Dynatrace (DT +1.12%) stock tumbled in Wednesday's trading. The artificial intelligence (AI) analytics company's share price fell 11.4% in the session. Shares had been off as much as 16.4% but regained some ground.
Before the market opened this morning, Dynatrace published results for the fourth quarter of its 2026 fiscal year -- which ended March 31. The company actually posted sales and earnings that topped Wall Street's forecasts, but forward guidance underwhelmed the market.
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Fiscal Q4 beats weren't enough to lift Dynatrace
In fiscal Q4, Dynatrace posted non-GAAP (adjusted) earnings of $0.41 per share on sales of $531.72 million. Adjusted earnings per share beat the average analyst estimate by $0.02, and revenue topped the consensus target by roughly $10.6 million.
Subscription revenue rose roughly 19% year over year to hit $506 million, and overall revenue was up roughly 19% compared to the prior-year quarter. Despite encouraging sales momentum, elements of management's commentary on the quarter and forward guidance caused investors to sell out of the stock.
NYSE: DT
Key Data Points
What's next for Dynatrace?
Dynatrace is guiding for sales to come in between $547 million and $551 million in the current quarter, which actually came in significantly ahead of the average analyst estimate's call for sales of $548.2 million. Meanwhile, adjusted earnings are projected to be between $0.44 and $0.45 -- with that midpoint of that range falling slightly short of the average analyst estimate's call for adjusted per-share earnings of $0.45.
Dynatrace is guiding for annual recurring revenue to be between $2.3 billion and $2.4 billion this fiscal year -- up from $2.05 billion last year. At the midpoint of the guidance range, that would mean delivering annual growth of roughly 14% -- down from growth of 18% last year. The company's fiscal Q4 results and guidance weren't terrible, but they weren't enough to assuage investor concerns about competitive pressures.
