Exhibit 99.1
Dynatrace Reports Fourth Quarter and Full Year Fiscal Year 2020 Financial Results
• | Subscription and Services revenue of $148.3 million, a year-over-year increase of 37% |
• | Annualized recurring revenue "ARR" of $572.8 million, a year-over-year increase of 42% |
• | GAAP EPS of $0.16 and non-GAAP EPS of $0.11 |
WALTHAM, Mass, May 12, 2020 (Business Wire) - Dynatrace (NYSE: DT), the market-leading software intelligence provider, purpose-built for dynamic multi-clouds, today released financial results for the fourth quarter of its fiscal 2020 ended March 31, 2020.
“COVID-19 and the sudden shift to remote work has caused applications and the clouds they run on to become an even more essential way to provide services, drive revenue, engage customers and collaborate among teams.” Said John Van Siclen, Dynatrace’s CEO. “We continue to work closely with our customers to help them respond to their rapidly changing workloads and requirements, enabling faster innovation, easier collaboration and greater efficiency without wasted motion. Despite these challenging times, our strong platform differentiation, balanced business model, and world-class team put us in a strong position for continued success in the world ahead.”
Fourth Quarter Fiscal 2020 and Other Recent Business Highlights:
Fourth Quarter Fiscal 2020 Financial Highlights:
• | Total Revenue of $150.6 million, an increase of 30% compared to $116.2 million in Q4 2019 |
• | Total ARR of $572.8 million, an increase of 42% compared to $403.3 million at the end of Q4 2019 |
• | Subscription and Services revenue of $148.3 million, an increase of 37% compared to $108.6 million in Q4 2019, and representing 98% of total revenue |
• | GAAP Operating Income of $8.0 million and Non-GAAP Operating Income of $36.0 million |
• | GAAP EPS of $0.16 and non-GAAP EPS of $0.11 |
Full Year Fiscal 2020 Financial Highlights:
• | Total Revenue of $545.8 million, an increase of 27% compared to $431.0 million in fiscal 2019, 29% adjusted for constant currency |
• | Subscription and Services revenue of $533.1 million, an increase of 36% compared to $390.6 million in fiscal 2019, 39% adjusted for constant currency, and representing 98% of total revenue |
• | Subscription revenue of $487.8 million, an increase of 39% compared to $349.8 million in fiscal 2019, 42% adjusted for constant currency, and representing 89% of total revenue |
• | GAAP Operating Loss of $(171.9) million and Non-GAAP Operating Income of $130.0 million |
• | GAAP EPS of $(1.58) and non-GAAP EPS of $0.31 |
Dynatrace® Platform Highlights:
• | Ended the year with 2,373 Dynatrace customers, an increase of 1,009 customers, up 74% for fiscal 2020 |
• | Dynatrace Net Expansion rate of 123%, the 8th consecutive quarter at or above 120% |
• | Dynatrace ARR represents 92% of total ARR, increasing from 70% of total ARR at the end of Q4 2019 |
Business Highlights:
• | Named a leader for completeness of vision and ability to execute in Gartner Magic Quadrant for APM for the 10th consecutive time and simultaneously earned the highest scores for 5 of 6 critical capabilities in Gartner Critical Capabilities report for APM. |
• | Announced the release of our next generation of infrastructure observability including major enhancements to AI, log monitoring, and data source access to bring greater automation and efficiency to a wider multi-cloud landscape. |
Exhibit 99.1
• | Broadened digital experience offering with new mobile platform and framework support with enhanced AI-powered answers and advanced observability for native mobile applications. |
Fourth Quarter 2020 Financial Highlights
(Unaudited – in thousands, except per share amounts)
Three Months Ended March 31, | |||||||
2020 | 2019 | ||||||
Annualized recurring revenue | $ | 572,759 | $ | 403,274 | |||
Year-over-Year Increase | 42 | % | |||||
Revenues: | |||||||
Total revenue | $ | 150,577 | $ | 116,168 | |||
Year-over-Year Increase | 30 | % | |||||
Subscription and services revenue | $ | 148,315 | $ | 108,619 | |||
Year-over-Year Increase | 37 | % | |||||
Subscription revenue | $ | 135,366 | $ | 97,856 | |||
Year-over-Year Increase | 38 | % | |||||
Non-GAAP operating income (*) | $ | 35,972 | $ | 25,328 | |||
Non-GAAP operating margin (*) | 24 | % | 22 | % | |||
Non-GAAP net income (*) | $ | 29,762 | $ | 6,529 | |||
Non-GAAP net income per share | $ | 0.11 | $ | 0.03 | |||
Non-GAAP shares outstanding - diluted | 283,302 | 238,900 | |||||
Unlevered Free Cash Flow (*) | $ | 63,302 | $ | 75,692 | |||
Full Year 2020 Financial Highlights
(Unaudited – in thousands, except per share amounts)
Year Ended March 31, | |||||||
2020 | 2019 | ||||||
Revenues: | |||||||
Total revenue | $ | 545,803 | $ | 430,966 | |||
Year-over-Year Increase | 27 | % | |||||
Total revenue - constant currency (*) | $ | 554,882 | $ | 430,966 | |||
Year-over-Year Increase | 29 | % | |||||
Subscription and services revenue | $ | 533,117 | $ | 390,612 | |||
Year-over-Year Increase | 36 | % | |||||
Subscription and services revenue - constant currency (*) | $ | 541,920 | $ | 390,612 | |||
Year-over-Year Increase | 39 | % | |||||
Subscription revenue | $ | 487,817 | $ | 349,830 | |||
Year-over-Year Increase | 39 | % | |||||
Subscription revenue - constant currency (*) | $ | 495,863 | $ | 349,830 | |||
Year-over-Year Increase | 42 | % | |||||
Non-GAAP operating income (*) | $ | 129,979 | $ | 78,774 | |||
Non-GAAP operating margin (*) | 24 | % | 18 | % | |||
Non-GAAP net income (*) | $ | 83,039 | $ | 31,877 | |||
Non-GAAP net income per share | $ | 0.31 | $ | 0.13 | |||
Non-GAAP shares outstanding - diluted | 269,271 | 237,085 | |||||
Unlevered Free Cash Flow (*) | $ | 149,547 | $ | 184,797 | |||
* Use of Non-GAAP Financial Measures
In our earnings press releases, conference calls, slide presentations, and webcasts, we may use or discuss non-GAAP financial measures, as defined by Regulation G. The GAAP financial measure most directly comparable to each non-GAAP financial measure used or discussed, and a reconciliation of the differences between each non-GAAP financial measure and the comparable GAAP financial measure, are included in this press release after the consolidated financial statements. Our earnings press releases containing such non-GAAP reconciliations can be found in the Investors section of our website at https://ir.dynatrace.com.
Financial Outlook
Based on information available, as of May 12, 2020, Dynatrace is issuing guidance for the first quarter fiscal 2021 and full year fiscal 2021 as follows:
First Quarter of Fiscal Year 2021:
• | Total revenue, as reported, is expected to be in the range of $148.0 million to $150.0 million, 24% to 25% growth, when adjusted for constant currency |
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• | Non-GAAP operating income is expected to be in the range of $38.0 million to $40.0 million |
• | Non-GAAP net income is expected to be in the range of $26.5 million to $28.0 million |
• | Non-GAAP net income per diluted share is expected to be in the range of $0.09 to $0.10, based on a range of 290 million to 291 million diluted weighted-average shares |
Full Year Fiscal 2021:
• | Total revenue, as reported, is expected to be in the range of $630.0 million to $643.0 million, 17% to 20% growth, when adjusted for constant currency |
• | Total Subscription revenue, as reported, is expected to be in the range of $591.0 million to $601.0 million, 23% to 25% growth, when adjusted for constant currency |
• | Total ARR is expected to be in the range of $680.0 million to $692.0 million |
• | Non-GAAP operating income is expected to be in the range of $146.0 million to $156.0 million |
• | Non-GAAP net income is expected to be in the range of $115.0 million to $123.0 million |
• | Non-GAAP net income per diluted share is expected to be in the range of $0.39 to $0.42, based on a range of 293 million to 295 million diluted weighted-average shares |
• | Total unlevered free cash flow is expected to be in the range of $180.0 million to $190.0 million |
Our revenue and subscription revenue guidance is based on foreign exchange rates as of March 31, 2020 for entities reporting in currencies other than U.S. Dollars.
While we believe we are in a strong financial position to weather the impact to our business from COVID-19, many of our customers and prospects are now operating under very challenging circumstances and may reduce or re-evaluate their spend. As such, in our first quarter and full year 2021 guidance we factor in the expected impacts of COVID‑19 on our business and results of operations based on information available to us today. Our outlook assumes a challenging economic environment through the first quarter of 2021 and incorporates a wider range of outcomes for the remainder of the fiscal year. Significant variation from these assumptions could cause us to raise, lower or modify our expectations and our guidance, and we undertake no obligation to update our assumptions, expectations or our guidance. These statements are forward-looking, and actual results may differ materially, as further discussed below under the heading “Cautionary Language Concerning Forward-Looking Statements”.
Reconciliation of non-GAAP operating income, non-GAAP net income, non-GAAP net income per share and unlevered free cash flow guidance to the most directly comparable GAAP measures is not available without unreasonable efforts on a forward-looking basis due to the high variability, complexity and low visibility with respect to the charges excluded from these non-GAAP measures; in particular, the measures and effects of stock-based compensation expense, employer taxes and tax deductions specific to equity compensation awards that are directly impacted by future hiring, turnover and retention needs, as well as unpredictable fluctuations in our stock price. We expect the variability of the above charges to have a significant, and potentially unpredictable, impact on our future GAAP financial results.
Conference Call and Webcast Information
Dynatrace will host a conference call today, May 12, 2020, to discuss its results and business outlook at 8:00 a.m. Eastern Time. The call will be accessible by telephone at 866-211-4694 (domestic) or 647-689-6731 (international). The call will also be available live via webcast on the Company’s website at https://ir.dynatrace.com. A telephone replay of the conference call will be available at 800-585-8367 or 416-621-4642 (access code 7698213) until May 26, 2020. A webcast replay will be available at https://ir.dynatrace.com.
The company has used, and intends to continue to use, the investor relations portion of its website as a means of disclosing material non-public information and for complying with disclosure obligations under Regulation FD.
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Non-GAAP Financial Measures & Key Metrics
In addition to disclosing financial measures prepared in accordance with GAAP, this press release and the accompanying tables contain certain non-GAAP financial measures.
Non-GAAP financial measures do not have any standardized meaning and are therefore unlikely to be comparable to similarly titled measures presented by other companies. Dynatrace considers these non-GAAP financial measures to be important because they provide useful indicators of its performance and liquidity measures. These are key measures used by our management and board of directors to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget and to develop short and long-term operational plans. In addition, investors often use similar measures to evaluate the performance of a company. Non-GAAP financial measures are presented for supplemental informational purposes only for understanding the company’s operating performance. The non-GAAP financial measures should not be considered a substitute for financial information presented in accordance with GAAP, and may be different from non-GAAP financial measures presented by other companies. The GAAP financial measure most directly comparable to each non-GAAP financial measure used or discussed, and a reconciliation of the differences between each non-GAAP financial measure and the comparable GAAP financial measure, are included in this press release after the consolidated financial statements.
Dynatrace presents constant currency amounts for Revenue and Annual Recurring Revenue to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency rate fluctuations. To present this information, current and comparative prior period results for entities reporting in currencies other than United States dollars are converted into United States dollars using the average exchange rates from the comparative period rather than the actual exchange rates in effect during the respective periods. All growth comparisons relate to the corresponding period in the last fiscal year. Dynatrace provides this non-GAAP financial information to aid investors in better understanding our performance.
Adjusted EBITDA is defined as Net Income (loss) adjusted by removing the impact of our capital structure (net interest income or expense from our outstanding debt), asset base (depreciation and amortization), tax consequences, restructuring and other gains and losses, transaction and sponsor related costs, gains and losses on foreign currency and stock-based compensation.
Annual Recurring Revenue “ARR” is defined as the daily revenue of all subscription agreements that are actively generating revenue as of the last day of the reporting period multiplied by 365. We exclude from our calculation of Total ARR any revenues derived from month-to-month agreements and/or product usage overage billings.
Dynatrace Net Expansion Rate is defined as the Dynatrace® ARR at the end of a reporting period for the cohort of Dynatrace® accounts as of one year prior to the date of calculation, divided by the Dynatrace® ARR one year prior to the date of calculation for that same cohort. This calculation excludes the benefit of Dynatrace® ARR resulting from the conversion of Classic products to the Dynatrace® platform, as well as any upsell generated at the time of conversion.
Dynatrace customers are defined as accounts, as identified by a unique account identifier, that generate at least $10,000 of Dynatrace® ARR as of the reporting date. In infrequent cases, a single large organization may comprise multiple customer accounts when there are distinct divisions, departments or subsidiaries that operate and make purchasing decisions independently from the parent organization. In cases where multiple customer accounts exist under a single organization, each customer account is counted separately based on a mutually exclusive accounting of ARR.
Adjusted EBITDA/Net Debt Leverage Ratio is defined as our Net Debt divided by our trailing twelve month Adjusted EBITDA. Net Debt is defined as total principal less cash and cash equivalents.
Unlevered Free Cash Flow is defined as net cash provided by (used in) operating activities and adjusted to exclude cash paid for interest (net of tax), non-recurring restructuring and acquisition related costs, along with costs associated with one-time offerings and filings, less cash used in investing activities for acquisition of property and equipment. However, given our debt obligations, unlevered free cash flow does not represent residual cash flow available for discretionary expenses.
About Dynatrace
Dynatrace provides software intelligence to simplify cloud complexity and accelerate digital transformation. With advanced observability, AI, and continuous automation, our all-in-one platform provides precise answers about the performance of applications, the underlying infrastructure and the experience of all users to enable organizations to innovate faster, collaborate efficiently, and deliver more value with dramatically less effort. That’s why many of the world’s largest enterprises trust Dynatrace to modernize and automate cloud operations, release better software faster, and deliver unrivaled digital experiences. Curious to see how you can simplify your cloud? Let us show you. Visit our trial page for a free 15-day Dynatrace trial. To learn more about how Dynatrace can help your business, visit https://www.dynatrace.com, visit our blog and follow us on Twitter @dynatrace.
Cautionary Language Concerning Forward-Looking Statements
This press release includes certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding management’s expectations of future financial and operational performance and operational expenditures, expected growth, and business outlook, including our financial guidance for the first quarter and full year of fiscal 2021, statements regarding the impact of the COVID-19 pandemic and related economic conditions on our business and results of operations; and statements regarding the size of our market and our positioning for capturing a larger share of our market. These forward-looking statements include, but are not limited to, plans, objectives, expectations and intentions and other statements contained in this press release that are not historical facts and statements identified by words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates” or words of similar meaning. These forward-looking statements reflect our current views about our plans, intentions, expectations, strategies and prospects, which are based on the information currently available to us and on assumptions we have made. Although we believe that our plans, intentions, expectations, strategies and prospects as reflected in or suggested by those forward-looking statements are reasonable, we can give no assurance that the plans, intentions, expectations or strategies will be attained or achieved. Furthermore, actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of risks and factors that are beyond our control including, without limitation, the effect of the COVID-19 pandemic on our business operations and demand for our products as well as its impact on general economic and financial market conditions; our ability to maintain our subscription revenue growth rates in future periods, our ability to service our substantial level of indebtedness, market adoption of software intelligence solutions for application performance monitoring, digital experience monitoring and infrastructure monitoring, continued spending on and demand for software intelligence solutions, our ability to maintain and acquire new customers, our ability to differentiate our platform from competing products and technologies; our ability to successfully recruit and retain highly-qualified personnel; the price volatility of our common stock, and other risks set forth under the caption “Risk Factors” in our Form 10-Q filed on January 31, 2020 and our other SEC filings. We assume no obligation to update any forward-looking statements contained in this document as a result of new information, future events or otherwise.
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DYNATRACE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
Three Months Ended March 31, | Twelve Months Ended March 31, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
(unaudited) | |||||||||||||||
Revenue: | |||||||||||||||
Subscription | $ | 135,366 | $ | 97,856 | $ | 487,817 | $ | 349,830 | |||||||
License | 2,262 | 7,549 | 12,686 | 40,354 | |||||||||||
Service | 12,949 | 10,763 | 45,300 | 40,782 | |||||||||||
Total revenue | 150,577 | 116,168 | 545,803 | 430,966 | |||||||||||
Cost of revenue: | |||||||||||||||
Cost of subscription | 17,263 | 16,012 | 73,193 | 56,934 | |||||||||||
Cost of service | 10,049 | 9,381 | 39,289 | 31,529 | |||||||||||
Amortization of acquired technology | 3,825 | 4,558 | 16,449 | 18,338 | |||||||||||
Total cost of revenue | 31,137 | 29,951 | 128,931 | 106,801 | |||||||||||
Gross profit | 119,440 | 86,217 | 416,872 | 324,165 | |||||||||||
Operating expenses: | |||||||||||||||
Research and development | 24,509 | 21,530 | 119,281 | 76,759 | |||||||||||
Sales and marketing | 55,594 | 48,219 | 266,175 | 178,886 | |||||||||||
General and administrative | 21,265 | 27,014 | 161,983 | 91,778 | |||||||||||
Amortization of other intangibles | 10,038 | 11,794 | 40,280 | 47,686 | |||||||||||
Restructuring and other | (1 | ) | 1,304 | 1,092 | 1,763 | ||||||||||
Total operating expenses | 111,405 | 109,861 | 588,811 | 396,872 | |||||||||||
Income (loss) from operations | 8,035 | (23,644 | ) | (171,939 | ) | (72,707 | ) | ||||||||
Interest expense, net | (5,682 | ) | (20,603 | ) | (45,397 | ) | (69,845 | ) | |||||||
Other (expense) income, net | (1,504 | ) | 363 | (1,197 | ) | 2,641 | |||||||||
Income (loss) before income taxes | 849 | (43,884 | ) | (218,533 | ) | (139,911 | ) | ||||||||
Income tax benefit (expense) | 45,853 | 13,286 | (199,491 | ) | 23,717 | ||||||||||
Net income (loss) | $ | 46,702 | $ | (30,598 | ) | $ | (418,024 | ) | $ | (116,194 | ) | ||||
Net income (loss) per share: | |||||||||||||||
Basic | $ | 0.17 | $ | (0.13 | ) | $ | (1.58 | ) | $ | (0.49 | ) | ||||
Diluted | $ | 0.16 | $ | (0.13 | ) | $ | (1.58 | ) | $ | (0.49 | ) | ||||
Weighted average shares outstanding: | |||||||||||||||
Basic | 278,665 | 236,667 | 264,933 | 235,939 | |||||||||||
Diluted | 283,302 | 236,667 | 264,933 | 235,939 | |||||||||||
SHARE-BASED COMPENSATION
Three Months Ended March 31, | Twelve Months Ended March 31, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
(unaudited) | |||||||||||||||
Cost of revenues | $ | 1,339 | $ | 2,311 | $ | 18,685 | $ | 5,777 | |||||||
Research and development | 1,991 | 4,976 | 38,670 | 12,566 | |||||||||||
Sales and marketing | 6,106 | 10,033 | 84,698 | 24,673 | |||||||||||
General and administrative | 3,358 | 11,546 | 80,425 | 28,135 | |||||||||||
Total share-based compensation expense | $ | 12,794 | $ | 28,866 | $ | 222,478 | $ | 71,151 | |||||||
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DYNATRACE, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
March 31, | |||||||
2020 | 2019 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 213,170 | $ | 51,314 | |||
Accounts receivable, net of allowance for doubtful accounts | 157,058 | 115,431 | |||||
Deferred commissions, current | 38,509 | 27,705 | |||||
Prepaid expenses and other current assets | 57,651 | 18,768 | |||||
Total current assets | 466,388 | 213,218 | |||||
Property and equipment, net | 31,508 | 17,925 | |||||
Goodwill | 1,270,733 | 1,270,120 | |||||
Other intangible assets, net | 201,592 | 259,123 | |||||
Deferred tax assets, net | 20,460 | 10,678 | |||||
Deferred commissions, non-current | 39,736 | 31,545 | |||||
Other assets | 7,917 | 7,649 | |||||
Receivable from related party | 3,746 | 1,108 | |||||
Total assets | $ | 2,042,080 | $ | 1,811,366 | |||
Liabilities and shareholders' equity / member's deficit | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 11,112 | $ | 6,559 | |||
Accrued expenses, current | 93,728 | 64,920 | |||||
Current portion of long-term debt | — | 9,500 | |||||
Deferred revenue, current | 384,060 | 272,772 | |||||
Payable to related party | — | 597,150 | |||||
Total current liabilities | 488,900 | 950,901 | |||||
Deferred revenue, non-current | 60,711 | 92,973 | |||||
Accrued expenses, non-current | 20,987 | 98,359 | |||||
Deferred tax liabilities | — | 47,598 | |||||
Long-term debt, net of current portion | 509,985 | 1,011,793 | |||||
Total liabilities | 1,080,583 | 2,201,624 | |||||
Commitments and contingencies | |||||||
Shareholders' equity / member's deficit: | |||||||
Common shares, $0.001 par value, 600,000,000 shares authorized, 280,853,040 shares issued and outstanding at March 31, 2020 | 281 | — | |||||
Common units, no par value, 100 units authorized, issued and outstanding at March 31, 2019 | — | — | |||||
Additional paid-in capital | 1,573,347 | (184,546 | ) | ||||
Accumulated deficit | (594,026 | ) | (176,002 | ) | |||
Accumulated other comprehensive loss | (18,105 | ) | (29,710 | ) | |||
Total shareholders' equity / member's deficit | 961,497 | (390,258 | ) | ||||
Total liabilities and shareholders' equity / member's deficit | $ | 2,042,080 | $ | 1,811,366 | |||
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DYNATRACE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Year Ended March 31, | |||||||
2020 | 2019 | ||||||
Cash flows from operating activities: | |||||||
Net loss | $ | (418,024 | ) | $ | (116,194 | ) | |
Adjustments to reconcile net loss to cash (used in) provided by operations: | |||||||
Depreciation | 7,864 | 7,319 | |||||
Amortization | 58,457 | 72,792 | |||||
Share-based compensation | 222,478 | 71,151 | |||||
Deferred income taxes | (59,276 | ) | (34,214 | ) | |||
Other | 6,129 | (1,140 | ) | ||||
Net change in operating assets and liabilities: | |||||||
Accounts receivable | (44,021 | ) | 17,979 | ||||
Deferred commissions | (20,107 | ) | (19,968 | ) | |||
Prepaid expenses and other assets | (36,201 | ) | (12,401 | ) | |||
Accounts payable and accrued expenses | 48,879 | 34,787 | |||||
Deferred revenue | 91,367 | 127,030 | |||||
Net cash (used in) provided by operating activities | (142,455 | ) | 147,141 | ||||
Cash flows from investing activities: | |||||||
Purchase of property and equipment | (19,721 | ) | (7,377 | ) | |||
Capitalized software additions | (892 | ) | (1,873 | ) | |||
Net cash used in investing activities | (20,613 | ) | (9,250 | ) | |||
Cash flows from financing activities: | |||||||
Proceeds from initial public offering, net of underwriters' discounts and commissions | 590,297 | — | |||||
Offering costs | (5,000 | ) | — | ||||
Proceeds from term loans | — | 1,120,000 | |||||
Debt issuance costs | (866 | ) | (16,288 | ) | |||
Repayment of term loans | (515,189 | ) | (83,871 | ) | |||
Payments to related parties | — | (1,177,021 | ) | ||||
Contribution for tax associated with reorganization | 265,000 | — | |||||
Equity repurchases | (156 | ) | (649 | ) | |||
Installments related to acquisitions | (4,694 | ) | (3,653 | ) | |||
Net cash provided by (used in) financing activities | 329,392 | (161,482 | ) | ||||
Effect of exchange rates on cash and cash equivalents | (4,468 | ) | (2,676 | ) | |||
Net increase (decrease) in cash and cash equivalents | 161,856 | (26,267 | ) | ||||
Cash and cash equivalents, beginning of year | 51,314 | 77,581 | |||||
Cash and cash equivalents, end of year | $ | 213,170 | $ | 51,314 | |||
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DYNATRACE, INC.
GAAP to Non-GAAP Reconciliations
(Unaudited - In thousands)
Three Months Ended March 31, 2020 | |||||||||||||||||||
GAAP | Share-based compensation | Amortization of other intangibles | Restructuring & other | Non-GAAP | |||||||||||||||
Non-GAAP operating income: | |||||||||||||||||||
Cost of revenue | $ | 31,137 | $ | (1,339 | ) | $ | (3,825 | ) | $ | — | $ | 25,973 | |||||||
Gross profit | 119,440 | 1,339 | 3,825 | — | 124,604 | ||||||||||||||
Gross margin | 79 | % | 83 | % | |||||||||||||||
Research and development | 24,509 | (1,991 | ) | — | — | 22,518 | |||||||||||||
Sales and marketing | 55,594 | (6,106 | ) | — | — | 49,488 | |||||||||||||
General and administrative | 21,265 | (3,358 | ) | — | (1,281 | ) | 16,626 | ||||||||||||
Amortization of other intangibles | 10,038 | — | (10,038 | ) | — | — | |||||||||||||
Restructuring and other | (1 | ) | — | — | 1 | — | |||||||||||||
Operating income | 8,035 | 12,794 | 13,863 | 1,280 | 35,972 | ||||||||||||||
Operating margin | 5 | % | 24 | % | |||||||||||||||
Three Months Ended March 31, 2019 | |||||||||||||||||||
GAAP | Share-based compensation | Amortization of other intangibles | Restructuring & other | Non-GAAP | |||||||||||||||
Non-GAAP operating income: | |||||||||||||||||||
Cost of revenue | $ | 29,951 | $ | (2,311 | ) | $ | (4,558 | ) | $ | — | $ | 23,082 | |||||||
Gross profit | 86,217 | 2,311 | 4,558 | — | 93,086 | ||||||||||||||
Gross margin | 74 | % | 80 | % | |||||||||||||||
Research and development | 21,530 | (4,976 | ) | — | — | 16,554 | |||||||||||||
Sales and marketing | 48,219 | (10,033 | ) | — | — | 38,186 | |||||||||||||
General and administrative | 27,014 | (11,546 | ) | — | (2,450 | ) | 13,018 | ||||||||||||
Amortization of other intangibles | 11,794 | — | (11,794 | ) | — | — | |||||||||||||
Restructuring and other | 1,304 | — | — | (1,304 | ) | — | |||||||||||||
Operating (loss) income | (23,644 | ) | 28,866 | 16,352 | 3,754 | 25,328 | |||||||||||||
Operating margin | (20 | )% | 22 | % | |||||||||||||||
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DYNATRACE, INC.
GAAP to Non-GAAP Reconciliations
(Unaudited - In thousands, except per share amounts)
Three Months Ended March 31, | |||||||
2020 | 2019 | ||||||
Non-GAAP net income: | |||||||
Net income (loss) | $ | 46,702 | $ | (30,598 | ) | ||
Income tax benefit | (45,853 | ) | (13,286 | ) | |||
Cash paid for tax | 1,573 | (2,477 | ) | ||||
Related party tax | (2,216 | ) | — | ||||
Interest expense, net | 5,682 | 20,603 | |||||
Cash paid for interest | (5,567 | ) | (16,322 | ) | |||
Share-based compensation | 12,794 | 28,866 | |||||
Amortization of other intangibles | 10,038 | 11,794 | |||||
Amortization of acquired technology | 3,825 | 4,558 | |||||
Transaction and sponsor related costs | 1,281 | 2,450 | |||||
Restructuring and other | (1 | ) | 1,304 | ||||
Loss (gain) on currency translation | 1,504 | (363 | ) | ||||
Non-GAAP net income | $ | 29,762 | $ | 6,529 | |||
Share count: | |||||||
Weighted-average shares outstanding - basic | 278,665 | 236,667 | |||||
Weighted-average shares outstanding - diluted | 283,302 | 236,667 | |||||
Shares used in non-GAAP per share calculations: | |||||||
Weighted-average shares outstanding - basic | 278,665 | 236,667 | |||||
Weighted-average shares outstanding - diluted | 283,302 | 238,900 | |||||
Net income (loss) per share: | |||||||
Net income (loss) per share - basic | $ | 0.17 | $ | (0.13 | ) | ||
Net income (loss) per share - diluted | $ | 0.16 | $ | (0.13 | ) | ||
Non-GAAP net income per share - basic | $ | 0.11 | $ | 0.03 | |||
Non-GAAP net income per share - diluted | $ | 0.11 | $ | 0.03 | |||
10
DYNATRACE, INC.
GAAP to Non-GAAP Reconciliations
(Unaudited - In thousands)
Three Months Ended March 31, | |||||||
2020 | 2019 | ||||||
Adjusted EBITDA: | |||||||
Net income (loss) | $ | 46,702 | $ | (30,598 | ) | ||
Income tax benefit | (45,853 | ) | (13,286 | ) | |||
Interest expense, net | 5,682 | 20,603 | |||||
Amortization | 14,359 | 17,940 | |||||
Depreciation | 1,887 | 1,894 | |||||
Restructuring and other | (1 | ) | 1,304 | ||||
Transaction and sponsor related costs | 1,281 | 2,450 | |||||
Loss (gain) on currency translation | 1,504 | (363 | ) | ||||
Share-based compensation | 12,794 | 28,866 | |||||
Adjusted EBITDA | $ | 38,355 | $ | 28,810 | |||
Three Months Ended March 31, | |||||||
2020 | 2019 | ||||||
Unlevered Free Cash Flow ("uFCF") (After tax adjustment): | |||||||
Net cash provided by operating activities | $ | 64,641 | $ | 62,208 | |||
Cash paid for interest expense | 5,567 | 16,322 | |||||
Restructuring and other | (1 | ) | 1,304 | ||||
Purchase of property, plant, and equipment | (4,578 | ) | (2,511 | ) | |||
Transaction and sponsor related costs | 1,281 | 2,450 | |||||
Related party tax | (2,216 | ) | — | ||||
Total uFCF | 64,694 | 79,773 | |||||
Interest tax adjustment | (1,392 | ) | (4,081 | ) | |||
uFCF (After tax adjustment) | $ | 63,302 | $ | 75,692 | |||
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DYNATRACE, INC.
GAAP to Non-GAAP Reconciliations
(Unaudited - In thousands)
Year Ended March 31, 2020 | |||||||||||||||||||
GAAP | Share-based compensation | Amortization of other intangibles | Restructuring & other | Non-GAAP | |||||||||||||||
Non-GAAP operating income: | |||||||||||||||||||
Cost of revenue | $ | 128,931 | $ | (18,685 | ) | $ | (16,449 | ) | $ | — | $ | 93,797 | |||||||
Gross profit | 416,872 | 18,685 | 16,449 | — | 452,006 | ||||||||||||||
Gross margin | 76 | % | 83 | % | |||||||||||||||
Research and development | 119,281 | (38,670 | ) | — | — | 80,611 | |||||||||||||
Sales and marketing | 266,175 | (84,698 | ) | — | — | 181,477 | |||||||||||||
General and administrative | 161,983 | (80,425 | ) | — | (21,619 | ) | 59,939 | ||||||||||||
Amortization of other intangibles | 40,280 | — | (40,280 | ) | — | — | |||||||||||||
Restructuring and other | 1,092 | — | — | (1,092 | ) | — | |||||||||||||
Operating (loss) income | (171,939 | ) | 222,478 | 56,729 | 22,711 | 129,979 | |||||||||||||
Operating margin | (32 | )% | 24 | % | |||||||||||||||
Year Ended March 31, 2019 | |||||||||||||||||||
GAAP | Share-based compensation | Amortization of other intangibles | Restructuring & other | Non-GAAP | |||||||||||||||
Non-GAAP operating income: | |||||||||||||||||||
Cost of revenue | $ | 106,801 | $ | (5,777 | ) | $ | (18,338 | ) | $ | — | $ | 82,686 | |||||||
Gross profit | 324,165 | 5,777 | 18,338 | — | 348,280 | ||||||||||||||
Gross margin | 75 | % | 81 | % | |||||||||||||||
Research and development | 76,759 | (12,566 | ) | — | — | 64,193 | |||||||||||||
Sales and marketing | 178,886 | (24,673 | ) | — | — | 154,213 | |||||||||||||
General and administrative | 91,778 | (28,135 | ) | — | (12,543 | ) | 51,100 | ||||||||||||
Amortization of other intangibles | 47,686 | — | (47,686 | ) | — | — | |||||||||||||
Restructuring and other | 1,763 | — | — | (1,763 | ) | — | |||||||||||||
Operating (loss) income | (72,707 | ) | 71,151 | 66,024 | 14,306 | 78,774 | |||||||||||||
Operating margin | (17 | )% | 18 | % | |||||||||||||||
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DYNATRACE, INC.
GAAP to Non-GAAP Reconciliations
(Unaudited - In thousands, except per share amounts)
Year Ended March 31, | |||||||
2020 | 2019 | ||||||
Non-GAAP net income: | |||||||
Net loss | $ | (418,024 | ) | $ | (116,194 | ) | |
Income tax expense (benefit) | 199,491 | (23,717 | ) | ||||
Cash paid for tax | (266,708 | ) | (5,928 | ) | |||
Tax associated with reorganization | 255,800 | — | |||||
Related party tax | 3,536 | — | |||||
Interest expense, net | 45,397 | 69,845 | |||||
Cash paid for interest | (39,568 | ) | (40,969 | ) | |||
Share-based compensation | 222,478 | 71,151 | |||||
Amortization of other intangibles | 40,280 | 47,686 | |||||
Amortization of acquired technology | 16,449 | 18,338 | |||||
Transaction and sponsor related costs | 21,619 | 12,543 | |||||
Restructuring and other | 1,092 | 1,763 | |||||
Loss (gain) on currency translation | 1,197 | (2,641 | ) | ||||
Non-GAAP net income | $ | 83,039 | $ | 31,877 | |||
Share count: | |||||||
Weighted-average shares outstanding - basic | 264,933 | 235,939 | |||||
Weighted-average shares outstanding - diluted | 264,933 | 235,939 | |||||
Shares used in non-GAAP per share calculations: | |||||||
Weighted-average shares outstanding - basic | 264,933 | 235,939 | |||||
Weighted-average shares outstanding - diluted | 269,271 | 237,085 | |||||
Net income (loss) per share: | |||||||
Net loss per share - basic | $ | (1.58 | ) | $ | (0.49 | ) | |
Net loss per share - diluted | $ | (1.58 | ) | $ | (0.49 | ) | |
Non-GAAP net income per share - basic | $ | 0.31 | $ | 0.14 | |||
Non-GAAP net income per share - diluted | $ | 0.31 | $ | 0.13 | |||
13
DYNATRACE, INC.
GAAP to Non-GAAP Reconciliations
(Unaudited - In thousands)
Year Ended March 31, | |||||||
2020 | 2019 | ||||||
Adjusted EBITDA: | |||||||
Net loss | $ | (418,024 | ) | $ | (116,194 | ) | |
Income tax expense (benefit) | 199,491 | (23,717 | ) | ||||
Interest expense, net | 45,397 | 69,845 | |||||
Amortization | 58,457 | 72,792 | |||||
Depreciation | 7,864 | 7,319 | |||||
Restructuring and other | 1,092 | 1,763 | |||||
Transaction and sponsor related costs | 21,619 | 12,543 | |||||
Loss (gain) on currency translation | 1,197 | (2,641 | ) | ||||
Share-based compensation | 222,478 | 71,151 | |||||
Adjusted EBITDA | $ | 139,571 | $ | 92,861 | |||
Year Ended March 31, | |||||||
2020 | 2019 | ||||||
Unlevered Free Cash Flow ("uFCF") (After tax adjustment): | |||||||
Net cash (used in) provided by operating activities | $ | (142,455 | ) | $ | 147,141 | ||
Cash paid for interest expense | 39,568 | 40,969 | |||||
Restructuring and other | 1,092 | 1,763 | |||||
Purchase of property, plant, and equipment | (19,721 | ) | (7,377 | ) | |||
Transaction and sponsor related costs | 21,619 | 12,543 | |||||
Tax associated with reorganization | 255,800 | — | |||||
Related party tax | 3,536 | — | |||||
Total uFCF | 159,439 | 195,039 | |||||
Interest tax adjustment | (9,892 | ) | (10,242 | ) | |||
uFCF (After tax adjustment) | $ | 149,547 | $ | 184,797 | |||
March 31, 2020 | |||
Adjusted EBITDA/Net Debt Leverage Ratio: | |||
Long-term debt | $ | 509,985 | |
Cash | 213,170 | ||
Net debt | 296,815 | ||
TTM Adjusted EBITDA | $ | 139,571 | |
Leverage Ratio | 2.1 | x | |
14
Contacts
Marc P. Griffin
646-277-1290
Michael Bowen
203-682-8299
Media Relations
Jack Murphy
646-677-1834
Mike Maciag
Dynatrace
650-279-3655
15