Data analytics company Dynatrace(NYSE: DT) was having a Wednesday to remember on the stock exchange. After the company published its latest set of quarterly results, investors piled into the shares, sending their price up by 16% in late afternoon trading. That performance was particularly impressive when matched against the slumping S&P 500 index, which, at the time, was down by more than 0.5%.
A solid double beat
Well before market open that day, Dynatrace took the wraps off its first quarter of fiscal 2025. The company earned revenue of $399 million for the period, representing a 20% improvement over the same quarter the previous year. That was on the back of annual recurring revenue (ARR), which also rose by 20% to over $1.54 billion.
Non-GAAP (adjusted) net income also headed north, increasing by 25% to just under $99 million, or $0.33 per share.
Both revenue and profitability sat comfortably above the average analyst estimates. Prognosticators tracking Dynatrace stock were modeling slightly more than $392 million on the top line and $0.29 per share for adjusted net income.
The company quoted its CEO Rick McConnell as saying that the quarter's gains were due largely to quality of product and reputation. According to him, "The strength of our end-to-end observability platform continues to resonate with our customers as they look to deliver the best end user experience with the highest availability and performance."
Full-year guidance maintained
Dynatrace maintained its existing guidance for the entirety of 2025 in its earnings release. The company believes ARR will come in at $1.72 billion to nearly $1.74 billion, total revenue should land at $1.64 billion to almost $1.66 billion, and adjusted net income will be $383 million to $392 million ($1.26 to $1.29 per share). The consensus analyst projection for total revenue is $1.65 billion, and for adjusted profitability, it's $1.28.
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
