On right before lunch, so we're going to finish with a bang here right before lunch, and then move on for the rest of the day. Yeah, this morning is moving really, really quickly. I'm thrilled to have Dynatrace here once again. I've known you guys for forever, and it's fun to see the evolution of the company and to think about the opportunities we talked. We'll get into it more, but thinking about some of these incremental opportunities I think are so exciting for the future of Dynatrace. It really feels like in this world where people are looking for names that could see an inflection, I think Dynatrace is certainly one that is capable of that. We're excited to spend time with Jim Benson, CFO. Noelle is down in the front row in IR. Thank you again for being here, guys. You know, Jim, you guys are coming off of really strong Q2 results. You did not see any ARR deceleration, and you raised the full-year guide after Q2. I want to talk more about that. Could you start out with just how you are seeing the overall buying environment? Obviously, the beat and raise would be indicative of, I think, what you are seeing, but maybe set the stage for some of the underlying trends that you are seeing out there. Yeah, I would kind of echo your point. We had a great Q2. We had a great first half. We accelerated in net new ARR to 16% growth in the second quarter, 14% for the half. You really got to kind of bring it back to we made a lot of changes 18 months ago. A lot of changes on the go-to-market side that we were very clear were going to position us to go on the offensive for the opportunity to re-accelerate growth in the business. I think you're seeing that. You're seeing it show up in the results. You're seeing Q1 and Q2 producing. We're getting more customers. We'll talk about it, I'm sure, as the discussion proceeds. We're getting more traction with our Dynatrace platform subscription. We are getting significant traction now in logs. The go-to-market motion now, 18 months in, is starting to deliver with some level of consistency. We're seeing the underpinnings of the Dynatrace platform subscription as customers consuming the platform. They're consuming the platform at a very rapid clip, over 20% growth in dollars. We feel really good about the building blocks that we've been talking about. I think you opened it. What you get, investors get with Dynatrace is this story of balanced growth and profitability that we're a unique company that delivers both of those things. I think you get optionality around a pivot upward on growth, which is really what we're striving for. Maybe let's just hit this right now. When we think ahead, how should we think about really the timing of growth acceleration? And really based on some of these early indicators like DPS, logs momentum, pipeline growth, consumption trends, but just how should we think about the timing of this acceleration? I think you're already seeing it manifest itself in it starts with net new ARR growth. At the end of the day, that's where you're going to see it. We did see net new ARR growth in Q2. We saw it in Q1. We're already starting to see the benefit of that. Now, we've got to continue to put more points on the board. We've got to continue to develop more consistency. The ambition of the company is to re-accelerate. You're starting to see it manifest itself in the results already. We've got to execute. One of the things we talked about for our second half is that we are not demand constrained. The demand environment is very healthy. The good news is we are weighted to a large number of very large deals. We have a large now, it goes hand in hand with go-to-market changes we made. We're focused more in large enterprise accounts. Not surprising that the pipeline is weighted towards large deals with large customers. They do bring an element of timing variability. We have to execute against that. I feel very good about the building blocks that we've been talking about and actually seeing them in the results to date. I mean, the goal, and you guys have been very consistent in this, is you think the business can grow at a 20% clip. That is what you guys are sort of building this for with the changes in go-to-market, the product. You said DPS growth. That is the framework that we should be thinking about as we progress into the future. Yeah, I mean, I certainly don't want to get ahead of ourselves. I think the market supports a growth rate north of 20%. The market supports that. I’d say when you generally think about the broader market with more workloads coming online with AI and kind of continued evolution of AI and AI becoming more production-level workloads, you're going to see more of that. We've got to execute against what we have in front of us here, which is green shoots. They're playing out. We've got to deliver a good second half. We've got to continue to see progression in our growth in net new ARR. We'll see. We are certainly not constrained. The products aren't constrained. I’d say the go-to-market is not constrained. We're in an environment where we have to execute that. Yeah. Now, you raised the full year after Q2. In the past, you've been a little hesitant to do that early. It was still relatively early in the year. What were some of the signals that, because now you talked about large deals, and one of the questions that we had from investors is like, "Okay, if there's large deal uncertainty, they raise guidance. Does that increase the risk of variability in the back half of the year?" What gave you the confidence, though, to raise the full year? I would say that our go-to-market leadership has continued to advance and mature. Our CRO has now been in the company for two-plus years. He's brought in many new leaders on his team. I think we've certainly upleveled the leadership. I would say the quality of the pipeline, the quality of the reviews, the quality and depth of our understanding of the fundamentals of the business is pretty strong. Our visibility is really good. Visibility gives you confidence. When we look at kind of where we're at, pipeline growth is better than it's been in four quarters. It's growing almost 2x the rate of our ARR growth rate. It is very, very, very healthy. That visibility, visibility with quality of pipeline and knowing this pipeline at a level of detail with a team of people, I'd say, that are inspecting it pretty well, gave us a lot of confidence to increase the guide. What I would say is that we certainly have to execute against it. One of the things we talked about was that the pipeline is big enough that if we have similar close rates that we saw in the first half of the year, you'll deliver better than what we've prepared. We did de-risk the back half of the year knowing that there is timing variability with large deals. Yeah. Let's talk about why that pipeline is growing as rapidly as it is. I mean, I think one of the presumptions is, is the core economy more comfortable with AI rollouts, inferencing? Are you seeing anything from the pipeline would suggest this? What is driving that underlying confidence in these customers to think more broadly about monitoring in the future? I think it's a couple of things. The number one sales play that we have been able to get progress in, we have three sales plays. We have end-to-end observability. We have kind of our traditional land with an application where we provide application performance monitoring or a cloud data workload, which is a little bit more grassroots. The number one sales play has been end-to-end observability. You say, what's causing these large deals? What's causing these large deals is we focus on large enterprises with very large, complex, hybrid environments. They have on-prem solutions. They have hybrid solutions. They have hyperscaler solutions. They have basically an abundance of all of them. They have fragmented tools. They have fragmented tools in their ecosystem. I think what's been happening is what started out as maybe an early theme 18 months ago was customers considering, "I need to start consolidating these tools to get better economics." That's become a more pervasive trend, especially for these large customers. We've made great traction in being able to consolidate tools, save customers money, save customers money on software costs, consolidate fragmented tools, lower their software bill. You allow their environment to run more efficiently. What you get with the Dynatrace platform is not just an efficient operation, but an ability to actually diagnose where exactly issues are so you can go remedy them and hopefully prevent them from occurring in the first place. Your point about why are things building? I think things are building because customers are frustrated with what they have in place. It is not just about, "Hey, I want to monitor new workloads." There is an element of that, right? There is also an element of, "I do not like what I have. I spent a lot of money. I have fragmented tools, and I still do not manage outages very well. I have a lot of dashboards. I have a lot of alerts, and I have a lot of people chasing. I need a new way of dealing with it." I would say we have a unique proposition in that regard, which is why large, complex enterprises like Dynatrace. It sounds like it's multifaceted what's driving some of this pipeline. How much of it is customers thinking about AI-native app build? Because I think there's a lot of perception. Some of that workload going elsewhere. When you talk to your customers, like banks, insurance, Global 2000 customers. Yeah. I mean, the I mean, the reality is everyone is experimenting with AI workloads. And they're in the enterprise. And there are many companies that have AI workloads that are in production environments. But it is still a small percentage. But there will be more. And this will continue to grow. And this will continue to build. One of the things that we have found is that people have asked me, "Hey, is the investment people are making in AI crowding out investments in other areas, Matt?" The reality, because it isn't like the CIO is getting a huge budget increase, right? They have to figure out a way, where am I going to lower costs to be able to self-fund some of these things? I think that's where this end-to-end observability proposition comes in, which is they get a twofer. They can lower their software costs by consolidating fragmented tools, and they can deliver a better result. I think we are the beneficiary of that. What it allows the customer to do is they can free up dollars to invest in other initiatives that they have because we're able to save them money in the process. Part of it, too, is that customers feel more comfortable in now we're sort of we're well into the AI cycle at this point, but some of the AI budgets are more defined. All of a sudden now it's like, "Oh, well, as that increases, therefore my we'll get into DPS in a second, but my consumption needs to increase too. There is an element of that. That's the benefit of the Dynatrace platform subscription model. You get full access to the platform. You're not having some sales engagement where someone's having to sell you something. You get a rate card. You get full access to the platform. You can trial anything you want. That certainly does benefit, whether it's an AI workload or even an existing workload. From a DPS perspective, I think it's now 70% of ARR and 50% of customers are on it right now. When you see the opportunity for that DPS pipeline, I mean, obviously, there's further expansion just within the customer base. What is it that effectively, why is that resonant? Is it because it increases the usability of the platform? It increases the amount of ROI that customers are seeing and obviously paying for that? Yeah. I I mean, the number one complaint that we received as a company before we implemented the Dynatrace platform subscription is, "We love your products, but you are very hard to do business with because we have to buy a finite number of SKUs for this. And then if we want to swap something out, that we want to buy something else," it was always a sales engagement, Matt. With the Dynatrace platform subscription, you commit to a dollar amount. You get full access to the platform over a term. It's much easier for customers to buy what they want, use what they want. We knew this was going to be the case. We knew if they were going to get more value out of it, they would expand and use more of the platform. We're seeing that play out. The DPS customers consume 2x the rate of a SKU-based customer. They consume 2x the number of capabilities. They use more of the products. They use more of the platform. One of the things that we introduced just six months ago is we did not have a CSM motion that was actually measured on driving consumption because that was not the model before. The model before was largely sales sold something. You had a CSM motion that was there as needed for the customer, more of a customer satisfaction role. I would say more passive. We now are compensating our CSMs. We are now compensating our strike teams, which are focused on three product categories: logs, DEM, and application security. They are measured. They are compensated on consumption. What goes hand in hand, get them on DPS. You now have teams of people that are there to drive adoption. You drive adoption. We talked about consumption growing north of 20%. The business is not growing north of 20% right now for ARR. The business is not growing north of 20% on subscription revenue. What it tells you is that consumption at 20% growth is a leading indicator of what usage of the platform customers are using. It will pivot over time. It will lead to an acceleration. You obviously have to continue at those rates. I think we have the recipe now. The recipe with the go-to-market motion is maturing. I'd say we are already seeing traction in that. The recipe now of augmenting this Dynatrace platform subscription model with a consumption orientation and a consumption measurement, all of these things lead to more consumption and expansion of Dynatrace, which is good. Yeah. Another element, ODC, which has been a topic of conversation for the last several quarters. You saw customers recommit, less ODC. I mean, I guess fundamentally, why? Do you envision a point in the future? Because I think one of the questions that we get is Dynatrace, they give us a lot of transparency in these metrics, but is there a point in the future where it's about subscription revenue growth? We. Yeah. I mean, one of the things we've always tried to do with investors is be super transparent, as you know. Life was simple a year and a half ago where investors just worried about ARR, and they worried about new logos, and they worried about expansion, right? That was the recipe for the model. When we introduced the Dynatrace platform subscription, an unforeseen thing happened last year, which is customers all of a sudden decided that when they were very early in their contract lifecycle, one year, most of our DPS contracts are three years, year in, consuming at a rapid clip, they went on demand. They paid us an overage. We didn't really expect that. We would try to be helpful for investors around. We are seeing a phenomena for customers where early in their contract lifecycle, they may be not choosing to do an expansion because they just went through a renewal maybe a year ago. Now what we're seeing, Matt, is now that we're now seeing the second-year cohort class, which is of DPS customers that are now in their second year of their three-year contract reset. If they're consuming at a very rapid clip, they're more incented now to do an early expansion. One, they're closer to their renewal date. You're within a year. When you're in year one, you're two years away. Two, they're probably leveraging more of the platform after being on the Dynatrace Platform Subscription for two years. There is an economic benefit for them that they're going to get a better unit price. I use the example of you might have a customer that was on a three-year agreement, $1 million a year. Maybe year one, they were consuming at $1.2 million. And you say, "You know what? $1.2 million, one year into the agreement, I'll go on demand for the $200,000." Now you're in year two. That $1.2 million has maybe become $1.8 million. And you say, "Wait a minute. Now I'm reaching a point where if I do an early expansion and maybe I commit to more like $2.5 million-$3 million a year, I'm going to get better unit pricing." You saw that play out in Q2. You saw customers that chose that route. I think what investors need to realize is that we haven't gone full circle or full cycle, I should say, with Dynatrace platform subscription customers. In fiscal 2027, our next year, that will be the first year where you have customers that are going through their third year of their cohort. You'll have second years and first years. You're going to have a much more balanced list of customers that are either going to do an expansion or they're going to go on demand. Obviously, we have to continue to drive consumption. You have to continue to make sure that motion works. The recipe is working. We just got to continue to play it. I guess from a goalpost perspective then, ARR was the metric early on. Then it felt like subscription revenue was kind of the new North Star. How would you tell investors to think about balancing all these things? Because it does, the reality is it's helpful. The transparency is helpful, but it does create a lot of questions. Yeah, it does. I mean, if you really kind of boil it down, subscription revenue is both ARR that manifests itself in subscription revenue and it's ODC. At the end of the day, what shows up in the P&L is subscription revenue. I'd say the leading indicator of how are you guys making traction is net new ARR. How is the company doing on generating net new ARR? I mean, if I were to kind of boil it down and say, "Hey, you provide a lot of metrics, but what metrics do you think I should really continue to focus on?" I think net new ARR and net new ARR growth is a really important metric. We're starting to show traction in that. If you can accelerate and continue to accelerate net new ARR, you will see an acceleration in ARR. ODC, it's 1% of revenue. I think it was we needed to introduce it for investors because it was new. I would say it's 1% of revenue. It's not going to move around much more than that. Just take it for what it is. It's going to show up in subscription revenue. It's going to be 1% of the revenue. Really what you need to focus on is how are we doing around ARR and generating net new ARR? If I were to simplify it, that's probably the simplest metric to look at. We've shared, and I think we'll continue to share possibly, how is consumption going on? At the end of the day, getting customers onto the platform, the metrics that investors look at financially are ARR, net new ARR, whether it be new logos, whether it be NRR. Those are all important building block metrics. At the end of the day, what drives them is consumption. If you can consume, if you are getting consumption growing at a rapid rate, those metrics will pivot. We do not want to confuse investors. We want to make sure, as we always do, that we provide full disclosure. If I were to really simplify it, ODC, 1% of revenue, focus on net new ARR and ARR, and that ultimately will measure the health of the business. What it sounds like is if you're seeing consumption grow at a 20% clip, that could be a preferred strategy. You will see a convergence over time. If we can continue to have consumption grow north of 20%, you will see a convergence of ARR and net new ARR growth will start to match that. The other question that we had a lot is, can you help us think about the Q3 and Q4 seasonality of net new ARR relative to prior years? Yeah. I'm glad you actually brought that up. One of the things we shared on the earnings call was I said, "Hey, I think that we'll be a little bit more weighted to Q4." I think what people missed was the little. I'm certainly aware of how the investor community, the sell side has modeled it. I think the sell side has modeled it at more like 37% of your net new ARR will happen in Q3, and then 63% will happen in Q4. It will not be nearly that. Extreme. Yeah. No. I mean, last year, I think it was 48% in Q3, 52% in Q4. The year before, it was like 45% in Q3, 55% in Q4. It'll probably be in between where we were in fiscal 2024 and fiscal 2025. What's out there now is way too backhand loaded to Q4. It'll probably be more in the kind of 46%-54% range. Okay. That's helpful. Yeah. It's always helpful to see when the dust settles how. Just to be clear, the underpinning of that was we were not demand constrained. All we did was try to effectively build some prudence into the timing of deals closing. The reason we wanted to orient a little bit more in Q4 was that if you have deals for Q3 that are slated to close in Q3, if it slipped or a customer decision happened in Q4, you maybe will see more of that. The other question we had, and Noelle, you and I chatted about this before, but subscription revenue, you guided Q3 13%-14% in constant currency, which is a step down. I think you did 17%, I think, in Q2 on a constant currency basis. Walk us through the thought process around that because I think a lot of people are like, "Oh, is he implying some massive disinflation? No. I mean, as you probably know, that in general, the model for subscription revenue is a ratable revenue recognition model. There's two phenomena going on with that. One, we changed the way we are accounting for ODC revenue, where ODC revenue used to be revenue that was recognized as incurred. So we had very large Q3 and Q4 ODC revenue. Now it's ratable. You're going to have a tough compare in the second half of the year. Think of it as it's not operationally, the business is growing more in the mid-teens. You're going to see both in Q3 and Q4. It's not a matter of you're not fueling it enough with net new ARR. It's a matter of you got a tough compare on ODCs from the year-ago period. I'd say, like all businesses, every now and again, you go through periods where it's handfuls of millions where you have one-time revenue adjustments. We happen to have more one-time revenue adjustments last Q3 and Q4. There's a little bit of a difficult compare. If I were to simplify it, those growth rates are more in the mid-teens. Exiting fiscal 2026, the business is going to be growing more in the mid-teens. Okay. Okay. That's helpful. I guess the other question that we had is, despite the acceleration in the business, NRR hasn't moved, which is a trailing metric. Just kind of walk us through how we should think about that. You don't guide to it, but how can we think about that metric progressing? If we're continuing to be successful with where we've been and we continue to see net new ARR growth like we saw in the first half, and that becomes the new normal where you're growing in kind of the teens, because call it 65%-70% of our net new ARR comes from expansions, the NRR metric will trend up. I think what people do not fully appreciate is because it is a trailing 12-month metric, it does not move a lot one quarter to another. It should inflect upward over time if we continue to drive net new ARR growth. Ultimately, that number, which was stable, we actually were pretty pleased that it was stable Q1 to Q2. I think every quarter, if we continue to see expansions the way we've seen them in the first half of the year, you'll start to see that inflect up. Again, every quarter, it'll be modest. It'll be like 30, 40 basis points a quarter. Investors have asked me about where will I see more your net new ARR growth. Where is it going to come? Is it going to come more from expansions, or is it going to come more from new logos? It's going to probably come more from expansions. Therefore, you'll see it more in NRR over time. I think that's a direct manifestation of a lot of the account rep changes that you've mentioned. Our go-to-market changes were very oriented around getting deeper penetration with our existing customers. Now, we do not want to lose sight of new logos. They are still important. We have a little over 4,000 customers. We target the global 15,000. There is a lot of room to run on capturing new logos. They are important. Reps are focused on bookings. They can maximize bookings. If they can maximize it through expansion of new logos, they will do it whatever is easiest. Reflecting back on some of the changes that you made in terms of reallocating some of the accounts to some reps, six-month quotas that allow you some flexibility to change, what grade would you give you guys internally on some of the execution of some of these changes? Do you feel like you've executed to sort of plan? Oh, absolutely. I would say that what we outlined, we have exceeded our internal expectations for execution across all those areas. We've seen a 45% increase in our strategic account pipeline. We've seen 10-15 deals of over a million dollars a year that were closing in Q1 and Q2. Everything we talked about that we were making changes in last year, we're starting to see green shoots from them. They're already in the results. The two six-month quotas, I think we've seen an improvement in linearity. We said that we thought that there would be an improvement in linearity because they're incented to sell all year, not just at the back end of the year. I think we have executed exceptionally well against all of those changes. We just got to continue to put more points on the board. One of the things I've said is what I would like is we got to get to the point where it's not good quarter, not so good quarter, good quarter. We got to build consistency where every, and right now we put two in a row. We've done Q1 and Q2 of very, very healthy kind of teens growth rates. The guide for the second half does not suggest that continues. I kind of told you that I think that that's because we're a little bit guarded in these large deals. We'll see how we do. Obviously, our internal plan is more ambitious than the guide. Having a March year-end, you benefit from theoretically two closes. You get the year-end December close and then your March quarter. Historically, have you seen much of a December enterprise flush? Modest. I would say it's not huge. It's like any that you do see that potentially, but it is we don't plan for huge budget flush. Especially with a lot of these deals that we're talking about, they're not necessarily budget flush oriented. These are C-level decisions that you're making around, "I actually want to do a consolidation of tools." They don't necessarily coincide with a December end decision. Usually, decisions coincide more with whatever the customer's timeframe is for how quickly do they think they can actually execute against the consolidation in a transition. Unfortunately, we got 90 seconds left. We didn't even talk about Logs. We didn't talk about DEM. We didn't talk about a lot of things. I guess when we sit back, I look for these opportunities because I think ultimately acceleration is rewarded by. We're seeing that in a number of other software companies. When you sit here today and you think about that opportunity, it feels like there's many, many levers that could get you there. How would you leave us thinking around the most important if we were to just look at one or two things? What are the most important? I would say that you mentioned logs. We're rapidly approaching kind of our first milestone, which is $100 million. That is $100 million on its path to something well above that. We are early days in logs. There is a huge opportunity for us to go and drive acceleration within logs. I'd say logs, I think the go-to-market change we've made, they will just continue to mature. We are 18 months in, we're seeing it in the results, we're getting traction with partners. That will continue to grow and mature. I think we'll see more traction in that regard. I think this focus now in the company around driving consumption with CSM teams and these strike teams, consumption ultimately will fuel expansions. Between logs, the go-to-market changes that are they're not just maturing anymore. I'd say they're in place, and we're starting to see the benefit of those. Combined with a recipe of driving more consumption, I think those three things are going to be the catalyst for growth for the company. Yeah. We're down right out of time, but really from all of us, best of luck. And we thank these stories. Thanks for having us, Paul. Thanks.