. Dynatrace reduced annual ARR guidance by about $40 million in August.
Guidance For Dynatrace Stock
For the current quarter ending in December, Dynatrace predicted EPS in a range of 21 to 22 cents vs. consensus estimates of 19 cents. The software maker forecast revenue of $284.5 million vs. estimates of $286.3 million.
DT stock pared early losses to 0.8%, trading around 33.90 on the stock market today. Meanwhile, Dynatrace stock has retreated 41% in 2022
The software maker’s computer network monitoring tools measure and analyze the performance of business-critical applications.
Heading into the Dynatrace earnings report, the stock owned a Relative Strength Rating of 29 out of a best-possible 99, according to IBD Stock Check-up.
Datadog, Cisco Among Competitors
Dynatrace competes in the application performance monitoring market vs. Datadog (DDOG), Cisco Systems (CSCO), New Relic (NEWR) and others. Datadog reports earnings Thursday before the market open.
“We believe that much of software is experiencing elongated deal cycles and lower demand levels, which includes observability and Dynatrace specifically,” said Keith Bachman, analyst at BMO Capital Markets, in a report published prior to the earnings release.
He added: “While we think DT continues to have the optimal solution for enterprise customers, particularly driven by scalability and AI, we nevertheless think that DT’s price points are high both for new lands and expansions, which creates some friction in the buying process.”
In addition, Dynatrace went public Aug. 1, 2019, backed by private equity firm Thoma Bravo. Further, the Dynatrace initial public offering raised $570 million.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.
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Read More: Dynatrace Earnings Top Estimates, Software Stock Falls On Weak Revenue Outlook