Dynatrace (DT) delivered a "strong start" to its fiscal year as new-customer wins, continued logs success and rising platform consumption supported better-than-expected Q1 results, RBC Capital Markets said in a report emailed Thursday.
Annual recurring revenue grew 17% on a constant-currency basis, above consensus expectations, while organic constant-currency net new annual recurring revenue increased 41%, the firm noted. New logos contributed $35 million of net new ARR, with average land size rising to $285,000, the report said.
More than 1,000 customers are using the platform to monitor "AI in production," while over 800 are using its agentic AI capabilities, the firm noted. Consumption among AI customers is about 1.5 times higher than among customers not using AI-related products, according to the report.
Dynatrace maintained its fiscal 2027 constant-currency ARR guidance, but the firm said momentum in new customers, logs, AI adoption and sales execution increased "confidence" in a potential acceleration later in the year.
RBC maintained an outperform rating on Dynatrace and raised the price target to $59 from $50.
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