Dynatrace Inc at UBS Global Technology and AI Conference Summary

The following is excerpted from the question-and-answer section of the transcript.

Question: Karl Keirstead - UBS AG - Analyst : <_ALACRA_META_ABSTRACT>Thank you so much. So let's start off with some good news because I think in this last quarter, you guys reported some numbers and some comments that were quite constructive. Obviously, 16%, 17% revs ARR growth, 20% CRPO growth. Your net new ARR of $70 million was up nicely year over year. So obviously, something is feeling good in the business to give you these kind of numbers. Maybe you could put your finger on one or two things that went right during this most recent quarter.

Question: Karl Keirstead - UBS AG - Analyst : Let's talk about some of those.

Question: Karl Keirstead - UBS AG - Analyst : And Rick, let's hit on that consumption strength because as you talked about on the call that's one of the things that's driving early expansion, so what is driving that consumption strength in the quarter and hopefully since.

Question: Karl Keirstead - UBS AG - Analyst : Okay, so let's hit on that log performance a little bit more. That was one of the highlights from this call that struck my attention. Similar question. What's behind that? To what extent is that incumbent log management companies like Splunk giving share to rivals like Dynatrace. I'm sure it's partly the investment that you've made in that log management product such that it's just getting better and better, more customer traction. Can you unpack that? And how big could that be?

Question: Karl Keirstead - UBS AG - Analyst : So, Jim, Maybe a question for you. You and Rick have talked about a lot of things that are going right in the business. Yet, how do we bridge that goodness with the guide for the second half, which you guided to a deceleration? Rick, you used the term derisked. Is it just conservatism, Jim? Or are there any factors that informed that second half guidance?

Question: Karl Keirstead - UBS AG - Analyst : Okay. Jim, on the call or at least the call back, you also mentioned that there were some year over year compare headwinds this quarter or next. Can you elaborate on what those were? Is there any way to quantify like on an adjusted basis what growth might have been?

Question: Karl Keirstead - UBS AG - Analyst : Okay, that's helpful. Let's switch subjects a little bit to the competitive environment. And I think one of the issues in the last couple of weeks that this group has been thinking through, there's always consolidation in your space, mostly to private equity, not so much strategics. But Palo Alto acquired Chronosphere, a much smaller player than you guys. But obviously, that created a little bit of concern in the Street that weighed at least temporarily on your shares as well as Datadog. Rick, what did you think of that acquisition? What's your perspective as CEO?

Question: Karl Keirstead - UBS AG - Analyst : Can we talk a little bit about some of your own efforts to step into the security space, not so much Palo Alto going the other way. But what has Dynatrace done to add security features to your already world-class observability platform? LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 02, 2025 / 8:35PM, DT.N - Dynatrace Inc at UBS Global Technology and AI Conference

Question: Karl Keirstead - UBS AG - Analyst : Okay. That makes sense. Rick, let's also talk about some of the ways that Dynatrace differentiates from some of these rivals, many of which sort of as you describe Chronosphere are very cloud-native, AI native. They don't have a presence with Fortune 200s where a lot of their infrastructure is on-prem. So can you elaborate a little bit on the on-prem cloud mix, how that perhaps gives you an edge and which way the wind is blowing in terms of that mix?

Question: Karl Keirstead - UBS AG - Analyst : Okay. I think another differentiator would be on the pricing front, where I think Dynatrace has been a little bit further along in being flexible on your pricing with DPS to customers, whereas some of the other large observability vendors are -- have a reputation for being quite expensive. So to what extent has that let's call it, more flexible pricing structure giving you a

Question: Karl Keirstead - UBS AG - Analyst : Okay. Let's talk a little bit about AI. There's a couple of aspects to it that are interesting. I think one topic that our team is thinking through, and I'm sure investors are, is when will the AI phenomenon be a real pull-through at the observability layer? I think I'll share the consensus and then Rick you can rebut it if you don't agree, that most of the AI applications inside large enterprises are today, still early stage, somewhat lightweight. They're chatbot-based, they're coding tools. They're not robust enough, and they're not really at scale in production to really need a lot of monitoring pull-through. So you haven't seen it yet. But you will, once the likes of UBS start building more robust enterprise-grade apps, then you'll see the pull-through. Does that feel right to you? Or are there ways in which you're actually seeing a benefit even today?

Question: Karl Keirstead - UBS AG - Analyst : Can you talk about your outlook for Dynatrace to penetrate that AI native community? I think you called out some successes on this last call. But can you elaborate and describe to the audience exactly what you're doing to become -- essentially gain mind share in that cohort?

Question: Karl Keirstead - UBS AG - Analyst : Yes. I think that gets at another question I had about this, and that is all the large successful incumbents like Dynatrace are going to have to worry about essentially, in your case, an AI-native observability player coming at you, but you're not going to sit still and wait for that day to happen. Your R&D team, I'm sure, in a lot of interesting ways, are AI enabling your core product such that you can retain that incumbency. Can you talk a little bit, Rick, about ways in which Dynatrace is getting in front of that risk and essentially innovating to make

Question: Karl Keirstead - UBS AG - Analyst : Okay. Let's finish with maybe a quick thought on all the go-to-market changes that the two of you have spent a number of earnings calls discussing. Rather than ask you to go back and describe all that, maybe I'll phrase it a different way, and that is you've now had a year to two years. So looking back, what in your judge -- give yourself a report card on those go-to-market changes. What do you think went really well? And where do you think you've still got a little bit of work to do?

Question: Karl Keirstead - UBS AG - Analyst : Yes, got it. Okay. Any questions from the audience? We've got about 1.5 minutes. We successfully ran through everything. Gentlemen, thanks so much for coming to the event. You've helped to make it even better than it was last year. So I'm super appreciative. Thank you --

Question: Karl Keirstead - UBS AG - Analyst : Okay. Thank you all.