Dynatrace Inc. can now boast of topping analysts’ revenue expectations in each of the past four quarters after growing sales by 34% in the three months ended Sept. 30, to $226 million.

The company also detailed in its fiscal second-quarter earnings report today that 94% of its revenue came from subscriptions. Dynatrace provides a cloud platform that enables enterprises to detect and diagnose technical issues in their applications. The company has expanded into a number of adjacent areas as well, which is contributing to its continued revenue growth.

Based on its latest quarterly results, Dynatrace is now generating $864 million in annual recurring revenue, a significant improvement from the same time a year ago. “ARR, our leading indicator for growth, was up 35% year-over-year, and Subscription Revenue was up 35% year-over-year,” said Dynatrace Chief Executive Officer John Van Siclen. “We continue to see robust investment in digital transformation across all industries and all geographies.”

Companies are investing in observability software as part of their digital transformation initiatives because enterprise applications are highly difficult to troubleshoot manually. An application built using software containers can comprise as many as hundreds of individual modules, which makes it difficult to identify exactly which component is causing a technical issue. Moreover, after administrators identify the malfunctioning module, it’s not always obvious what specific snippet of code has to be changed for the issue to be resolved.

Dynatrace’s platform helps information technology teams troubleshoot malfunctions faster. The platform alerts administrators when a workload is experiencing technical issues and uses artificial intelligence to identify the root cause. Dynatrace can spot infrastructure-level malfunctions as well, and helps with cybersecurity by providing features that detect vulnerable code before it’s released to production.

Yet another use for the company’s platform is planning cloud migrations. Dynatrace provides features that enable organizations to map out all the applications in the corporate network, as well as other IT assets, and identify how they interact with one another. Using this information, IT teams can plan the best way to move applications to the cloud.

This past quarter was a notable one for Dynatrace not only because of its strong sales momentum. The company announced expanded partnerships with Microsoft Corp. and Google LLC to make its platform available for purchase through the software marketplaces in the two tech giants’ respective cloud platforms. The expanded partnerships are significant for Dynatrace because many customers use its platform to monitor applications they run in the public cloud, where Microsoft and Google are two of the largest market players.

Last quarter, Dynatrace also acquired a startup called SpectX to enhance its platform’s feature set. Troubleshooting application issues requires collecting a large amount of machine-generated technical data about a workload and the infrastructure on which it runs. SpectX developed a software platform that makes it possible to process machine-generated data faster.

Despite the cost of the acquisition, the terms of which were not disclosed, Dynatrace’s profit exceeded analysts’ expectations. The company increased its adjusted operating income to $61 million last quarter and delivered a profit of 18 cents per share, more than the 16 cents per share that the Zacks consensus estimate had projected. Dynatrace’s quarterly revenues of $226 million, meanwhile, was about 2.4% higher than the Zacks consensus estimate.

Image: Dynatrace