Good morning, and thank you for joining Dynatrace's fourth quarter and full year fiscal twenty twenty five earnings conference call. Joining me today are Rick McConnell, Chief Executive Officer and Jim Bedson, Chief Financial Officer. Before we get started, please note that today's comments include forward looking statements such as statements regarding revenue, earnings guidance and economic conditions. Actual results may differ materially from our expectations due to a number of risks and uncertainties discussed in Dynatrace SEC filings. Including our most recent quarterly report on Form 10 Q and our upcoming annual report on Form 10 ks we plan to file later this month The forward looking statements contained in this call represent the company's views on 05/14/2025. We assume no obligation to update these statements as a result of new information, future events or circumstances. Unless otherwise noted, the growth rates we discuss today are non GAAP reflecting constant currency growth. And per share amounts are on the diluted basis. We will also discuss other non GAAP financial measures on today's call. To see reconciliations between non GAAP and GAAP measures, please refer to today's earnings press release and supplemental presentation, which are both posted in the financial results section of our IR webpage.

With that, let me turn the call over to our Chief Executive Officer, Rick McConnell. Thanks, Noel, and good morning, everyone. Thank you for joining us for today's call. Dynatrace delivered a strong finish to fiscal twenty twenty five having achieved several noteworthy milestones and accomplishments. Subscription revenue grew 20% We surpassed $1,700,000,000 in ARR and $1,000,000,000 in DPS ARR. We expanded our non GAAP operating margin by more than 100 basis points and our pre tax free cash flow margin by roughly two fifty basis points emphasizing the strength of our balanced business model. We surpassed 4,000 customers and 5,000 employees. We announced major platform innovations, including Rail for GCP, observability for developers, preventive operations, cloud security posture management, AI powered log management and analytics and AI observability to name just a few. And we were consistently named a leader in all major analyst reports for observability and AIOps over the past year. Today, I'm going to cover my perspective on the observability market growth tailwinds and opportunities our AgenTik AI vision, and the growing criticality of business observability. Let's begin with the market. While we are clearly in an uncertain economic environment, we continue to see strength in the observability market as virtually all organizations aspire to have their software work perfectly.

Just as our vision imagines. And now more than ever, customers need to deliver improved productivity and a better user experience at lower cost. Which is precisely our value proposition. As such, we see observability spend continuing to be a priority. Additionally, cloud growth remains healthy. Hyperscalers are now generating nearly $250,000,000,000 in annualized revenue growing in the mid-20s. And as organizations accelerate cloud and AI native initiatives, the need for AI powered observability at scale has never been greater. We expect to see materially greater penetration in the coming year into hyperscaler workloads. Where we expect the majority of observability market growth to occur. And we are innovating to capture this opportunity. Our next major platform release plan for June will further empower cloud and AI native teams to expand their AI ops and preventive operations. These new capabilities will provide development teams with easy access to hyperscaler and Kubernetes telemetry leverage Davis to analyze all data with AI assistance, and leverage Davis co pilot for remediation workflows or instant response. We believe these secular tailwinds will fuel an addressable market opportunity that we now size at 65,000,000,000 in observability and application security. Beyond these market dynamics, I'd like to talk next about four key Dynatrace growth drivers.

Each of these represents an intentional area of focus to drive consumption growth across the Dynatrace platform. First are the ongoing investments in our go to market efforts. Including customer segmentation, partner enablement, and expanding our sales motion beyond application performance to include end to end observability and cloud modernization. We kicked off these initiatives at the beginning of fiscal twenty twenty five, they continue to gain traction. We expect them to drive sales productivity gains in fiscal twenty twenty six. We've seen a consistent trend in total pipeline growth driven primarily by strength in strategic accounts, where pipeline was up 45% compared to last year. Highlighting the traction in our customer segmentation efforts. More than 80% of our ACV closed in the quarter, were partner influenced with over 40% of those coming from GSI and hyperscalers. And the expansion of our sales motion beyond our proven land and expand approach resulted in more than 50% of our anchor deals in the quarter driving end to end observability. These investments are gaining traction and contributed to large deal closures in the quarter including 15 deals with incremental ACV of over $1,000,000 Second, our Dynatrace platform subscription or DPS licensing model continues to build momentum with over 40% of our customer base and more than 60% of ARR, leveraging this approach as of the end of the fourth quarter.

With access to the full platform, customers are adopting Dynatrace more broadly across their IT environments. Resulting in increased consumption. We expect this DPS adoption to materialize over time in early expansions or on demand consumption beyond customer commit levels. Third is the massive opportunity in log management. We believe the logs market remains ripe for disruption given expensive legacy solutions that largely operate independently from existing observability tools and result in lower value. Our unique approach to log management and analytics integrates logs, traces, metrics and other core observability and security data types into a single platform. Providing a holistic view of the health of IT ecosystem. Combined with our AI approach, teams can derive greater value from logs faster and at lower cost. Leveraging rail as their massively parallel processing data lakehouse, logs can then contribute near real time insights at enormous scale. We are seeing strong adoption of our log management offering with a third of our customers now using this solution. The number of customers leveraging logs is up 18% compared to last quarter. Plus nearly half of our new logos added in the fourth quarter are deploying in their initial implementation. Compared to roughly 20% in the same quarter last year.

And finally, in what could arguably be our largest growth opportunity, the AI revolution is upon us. So I'd like to turn to that next. As you know, AI is evolving into a whole new era where systems can plan make decisions and take action autonomously. According to IDC, by 2029 Gen iAI based software testing tools capable of writing 85% of tests will be augmented by AI agents and agentic workflows. And we expect that as much as 80% or more of developers' time is spent ensuring that code is running properly in production by securing debugging and optimizing it. In many ways, this is exactly what Dynatrace was purpose built to enable. And it represents a massive opportunity. We were pleased to see that Forrester recently recognized Dynatrace as a leader in AIOps with the highest score in the current offering category. Our mission for many years has been to deliver answers and intelligent automation from data. Well beyond dashboards and root cause analysis. Automation is enabled by an autonomous system that can recommend and then carry out action based upon trustworthy deterministic conclusions from context rich data. And AgenTik AI is the architectural approach for that system.

Indeed, our AI native platform is what sets Dynatrace apart from our peers and we believe that as a result of this market evolution it will become an even bigger differentiator in the future. In fact, Dynatrace has been investing in advancing our capabilities to evolve into a fully agentic AI platform that can automatically remediate protect and optimize without the need for human intervention. A true agentic platform must be able to make intelligent decisions to act in real time. We postulate this requires various core capabilities. You need a common data lakehouse to store all data types in context for accuracy, performance and scale without manual tagging. You must be able to act in real time without limitations of predefined schemas or indexing. You need causation of data, not correlation, to deliver answers that are trustworthy and actionable. You need a combination of AI techniques including causal, predictive and generative AI to facilitate the discovery and prediction of issues to provide these answers. And in autonomously preventing and remediating issues as well as optimizing cloud native workloads an agentic AI system needs to delegate and handle tasks not only on its own, but also to an ecosystem of AI agents.

We believe Dynatrace is uniquely positioned to lead in this space with Crayo. Our index list schema free lakehouse designed for real time intelligent AI automation at scale. Today, we already provide the knowledge memory, reasoning, planning and actioning to meet the heightened requirements of an AgenTeq AI system. Our knowledge is fueled by one agent collecting all data types in context. Normalized with our semantic dictionary cleansed protected and then ingested through open pipeline. Rail provides instant access to petabytes of short and long term data in context. The real time memory to enable AI queries. Davis leverages the combination of causal predictive and generative AI to handle the reason. Davis AI Co Pilot can then intelligently plan actions based on context and reason. And finally, our automation engine is able to take action. Autonomously executing tasks and collaborating with third party AI agents. We plan to continue to innovate aggressively to meet the needs of this rapidly evolving AI landscape. I'd like to next turn to business observability. As the AI landscape continues to evolve, so too have our customers' needs for a more sophisticated observability approach. They want more than technical analytics. Organizations want to use observability solutions to help them understand core business metrics.

Business observability provides precise answers to help customers address not only operational issues, such as cost reduction and risk mitigation, but also customer centric issues. Such as optimizing user experience and driving profitability. For example, a large cruise ship operator is using Dynatrace to enable an exceptional on ship experience for passengers. They begin with the core user experiences they want to track and then drill down into micro services and technical analytics rather than the other way around. In many such customer deployments, our platform is playing an increasing role in our differentiation. Only Dynatrace captures business events in context with other data types. Enabling quick and easy querying rich visualization dashboards and business driven automation. I'd like to highlight just a few of our larger Q4 wins. A major airline already committed to spend nearly $50,000,000 with Dynatrace over its contract term signed an additional 7 figure expansion in an ongoing effort to reduce the number of disparate monitoring tools. Including logs to have all their relevant data types in one place with A Canadian financial services company, another 8 figure customer added a 7 figure expansion to consolidate various observability and log monitoring tools standardize on Dynatrace and substantially reduce costs.

And we closed a 7 figure expansion deal with a large software company including Logs on Grail to ensure stability and performance during a major software release.

Finally, I'd like to welcome Steve McMahon to Dynatrace as our new Chief Customer Officer replacing Matthias Dolan Shahar who is retiring from the company. I wish Ventias well after an incredible career here over the past decade. And I am delighted with Steve's employment. As his background in observability and security at Splunk CrowdStrike and Zscaler provides him a terrific foundation for a rapid ramp. To wrap up, our market opportunity is stronger than ever. We have several Dynatrace specific drivers supporting our growth. We have a significantly differentiated AI powered observability platform that is leading the way toward us delivering a highly differentiable agentic observability We are increasingly bringing customers deep business insights. And we have a compelling business model which has enabled us to deliver a sustained balance of growth and profitability. Jim, over to you. Thank you, Rick, and good morning, everyone.

Q4 was a strong finish to fiscal twenty twenty five. Once again, we exceeded the high end of guidance across all top line growth and profitability metrics. Our ability to execute successfully in this dynamic environment is a testament to the growing criticality of observability and security in the market are highly differentiated