Dynatrace Earnings: What To Look For From DT

Application performance monitoring software provider Dynatrace (NYSE:DT) will be reporting earnings tomorrow morning. Here's what you need to know.

Dynatrace beat analysts' revenue expectations by 2.1% last quarter, reporting revenues of $365.1 million, up 22.7% year on year. It was a solid quarter for the company, with a decent beat of analysts' revenue estimates.

Is Dynatrace a buy or sell going into earnings? Read our full analysis here, it's free.

This quarter, analysts are expecting Dynatrace's revenue to grow 19.4% year on year to $375.5 million, slowing from the 24.5% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.27 per share.

The majority of analysts covering the company have reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Dynatrace has a history of exceeding Wall Street's expectations, beating revenue estimates every single time over the past two years by 2.5% on average.

Looking at Dynatrace's peers in the software development segment, some have already reported their Q1 results, giving us a hint as to what we can expect. Datadog delivered year-on-year revenue growth of 26.9%, beating analysts' expectations by 3.3%, and Cloudflare reported revenues up 30.5%, topping estimates by 1.4%. Datadog traded down 7.7% following the results while Cloudflare was also down 16.4%.

Read our full analysis of Datadog's results here and Cloudflare's results here.

There has been positive sentiment among investors in the software development segment, with share prices up 4.1% on average over the last month. Dynatrace is up 2.2% during the same time and is heading into earnings with an average analyst price target of $61.6 (compared to the current share price of $45.93).

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