--- title: "Dynatrace says AI customers consume its platform at twice the rate" description: "CFO James Benson's doubling claim is the most concrete AI-monetization number enterprise software has produced, and the mechanism behind it is real: observability bills scale with AI sprawl. At close to 80 times trailing earnings, the stock has already paid for that usage to reach the P&L." publisher: "The Inference" section: "Platforms" published: 2026-11-14T15:15:16.749Z modified: 2026-11-14T15:15:16.749Z canonical: https://theinference.org/article/dynatrace-says-ai-customers-consume-its-platform-at-twice-the-rate language: en keywords: "Earnings, Observability, Enterprise Software, AI Infrastructure" --- # Dynatrace says AI customers consume its platform at twice the rate > CFO James Benson's doubling claim is the most concrete AI-monetization number enterprise software has produced, and the mechanism behind it is real: observability bills scale with AI sprawl. At close to 80 times trailing earnings, the stock has already paid for that usage to reach the P&L. [Dynatrace](https://theinference.org/markets/companies/dynatrace), whose observability software watches how applications and cloud infrastructure behave, has put the cleanest AI-monetization number in enterprise software on the record. Chief financial officer James Benson [told BMO's technology conference on November 12, 2026](https://www.marketbeat.com/instant-alerts/event-dynatrace-sees-ai-customers-consuming-its-platform-at-twice-the-rate-fueling-growth-hopes-2026-11-13/), that customers running large language models or agentic workflows on the platform consume it at twice the rate of everyone else [1]; chief executive Rick McConnell said the same, more than twice, on the November 3 earnings call [2]. The claim deserves to be taken seriously because it names a mechanism. It has not yet reached the profit line. Observability is one of the few software lines where AI raises the bill instead of compressing it: every agent step emits telemetry, and someone has to store and check it. ## Agents are chatty, and telemetry is the bill Agents are chatty. Every model call, tool use and autonomous step emits traces and logs, and Dynatrace, which charges by consumption, is the one that stores and checks them. [Its own research puts the rise in log volume from AI workloads at 93% in a year](https://www.msn.com/en-us/news/other/dynatrace-q2-2027-earnings-call-transcript/ar-AA2gFHTm) [2]. The revenue line follows the telemetry: logs consumption is approaching $250 million a year [1]. Three quarters ago it was $100 million [1]. More than 1,100 customers already run AI workloads on the platform, and since October 1 the company has charged for its own agents as well [2]. For those customers, AI sprawl now has a line item. ## Usage is outrunning bookings, and the proof is back-loaded On that same earnings call, platform consumption grew more than 20% while net new annual recurring revenue was flat from a year earlier, as large deals slipped into the second half [2]. [The stock fell almost 15% that day](https://seekingalpha.com/news/4664019-dynatrace-falls-15-on-trimmed-earnings-guidance) [4]. Benson calls the slippage timing rather than demand, and the calendar is why he can: seven of ten annual renewals fall in the fiscal second half, most of them in the fourth quarter [1]. He expects AI-related consumption to rise significantly in calendar 2027, and says revenue growth lags consumption [1]. One caution sits inside the headline number: the twice-rate cohort is self-selected, customers who chose Dynatrace for AI work in the first place [1]. ## At 80 times earnings, shareholders own the lag Dynatrace [still trades near 80 times its trailing earnings](https://www.trefis.com/stock/dt/articles/624866/can-you-justify-buying-dynatrace-stock-today/2026-11-13); the S&P 500 sits at 22 [3]. The net margin behind those earnings is 7.4% [3]. [Datadog](https://theinference.org/markets/companies/datadog), its larger observability rival, [grew 35% in the same quarter](https://theinference.org/article/datadog-grew-revenue-35-beat-every-line-and-still-lost-11-on-a-flat-december-guide) [5], so the demand is not in question; Dynatrace's conversion of it is. *Chart: **Datadog's growth has pulled nearly 18 points clear of Dynatrace** Line chart of year-over-year revenue growth for Dynatrace and Datadog, Q4 2024 to Q3 2026, in percent* *Year-over-year revenue growth, percent, by calendar quarter, from Dynatrace's and Datadog's SEC filings. Dynatrace has held between 16% and 20% for eight quarters while Datadog accelerated from 25% to 35%. [6][7]* *Chart: **Revenue has compounded for twelve quarters; operating profit stays a thin slice** Line chart of Dynatrace quarterly revenue and GAAP operating income from Q4 2023 to Q3 2026, in millions of dollars* *Quarterly revenue and GAAP operating income, USD millions, from Dynatrace's SEC filings; calendar quarter labels. [6]* The tests are dated. The renewal wave lands in the fiscal quarter ending in March, and Trefis marks the February results, with net margin the number to watch [3]. The usage half of the claim is already visible in consumption data and on customers' bills. The profit half is a conversion the company has scheduled, mostly, for one quarter, at a price that has already paid for it. ## Takeaway Dynatrace says AI workloads consume its platform at twice the rate of everything else, and log consumption has gone from $100 million to nearly $250 million a year in three quarters. But net new recurring revenue was flat, rival Datadog is growing twice as fast, and at close to 80 times trailing earnings the stock has already paid for the conversion the company says lands in the March quarter. ## Sources 1. [MarketBeat, Dynatrace Sees AI Customers Consuming Its Platform at Twice the Rate, Fueling Growth Hopes, 13 November 2026](https://www.marketbeat.com/instant-alerts/event-dynatrace-sees-ai-customers-consuming-its-platform-at-twice-the-rate-fueling-growth-hopes-2026-11-13/) 2. [Benzinga via MSN, Dynatrace Q2 2027 earnings call transcript, 3 November 2026](https://www.msn.com/en-us/news/other/dynatrace-q2-2027-earnings-call-transcript/ar-AA2gFHTm) 3. [Trefis, Can You Justify Buying Dynatrace Stock Today?, 13 November 2026](https://www.trefis.com/stock/dt/articles/624866/can-you-justify-buying-dynatrace-stock-today/2026-11-13) 4. [Seeking Alpha, Dynatrace falls 15% on trimmed earnings guidance, 3 November 2026](https://seekingalpha.com/news/4664019-dynatrace-falls-15-on-trimmed-earnings-guidance) 5. [Datadog press release via Markets Insider, Datadog Announces Third Quarter 2026 Financial Results, 4 November 2026](https://markets.businessinsider.com/news/stocks/datadog-announces-third-quarter-2026-financial-results-1036714080) 6. [Dynatrace quarterly figures from its SEC filings, retrieved 14 November 2026](https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001773383) 7. [Datadog, quarterly figures from its SEC filings, retrieved 14 November 2026](https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001561550) --- Dynatrace says AI customers consume its platform at twice the rate — The Inference. Canonical: https://theinference.org/article/dynatrace-says-ai-customers-consume-its-platform-at-twice-the-rate