Share-based Compensation

6 Months Ended

Sep. 30, 2025

Share-Based Payment Arrangement [Abstract]

The following table summarizes the components of total share-based compensation expense included in the condensed consolidated statements of operations for each period presented (in thousands):


	Three Months Ended September 30,				Six Months Ended September 30,
	2025		2024		2025		2024
Cost of revenue	$	10,015	$	9,714	$	19,865	$	17,444
Research and development	29,718		26,607		56,579		48,187
Sales and marketing	22,576		20,750		42,610		36,772
General and administrative	14,505		14,632		29,655		26,957
Total share-based compensation	$	76,814	$	71,703	$	148,709	$	129,360

Amended and Restated 2019 Equity Incentive Plan

In July 2019, the Company’s Board of Directors (the “Board”), upon the recommendation of the Compensation Committee of the Board, adopted the 2019 Equity Incentive Plan (the “Equity Incentive Plan”), which was subsequently approved by the Company’s stockholders and was later amended and restated by the Board in January 2021.

The Company initially reserved 52,000,000 shares of common stock for the issuance of awards under the Equity Incentive Plan. The Equity Incentive Plan provides that the number of shares reserved and available for issuance under the plan automatically increases each April 1 by 4% of the outstanding number of shares of the Company’s common stock on the immediately preceding March 31 or such lesser number determined by the compensation committee. This number is subject to adjustment in the event of a stock split, stock dividend or other change in the Company’s capitalization. As of September 30, 2025, 63,327,488 shares of common stock were available for future issuance under the Equity Incentive Plan.

Restricted shares and units

The following table provides a summary of the changes in the number of restricted stock units (“RSUs”) and restricted stock awards (“RSAs”) for the six months ended September 30, 2025:


	Number of RSUs	Weighted Average Grant Date Fair Value		Number of RSAs	Weighted Average Grant Date Fair Value
	(in thousands)	(per share)		(in thousands)	(per share)
Balance, March 31, 2025	10,024	$	48.33	95	$	49.05
Granted	6,164	55.46		41	49.05
Vested	(3,694)	47.65		(44)	49.05
Forfeited	(600)	50.85		—	—
Balance, September 30, 2025	11,894	$	52.11	92	$	49.05

RSUs outstanding as of September 30, 2025 were comprised of 10.7 million RSUs with only service conditions and 1.2 million RSUs with both service and performance or market-based conditions (“PSUs”).

During the six months ended September 30, 2025, the Company granted PSUs that contain financial performance conditions (the “Financial PSUs”) and PSUs based on relative total stockholder return performance (the “rTSR PSUs”). Both the Financial PSUs and rTSR PSUs are not earned if the applicable threshold percentage of the specific metric is not achieved. The maximum number of shares that may be earned is 200% of the target award. The PSUs are also subject to time-based vesting and are contingent upon the employee remaining employed by the Company or one of its subsidiaries through the applicable vesting dates.

The Financial PSUs generally vest 33% one year after the grant date and the remaining 67% vest ratably on a quarterly basis over the following two years. The number of shares that may be earned pursuant to the Financial PSUs granted in fiscal 2026 is based on specific Company metrics related to the Company’s fiscal year ending March 31, 2026.

The rTSR PSUs generally vest 33% annually after the grant date. The number of shares that may be earned pursuant to the rTSR PSUs granted in fiscal 2026 is based on the Company’s stock price performance relative to companies that are the constituents of the Russell 3000 index over performance periods of one, two, and three fiscal years that began on April 1, 2025.

As of September 30, 2025, the total unrecognized compensation expense related to unvested RSAs is $3.5 million and is to be recognized over a weighted average period of 1.2 years. As of September 30, 2025, the total unrecognized compensation expense related to unvested RSUs was $538.9 million and is expected to be recognized over a weighted average period of 2.2 years.

Stock options

The following table summarizes activity for stock options during the six months ended September 30, 2025:


	Number of Options	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
	(in thousands)	(per share)		(years)	(in thousands)
Balance, March 31, 2025	2,072	$	22.07

Exercised	(181)	20.68
Forfeited or expired	(11)	28.33
Balance, September 30, 2025	1,880	$	22.17	4.0	$	49,670
Options vested and expected to vest at September 30, 2025	1,880	$	22.17	4.0	$	49,670
Options vested and exercisable at September 30, 2025	1,880	$	22.17	4.0	$	49,670

As of September 30, 2025, there was no unrecognized compensation expense related to non-vested stock options.

Employee Stock Purchase Plan

In July 2019, the Board adopted, and the Company’s stockholders approved, the 2019 Employee Stock Purchase Plan (the “ESPP”). The Company offers, sells and issues shares of common stock under this ESPP from time to time based on various factors and conditions, although the Company is under no obligation to sell any shares under this ESPP. The ESPP provides for six-month offering periods and each offering period consists of six-month purchase periods. On each purchase date, eligible employees purchase shares of the Company’s common stock at a price per share equal to 85% of the lesser of (1) the fair market value of the Company’s common stock on the offering date or (2) the fair market value of the Company’s common stock on the purchase date. During the six months ended September 30, 2025, 254,003 shares of common stock were purchased under the ESPP. As of September 30, 2025, 21,047,506 shares of common stock were available for future issuance under the ESPP.

As of September 30, 2025, there was approximately $1.4 million of unrecognized share-based compensation related to the ESPP that is expected to be recognized over the remaining term of the current offering period.

Dynatrace, Inc. 10-Q