Dynatrace, Inc. (NYSE:DT) Q1 2025 Earnings Conference Call August 7, 0202 8:00 AM ET

Company Participants

Rick McConnell - CEO
Jim Benson - CFO
Noelle Faris - VP, IR

Conference Call Participants

Patrick Colville - Scotiabank
Pinjalim Bora - J.P. Morgan
Will Power - Robert W. Baird
Matt Hedberg - RBC Capital Markets
Sanjit Singh - Morgan Stanley
Raimo Lenschow - Barclays
Mike Cikos - Needham & Company
Jake Roberge - William Blair
Fatima Boolani - Citigroup
Adam Tindle - Raymond James
Kash Rangan - Goldman Sachs
Koji Ikeda - Bank of America
Keith Bachman - BMO Capital Markets

Operator

Greetings. Welcome to the Dynatrace Fiscal First Quarter 2025 Earnings Call. [Operator Instructions] Please note, this conference is being recorded. I will now turn the conference over to your host, Noelle Faris, Vice President of Invest Relations. You may begin.

Noelle Faris

Good morning, and thank you for joining Dynatrace's first quarter fiscal 2025 earnings conference call. Joining me today are Rick McConnell, Chief Executive Officer, and Jim Benson, Chief Financial Officer.

Before we get started, please note that today's comments include forward-looking statements such as statements regarding revenue, earnings guidance, and economic conditions. Actual results may differ materially from our expectations due to a number of risks and uncertainties discussed in Dynatrace's SEC filings, including our most recent quarterly report on Form 10-Q that we filed earlier today. The forward-looking statements contained in this call represent the company's views on August 7, 2024. We assume no obligation to update these statements as a result of new information, future events, or circumstances. Unless otherwise noted, the growth rates we discuss today are non-GAAP, reflecting constant currency growth rate, and per share amounts are on a diluted basis. We will also discuss other non-GAAP financial measures on today's call. To see reconciliations between non-GAAP and GAAP measures, please refer to today's earnings press release and supplemental presentation, which are both posted in the financial results section of our IR website.

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

Rick McConnell

Thanks Noelle, and good morning, everyone. Thank you for joining us for today's call. Our first quarter results are a compelling example of our team's disciplined execution and dedicated focus on delivering exceptional customer value. ARR grew 20% year-over-year in constant currency. Subscription revenue increased 21% year-over-year in constant currency, and free cash flow was 30% of revenue on a trailing 12-month basis. These results continue to demonstrate our ability to deliver a powerful combination of top-line growth and profitability. Now more than ever, given recent industry-wide outages that have impacted billions of end users globally, observability software has become mandatory in helping organizations minimize impact. The strength of our end-to-end observability platform resonates with our customers as they look to maximize software availability and deliver mission-critical business resilience. Jim will share more details about our Q1 performance in a moment. In the meantime, I'd like to share my thoughts on the evolution of the market and why I believe we are well positioned to win.