Cloud Stocks: Dynatrace Competing With Rivals By Simplifying DevOps

According to a recently published report, the global Application Performance Management (APM) market is projected to grow at 7% CAGR to reach $6.12 billion by 2026 from $3.8 billion in 2019. Dynatrace (NYSE: DT) is a leading player in the market that continues to outpace market expectations.

Dynatrace’s Financials

For the recently reported third quarter, Dynatrace’s revenues grew 28% to $182.9 million, ahead of the Street’s forecast of $172.36 million. Subscription and services revenue grew 33% to $170.3 million. License revenues fell 93.4% to $257 million. EPS grew from $0.10 a year ago to $0.17 and was ahead of the Street’s forecast of $0.13 for the quarter.

Among key metrics, Annual Recurring Revenue (ARR) rose 35% to $722 million, ahead of the market’s forecast of $514.5 million.

Dynatrace expects to end the fourth quarter with revenues of $190-$192 million and an adjusted income of $0.13-$0.14 per share. The market was looking for revenues of $191.81 million for the quarter. Dynatrace expects to end the year with revenues of $697-$699 million with an EPS of $0.61-$0.62.

Dynatrace’s Product Growth

During the quarter, Dynatrace announced the expansion of its collaboration with Microsoft. The expanded agreement will allow Dynatrace’s observability platform to be available for purchase through Microsoft’s marketplace. Microsoft customers will also be able to implement Dynatrace’s automatic and intelligent observability for both their Microsoft Azure and hybrid-cloud environments.

Additionally, Dynatrace announced the launch of Software Intelligence Hub. The Hub provides customers with the ability to leverage out-of-the-box integrations as well as create their own custom integrations without the need for coding. It will enable teams to extend Dynatrace’s automation and AI-assistance across environments in addition to simplifying operations.

Last month, Dynatrace also announced the launch of a Cloud Automation Module to its Software Intelligence Platform. This new Module leverages the automation and intelligence of the Dynatrace Platform to manage the application development lifecycle process. The new module automates code tests and quality checks in line with an organization’s service level objectives. Powered by a fully-supported version of Keptn, an open-source project, the enhancement will accelerate DevOps by enabling Site Reliability Engineering teams to develop and manage cloud-native applications.

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Disclosure: All investors should make their own assessments based on their own research, informed interpretations and risk appetite. This article expresses my own opinions based on my own ...

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