Dynatrace (DT) Q3 2026 earnings summary

Executive summary

• Achieved $1.97 billion in ARR as of Q3 FY26, with 16%–20% year-over-year growth and strong net new ARR momentum; subscription revenue also grew 16%–18% year-over-year.

• Surpassed $100 million in annualized log management consumption, the fastest-growing product category.

• Announced Dynatrace Intelligence, an agentic AI-powered operations system, now available to all customers.

• Authorized a new $1 billion share repurchase program after nearly completing the $500 million buyback.

• Achieved significant go-to-market traction, closing 12 deals over $1 million in ARR, including record new logo ARR.

Financial highlights

• Q3 ARR reached $1.97 billion, up 16%–20% year-over-year, with net new ARR of $75 million, up 11% year-over-year.

• Total Q3 revenue was $515 million, up 16%–18% year-over-year; subscription revenue was $493–$494 million, up 16%–18%.

• Non-GAAP operating margin was 29%–30%; non-GAAP net income was $135 million ($0.44 per diluted share).

• Free cash flow for the quarter was $27 million; trailing 12-month free cash flow was $463 million (24% of revenue), with pre-tax FCF at 30% of revenue.

• GAAP income from operations was $73 million; GAAP net income per diluted share was $0.13.

Outlook and guidance

• Raised FY26 ARR guidance to $2.05–$2.06 billion, reflecting 15.5%–19% year-over-year growth.

• Increased total and subscription revenue guidance to $2.00–$2.01 billion, up 15%–19% year-over-year.

• Non-GAAP operating income guidance raised to $582–$587 million (29% margin); free cash flow guidance increased to $520–$525 million (26% margin).

• Non-GAAP EPS guidance raised to $1.67–$1.69 per diluted share.

• Foreign exchange expected to be a $49 million tailwind on ARR and $37 million on revenue for FY26.