Dynatrace stock soared on Wednesday after the software maker reported fiscal third-quarter earnings that beat estimates. A key measure of revenue growth also beat Wall Street forecasts and countered the number of views for slowing cloud computing growth.
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Based in Waltham-Massachusetts Dynatrace (DT) reported earnings before the market opened. In the December quarter, Dynatrace earnings were adjusted by 25 cents per share, up 38% from a year earlier. Revenue climbed 24% to $97.5 million, the company said.
Analysts had estimated a profit of 21 cents on revenue of $285 million. Additionally, annual recurring revenue, or ARR, rose 25% to $1.163 billion, beating analyst estimates of $1.115 billion. The growth of ARR is tied to subscription services.
For the current quarter ending March, Dynatrace forecast revenue in the range of $304 million to $307 million versus estimates of $292 million.
Dynatrace stock: cloud computing growth slowing?
Shares of Dynatrace jumped 13.5% to 43.60 in early trading in the stock market today. Dynatrace stock had been flat in 2023. Shares were down nearly 32% from a year ago as of Tuesday’s market close.
The company’s computer network monitoring tools measure and analyze the performance of business-critical applications. Many of its customers use cloud computing platforms, such as Amazon Web Services, which is part of Amazon.co.uk (AMZN). Microsoft (MSFT) warned last week of slowing growth in its Azure cloud business.
Heading into the earnings report, Dynatrace stock had a relative strength rating of 39 out of the best possible 99, according to IBD Stock Check-up.
Dynatrace competes in the application performance monitoring market vs. Cisco Systems (CSCO), Datadog (DDOG), New relic (NEWR) and others.
Dynatrace stock went public on August 1, 2019, backed by private equity firm Thoma Bravo. Additionally, Dynatrace’s IPO raised $570 million.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.
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