Dynatrace Stock Falls After Q2 Results, Operating Margin Shrinks

Dynatrace Inc DT reported second-quarter FY22 revenue growth of 34% year-on-year to $226.4 million, beating the consensus of $220.6 million.
Total ARR increased 35% Y/Y to $864 million. Revenues from Subscription rose 35% Y/Y to $212.6 million.
Margins: The non-GAAP gross margin remained flat at 85%, while the non-GAAP operating margin contracted 500 basis points to 27%.
Non-GAAP EPS of $0.18 beat the consensus of $0.16.
Dynatrace generated $18.3 million in operating cash flow. It held $370.3 million in cash and equivalents.
Outlook: Dynatrace sees Q3 revenue of $233 million- $235 million, versus the consensus of $233.2 million.
It sees non-GAAP EPS of $0.16 at par with the consensus of $0.16.
For FY22, it expects total revenue of $913 million - $919 million (prior view $902 million - $914 million) above the consensus of $910.89 million.
Non-GAAP EPS of $0.63 - $0.65 (prior $0.60 - $0.63) versus the consensus of $0.63.
Price Action: DT shares traded lower by 7.98% at $71.50 on the last check Wednesday.

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