Posted on Friday, Oct 8th 2021
global application performance monitoring (APM) market is expected to grow at 11% CAGR to reach $15.4 billion by 2028. Dynatrace (NYSE: DT), a leading player in the market, is looking to expand its presence in the market through acquisitions. Dynatrace’s Financials
For the recently reported first quarter, Dynatrace’s revenues grew 29% to $210 million, ahead of the Street’s forecast of $203.46 million. Subscription and services revenue grew 30% to $197 million. Non GAAP EPS of $0.16 was also ahead of the Street’s forecast of $0.15 for the quarter. Among key metrics, Annual Recurring Revenue (ARR) rose 32% to $823.
Dynatrace expects to end the second quarter with revenues of $219-$221 million and an adjusted income of $0.15-$0.16 per share. The market was looking for revenues of $220.61 million and an EPS of $0.16 for the quarter. Dynatrace expects to end the year with revenues of $902-$914 million and an EPS of $0.60-$0.63. The market expects revenues of $910.89 for the year and an EPS of $0.63.
Recently, Dynatrace announced the acquisition of Estonia-based Spectx, a high-speed parsing and query analytics player. Founded in 2015 by Jüri Shamov-Liiver, Mihhail Meshkov, and Renee Trisberg, SpectX is a powerful browser-based analytics platform that makes it easy to customize for log analysis, incident analytics, ad hoc data analysis, data discovery, and data processing automation. The acquisition will enable the acceleration of the convergence of observability and security for modern, hybrid, multi-cloud environments. It will also allow Dynatrace to advance its Software Intelligence Platform’s observability and application security analytics capabilities.
Dynatrace believes that SpectX’s advanced analytics solution will fit seamlessly into their product roadmap, and its experienced team will help Dynatrace extend its ability to accelerate digital innovation globally. According to projections from
Statista, 79 zettabytes of data will be created this year. That is twice the amount of data that was produced two years ago. Organizations need a reliable combination of AI-powered analytics and advanced automation to analyze this data in real-time, and to ensure the performance and security of clouds and the applications that run on them. The SpectX acquisition is aimed at addressing this imminent requirement. Terms of the acquisition or SpectX’s financials prior to the acquisition were not disclosed.
Dynatrace’s offerings continue to get recognition in the industry. The recent Gartner magic quadrant on the APM market ranked it as the leader for the 11th consecutive time. Gartner recognized Dynatrace for its multi-cloud observability capabilities that span applications, infrastructure, user experience, AI Ops, automation, and application security on a single solution. The industry is rife with competition from players like Cisco’s AppDynamics, New Relic, and Datadog which have all been recognized for their offerings of full stack innovation that are helping organizations with their digital journeys.
Dynatrace’s stock is trading at $72.80 with a market capitalization of $20.24 billion. It had climbed to a peak of $74.34 in September. It was trading at $33.83 in October last year.
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 research of product-market fit, channel execution, and other factors. My primary interest is in product strategy. While this may have bearing on stock movements, my writings tend to focus on long-term implications. The information presented is illustrative and educational, but should not be regarded as a complete analysis nor recommendation to buy or sell the securities mentioned herein. I am not a registered investment adviser and I am not receiving compensation for this article. This segment is a part in the series : Cloud Stocks . Smartsheet Acquiring Bootstrapped Startups to Drive Growth . Bootstrapped Unicorn Atlassian is Acquiring Capital Efficient Startups . Netflix Price Hike Ruffles Competition . How Will Carbon Black Differentiate? . 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