How Dynatrace’s (DT) Billings Growth and Profitability Are Shaping Its Investment Story

• Recent news highlights Dynatrace’s strong demand, as the company achieved average billings growth of 18.9% over the past year, maintained high gross margins, and generated free cash flow profitability, supporting further investments and investor rewards.
• An interesting aspect is that these robust financial metrics enable Dynatrace to pursue new opportunities for innovation and business expansion, which can reinforce long-term value creation.
• We'll look at how Dynatrace's billings growth and profitability may influence its investment narrative going forward.

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Dynatrace Investment Narrative Recap

To own Dynatrace stock, you need to believe that the company’s competitive edge in AI-driven observability and platform innovation can sustain its growth in the face of evolving industry needs. The recent billings strength and rising gross margins reinforce investor confidence in Dynatrace’s ability to invest in innovation, supporting the biggest near-term catalyst, continued enterprise account expansion, yet they do not materially reduce core risks like competition and customer deal concentration.

A relevant recent announcement was Dynatrace’s August 6, 2025 update, which increased full-year revenue guidance and highlighted continued buybacks. This underscores ongoing momentum behind customer adoption and signals management’s confidence in expanding the company’s platform footprint, directly connecting to the catalysts around large enterprise wins and sustained platform investment.

In contrast, investors should still be mindful of how greater reliance on fewer, higher-value customer deals could introduce significant earnings swings if…

Read the full narrative on Dynatrace (it's free!)

Dynatrace's outlook envisions $2.7 billion in revenue and $521.4 million in earnings by 2028. This implies a 15.2% annual revenue growth, with earnings rising by $28.4 million from the current $493.0 million.

Uncover how Dynatrace's forecasts yield a $63.09 fair value, a 32% upside to its current price.

Exploring Other Perspectives

Four voices in the Simply Wall St Community estimate Dynatrace’s fair value between US$50.62 and US$71.79. As you weigh these varied outlooks, consider how billings growth, high gross margins, and concentrated enterprise focus could shape Dynatrace’s long-term performance.

Explore 4 other fair value estimates on Dynatrace - why the stock might be worth as much as 50% more than the current price!

Build Your Own Dynatrace Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Dynatrace research is our analysis highlighting 4 key rewards that could impact your investment decision.
• Our free Dynatrace research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Dynatrace's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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