Dynatrace Investor Presentation Q2 FY21 FINAL.pdf

Investor Presentation &
Business Overview

Confidential 2
© 2020 Dynatrace, Inc. All Rights Reserved
This presentation includes certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding management’s
expectations of future financial and operational performance and operational expenditures, expected growth, and business outlook, including our financial guidance for the third quarter and full
year of fiscal 2021, statements regarding the impact of the COVID-19 pandemic and related economic conditions on our business and results of operations; and statements regarding the size of our
market and our positioning for capturing a larger share of our market. These forward-looking statements include, but are not limited to, plans, objectives, expectations and intentions and other
statements contained in this press release that are not historical facts and statements identified by words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates” or
words of similar meaning. These forward-looking statements reflect our current views about our plans, intentions, expectations, strategies and prospects, which are based on the information
currently available to us and on assumptions we have made. Although we believe that our plans, intentions, expectations, strategies and prospects as reflected in or suggested by those forward-
looking statements are reasonable, we can give no assurance that the plans, intentions, expectations or strategies will be attained or achieved. Furthermore, actual results may differ materially from
those described in the forward-looking statements and will be affected by a variety of risks and factors that are beyond our control including, without limitation, the effect of the COVID-19 pandemic
on our business operations and demand for our products as well as its impact on general economic and financial market conditions; our ability to maintain our subscription revenue growth rates in
future periods, our ability to service our substantial level of indebtedness, market adoption of software intelligence solutions for application performance monitoring, digital experience monitoring
and infrastructure monitoring, continued spending on and demand for software intelligence solutions, our ability to maintain and acquire new customers, our ability to differentiate our platform
from competing products and technologies; our ability to successfully recruit and retain highly-qualified personnel; the price volatility of our common stock, and other risks set forth under the
caption “Risk Factors” in our most recently filed annual report on Form 10-K and quarterly reports on Form 10-Q, and our other SEC filings. We assume no obligation to update any forward-looking
statements contained in this document as a result of new information, future events or otherwise.
This presentation also contains estimates and other statistical data made by independent parties and by the Company relating to market size and growth and other data about the Company's
industry. This data involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. Neither the Company nor any other person makes any
representation as to the accuracy or completeness of such data or undertakes any obligation to update such data after the date of this presentation. In addition, projections, assumptions and
estimates of the Company's future performance and the future performance of the markets in which the Company operates are necessarily subject to a high degree of uncertainty and risk. By
attending or receiving this presentation you acknowledge that you will be solely responsible for your own assessment of the market and the Company's market position and that you will conduct
your own analysis and be solely responsible for forming your own view of the potential future performance of the Company's business.
This presentation includes non-GAAP financial measures which have certain limitations and should not be considered in isolation, or as alternatives to or substitutes for, financial measures
determined in accordance with generally accepted accounting principles in the United States (“GAAP”). The non-GAAP measures as defined by the Company may not be comparable to similar non-
GAAP measures presented by other companies. The Company's presentation of such measures, which may include adjustments to exclude unusual or non-recurring items, should not be construed
as an inference that its future results will be unaffected by these or other unusual or non-recurring items. A reconciliation of these non-GAAP financial measures to the most directly comparable
GAAP financial measures is included in the Appendix to these slides.
Legal Disclaimer

Confidential 3
Leading Software Intelligence Platform
Automatic & Intelligent Observability at Scale
Observability
Intelligence
Automation
Simplify cloud complexity
Accelerate digital transformation
Innovate faster
Collaborate efficiently

Confidential 4
Macro Trends provide long term tailwinds for growth
Trend 1:
Digital Transformation
is Accelerating
Trend 2:
Dynamic Clouds are the
Platform of Choice
89%
Digital transformation has
accelerated in the last 12
months
86%
Organizations are using cloud-
native technologies and
platforms such as Kubernetes,
microservices and containers

Confidential 5
A Large Available Market growing rapidly
$32B+ TAM*
Application
Performance
Infrastructure & Log Monitoring
AIops
User
Experience
Networks
Business
Analytics
*$32B+ Bottom-up TAM based on the total number of global enterprises with greater than $1 billion in annual revenue, as identified by S&P Capital IQ in September 2020. For each respective band
of customers, we multiply the average annualized Dynatrace bookings per customer of the top 5% of Dynatrace customers in the band (which we believe to be representative of broader
implementation of our solutions), for the 12 months ended September 30, 2020, by the number of customers in the size band.

Confidential 6
Focus on Enterprise Accounts – Global 15,000
$1B+
Technology / Services
Travel / Transportation
Telecommunications / Media Manufacturing
Insurance / Financial Services Retail / Commerce

Confidential 7
The Dynatrace Software Intelligence Platform

Confidential 8

Confidential 9
Intelligent Infrastructure Monitoring

Confidential 10
Intelligent Digital Experience & Digital Business Analytics

Confidential 11
Single Platform –
Multiple Consumption-based Monetization Opportunities

Confidential 12
A Fundamentally Different Approach

Confidential 13
Unified Platform with purpose built use-cases

Confidential 14

Confidential 15
Our Approach Creates Strong and Defensible Moats

Confidential 16
Insurance provider redefines customer experience with Dynatrace
“Dynatrace has been transformative for us in our
customer experience.” - Chief Digital Officer
•
•
•
Confidential 16

Confidential 17
Equipment rental company keeps people moving across
21,000 locations with Dynatrace
Confidential 17
“Dynatrace was the best solution we’ve ever purchased.”
- Director of Software Development

Confidential 18
Global telco manages sustained peak demand with Dynatrace
•
•
•
Confidential 18
“With Dynatrace, out-of-the-box, it felt like we had a thousand
analysts working on our behalf.” - Head of Digital Service
Management

Confidential 19
Industry Analysts continue to recognize Dynatrace as the Leader
Leader ISG Provider Lens
Cloud-Native Observability
Leader Gartner
2020 MQ for APM
Leader G2
AI-Powered Observability
Highest score in 5 out of 6
Gartner Critical Capabilities
Dynatrace
Leader Forrester Wave
Artificial Intelligence for IT Operations (AIOps)

Confidential 20
Uniquely Positioned For Dynamic Multiclouds

Confidential 21
An Efficient Enterprise ‘Land & Expand’ Model
Scalable Demand Gen Proven Land
Direct Sales Team Rapid Expand
Global 15k
> $1B1
3+ Modules
~$400K ARR per
customer
Initial Land
~$100K Dynatrace
ARR2
120%+
Net expansion rate
~$230K ARR per
customer
Free Trial
1) 15,000 global enterprise accounts which generally have revenues in excess of $1B.
2) Initial average Dynatrace ARR for new customers added during the twelve months ended September 30, 2020.
Platform Cross-sell

Confidential 23
© 2020 Dynatrace, Inc. All Rights Reserved 23
4.7

Confidential 25
Compelling Financial Profile

Confidential 26
Dynatrace Platform Driving ARR Growth

Confidential 27
Total ARR Growth
Q2-21 +33% or $158M YoY @ CC1
•
•
•
•
•
•
•

Confidential 28
Strong Dynatrace
Net Expansion Rate1
120%+
Dynatrace
Platform Customers1
2,594
Initial ARR
Land2
$104K
Avg
ARR/Customer
$234K
ARR Growth Drivers – New Logos & Expansion
541 New logos TTM Last 10 Quarters Up 14% YoY
Up 5% YoY

Confidential 29
Revenue Growth
Quarterly Revenue ($M)

Confidential 30
12% 11% 11%
36% 33% 31%
15% 15% 14%
63%
59%
55%
FY19 FY20 Q2-21 TTM
Non-GAAP OPEX as % of Revenue1
Efficient model with expanding non-GAAP Gross Margins1
Non-GAAP Gross Profit Margin
2

Confidential 31
Proven Profitable Business Model
Non-GAAP Operating Income and Unlevered Free Cash Flow (uFCF)1,2 ($M)
$79
$131
$178
$185
$150 $154
FY19 FY20 Q2-21 TTM
3

Confidential 32
($ In Millions) Q2-21
NetDebt2,3 $233
TTM Adj. EBITDA3
$188
Net Debt / TTM Adj.
EBITDA Ratio2 1.2x
Increased cash balance
to $248M up 17% YoY
Business expected to
naturally de-lever as cash
is generated
Q1-20 PF Q2-20 Q3-20 Q4-20 Q1-21 Q2-21
Proven ability to
generate cash to
reduce debt
1
Cash Allocation
Shifting focus from debt repayment to building a cash balance

Confidential 33
Building Blocks for Continued Success

Definitions & Non-GAAP
Reconciliations

Confidential 35
Appendix - Definitions
1. Annual Recurring Revenue “ARR” is defined as the daily revenue of all subscription agreements that are
actively generating revenue as of the last day of the reporting period multiplied by 365. We exclude from our
calculation of Total ARR any revenues derived from month-to-month agreements and/or product usage
overage billings.
2. Subscription Revenue is defined as Software-as-a-service (“SaaS”) agreements, Dynatrace® term-based
licenses, for which revenue is recognized ratably over the contract term, Dynatrace® perpetual licenses, which
are recognized ratably over the term of the expected optional maintenance renewals, which is generally three
years, and maintenance and support agreements.
3. Adjusted EBITDA/Net Debt Leverage Ratio is defined as our Net Debt divided by our trailing twelve
month Adjusted EBITDA. Net Debt is defined as total principal less cash and cash equivalents.
4. Unlevered Free Cash Flow is defined as net cash provided by (used in) operating activities and adjusted to
exclude cash paid for interest (net of tax), non-recurring restructuring and acquisition related costs, along
with costs associated with one-time offerings and filings, less cash used in investing activities for acquisition
of property and equipment. However, given our debt obligations, unlevered free cash flow does not represent
residual cash flow available for discretionary expenses.

Confidential 36
ARR and Revenue Growth at Constant Currency
Three Months Ended

Confidential 37

Confidential 38
Adjusted EBITDA Reconciliation

Confidential 39
uFCF Reconciliation

Dynatrace Investor Presentation Q2 FY21 FINAL.pdf

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