Risk Factors Dashboard

Once a year, publicly traded companies issue a comprehensive report of their business, called a 10-K. A component mandated in the 10-K is the ‘Risk Factors’ section, where companies disclose any major potential risks that they may face. This dashboard highlights all major changes and additions in new 10K reports, allowing investors to quickly identify new potential risks and opportunities.

Risk Factors - DT

-New additions in green
-Changes in blue
-Hover to see similar sentence in last filing

$DT Risk Factor changes from 00/05/25/23/2023 to 00/05/23/24/2024

Item 1A. entitled “Risk Factors” in this Annual Report, and in our other SEC filings. We assume no obligation to update any forward-looking statements contained in this Annual Report as a result of new information, future events, or otherwise.SUMMARY OF THE MATERIAL RISKS ASSOCIATED WITH OUR BUSINESSOur business is subject to numerous risks and uncertainties that you should be aware of in evaluating our business. Please see Item 1A. entitled “Risk Factors” in this Annual Report for a discussion of risks that we believe are material. These risks and uncertainties include, but are not limited to, the following:•We have experienced rapid revenue growth in recent periods, which may not be indicative of our future growth. These risks and uncertainties include, but are not limited to, the following:•We have experienced rapid revenue growth in recent periods, and our recent growth rates may not be indicative of our future growth. •Our quarterly and annual operating results may be adversely affected due to a variety of factors, which could make our future results difficult to predict.•Market adoption of the solutions that we offer is relatively new and may not grow as we expect, which may harm our business and prospects.•Our business is dependent on overall demand for observability and security solutions and therefore reduced spending on those solutions or overall adverse economic conditions may negatively affect our business, operating results, and financial condition.•If we fail to innovate and do not continue to develop and effectively market solutions that anticipate and respond to the needs of our customers, our business, operating results, and financial condition may suffer.•If our platform and solutions do not effectively interoperate with our customers’ existing or future IT infrastructures, installations of our solutions could be delayed or canceled, which would harm our business.4Table of Contents•If we are unable to acquire new customers or retain and expand our relationships with existing customers, our future revenues and operating results will be harmed.•Failure to effectively expand our sales and marketing capabilities could harm our ability to execute on our business plan, increase our customer base, and achieve broader market acceptance of our applications.•We face significant competition, which may adversely affect our ability to add new customers, retain existing customers, and grow our business.•If we are unable to maintain successful relationships with our partners, or if our partners fail to perform, our ability to market, sell, and distribute our applications and services will be limited, and our business, operating results, and financial condition could be harmed.•Security breaches, computer malware, computer hacking attacks, and other security incidents or compromises could harm our business, reputation, brand and operating results.•Security breaches, computer malware, computer hacking attacks and other security incidents could harm our business, reputation, brand and operating results. •Real or perceived errors, failures, defects, or vulnerabilities in our solutions could adversely affect our financial results and growth prospects.•Failure to protect and enforce our proprietary technology and intellectual property rights could substantially harm our business, operating results, and financial condition.5Table of ContentsPART I. FINANCIAL INFORMATIONITEM 1. BUSINESSOverviewOur vision is a world where software works perfectly. Dynatrace offers the only end-to-end platform that combines broad and deep observability and continuous runtime application security with advanced artificial intelligence (“AI”) for IT operations to provide answers and intelligent automation from data at an enormous scale. Our comprehensive solutions help IT, development, security, and business operations teams at global organizations modernize and automate cloud operations, deliver software faster and more securely, and provide significantly improved digital experiences. Many of the world’s largest organizations trust the Dynatrace® platform to accelerate digital transformation. We have been seeing increased demand for large, strategic deals in which customers’ business criteria drive broader technology architecture decisions. At the same time, workloads continue migrating to the cloud as customers seek the agility, flexibility, and rapid technology advancements that can prove elusive in on-premises data center environments. AI has been sweeping across industries and exploding in relevancy and criticality as organizations desire significant advancements in innovation, productivity, and performance. The escalating cybersecurity threat landscape is also increasing the need for more sophisticated protection. The confluence of these megatrends in dynamic hybrid, multicloud environments brings a scale and frequency of change that is exponentially greater than that of just a few years ago. These trends also bring an explosion of data, a massive increase in complexity exacerbated by tool sprawl and siloed data, and a need for better analytics to prevent issues, instead of reacting to them. We believe that traditional approaches for developing, operating, monitoring, and securing software cannot keep pace with modern cloud environments. Traditional approaches for developing, operating, monitoring, and securing software were not designed to keep pace with these modern cloud environments. Applications are no longer monolithic and have become fragmented into thousands, potentially millions, of microservices, written in multiple software languages and extending across environments offered through hyperscaler vendor solutions such as Amazon Web Services (“AWS”), Microsoft Azure (“Azure”), and Google Cloud Platform (“GCP”), and more traditional data center solutions, such as mainframe environments. Applications are no longer monolithic and have become fragmented into thousands, potentially millions, of microservices, written in multiple software languages. Organizations are increasingly seeing the need to move from manual processes, siloed dashboards, rudimentary AI, and after-the-fact remediating to solutions such as Dynatrace that deliver vastly improved and deeper insights, advanced analytics, answers, and automation. As enterprises and public sector institutions embrace modern cloud environments as the underlying foundation of their business and digital transformations, we believe that the scale, growing complexity, and dynamic nature of these environments are rapidly making solutions such as the Dynatrace platform mandatory instead of optional for many organizations. As enterprises and public sector institutions embrace modern cloud environments as the underlying foundation of their digital transformations, we believe that the scale, growing complexity, and dynamic nature of these environments are rapidly making solutions such as the Dynatrace® platform mandatory instead of optional for many organizations. We believe our company has a significant market opportunity based on the technical differentiation of our platform, our ability to integrate successfully into customers’ cloud ecosystems, and the trust that we have built within our customer base and partner ecosystem.Key DifferentiatorsWe believe our approach is different from other offerings in three critical ways:•Dynatrace is an end-to-end platform that enables contextual analysis. We store all data types, including logs, traces, metrics, real user data, and business events, in an integrated, highly performant and massively scalable data store called GrailTM. Through our proprietary technology, these data types are stored together in context, and we are able to analyze billions of interdependencies across applications, networks, and infrastructure throughout an enterprise. This provides near real-time end-to-end awareness that we believe is not possible to replicate without a unified data store with equivalent capabilities.•The Dynatrace platform is powered by hypermodal AI. For over a decade, Dynatrace customers have relied on the predictive and causal AI capabilities of our AI engine, Davis®. We are making our generative AI capabilities available on the Dynatrace platform through Davis CoPilot, bringing the platform to a much wider array of end users and extending the capabilities of the Dynatrace platform. We believe we have architected our combination of predictive, causal, and generative AI (which we refer to collectively as hypermodal AI) to make AI techniques iteratively more intelligent. As organizations collect and maintain more data, AI embedded in end-to-end observability and security solutions is often required for reliable analysis, accurate insights, prevention of issues and problems, and quick identification and resolution when they arise. We believe our experience in AI gives our customers a competitive advantage in developing their own AI initiatives, and we are investing in AI best practices in services, data, and observability to support our customers on their AI journeys and to enable AI practices of our partners.•The Dynatrace platform is automated. We believe many organizations want a platform with broad-based situational awareness that can automatically identify, repair, and remediate issues and maximize application performance by optimizing the code, underlying infrastructure resources, and software delivery processes. Dynatrace OneAgent® uses automation to discover hybrid, multicloud environments, dynamically instruments applications, and consistently learns and updates without human scripting and user configuration. Our Smartscape® technology continuously updates topological dependencies as the 6Table of Contentsapplication or operating environment evolves, providing the Dynatrace platform with a representation of relationships between all elements within an environment. We believe this is especially critical during business-impacting threats or incidents. We believe the Dynatrace platform’s integrated approach reduces or eliminates the need for organizations to maintain a variety of disparate and siloed tools, enabling them to:•improve the reliability and performance of their infrastructure and applications, which can help optimize the experience of their own users;•improve organizational productivity, decision making and innovation, while also increasing transparency and collaboration between IT, development teams, and other business functions;•reduce operating costs; and•mitigate risk.The Dynatrace PlatformThe Dynatrace platform delivers analytics and automation for observability and security at scale and comprises several solutions, including the following:•Infrastructure Observability provides complete visibility into a customer’s IT infrastructure layer across public and private clouds and hybrid, multicloud environments, including AWS, Azure, GCP, VMware Tanzu, Red Hat OpenShift, and Kubernetes. •Application Observability monitors the full stack (i.e., front-end and back-end technologies) through APM, distributed tracing, and profiling across public and private clouds and hybrid, multicloud environments. •Security Protection automatically and continuously detects runtime vulnerabilities in applications, libraries, and code. It also provides near real-time detection and blocking to help protect against third-party cyber-attacks that can exploit critical vulnerabilities. It also provides real-time detection and blocking to help protect against injection attacks that exploit critical vulnerabilities, such as Log4Shell. •Security Analytics enable AI and runtime-enhanced detection, investigation, and response to cybersecurity events.7Table of Contents•Digital Experience allows customers to monitor user experiences across channels with real-user and synthetic monitoring and session replays and encompasses mobile and web applications. •Business Analytics unifies data flowing through the Dynatrace platform to provide precise, near real-time answers that enable teams to understand how the performance of their digital services affects critical key performance indicators and provides insights to improve user experiences.•Automations leverage observability and security data to drive workflow automations created with a visual workflow creator or automation-as-code.•Custom Solutions can also be developed for different use cases with enterprise-grade extensibility and customizations.The Dynatrace platform provides the following key benefits to customers through our various proprietary technologies:•Securely unify, store, and analyze data in context.The Dynatrace platform provides the following key benefits:•Single agent, fully automated configuration. Grail, our data lakehouse, is a unified storage solution with a massively parallel processing (“MPP”) analytics engine. Grail allows organizations to interconnect and analyze large volumes of different types of data quickly and cost effectively in context, without the overhead, expense, and limitation of storage tiering, re-indexing, and rehydration imposed by alternative solutions.•Receive answer-centric insights and automation with hypermodal AI. Davis, our AI engine at the core of the platform, combines predictive, causal, and generative AI to deliver answers, insights, automation, and recommendations, and detect, identify, remediate, and prevent issues. •Create and share custom applications and automations to support all business needs. AutomationEngine supports advanced workflow automation, and AppEngine allows organizations to create and share custom, data-driven applications. Business, development, security, and operations teams can collaborate and innovate faster with greater security and smarter answers.•Visualize and understand environments in near real time. Smartscape automatically identifies and maps interactions and relationships between applications and the underlying IT infrastructure and uses that map to enrich and contextualize data. This helps organizations understand how everything in their environments is connected.•Automatically capture and pre-process data in any form, from anywhere. ◦OpenPipeline uses high performance, stream processing technology to ingest, enrich, and contextualize data from a variety of sources (such as OpenTelemetry) for in-depth, AI-powered analytics. This helps organizations manage the cost and scale of large amounts of data, understand the context, and address security requirements.◦OneAgent deploys once on a host and instantly and continuously collects all relevant data and metrics along the full chain of applications that are being delivered. OneAgent helps organizations discover which processes are running on the host and automatically activates instrumentation.◦PurePath® captures and analyzes timing and code-level context for all distributed traces, end-to-end, across the full stack.Dynatrace Deployment and OperationsDynatrace provides out-of-the-box configuration for the leading cloud platforms, such as AWS, Azure, GCP, Red Hat OpenShift, and SAP, as well as Kubernetes and coverage for traditional on-premises systems, including mainframe and monolithic applications in a single, easy-to-use, intelligent platform.Dynatrace® provides out-of-the-box configuration for the leading cloud platforms, such as AWS, Azure, GCP, Red Hat OpenShift, and SAP, as well as coverage for traditional on-premises systems, including mainframe and monolithic applications in a single, easy-to-use, intelligent platform. The majority of our customers deploy Dynatrace as a Software-as-a-Service (“SaaS”) solution to get the latest Dynatrace features and updates with greatly reduced administrative effort. Our SaaS solution provides customers with the ability to scale up and down rapidly, without having to purchase, provision, and manage their hardware. We also provide options to deploy our platform in customer-provisioned infrastructure, which we refer to as Dynatrace Managed. We also provide options to deploy our platform at the edge in customer-provisioned infrastructure, which we refer to as Dynatrace Managed. This offering allows customers the flexibility to maintain control of the environment where their data resides, whether in the cloud or on-premises, combining the simplicity of SaaS with the ability to adhere to their own data security and sovereignty requirements. We automatically upgrade all Dynatrace instances and offer on-premises cluster customers auto-deployment options that suit their specific enterprise management processes. Our Mission Control center automatically upgrades all Dynatrace® instances and offers on-premises cluster customers auto-deployment options that suit their specific enterprise management processes. During our fiscal 2024, we introduced a new version of the Dynatrace Platform Subscription (“DPS”) licensing model which provides customers with more modern pricing with flexibility and transparency. Under the DPS model, a customer makes a minimum annual spend commitment at the platform level and then consumes that commitment based on actual usage and a straightforward rate card. Any platform capability can be used in any quantity at any time based on the customer’s evolving needs. Existing Dynatrace 8Table of Contentscustomers can also license individual capabilities in a subscription model. We provide customers with a near real-time view of licensed product consumption, with historical analysis at the daily or hourly level.CustomersAs of March 31, 2024, we had approximately 4,000 customers in over 100 countries. Our customers reflect diverse industries including, but not limited to, banking and financial services, government, insurance, retail and wholesale, transportation, and software. Our customers reflect diverse industries including, but not limited to, banking and finance, government, insurance, retail and wholesale, and software. No organization or customer accounted for more than 10% of our revenue for the fiscal years ended March 31, 2024, 2023, and 2022. Our Growth StrategyExtend our technology and market leadership position. We intend to maintain our position as the market-leading unified observability and security platform through increased investment in research and development, and innovation. We plan to expand the functionality of our end-to-end Dynatrace platform and invest in capabilities that address new market opportunities. We expect to focus on expanding the functionality of our unified Dynatrace® platform and investing in capabilities that address new market opportunities. We also plan to evolve our AI capabilities to drive differentiation. We believe this strategy will enable new growth opportunities and allow us to deliver differentiated high-value outcomes to our customers. We believe this strategy will enable new growth opportunities and allow us to continue to deliver differentiated high-value outcomes to our customers. Expand and strengthen our relationships with existing customers. We plan to establish new and deeper relationships within our existing customers’ organizations (notably, development teams) and expand the breadth of our platform capabilities to provide for expansion opportunities. In addition, we believe the ease of implementation of Dynatrace provides us with the opportunity to expand adoption within our existing enterprise customers, across new customer applications, and into additional business units or divisions. In addition, we believe the ease of implementation for Dynatrace® provides us the opportunity to expand adoption within our existing enterprise customers, across new customer applications, and into additional business units or divisions. While still in its early stages, we also believe that our DPS licensing model will drive further expansion opportunities for customers that prefer the flexibility and predictability of pricing under that model.Grow our customer base. Grow our customer base. We intend to drive new customer growth through a focus on the largest 15,000 global enterprise accounts, which generally have annual revenues in excess of $1 billion and more complex IT ecosystems and cloud environments. We intend to drive new customer growth by expanding our direct sales force focused on the largest 15,000 global enterprise accounts, which generally have annual revenues in excess of $1 billion. In particular, we are increasing the focus of our sales force on the largest 500 global companies and strategic enterprise accounts. In addition, we plan to expand our reach internationally to what we believe are large, mostly untapped, markets for our company, while leveraging our sector specialization globally. Leverage our strategic partner ecosystem. We intend to invest in our strategic partner ecosystem, with a particular emphasis on building cloud-focused, loyal and comprehensive partnerships with global system integrators (“GSIs”) and hyperscaler cloud providers. These strategic partners continually work with their customers to help them digitally transform their businesses and reduce cloud complexity. By working more closely with strategic partners, our objective is to participate in digital transformation projects earlier in the purchasing cycle and enable customers to establish more resilient cloud deployments from the start.Research and DevelopmentWe have a strong research and development (“R&D”) organization that is responsible for designing, developing, testing, and operating all aspects of our offerings, including addressing new use cases, adding new innovative capabilities, extending the scale and scope of our technology, and embracing modern cloud and AI technologies while maintaining high quality.We utilize an agile development process with 100% test automation to deliver major software releases throughout the year and hundreds of minor releases, fixes and updates.We utilize an agile development process with 100% test automation to deliver approximately 25 major software releases per year and hundreds of minor releases, fixes and updates. We believe the full stack monitoring required by dynamic multicloud environments requires a highly efficient and agile process to enable high-performing software across the diverse, dynamic cloud ecosystems of our customers. We believe the full-stack monitoring required by dynamic multicloud environments requires a highly efficient and agile process to enable high-performing software across the diverse, dynamic cloud ecosystems of our customers. Sales and MarketingWe take Dynatrace to market through a combination of our global direct sales team and a network of partners, including GSIs, cloud providers, resellers, and technology alliance partners.Sales and MarketingWe take Dynatrace® to market through a combination of our global direct sales team and a network of partners, including global system integrators (“GSIs”), cloud providers, resellers and technology alliance partners. We target the largest 15,000 global enterprise accounts, which generally have annual revenues in excess of $1 billion, which we believe see more value from our integrated full-stack platform.Our sales and marketing organizations seek to promote the Dynatrace brand, our platform capabilities, and develop partnerships to drive revenue growth. We utilize a variety of go-to-market strategies, including search-engine optimization, online advertising, free software trials, events, online webinars, and broad content marketing strategies. We nurture our existing customer base through ongoing education, and training, including expansion opportunities. We nurture our existing customer base through ongoing education, and training, including upsell and cross-sell opportunities. We do this primarily through our digital online channels, such as the Dynatrace blog, Dynatrace Community, and Dynatrace University, as well as our customer event series ‘Perform’ and ‘Innovate. We do this primarily through our digital online channels, such as the Dynatrace News blog, Dynatrace Community, and Dynatrace University, as well as our customer event series ‘Perform’ and ‘Innovate’. ’9Table of ContentsPartnersWe develop and maintain partnerships that help us market and deliver our offerings to our customers around the world. Our goal is to bring together industry experts and hands-on practitioners to create a world-class partner network. Through this intersection of industry and technology, our partner network extends the sales reach of the Dynatrace go-to-market team, while bringing enhanced value to our customers. This ecosystem contributes in all phases of our go-to-market approach: new sales opportunities, adoption, expansion through the identification of new use cases, integration into other market leading independent software vendors, and connecting us into other companies’ business transformation initiatives. Our partner network includes:•Global system integrators. Our partner network includes:•Global system integrators. We work closely with a number of strategic GSIs, including Accenture, Deloitte, DXC, and Kyndryl, to help customers digitally transform their businesses and reduce cloud complexity. We work closely with 10 strategic GSIs, including Deloitte and DXC, to help customers digitally transform their businesses and reduce cloud complexity. We continue to see a robust technical readiness investment from our key strategic GSIs resulting in hundreds of individuals trained or certified on the Dynatrace platform. In addition, we continue to foster relationships with a network of regional systems integrators that help joint customers integrate our offerings into their multicloud ecosystems. These partners extend our scale and reach and collaborate with our direct sales teams, bringing domain expertise in technologies and industries along with additional offerings powered by Dynatrace.•Cloud providers. We work with the major cloud providers to increase awareness of our offerings and make it easy for customers to access our software. Our software is developed to run in and integrate with leading cloud providers, such as AWS, Azure, and GCP. Our customers are also able to procure our software through leading marketplaces, such as AWS, Azure, SAP, and Google. •Resellers. Our resellers market and sell our offerings throughout the world and provide a go-to-market channel in countries and regions where we do not have a direct presence. Our resellers market and sell our offerings throughout the world and provide a go-to-market channel in countries and regions where we do not have a direct presence, such as in Africa, Japan, the Middle East, and South Korea. •Technology alliance partners. We partner with leading innovative technology organizations such as Atlassian, Red Hat, ServiceNow, Snyk, and VMware to develop integrations, best practices, and extended capabilities that help our customers and solution partners achieve faster time to market and enhanced value in dynamic multicloud environments.Professional ServicesOur Dynatrace Services Organization empowers our customers to innovate, automate, and transform the way they work with the Dynatrace platform. Our expertise and cloud modernization practices cover cloud ecosystem integration, automated incident management and problem resolution, DevOps integration, user experience, business intelligence insights, digital business analytics, and more. Our expertise and cloud modernization practices cover cloud ecosystem integration, automated incident management and problem resolution, DevOps CI/CD integration, user experience, business intelligence insights, digital business analytics, and more. Dynatrace University is our global online, self-service education program that provides several learning options for customers and partners to develop their skills around monitoring, managing, integrating, and analyzing multicloud environments and application workloads with Dynatrace.Customer SupportWe have an innovative onboarding and support service that is focused on simplifying and streamlining customer experience. We use in-product chat as the primary vehicle for customer interaction to drive adoption and growth, as well as to handle issues and user questions. Dynatrace ONE uses in-product chat as the primary vehicle for customer interaction to drive adoption and growth, as well as to handle issues and user questions. We maintain a SaaS-like connection to tenants and clusters, both in the cloud and managed on customer provisioned infrastructure. We maintain a SaaS-like connection to tenants and clusters, both in the cloud and managed on customer provisioned infrastructure, using our “Mission Control” system, which allows us to streamline communication and accelerate resolution of issues. Our customer support also includes automatic product updates and upgrades, online access to documentation, a knowledge base, and discussion forums as well as access to Dynatrace University. We also offer an extra level of success and support services for customers that want to accelerate their adoption of our platform, increase their access to support globally 24/7, and extend their hours of expert coverage.Dynatrace ONE Premium is an extra level of success and support services for customers who want to accelerate their adoption of our platform, increase their access to support globally 24/7, and extend their hours of expert coverage. Intellectual PropertyWe rely on a combination of patent, copyright, trademark, trade dress, and trade secret laws, as well as confidentiality procedures and contractual restrictions, to establish and protect our proprietary rights.10Table of ContentsIntellectual PropertyDynatrace relies on a combination of patent, copyright, trademark, trade dress, and trade secret laws, as well as confidentiality procedures and contractual restrictions, to establish and protect our proprietary rights. As of March 31, 2024, we had 128 issued patents, 86 of which are U.S. patents, and 63 pending applications, of which 40 are U.S. applications. Our issued patents expire at various dates through November 2042. Our issued patents expire at various dates through July 2041. 10Table of ContentsWe have registered “Dynatrace” and the “Dynatrace” logo as trademarks in the United States and other jurisdictions for our name and our product as well as certain other words and phrases that we use in our business, including “OneAgent,” “PurePath,” “Smartscape,” and “Davis”. We have registered “Dynatrace” and the “Dynatrace” logo as trademarks in the United States and other jurisdictions for our name and our product as well as certain other words and phrases that we use in our business, including “One Agent”, “PurePath”, “SmartScape”, and “Davis”. We have registered numerous Internet domain names related to our business. We also license software from third parties for integration into our applications and utilize open-source software.We enter into agreements with our employees, contractors, customers, partners, and other parties with which we do business to limit access to and disclosure of our confidential and proprietary information. See the “Risk Factors” section of this Annual Report for a discussion of risks related to our intellectual property.CompetitionThe market for observability, analytics, and application security is evolving, complex, and defined by rapidly changing technology and customer needs.CompetitionThe market for observability, analytics, and application security is evolving, complex, and defined by changing technology and customer needs. As we have expanded our platform capabilities, we increasingly compete with a wider range of vendors. We expect competition to continually evolve as enterprises shift to dynamic multicloud environments and as more mature vendors look to provide a holistic approach in areas of the market that we serve.The principal competitive factors in our markets are:•AI capabilities;•automation;•product features, functionality, and reliability;•ease and cost of deployment, use, and maintenance;•deployment options and flexibility;•customer, technology, and platform support;•ability to easily integrate with customers’ software application and IT infrastructure environments;•the quality of data collection and correlation;•interoperability and ease of integration; and•brand recognition.We compete either directly or indirectly with infrastructure monitoring vendors, APM vendors, log management vendors, digital experience monitoring (“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.We compete either directly or indirectly with APM vendors, infrastructure monitoring 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, AIOps and business intelligence providers with offerings that cover some portion of the capabilities that we provide. Our principal competitors include Cisco (which now includes AppDynamics and Splunk), Datadog, and New Relic.We also face potential competition from vendors in adjacent markets that may offer capabilities that overlap with ours. We may also face competition from companies entering our market, including large technology companies that could expand their platforms or acquire one of our competitors. See the “Risk Factors” section of this Annual Report for a discussion of risks related to competition.SustainabilityOverviewWe believe advancing and strengthening our sustainability strategy are paramount to our success and are our responsibility as a global company. Our strategy focuses on areas where we can make our business and the communities in which we operate more equitable and sustainable. Our ESG strategy focuses on areas where we can make our business and the communities in which we operate more equitable and sustainable. We group our material sustainability topics into three key pillars: sustaining our environment; people, culture and community; and governance and ethics. With these issues at the forefront, we have embedded our sustainability strategy in our business priorities, mission, purpose, vision, and values. During our fiscal 2024, we issued our inaugural Global Impact Report, a copy of which is posted on our website at www.dynatrace.com/company/sustainability/. Among other things, our Global Impact Report included our baseline greenhouse gas emissions data and an expanded scope of diversity, equity, inclusion, and belonging (“DEIB”) data for our fiscal 2023. Over the last year, we continued to develop and implement programs that drive progress on our sustainability initiatives. Later this year, we plan to share our progress in a new Global Impact Report. The contents of our Global Impact Reports are not incorporated into this Annual Report and inclusion of the website address above is an inactive textual reference only.11Table of ContentsHuman Capital Management Our company’s vitality comes from the talent, enthusiasm, and innovative spirit of our employees (who we call “Dynatracers”) across the more than 30 countries where we operate.Human Capital Management Our company’s vitality comes from the talent, enthusiasm, and innovative spirit of our employees (who we call “Dynatracers”) across the more than 30 countries where we operate. In fiscal 2024, we strengthened and expanded our approach to human capital development. In fiscal 2023, we strengthened and expanded our approach to human capital. We identified and implemented new and better ways to transform our people, culture, and community initiatives as Dynatrace has expanded its global footprint and continued to focus on long-term growth. We identified and implemented new and better ways to transform our people, culture, and community initiatives as Dynatrace expands its global footprint and continues to focus on long-term growth. We created more global common experiences for our employees and launched a new Culture Code that connects our mission, purpose, vision, and values with our core values and expected behaviors. Our Chief Executive Officer, Chief People Officer, and other leaders continued to discuss various human capital-related topics with our Board of Directors throughout the year. Our Chief Executive Officer, Chief People Officer, and other leaders discuss various human capital-related topics with our Board of Directors throughout the year. For several years, third party organizations have recognized Dynatrace as an employer of choice around the globe. During our fiscal 2024, Dynatrace won several of Comparably’s workplace awards - Best Global Culture, Best Leadership, Best Work-Life Balance, Best Engineering Teams, Best HR Teams, Best Product and Design Teams, Best CEO, and Best CEOs for Diversity. In fiscal 2024, we also received a Great Place to Work certification in 13 countries and other awards and recognitions.As of March 31, 2024, we had approximately 4,700 employees, approximately 33% of whom were located in the United States, and approximately 26% of whom were located in Austria.As of March 31, 2023, we had approximately 4,180 employees, approximately 65% of whom were located outside of the United States. None of our employees are represented by a labor union; some of our employees outside of the United States are represented by a works council. None of our employees are represented by a labor union and some of our employees outside of the United States are represented by a works council. We have not experienced any work stoppages due to labor disputes. We believe that our relations with our employees and works councils are strong.As part of our human capital management strategy, we have prioritized a number of initiatives to provide all Dynatracers with an environment in which they can thrive. These initiatives include: (1) strengthening our approach to DEIB in our employee base; (2) working to optimize the Dynatrace workplace experience; and (3) building out our learning and development program to help provide each Dynatracer with tools and pathways to progress in their role. These initiatives include: (1) strengthening our approach to diversity, equity, inclusion and belonging (“DEIB”); (2) optimizing the Dynatrace workplace experience; and (3) building out our learning and development program to help provide each Dynatracer with tools and pathways to progress in their role. We also believe that our employees should have strong wellness programs, be able to save for their future, and give back to the communities in which we work and live. We also believe that our employees should have a strong work/life balance, be able to save for their future, and give back to the communities in which we work and live. Strengthening our approach to DEIB - People, culture, and community initiatives focused on improving our DEIB efforts help us build a more inclusive and supportive culture. At Dynatrace, we respect and value all of our diverse backgrounds, identities, and perspectives. Providing opportunities to qualified individuals is critical to our mission, and we are committed to maintaining a culture where every Dynatracer feels respected, safe, included, and valued. Integral to our DEIB program are our six employee resource groups or “Dynaspaces.” These groups enable employees with shared values, experiences, or identities to collectively raise key topics and priorities to our management team, build community, and provide mentorship. Optimizing the Dynatrace workplace experience - In fiscal 2024, we continued conducting detailed discovery initiatives to better understand the global employee experience. 12Table of ContentsOptimizing the Dynatrace workplace experience - In fiscal 2023, we conducted a detailed discovery initiative to better understand the global employee experience. Among other things, we completed our first global employee engagement survey to measure and assess employment sentiment and engagement and provide us with data to share with leaders at functional and departmental levels. The findings from this survey and our other initiatives have highlighted a number of strengths and also have provided focus areas for future refinements. The findings from these assessments highlighted a number of strengths and also provided focus areas for future refinements. The Dynatrace Work Model, which has hybrid and remote options, supports increased connection and collaboration, driving cultural vibrancy and supporting innovation, all while enabling a flexible work approach. We designed a Dynatrace Work Model (which has hybrid and remote options) to support increased connection and collaboration, driving cultural vibrancy and supporting innovation, all while enabling a flexible work approach. We continually evaluate this model to balance these objectives. Building out our learning and development program - At Dynatrace, we embrace a culture of continuous learning. We offer employees a comprehensive, global, and scalable learning solution that includes access to thousands of online courses for every role and level. Employees can also use Dynatrace University to develop skills to monitor, manage, and analyze Dynatrace customer environments. We require Dynatracers to complete a set of mandatory training courses each year. We also reimburse employees for certain educational expenses, including tuition, conferences, training, and books. Wellness – We value the health and well-being of our employees. As part of our focus in this area, we provide employees with quarterly, company-designated wellness days to disconnect from work and recharge. Our mental health resources include access to an employee assistance program and we also provide employees with financial wellness tools. Our mental health resources include access to an employee assistance program (“EAP”), and we also provide employees with financial wellness tools. Saving for the future: compensation and benefits - Our compensation program is designed to attract, reward, and retain talented individuals who possess the skills necessary to support our business, contribute to our strategic goals, and create long-term value for our stockholders. We provide employees with compensation and benefits, which are designed to be competitive for our industry, including retirement savings programs, the opportunity to invest in Dynatrace at a discount through our Employee Stock Purchase Plan (“ESPP”), and medical, dental, vision, and life and disability plans. We provide employees with industry-competitive compensation and benefits, including retirement savings programs, the opportunity to invest in Dynatrace at a discount through our Employee Stock Purchase Plan (“ESPP”), and medical, dental, vision, and life and disability plans. Our benefits vary around the world due to local country regulations and cultural preferences.Community service and volunteering - Community service and volunteering allow us to share our skills, passion, and resources to help benefit others, whether they are underprivileged members of society or underrepresented communities in the technology space. 12Table of ContentsThrough our program, Dynatracers can engage in paid time off to volunteer with charitable organizations about which they are passionate. Through our volunteer program, Dynatracers can engage in paid time off to volunteer with charitable organizations that they are passionate about. Corporate InformationOur principal executive offices are located at 1601 Trapelo Road, Suite 116, Waltham, Massachusetts 02451 and our telephone number is (781) 530-1000. Our website is www.dynatrace.com and our Investor Relations website is https://ir.dynatrace.com. Information contained on, or that can be accessed through, our websites is not incorporated by reference into this Annual Report and should not be considered to be part of this Annual Report, and inclusions of our website addresses in this Annual Report are inactive textual references only. Information contained on, or that can be accessed through, our websites are not incorporated by reference into this Annual Report and should not be considered to be part of this Annual Report, and inclusions of our website addresses in this Annual Report are inactive textual references only. The Dynatrace design logo and our other registered or common law trademarks, service marks or trade names appearing in this Annual Report are the property of Dynatrace LLC. This Annual Report includes our trademarks and trade names, including, without limitation, Dynatrace, OneAgent®, Smartscape®, PurePath®, Davis® and GrailTM which are our property and are protected under applicable intellectual property laws. This Annual Report includes our trademarks and trade names, including, without limitation, Dynatrace®, OneAgent®, SmartScape®, PurePath®, Davis® and GrailTM which are our property and are protected under applicable intellectual property laws. Other trademarks and trade names referred to in this Annual Report are the property of their respective owners.

Available InformationOur Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K, including amendments and exhibits to these reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are available free of charge on the Investor Relations section of our website at https://ir.dynatrace.com as soon as reasonably practicable after we file or furnish such material with the Securities and Exchange Commission (“SEC”). The SEC maintains a website at www.sec.gov that contains our SEC filings and other information regarding us and other companies that file materials with the SEC electronically.Investors and others should note that we announce material financial information to our investors using our Investor Relations website, press releases, SEC filings and public conference calls and webcasts. We also use these channels to disclose information about the company, our planned financial and other announcements, attendance at upcoming investor and industry conferences, and for complying with our disclosure obligations under Regulation FD. The information we post through these channels may be deemed material. Accordingly, we encourage investors to review the information we make available through these channels. ITEM 1A. ITEM 1B. RISK FACTORS Investing in our common stock involves a high degree of risk.

You should carefully consider the risks and uncertainties described below, together with all of the other information in this Annual Report on Form 10-K, including the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our condensed consolidated financial statements and related notes, before making a decision to invest in our common stock. The risks and uncertainties described below may not be the only ones we face. If any of the risks actually occur, our business, operating results, financial condition and prospects could be materially and adversely affected. In that event, the market price of our common stock could decline, and you could lose all or part of your investment.Risks Related to Our Business and IndustryWe have experienced rapid revenue growth in recent periods, which may not be indicative of our future growth.We have experienced rapid revenue growth in recent periods. Our annual revenue grew 23%, 25%, and 32% in the years ended March 31, 2024, 2023, and 2022, respectively, compared to the prior year. Our annual revenue grew 25%, 32% and 29% in the years ended March 31, 2023, 2022 and 2021, respectively, compared to the prior year. This revenue growth may not be indicative of our future revenue growth, and we may not be able to sustain revenue growth consistent with recent history, or at all. 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 business intelligence, data analytics, and application security markets, and expand our global operations.13Table of ContentsIf we are unable to achieve any of these, our revenue growth could be adversely affected.Our quarterly and annual operating results may be adversely affected due to a variety of factors, which could make our future results difficult to predict.Our annual and quarterly revenue and operating results have fluctuated significantly in the past and may vary significantly in the future due to a variety of factors, many of which are outside of our control. Our financial results in any one quarter may not be meaningful and should not be relied upon as indicative of future performance. If our revenues, earnings, or operating results fall below the expectations of investors or securities analysts in a particular quarter, or below any guidance that we may provide, the price of our common stock could decline. We may not be able to accurately predict our future billings, revenues, earnings, or operating results. 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 business intelligence, data analytics, and application security 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 who 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 or other disruptions to commerce;•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. 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 business intelligence, data analytics, and application security markets;•the budgeting cycles and internal purchasing priorities of our customers;•changes in 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;14Table of Contents•changes in the demand and growth rate of the market for observability, application security, and analytics 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 who 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 or other disruptions to commerce;•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. 14Table of ContentsAny one of the factors referred to above or the cumulative effect of some of the factors referred to above may result in our operating results being below our expectations and the expectations of securities analysts and investors and any guidance that we may provide or may result in significant fluctuations in our quarterly and annual operating results, including fluctuations in our key performance indicators.Any one of the factors referred to above or the cumulative effect of some of the factors referred to above may result in our operating results being below our expectations and the expectations of securities analysts and investors and any guidance that we may provide or may result in significant fluctuations in our quarterly and annual operating results, including fluctuations in our key performance indicators. This variability and unpredictability could result in our failure to meet our business plan or the expectations of securities analysts or investors for any period. In addition, a significant percentage of our operating expenses are fixed in nature in the short term and based on forecasted revenue trends. Accordingly, in the event of revenue shortfalls, we are generally unable to mitigate the negative impact on margins in the short term.Market adoption of the solutions that we offer is relatively new and may not grow as we expect, which may harm our business and prospects.The utilization of solutions that we offer on the Dynatrace platform is relatively new. We believe our future success will depend in large part on the growth, if any, in the demand for observability and security solutions that utilize analytics and automation 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, security protection, security analytics, digital experience, business analytics, and automation. We currently target the markets for observability, APM, application security, infrastructure monitoring, log management and analytics, DEM, digital business analytics, and automation. It is difficult to predict customer demand, adoption, churn, and renewal rates for our new and existing solutions, the rate at which existing customers expand their usage of our solutions, and the size and growth rate of the market for our solutions. It is difficult to predict customer demand, adoption, churn and renewal rates for our new and existing solutions, the rate at which existing customers expand their usage of our solutions, and the size and growth rate of the market for our solutions. 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 security 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 security 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 security solutions, particularly demand from mid- to large-sized accounts worldwide, and the purchase of our solutions by such organizations is often discretionary. During our fiscal 2024, we 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 security solutions, including ours. Customers may delay or cancel IT projects or seek to lower their costs by renegotiating vendor contracts or renewals. To the extent purchases of observability and security 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 security 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 uncertainty surrounding the 2024 U.S. Presidential election may 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 and financial results.As the market for observability and security solutions is relatively new and 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.As the market for observability and security solutions is new and 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. If we fail to innovate and do not continue to develop and effectively market solutions that anticipate and respond to the needs of our customers, our business, operating results, and financial condition may suffer.The markets for observability and security solutions are characterized by constant change and innovation, and we expect them to continue to rapidly evolve. Moreover, many of our customers operate in industries characterized by changing technologies and business models, which require them to develop and manage increasingly complex software application and IT infrastructure environments. 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. Our future success, if any, will be based on our ability to consistently provide our customers with a unified, 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. If we do not respond to the rapidly changing needs of our customers by 15Table of Contentsdeveloping and making available new solutions and solution enhancements that can address evolving customer needs on a timely basis, our competitive position and business prospects will be harmed, and our revenue growth and margins could decline. If we do not respond to the rapidly changing needs of our customers by developing and making available new solutions and solution enhancements that can address evolving customer needs on a timely basis, our competitive position and business prospects will be harmed, and our revenue growth and margins could decline. In addition, the process of developing new technology is complex and uncertain, and if we fail to accurately predict customers’ changing needs and emerging technological trends, our business could be harmed. We believe that we must continue to dedicate significant resources to our research and development efforts, including significant resources to developing new solutions and solution enhancements before knowing whether the market will accept them. For example, we have made significant investments in our new application security offering and in developing our GrailTM core technology, AutomationEngine, and AppEngine. In July 2023, we announced that we are expanding our Davis® AI engine to create the observability and security industry’s first hypermodal AI, converging fact-based, predictive, and causal AI insights with new generative AI capabilities. Our new solutions and solution enhancements could fail to attain sufficient market acceptance for many reasons, including:•delays in developing and releasing new solutions or enhancements to the market;•delays or failures to provide updates to customers to maintain compatibility between Dynatrace and the various applications and platforms being used in the customers’ applications and multicloud environments;•failures to accurately predict market or customer demands, priorities, and practices, including other technologies utilized by customers in their environments and partners that they prefer to work with;•the introduction or anticipated introduction of competing products by existing and emerging competitors; •flaws in our go-to-market strategy, as well as the inability of our sales and marketing teams or those of our partners to sell solutions for new markets and product categories;•defects, errors, or failures in the design or performance of our new solutions or solution enhancements;•negative publicity about the performance or effectiveness of our solutions; and•the perceived value of our solutions or enhancements relative to their cost. Our new solutions and solution enhancements could fail to attain sufficient market acceptance for many reasons, including:•delays in developing and releasing new solutions or enhancements to the market;•delays or failures to provide updates to customers to maintain compatibility between Dynatrace® and the various applications and platforms being used in the customers’ applications and multicloud environments;•failures to accurately predict market or customer demands, priorities, and practices, including other technologies utilized by customers in their environments and partners that they prefer to work with;•the introduction or anticipated introduction of competing products by existing and emerging competitors; •the inability of our sales and marketing teams or those of our partners to sell solutions for new markets and product categories;•defects, errors, or failures in the design or performance of our new solutions or solution enhancements;•negative publicity about the performance or effectiveness of our solutions; and•the perceived value of our solutions or enhancements relative to their cost. In addition to developing new solutions or enhancements using internal resources, we may acquire technologies from a third party, or acquire another company. Any acquisition of this type could be unsuccessful for a variety of reasons, require significant management attention, disrupt our business, dilute stockholder value, and adversely affect our results of operations. 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. 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.”16Table of ContentsTo the extent 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. Further, we may make changes to our solutions that our customers do not value or find useful. We may also discontinue certain features, begin to charge for certain features that are currently free, or increase fees for any of our features or usage of our solutions. If our new solutions, enhancements, or pricing strategies do not achieve adequate acceptance in the market, our competitive position will be impaired, our revenue may decline or grow more slowly than expected and the negative impact on our operating results may be particularly acute, and we may not receive a return on our investment in the upfront research and development, sales and marketing, and other expenses that we incur in connection with new solutions or solution enhancements.If our platform and solutions do not effectively interoperate with our customers’ existing or future IT infrastructures, installations of our solutions could be delayed or canceled, which would harm our business.Our success depends on the interoperability of our platform and solutions with third-party operating systems, applications, cloud platforms, data, and devices that we have not developed and do not control. Any third-party changes that degrade the functionality of our platform or solutions or give preferential treatment to competitive software could adversely affect the adoption and usage of our platform. We may not be successful in adapting our platform or solutions to operate effectively with these systems, applications, cloud platforms, data, or devices. If it is difficult for our customers to access and use our platform or solutions, or if our platform or solutions cannot connect a broadening range of systems, applications, cloud platforms, data, and devices, then our customer growth and retention may be harmed, and our business and operating results could be adversely affected. If it is difficult for our customers to access and use our platform or solutions, or if our platform or solutions cannot connect a broadening range of applications, data, and devices, then our customer growth and retention may be harmed, and our business and operating results could be adversely affected. Multicloud deployments utilize multiple third-party platforms and technologies, and these technologies are updated to new versions at a rapid pace. As a result, we deliver frequent updates to our solutions designed to maintain compatibility and support for our customers’ changing technology environments and ensure our solutions’ ability to continue to monitor customers’ applications. If our solutions fail to work with any one or more of these technologies or applications, or if our customers fail to install the most recent updates and versions of our solutions that we offer, our solutions will be unable to continuously monitor our customers’ critical business applications.16Table of ContentsEnsuring that our solutions are up-to-date and compatible with the technology and multicloud platforms utilized by our customers is critical to our success.Ensuring that our solutions are up-to-date and compatible with the technology and multicloud platforms utilized by our customers is critical to our success. We have formed alliances with many technology and cloud platform providers to provide updates to our solutions to maintain compatibility. We work with technology and cloud platform providers to understand and align updates to their product roadmaps and engage in early access and other programs to ensure compatibility of our solutions with the technology vendor’s generally available release. If our relations with our technology partners degrades or ceases we may be unable to deliver these updates, or if our customers fail to install the most recent updates and versions of our solutions that we offer, then our customers’ ability to benefit from our solution may decrease significantly and, in some instances, may require the customer to de-install our solution due to the incompatibility of our solution with the customer’s applications.If we are unable to acquire new customers or retain and expand our relationships with existing customers, our future revenues and operating results will be harmed.To continue to grow our business, we need to attract new customers and increase deployment, usage, and consumption of our solutions by existing customers. 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 observability and security platform, together with advanced AI for IT operations that provides answers and intelligent automation from data at an enormous scale;•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, 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 success in attracting new customers and expanding our relationships with existing customers depends on numerous factors, including our ability to:•offer a compelling, unified observability and security platform, together with advanced AIOps, that provides answers and intelligent automation from data at an enormous scale;•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 Deloitte and DXC, and hyperscalers such as AWS, GCP, Azure, IBM Red Hat 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.17Table of ContentsOur 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. Although our customer retention rate has historically been strong, some of our customers have elected not to renew their agreements with us, and it is difficult to accurately predict long-term customer retention, churn and expansion rates. Our customer retention and expansion rates may decline or fluctuate as a result of a number of factors, including our customers’ satisfaction with our solutions 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. Our customer retention and expansion rates may decline or fluctuate as a result of a number of factors, including our customers’ satisfaction with our solutions platform, our customer support and professional services, 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, we recently updated our go-to-market strategy, which resulted in more than 30% of our customer accounts transitioning 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. If our customers do not renew their agreements, or renew on less favorable terms, our business, financial condition, and operating results may be adversely affected.Our ability to increase sales to existing customers depends on several factors, including their experience with implementing and using our platform and the existing solutions they have implemented, their ability to integrate our solutions with existing technologies, and our pricing models, including our new DPS licensing model. A failure to increase sales to existing customers could adversely affect our business, operating results, and financial condition.Failure to effectively expand our sales and marketing capabilities could harm our ability to execute on our business plan, increase our customer base, and achieve broader market acceptance of our applications.Our ability to increase our customer base and achieve broader market acceptance of our solutions will depend to a significant extent on the ability of our sales and marketing organizations to work together to drive our sales pipeline and cultivate customer and partner relationships to drive revenue growth. We have invested in and plan to continue expanding our sales and marketing organizations, both in the United States and internationally. We also plan to dedicate significant resources to sales and marketing programs, including lead generation activities and brand awareness campaigns, such as our industry events, webinars, and user events with an increased investment in digital or online activities. If we are unable to effectively identify, hire, onboard, train, develop, motivate, and retain talented sales personnel or marketing personnel or if our new sales personnel or marketing personnel, online investments are unable to achieve desired productivity levels in a reasonable period of time, or if we do not create an effective strategy for our personnel to execute, our ability to increase our customer base and achieve broader market acceptance of our offerings could be harmed. If we are unable to effectively identify, hire, onboard, train, develop, motivate, and retain talented sales personnel or marketing personnel or if our new sales personnel or marketing personnel or online investments are unable to achieve desired productivity levels in a reasonable period of time, our ability to increase our customer base and achieve broader market acceptance of our offerings could be harmed. 17Table of ContentsWe face significant competition, which may adversely affect our ability to add new customers, retain existing customers, and grow our business.We face significant competition, which may adversely affect our ability to add new customers, retain existing customers, and grow our business. The markets in which we compete are highly competitive, fragmented, evolving, complex, and defined by rapidly changing technology (including, without limitation, new and evolving uses of AI) and customer needs, and we expect competition to continue to increase in the future.The markets in which we compete are highly competitive, fragmented, evolving, complex and defined by rapidly changing technology and customer demands, and we expect competition to continue to increase in the future. A number of companies, some of which are larger and have more resources than we do, have developed or are developing products and services that currently, or in the future may, compete with some or all of our solutions. We have also been expanding the scope of our solutions to include new offerings and we increasingly compete with other companies in new and adjacent markets. Competition could result in increased pricing pressure, reduced profit margins, increased sales and marketing expenses and our failure to increase, or loss of, market share, any of which could adversely affect our business, operating results, and financial condition.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.We compete either directly or indirectly with APM vendors, infrastructure monitoring 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, AIOps and business intelligence providers with offerings that cover some portion of the capabilities that we provide. Further, to the extent that one of our competitors establishes or strengthens a cooperative relationship with, or acquires one or more software APM, data analytics, compliance, or network visibility vendors, it could adversely affect our ability to compete. Further, to the extent that one of our competitors establishes or strengthens a cooperative relationship with, or acquires one or more software application performance monitoring, data analytics, compliance, or network visibility vendors, it could adversely affect our ability to compete. We may also face competition from companies entering our market, which has a relatively low barrier to entry in some segments, including large technology companies that could expand their platforms or acquire one of our competitors. For example, Cisco acquired Splunk earlier this year. 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 intellectual property portfolios; and•substantially greater financial, technical, management and other resources.Additionally, in certain circumstances, and particularly among large technology companies that have complex and large software application and IT infrastructure environments, customers may elect to build in-house solutions to address their observability and security needs.18Table of ContentsAdditionally, in certain circumstances, and particularly among large technology companies that have complex and large software application and IT infrastructure environments, customers may elect to build in-house solutions to address their observability and security needs. Any such in-house solutions could leverage open source software, and therefore be made generally available at little or no cost.These competitive pressures in our markets or our failure to compete effectively may result in fewer customers, price reductions, fewer orders, reduced revenue and gross profit, and loss of market share. Any failure to meet and address these factors could materially and adversely affect our business, operating results, and financial condition.If the prices we charge for our solutions and services are unacceptable to our customers, our operating results will be harmed.As the market for our solutions matures, or as new or existing competitors introduce new products, offerings, or services that compete with ours, we may experience pricing pressure and be unable to renew our agreements with existing customers or attract new customers at prices that are consistent with our current pricing model and operating budget. If this were to occur, it is possible that we would have to change our pricing model or reduce our prices, which could harm our revenue, gross margin, and operating results. Pricing decisions may also impact the mix of adoption among our licensing and subscription models, and negatively impact our overall revenue. Moreover, large global accounts, which we expect will account for a large portion of our business in the future, may demand substantial price concessions. If we are, for any reason, required to reduce our prices, our revenue, gross margin, profitability, financial position, and cash flow may be adversely affected.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 18Table of Contentsfactors may result in significant fluctuations in our revenues, billings, gross margin, and operating results. 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.If we are unable to maintain successful relationships with our partners, or if our partners fail to perform, our ability to market, sell, and distribute our applications and services will be limited, and our business, operating results, and financial condition could be harmed.In addition to our sales force, we rely on partners, including our strategic partners, to increase our sales and distribution of our software and services. We also have independent software vendor partners whose integrations may increase the breadth of the ecosystem in which our solutions can operate, and the size of the market that our solutions can address. We also have partnerships with GSIs, including Accenture, Deloit