“We are also working on cloud hosting costs, where we anticipate achieving some modest leverage in gross margin.”

In context

“Jim Benson (CFO): You're correct, Raimo, that Dynatrace has consistently committed to driving leverage and maintaining balance, as shown by nearly 300 basis points of operating margin improvement this year and 200 basis points of free cash flow. We are continuing to scale the business. If you've noticed leverage in G&A, expect to see more. We are also working on cloud hosting costs, where we anticipate achieving some modest leverage in gross margin. While the gains are modest in several areas, they do accumulate. Our focused investments are primarily in R&D, which we expect will grow as a percentage of revenue in fiscal '25. We believe that in sales and marketing, we will observe some leverage, partly from our partners and increasing sales through them. However, I want to emphasize that we will also invest in additional sales representatives in fiscal '25. So, there will be investments in sales capacity alongside improving partner leverage and productivity. Overall, we are dedicated to stabilizing and/or expanding margins for the business.”