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How DT rewrote its risk factors

10-K ITEM 1A · FY2025 → FY2026

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Our annual revenue grew 19%, 19%, and 23% in the years ended March 31, 2026, 2025, and 2024, r espectively, compared to the prior year.
We believe our ability to continue to increase our revenue depends on several factors, including, but not limited to: • our ability to attract new customers and retain and increase sales to existing customers; • our ability to continue to expand customer adoption and usage of our Dynatrace platform; • our ability to develop our existing platform, introduce new solutions, enhance and improve existing solutions on our platform, and keep pace with technological developments (including rapid advances in AI and other emerging technologies); • continued growth of cloud-based services and solutions; • our ability to continue to develop offerings and solutions that our customers prefer over those of our competitors; • our ability to hire and retain sufficient numbers of sales and marketing, research and development, and general and administrative personnel; and • our ability to expand into new geographies and markets, including the application security and log management markets, and expand our global operations.
Overall demand and market adoption of the solutions that we offer may not grow as we expect, which may harm our business and prospects.
We believe our future success will depend in large part on the growth, if any, in the overall demand and market adoption for observability and related solutions that utilize analytics and AI at their core, particularly the demand for enterprise-wide solutions and our ability to provide solutions that meet such ever-evolving needs.
We currently target the markets for AI observability, log management and analytics, modern cloud observability, infrastructure observability, application observability, digital experience, application security, software delivery, developer experience, and business analytics.
Expansion in our addressable markets depend on a number of factors, including the continued and growing use and reliance of enterprises on software applications to manage and drive critical business functions and customer interactions, increased cloud computing adoption and use, increased use of microservices and containers, and the continued proliferation of mobile applications, large data sets, and the Internet of Things.
If our solutions do not achieve widespread adoption, we are not able to develop new or innovative solutions that meet customer needs, or there is a reduction in demand for observability and related solutions generally, it could result in reduced customer purchases, reduced renewal rates, and decreased revenue, any of which will adversely affect our business, operating results, and financial condition.
The markets in which we operate are highly competitive, which may adversely affect our ability to add new customers, retain existing customers, and grow our business.
We have incorporated AI into our platform and AI is changing the competitive dynamics of our industry.
Our competitors or other third parties may incorporate AI into their products more quickly or more successfully than us, may invest more in AI development than us, or have access to more advanced AI models or autonomous agents with greater capabilities or broader functionality, which could reduce demand for our platform and adversely affect our results of operations.
We may also face greater competition from non-specialist solutions relying on generic LLMs, generative AI, and general-purpose agents to address a broad range of business needs.
As part of our sales efforts, we must demonstrate to existing and prospective customers that our offerings are preferable to other solutions available to their organizations, including generic LLMs, software created using natural language prompts and generative AI (referred to as vibe coding) and other emerging technologies.
If we are unable to continue developing and integrating advanced AI functionality into the Dynatrace platform in a way that meets customer expectations or competitive benchmarking, our market position and growth prospects could be adversely affected.
For a description of additional risks related to AI, please see the risk below entitled, “ Our use of new and evolving technologies, including AI in our offerings and business, may present risks and challenges that can impact our business, including by posing cybersecurity, operational, and other risks to our confidential and/or proprietary information, including personal information, and as a result we may be exposed to reputational harm and liability” along with AI-related references in other risks discussed in this section.
We compete either directly or indirectly with infrastructure monitoring vendors, APM vendors, log management vendors, digital experience monitoring vendors, security vendors, open source and commercial open source vendors, point solutions from public cloud providers, and IT operations management and business intelligence providers with offerings that cover some portion of the capabilities that we provide.
For example, Cisco acquired Splunk in 2024 and Palo Alto Networks acquired Chronosphere in 2026.
Many existing and potential competitors enjoy substantial competitive advantages, such as: • greater brand recognition, longer operating histories, and greater familiarity with some of our target customers; • longer-term and more extensive relationships with existing and potential customers, and access to larger customer bases, which often provide incumbency advantages; • broader global distribution and presence; • larger sales and marketing budgets and resources; • the ability to integrate or bundle competitive offerings with other products, offerings and services; • lower labor and development costs; • greater resources to make acquisitions; • larger and more mature IP portfolios; and • substantially greater financial, technical, management and other resources.
Any such in-house solutions could leverage AI and open source software, and therefore be made generally available at little or no cost.
Our future success, if any, will be based on our ability to consistently provide our customers with a compelling, AI-driven, end-to-end, near real-time view into the performance of their software applications and IT infrastructure, provide notification and prioritization of degradations and failures, perform root cause analysis of performance issues, and analyze the quality of their end users’ experiences and the resulting impact on their businesses and brands.
We plan to continue evolving our AI capabilities to drive differentiation, with a continued focus on agentic AI capabilities and functionalities that can act autonomously to make decisions and take actions without human intervention.
In addition to developing new solutions or solution enhancements using internal resources, we may license or acquire technologies from a third party, or acquire another company.
For a description of some of the risks related to potential acquisitions, please see the risk below entitled “ We may acquire other businesses, products, or technologies in the future which could require significant management attention, disrupt our business or result in operating difficulties, dilute stockholder value, and adversely affect our results of operations. ” To the extent that we are not able to continue to execute on our business model to timely and effectively develop, license, or acquire and market applications to address these challenges and attain market acceptance, our business, operating results, and financial condition will be adversely affected.
Our success in attracting new customers and expanding our relationships with existing customers depends on numerous factors, including our ability to: • offer a compelling, AI-driven, end-to-end platform that combines broad and deep observability and continuous runtime application security to support IT operations, development, security, business, and executive teams; • design and execute our sales and marketing strategy; • effectively identify, attract, onboard, train, develop, motivate, and retain new sales, marketing, professional services, and support personnel in the markets we pursue; • develop or expand relationships with technology partners, systems integrators, resellers, online marketplaces, and other partners, including strategic alliances and cloud-focused partnerships with GSIs, including Accenture, Atos, Deloitte, DXC, and Kyndryl, and hyperscalers such as AWS, GCP, Azure, and others, some of which may also compete with us; • expand into new geographies and markets, including the business intelligence and data analytics market; • deploy our platform and solutions for new customers; and • provide quality customer support and professional services.
Our customers have no obligation to renew their agreements, and our customers may decide not to renew these agreements with a similar contract period, or at the same prices and terms.
Our customer retention and expansion rates may decline or fluctuate as a result of a number of factors, including our customers’ satisfaction with our platform, the competitiveness of other software products and services, utilization rates of our platform by our customers, reductions in our customers’ spending levels, customer concerns about macroeconomic trends, our prices and pricing plans, the impact of mergers and acquisitions on our customers, leadership changes at our customers, our customer support and professional services, changes to our go-to-market strategy, user adoption of our solutions, deployment success, new product releases and changes to our product offerings.
The increasing adoption of generic LLMs and AI‑driven assistants may also impact how customers access, interpret, and derive value from Dynatrace, which could affect how we market, sell, and position our solutions.
We also have partnerships with GSIs and hyperscalers on which many of our customers depend, and through which our customers may be able to procure and deploy our solutions.
Many of our customers are also customers of hyperscalers.
In addition, the increasing adoption of generic LLMs and AI‑driven assistants may influence how customers discover, recognize, and attribute value to brands across the observability and security market segments.
Some of the important factors that may cause our operating results to fluctuate from quarter to quarter or year to year include: • fluctuations in the demand for our solutions, the timing of purchases by our customers, and the length of the sales cycles, particularly for larger purchases; • fluctuations in the rate of utilization by customers of the cloud to manage their business needs, or a slowdown in the migration of enterprise systems to the cloud; • the impact of recessionary pressures or uncertainties in the global economy, or in the economies of the countries in which we operate, on our customers’ purchasing decisions and the length of our sales cycles; • our ability to attract new customers and retain existing customers; • our ability to expand into new geographies and markets, including the application security and log management markets; • the budgeting cycles and internal purchasing priorities of our customers; • changes in go-to-market strategy, customer renewal rates, churn, and our ability to cross-sell additional solutions to our existing customers and our ability to up-sell additional quantities of previously purchased offerings to existing customers; • the seasonal buying patterns of our customers; • the payment terms and contract term length associated with our product sales and their effect on our billings and free cash flow; • changes in customer requirements or market needs; • the emergence of significant privacy, data protection, systems and application security or other threats, regulations, or requirements applicable to the use of enterprise systems or cloud-based systems that we are not prepared to meet or that require additional investment by us; • changes in the demand and growth rate of the markets for observability, application security, analytics, and AI-enabled solutions; • our ability to anticipate or respond to changes in the competitive landscape, or improvements in the functionality of competing solutions that reduce or eliminate one or more of our competitive advantages; • our ability to timely develop, introduce, and gain market acceptance for new solutions and product enhancements; • our ability to adapt and update our offerings and solutions on an ongoing and timely basis in order to maintain compatibility and efficacy with the frequently changing and expanding variety of software and systems that our offerings are designed to monitor; • our ability to maintain and expand our relationships with strategic technology partners that own, operate, and offer the major platforms on which applications operate, with which we must interoperate and remain compatible, and from which we must obtain certifications and endorsements in order to maintain credibility and momentum in the market; • our ability to control costs, including our operating expenses; • our ability to efficiently complete and integrate any acquisitions or business combinations that we may undertake in the future; • general economic, industry, and market conditions, both domestically and in our foreign markets, including regional or geopolitical conflicts, potential changes in the U.S. and foreign laws and regulations on international trade ( e.g. , export controls, import tariffs and trade agreements), or other disruptions to commerce; • the U.S. federal government cancelling, consolidating, or not awarding contracts to us or our customers or suppliers; • the emergence of new technologies or trends in the marketplace, or a change in the trends that are important to our strategy and the value of our platform in the marketplace; • foreign currency exchange rate fluctuations; • the timing of revenue recognition for our customer transactions, and the effect of the mix of subscriptions and services on the timing of revenue recognition; • extraordinary expenses, such as litigation or other dispute-related settlement payments; and • future accounting pronouncements or changes in our accounting policies.
In the last three years, we hired a new Chief People Officer, Chief Customer Officer, Chief Revenue Officer, Chief Marketing Officer, and various new sales and marketing leaders in their organizations, among other leadership changes.
Our employment agreements with members of our senior management team do not require them to remain employed with us for any specified period.
Accordingly, and despite our efforts to retain our senior management team, they could terminate their employment with us at any time, subject to any applicable notice period.
The loss of a member of senior management team could disrupt our operations and negatively impact employee morale and our culture.
Competition in our industry is intense, and often can lead to increased compensation and other personnel costs.
In addition, competition for employees with experience in our industry and with AI and machine learning can be intense, particularly in Europe, where our research and development operations are concentrated and where other technology companies compete for management and engineering talent.
In the last two years, we acquired Metis, DevCycle, and Bindplane.
Acquisitions may involve additional significant challenges, uncertainties, and risks, including, but not limited to: • challenges, difficulties, or increased costs associated with integrating new employees, systems, technologies, and business cultures; • failure of the acquisition to advance our business strategy and failure to achieve the acquisition’s anticipated benefits or synergies; • disruption of our ongoing operations, diversion of our management’s attention, and increased costs and expenses associated with pursuing acquisition opportunities; • inadequate data security, cybersecurity, and operational and IT compliance and resilience; • failure to identify, or our underestimation of, commitments, liabilities, deficiencies, and other risks associated with acquired businesses or assets; • inconsistency between the business models of our company and the acquired company, and potential exposure to new or increased regulatory oversight and uncertain or evolving legal, regulatory, and compliance requirements; • the potential loss of key management, other employees, or customers of the acquired business; • potential reputational risks that could arise from transactions with, or investments in, companies involved in new or developing businesses or markets, which may be subject to uncertain or evolving legal, regulatory, and compliance requirements; • potential impairment of goodwill or other acquisition-related intangible assets; and • the potential for acquisitions to result in dilutive issuances of our equity securities or significant additional debt.
Over our last two fiscal years, our total employee headcount as of March 31, 2026 increased approximately 18% compared to our total headcount as of March 31, 2024 and we also expanded our international employee presence.
Sales to government entities are subject to a number of challenges and risks, including constraints on the budgetary process, including changes in the policies and priorities of the particular government, such as to reform federal government processes and reduce government expenditures, continuing resolutions, adherence to government audit and certification requirements, debt ceiling disruptions, deficit-reduction legislation, and any shutdown or default of the particular government.

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Gone since FY2025

Our annual revenue grew 19%, 23%, and 25% in the years ended March 31, 2025, 2024, and 2023, r espectively, compared to the prior year.
We believe our ability to continue to increase our revenue depends on several factors, including, but not limited to: • our ability to attract new customers and retain and increase sales to existing customers; • our ability to continue to expand customer adoption and usage of our Dynatrace platform; • our ability to develop our existing platform, introduce new solutions, and enhance and improve existing solutions on our platform; • continued growth of cloud-based services and solutions; • our ability to continue to develop offerings and solutions that our customers prefer over those of our competitors; • our ability to hire and retain sufficient numbers of sales and marketing, research and development, and general and administrative personnel; and • our ability to expand into new geographies and markets, including the application security and logs markets, and expand our global operations.
Some of the important factors that may cause our operating results to fluctuate from quarter to quarter or year to year include: • fluctuations in the demand for our solutions, the timing of purchases by our customers, and the length of the sales cycles, particularly for larger purchases; • fluctuations in the rate of utilization by customers of the cloud to manage their business needs, or a slowdown in the migration of enterprise systems to the cloud; • the impact of recessionary pressures or uncertainties in the global economy, or in the economies of the countries in which we operate, on our customers’ purchasing decisions and the length of our sales cycles: • our ability to attract new customers and retain existing customers; • our ability to expand into new geographies and markets, including the application security and logs markets; • the budgeting cycles and internal purchasing priorities of our customers; • changes in go-to-market strategy, customer renewal rates, churn, and our ability to cross-sell additional solutions to our existing customers and our ability to up-sell additional quantities of previously purchased offerings to existing customers; • the seasonal buying patterns of our customers; • the payment terms and contract term length associated with our product sales and their effect on our billings and free cash flow; • changes in customer requirements or market needs; • the emergence of significant privacy, data protection, systems and application security or other threats, regulations, or requirements applicable to the use of enterprise systems or cloud-based systems that we are not prepared to meet or that require additional investment by us; • changes in the demand and growth rate of the markets for observability, application security, analytics, and AI-enabled solutions; • our ability to anticipate or respond to changes in the competitive landscape, or improvements in the functionality of competing solutions that reduce or eliminate one or more of our competitive advantages; • our ability to timely develop, introduce and gain market acceptance for new solutions and product enhancements; • our ability to adapt and update our offerings and solutions on an ongoing and timely basis in order to maintain compatibility and efficacy with the frequently changing and expanding variety of software and systems that our offerings are designed to monitor; • our ability to maintain and expand our relationships with strategic technology partners that own, operate, and offer the major platforms on which applications operate, with which we must interoperate and remain compatible, and from which we must obtain certifications and endorsements in order to maintain credibility and momentum in the market; • our ability to control costs, including our operating expenses; • our ability to efficiently complete and integrate any acquisitions or business combinations that we may undertake in the future; • general economic, industry, and market conditions, both domestically and in our foreign markets, including regional or geopolitical conflicts, potential changes in the U.S. and foreign laws and regulations on international trade ( e.g. , export controls, import tariffs and trade agreements), or other disruptions to commerce; • the U.S. federal government cancelling, consolidating, or not awarding contracts to us or our customers or suppliers; • the emergence of new technologies or trends in the marketplace, or a change in the trends that are important to our strategy and the value of our platform in the marketplace; • foreign currency exchange rate fluctuations; • the timing of revenue recognition for our customer transactions, and the effect of the mix of subscriptions and services on the timing of revenue recognition; • extraordinary expenses, such as litigation or other dispute-related settlement payments; and • future accounting pronouncements or changes in our accounting policies.
Market adoption of the solutions that we offer may not grow as we expect, which may harm our business and prospects.
We believe our future success will depend in large part on the growth, if any, in the demand for observability and related solutions that utilize analytics and AI at their core, particularly the demand for enterprise-wide solutions and our ability to provide solutions that meet such ever-evolving needs.
We currently target the markets for infrastructure observability, application observability, AI observability, digital experience, log analytics, application security, threat observability, software delivery, and business analytics.
Expansion in our addressable market depends on a number of factors, including the continued and growing reliance of enterprises on software applications to manage and drive critical business functions and customer interactions, increased use of microservices and containers, as well as the continued proliferation of mobile applications, large data sets, cloud computing, and the Internet of Things.
If our solutions do not achieve widespread adoption, we are not able to develop new solutions that meet customer needs, or there is a reduction in demand for observability and related solutions generally, it could result in reduced customer purchases, reduced renewal rates, and decreased revenue, any of which will adversely affect our business, operating results, and financial condition.
Our business is dependent on overall demand for observability and related solutions and therefore reduced spending on those solutions or overall adverse economic conditions may negatively affect our business, operating results, and financial condition.
Our business depends on the overall demand for observability and related solutions, particularly demand from mid- to large-sized accounts worldwide, and the purchase of our solutions by such organizations is often discretionary.
Over the last year, we have observed global economic uncertainty at times as well as lengthening sales cycles.
In an economic downturn or during periods of economic or political instability, we believe that our customers or prospects may reduce their operating or IT budgets, which could cause them to defer or forego purchases of observability and related solutions, including ours.
Customers may delay or cancel IT projects or seek to lower their costs by renegotiating their vendor contracts or renewals, such as contracts with us.
To the extent purchases of observability and related solutions are perceived by existing customers and potential customers to be discretionary, our revenue may be disproportionately affected by delays or reductions in general IT spending.
Weak or turbulent global economic conditions or a reduction in observability and related spending, even if general economic conditions remain unaffected, could adversely impact our business, operating results and financial condition in a number of ways, including longer sales cycles, lower prices for our solutions, reduced subscription renewals, and lower revenue.
Moreover, any potential U.S. federal government shutdown resulting from budgetary decisions, a prolonged continuing resolution, breach of the federal debt ceiling, a potential U.S. sovereign default, and changes in laws, regulations, or policies, such as the introduction of tariffs, have and may continue to increase uncertainty and volatility in the global economy and financial markets.
In addition, any negative economic effects or instability resulting from changes in the political environment and international relations in the United States or other key markets as well as resulting regulatory or tax policy changes may adversely affect our business, operating results, and financial condition.
As the market for observability and related solutions continues to develop, trends in spending remain unpredictable and subject to reductions due to the changing technology environment and customer needs as well as uncertainties about the future.
Our future success, if any, will be based on our ability to consistently provide our customers with an end-to-end, near real-time view into the performance of their software applications and IT infrastructure, provide notification and prioritization of degradations and failures, perform root cause analysis of performance issues, and analyze the quality of their end users’ experiences and the resulting impact on their businesses and brands.
For example, we have made significant investments in our application security offering and in developing our Grail TM core technology, AutomationEngine, and AppEngine.
We also expanded our Davis® AI engine to create the observability industry’s first solution that converged fact-based, causal and predictive AI insights with new generative AI capabilities.
We also plan to evolve our AI capabilities to drive differentiation, with a focus on evolving into an agentic AI platform that can act autonomously to make decisions and take actions without human intervention.
In addition to developing new solutions or solution enhancements using internal resources, we may acquire technologies from a third party, or acquire another company.
For a description of some of the risks related to potential acquisitions, please see the risk below entitled “ We may acquire other businesses, products, or technologies in the future which could require significant management attention, disrupt our business or result in operating difficulties, dilute stockholder value, and adversely affect our results of operations. ” To the extent that we are not able to continue to execute on our business model to timely and effectively develop or acquire and market applications to address these challenges and attain market acceptance, our business, operating results, and financial condition will be adversely affected.
Our success in attracting new customers and expanding our relationships with existing customers depends on numerous factors, including our ability to: • offer a compelling, end-to-end platform that combines broad and deep observability, continuous runtime application security, and advanced AI to support IT operations, development, security, business, and executive teams; • design and execute our sales and marketing strategy; • effectively identify, attract, onboard, train, develop, motivate, and retain new sales, marketing, professional services, and support personnel in the markets we pursue; • develop or expand relationships with technology partners, systems integrators, resellers, online marketplaces, and other partners, including strategic alliances and cloud-focused partnerships with GSIs, including Accenture, Atos, Deloitte, DXC, and Kyndryl, and hyperscalers such as AWS, GCP, Azure, and others, some of which may also compete with us; • expand into new geographies and markets, including the business intelligence and data analytics market; • deploy our platform and solutions for new customers; and • provide quality customer support and professional services.
Our customers have no obligation to renew their agreements, and our customers may decide not to renew these agreements with a similar contract period, at the same prices and terms or with the same or a greater number of licenses.
Our customer retention and expansion rates may decline or fluctuate as a result of a number of factors, including our customers’ satisfaction with our platform, our customer support and professional services, changes to our go-to-market strategy, our prices and pricing plans, the competitiveness of other software products and services, reductions in our customers’ spending levels, customer concerns about macroeconomic trends, user adoption of our solutions, deployment success, utilization rates by our customers, new product releases and changes to our product offerings.
For example, when we updated our go-to-market strategy during our fiscal year 2025, more than 30% of our customer accounts transitioned to new sales representatives.
It is difficult to predict whether these changes will achieve their desired effects and a negative impact on retention and other results is possible.
We face significant competition, which may adversely affect our ability to add new customers, retain existing customers, and grow our business.
We compete either directly or indirectly with infrastructure monitoring vendors, APM vendors, log management vendors, DEM vendors, security vendors, open source and commercial open source vendors, point solutions from public cloud providers, and IT operations management and business intelligence providers with offerings that cover some portion of the capabilities that we provide.
For example, Cisco acquired Splunk in 2024.
Many existing and potential competitors enjoy substantial competitive advantages, such as: • greater brand recognition and longer operating histories; • longer-term and more extensive relationships with existing and potential customers, and access to larger customer bases, which often provide incumbency advantages; • broader global distribution and presence; • larger sales and marketing budgets and resources; • the ability to integrate or bundle competitive offerings with other products, offerings and services; • lower labor and development costs; • greater resources to make acquisitions; • larger and more mature IP portfolios; and • substantially greater financial, technical, management and other resources.
Any such in-house solutions could leverage open source software, and therefore be made generally available at little or no cost.
We expect our billings and revenue mix to vary over time, which could harm our gross margin, cash flows, and operating results.
Our billings and revenue mix may vary over time due to a number of factors, including the mix of subscriptions and services and the contract length of our customer agreements.
Our gross margins, cash flows, and operating results could also be harmed by further changes in billings and revenue mix and costs, together with numerous other factors, including entry into new lower margin markets or growth in lower margin markets, entry into markets with different pricing and cost structures, pricing discounts, increased price competition, and in response to macroeconomic conditions.
Any one of these factors or the cumulative effects of certain of these factors may result in significant fluctuations in our revenues, billings, gross margin, and operating results.
This variability and unpredictability could result in our failure to meet internal expectations or those of securities analysts or investors for a particular period.
If we fail to meet or exceed such expectations for these or any other reasons, the market price of our common stock could decline.

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Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2025 ↗, FY2026 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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