Dynatrace, Inc. (DT) Q1 2023 Earnings Call Transcript

For the period ending June 30, 2022

August 3, 2022 8:00 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Greetings, and welcome to Dynatrace First Quarter Fiscal 2023 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

I would now like to turn the conference over to your host, Noelle Faris, Vice President of Investor Relations. Please go ahead, Ms. Faris.

Noelle Faris

Thanks, operator. Good morning, everyone, and thank you for joining Dynatrace's first quarter fiscal 2023 earnings conference call. With me on the call today are Rick McConnell, Chief Executive Officer; and Kevin Burns, Chief Financial Officer.

Before we get started, please note that today's comments include forward-looking statements, such as statements regarding revenue and earnings guidance. These forward-looking statements are subject to risks and uncertainties depending on a number of factors that could cause actual results to differ materially from those expressed or implied by such statements.

Additional information concerning these uncertainties and risk factors is contained in Dynatrace's filing with the SEC, including our annual report on Form 10-K and quarterly reports on Form 10-Q. The forward-looking statements included in this call represent the company's view on August 3, 2022. Dynatrace disclaims any obligation to update these statements to reflect future events or circumstances.

As a reminder, we will be referring to some non-GAAP financial measures during today's call. A detailed reconciliation of GAAP and non-GAAP measures can be found on the Investor Relations section of our website. Unless otherwise noted, the growth rate we discuss today are non-GAAP, reflecting constant currency growth. To see the reconciliation between these non-GAAP and GAAP measures, please refer to today's earnings press release and financial presentation under the Events section of our website.

And with that, let me turn the call over to our Chief Executive Officer, Rick McConnell. Rick?

Rick McConnell

Thanks, Noelle, and good morning, everyone. Thank you for joining us on today's call. Let me start by saying that I am proud of the Dynatrace team and our solid first quarter performance. In particular, we saw a continuation of our mid-30s growth in adjusted ARR again in the first quarter at 34% year-over-year.

Subscription revenue came in at $250 million, an increase of 32% year-over-year in constant currency. And non-GAAP operating income was $60 million or 23% of revenue. This is a testament to the strength of our market, the significant value of our platform and the ongoing durability of our business model, which, combined, enable us to run a business that delivers high growth, with strong profitability and free cash flow.