Dynatrace (DT) investor relations material

Deal rationale and strategic fit

• Expands presence and leadership in the high-growth AI observability market, projected to exceed $10B by 2030.

• Creates the most comprehensive AI development lifecycle solution, spanning experimentation to production at scale.

• Unlocks access to elite AI talent, a strong open-source community, and developer-led markets via the Phoenix platform.

• Combines complementary solutions and go-to-market models, positioning the combined entity as a category leader for both enterprise and AI-native customers.

• Addresses fragmentation in AI software delivery by unifying model evaluation and production observability.

Financial terms and conditions

• Transaction valued at $915M: $815M in cash plus replacement equity awards for joining employees.

• Funded through cash on hand and/or existing credit facility; share repurchase plan remains unchanged.

• Co-founders and employees to join the acquiring company at closing.

• Arize expected to add 200 basis points to ARR growth in fiscal 2027, contributing about $40M.

• Near-term dilution of 175 basis points to non-GAAP operating margin in fiscal 2027, with margin expansion expected from fiscal 2028.

Synergies and expected cost savings

• Significant cross-sell and up-sell opportunities across combined customer bases.

• Synergies expected to drive operating margin accretion in fiscal 2028 and beyond.

• Provides continuous coverage across the AI lifecycle, with automated feedback loops for ongoing improvement.

• Delivers unified context connecting AI behavior, application performance, infrastructure health, and business outcomes.

• Offers an enterprise data foundation for AI workloads, leveraging exabyte-scale analysis and AI lakehouse capabilities.