Dynatrace Beats Q2 2027 Earnings but Lowers EPS Guidance, Shares Dive

DT reported fiscal second-quarter 2027 results before the market opened on Tuesday, Nov. 3, with non-GAAP EPS of $0.54 against a $0.49 consensus and revenue of $579.9 million, up 17%, versus about $568 million expected. GAAP diluted EPS was $0.23, per the company's release. Shares fell about 13% in early trading, Investing.com reported, while a Seeking Alpha headline put the drop at 15%.

The guidance cut is to non-GAAP EPS only: fiscal 2027 guidance is now $1.88 to $1.90, down from $1.97 to $1.99. The company said its guidance includes about 175 basis points of Arize dilution to non-GAAP operating margin and about 200 basis points of ARR growth accretion. Arize closed Oct. 1, after the quarter ended. The same release raised fiscal 2027 ARR guidance to $2,393 million to $2,413 million and revenue guidance to $2,330 million to $2,340 million, while the diluted share count guide rose to 306 million to 308 million.

Not everything was strong. ARR was $2.21 billion, up 16% in constant currency, but net new ARR of $70 million was flat year over year, with management saying large enterprise deals slipped into the second half. Q3 guidance calls for non-GAAP EPS of $0.44 to $0.45 and a 26% non-GAAP operating margin, versus 32% in Q2. 24/7 Wall St noted that topping expectations on both lines did not stop the selling, and none of the sources isolates a single cause.

Next checkpoints are the Q3 report, including whether the slipped deals close, and Investor Day on Feb. 16, 2027.