Investor Summary
Fund Strategy
FUND PERFORMANCE AS OF 31st March 2026
| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | - | - |
| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | - | - |
Starboard Value, as one of Dynatrace's largest shareholders, believes the company represents an attractive investment opportunity that has been incorrectly perceived as exposed to AI risks. The firm argues Dynatrace is actually well-positioned to benefit from enterprise AI adoption, as increased deployment of AI agents and applications will drive demand for observability solutions. The company's consumption-based pricing model and leading position in Application Performance Monitoring provide competitive advantages. Despite strong fundamentals, Dynatrace has significantly underperformed peers across multiple timeframes, trading at steep valuation discounts. Starboard identifies opportunities for meaningful margin expansion through improved sales efficiency and R&D productivity, targeting at least 500 basis points of operating margin improvement by FY2029. The firm advocates for aggressive capital returns, believing the company could repurchase over $2.5 billion in shares while maintaining strong cash balances. With convergence of observability and cybersecurity creating strategic optionality, Starboard sees multiple paths to value creation and expects the company to generate over $3.30 in free cash flow per share by FY2029.
Dynatrace is a high-quality observability platform positioned to benefit from enterprise AI adoption, with significant opportunities for margin expansion through operational improvements and value creation through aggressive share repurchases at attractive valuations.
Starboard believes Dynatrace can deliver re-acceleration of revenue growth and meaningful margin expansion over the next few years while returning significant capital to shareholders, with potential to generate more than $3.30 of free cash flow per share by FY2029.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Apr 28 2026 | 2026 Q1 | DDOG, DT | Activist, AI, Buybacks, margin expansion, Observability, software, value creation | DT | Starboard Value sees Dynatrace as misunderstood software platform positioned to benefit from AI adoption rather than face disruption. Despite strong competitive position in observability market, shares have significantly underperformed due to margin concerns. Firm targets 500bps margin expansion through operational improvements while advocating aggressive share buybacks at attractive valuations, expecting doubled free cash flow by FY2029. |
| Feb 18 2026 | 2025 Q4 | AMD, APLD, CIFR, DLR, EQIX, HUT, RIOT, WULF | Activist, AI, crypto, Data centers, Power, value | RIOT | Starboard Value targets Riot Platforms' transformation from bitcoin mining to AI/HPC data centers. With 1.7GW of prime Texas power capacity, recent AMD deal validation, and potential for $1.6+ billion annual EBITDA, Riot could reach $23-53 per share. Execution urgency critical given dynamic AI market and peer outperformance. |
| Oct 21 2025 | 2025 Q3 | ABNB, BKNG, CART, CHWY, EBAY, ETSY, EXPE, MTCH, TRIP, W | AI, Experiences, M&A, Marketplace, Online travel, Travel, valuation |
TRIP TRIP |
Tripadvisor trades at 6.5x EBITDA, a significant discount to peers, due to misconceptions about control structure and business mix. Company operates three market-leading travel businesses with Viator and TheFork comprising 60% of revenue in fastest-growing travel segments. Multiple value creation paths include TheFork sale, Viator margin expansion, and Brand Tripadvisor transformation through AI monetization. |
| Jul 15 2024 | 2024 Q2 | MTCH | activism, Buybacks, growth, Margins, technology, value | MTCH | Starboard Value targets Match Group as deeply undervalued at 8.5x free cash flow, advocating for Tinder product improvements, 40% margin expansion, and aggressive buybacks using available cash flow and debt capacity. The activist sees significant value creation potential through operational improvements and capital allocation optimization, with private company structure as alternative if public execution fails. |
| Jun 17 2024 | 2024 Q1 | ADSK | Accounting, activism, Board Oversight, Governance, Shareholder rights, software | ADSK | Starboard Value is pursuing legal action against Autodesk after an audit investigation revealed the company intentionally misled investors about billing practices to inflate free cash flow. Despite governance failures and missed financial targets, Starboard maintains conviction in the underlying business quality and sees significant value creation opportunity through improved oversight and operational execution. |
| Jan 31 2024 | 2023 Q4 | GDDY | activism, free cash flow, Margins, technology, valuation | ARIS|BAB LN|GDDY|GXI|III LN|IOT|IRTC|MIPS SS|RBC|SAIA|SPOT|SRT GR|TTD|WING | Starboard Value pushes GoDaddy to balance growth with profitability through margin expansion and aggressive share buybacks. Despite recent momentum, the company trades at a discount to peers. With $4+ billion in projected free cash flow over three years, Starboard sees substantial upside through execution on realistic targets and capital returns to shareholders. |
| Oct 31 2023 | 2023 Q3 | AQN, BLMN, CRM, DRI, FTRE, GDDY, ICLR, IQV, NWSA, NYT, REA.AX, SPLK, TXRH, VRT, WIX | activism, Media, Operational, Restaurants, technology, Utilities, value | - | Starboard Value targets operationally challenged companies trading at discounts to peers. Current portfolio includes GoDaddy needing margin expansion, News Corp with undervalued digital real estate assets, Fortrea requiring CRO margin improvement, Bloomin' Brands with restaurant execution gaps, and Algonquin Power offering utility value at significant peer discounts. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q1 |
AIEnterprise AI adoption will increase demand for observability solutions as companies deploy more applications and AI agents, creating growth opportunities for platforms like Dynatrace that can manage complex telemetry data across heterogeneous environments. |
Enterprise AI Observability AI Agents Telemetry |
ObservabilityDynatrace is positioned as a leading observability platform that should benefit from AI adoption and the convergence with cybersecurity, with opportunities for automated remediation through AI agents and continued market share gains. |
Platform Monitoring Davis AI DPS | |
CybersecurityThe convergence of observability and cybersecurity continues as AI advances, with real-time visibility becoming foundational to both performance monitoring and threat detection, creating strategic optionality for Dynatrace. |
Convergence Threat Detection Security | |
CloudDynatrace's platform manages complex environments spanning on-premise infrastructure and cloud environments, with consumption-based pricing model strengthening positioning as enterprises add workloads and consolidate observability environments. |
Infrastructure Consumption Workloads | |
| 2025 Q4 |
FinancialsThe Fund is currently substantially invested in the Financials sector, with performance closely tied to developments in this industry. Companies in the Financials sector may be adversely affected by changes in the regulatory environment and interest rate changes. |
Banks Insurance Interest Rates Regulation |
| 2025 Q3 |
TravelTripadvisor operates three distinct market-leading businesses in the online travel category. The experiences segment is the fastest growing category in travel, having grown approximately 200% since 2019. Online experiences has the lowest penetration of all travel categories at less than 30%, compared to 85% for cruises and 74% for flights, creating significant growth opportunity. |
Online Travel Experiences Tours Activities Attractions |
AIBrand Tripadvisor is the most cited travel website by large language models and is the single most cited source for travel data. Tripadvisor is already a partner to OpenAI for both ChatGPT and its agentic tool, Operator. The company has opportunities to further monetize its valuable dataset through licensing agreements with AI partners. |
LLM ChatGPT OpenAI Data Licensing Dataset | |
E-commerceViator operates as the leading global marketplace for tours, activities, and attractions with over 400,000 bookable experiences and $4+ billion in gross booking value. TheFork serves as Europe's largest marketplace for restaurant listings and reservations. Both platforms demonstrate the shift toward online marketplaces in their respective categories. |
Marketplace Platform Booking Reservations Digital | |
| 2024 Q2 |
ValueMatch trades at less than 8.5x 2024 free cash flow, representing a nearly 45% discount to comparable technology companies despite its quality business characteristics and market leadership position. |
Undervalued Discount FCF Multiple Valuation Quality |
BuybacksStarboard advocates for aggressive share repurchases given Match's depressed valuation, recommending the company use 75% or more of free cash flow plus available debt capacity for buybacks to accelerate per-share growth. |
Share Repurchases Capital Return Leverage Per Share Growth Cash Flow | |
| 2024 Q1 |
GovernanceStarboard identifies significant governance failures at Autodesk, including the Board's decision to withhold material information from shareholders ahead of the nomination deadline to preserve the status quo. The Board commenced an investigation in March but delayed disclosure to shareholders until after the nomination window closed, while informing the SEC weeks earlier. |
Board oversight Shareholder rights Disclosure timing Director independence Executive accountability |
AccountingThe Audit Committee Investigation revealed that Autodesk intentionally misled investors about its billing practices, telling investors it was transitioning to annual billing while actually pursuing multi-year upfront billings at substantially higher rates to artificially inflate free cash flow. This manipulation directly impacted a key operational metric used for executive compensation. |
Free cash flow Billing practices Financial reporting Audit investigation Disclosure violations | |
| 2023 Q4 |
BuybacksStarboard advocates for continued share repurchases as the best use of capital given GoDaddy's undervaluation. They anticipate over $4 billion in free cash flow over three years, representing nearly 30% of current market cap, and recommend using 95% for share buybacks to drive per-share value creation. |
Share Repurchases Capital Allocation Free Cash Flow Undervaluation |
| 2023 Q3 |
ValueStarboard focuses on identifying undervalued companies with operational improvement opportunities. The firm targets companies trading at discounts to peers due to execution issues or temporary challenges, believing these can be addressed through better management and strategic changes. |
Undervalued Operational Discount Peers Execution |
RestaurantsStarboard presents Bloomin' Brands as an opportunity to replicate their success at Darden. They believe Outback Steakhouse has significant operational improvement potential and that Bloomin' trades at a meaningful discount to peers like Darden and Texas Roadhouse due to execution gaps. |
Outback Operational Execution Casual Dining Steakhouse | |
UtilitiesAlgonquin Power represents a diversified utility with regulated services and renewable energy assets trading at a significant discount to peers. The company has unique water utility exposure and a green generation mix, but faces leverage concerns and dividend sustainability questions. |
Regulated Renewables Water Leverage Dividend | |
MediaNews Corp owns valuable media assets including a controlling stake in REA Group. Starboard believes the company trades at an attractive valuation and that separating digital real estate assets could unlock substantial value for shareholders. |
REA Group Digital Real Estate Separation Dow Jones Valuation |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Apr 28, 2026 | Fund Letters | Starboard Value | DT | Dynatrace, Inc. | Software - Application | Systems Software | Bull | New York Stock Exchange | AI, Application Performance Monitoring, cloud infrastructure, Consumption-based Pricing, Cybersecurity Convergence, Enterprise software, growth, margin expansion, observability, SaaS, share repurchase, Value | Login |
| Feb 18, 2026 | Fund Letters | Jeffrey Smith | RIOT | Riot Platforms, Inc. | Information Technology | Data Center REITs | Bull | NASDAQ | Activism, AI, data centers, infrastructure, monetization, Power, valuation | Login |
| Oct 21, 2025 | Fund Letters | Jeffrey Smith | TRIP | Tripadvisor Inc. | Consumer Discretionary | Online Travel Services | Bull | NASDAQ | Activism, AI data, Experiences, Governance, margin expansion, spin-off, valuation | Login |
| Oct 21, 2025 | Fund Letters | Jeffrey Smith | TRIP | Tripadvisor Inc. | Consumer Discretionary | Online Travel Services | Bull | NASDAQ | Activism, AI data, Experiences, Governance, margin expansion, spin-off, valuation | Login |
| Jul 15, 2024 | Fund Letters | Starboard Value | MTCH | Match Group, Inc. | Communication Services | Interactive Media & Services | Bull | NASDAQ | activist, capital allocation, margin expansion, market leader, Online Dating, product innovation, SaaS, Share Buybacks, technology, turnaround, Value | Login |
| Jun 17, 2024 | Fund Letters | Starboard Value | ADSK | Autodesk, Inc. | Software & Services | Application Software | Bull | NASDAQ | Activist Investment, architecture, construction, Design Software, engineering, Entertainment Software, Governance Reform, margin expansion, operating leverage, SaaS, share repurchases, value creation | Login |
| Jan 31, 2024 | Fund Letters | Starboard Value | ARIS|BAB LN|GDDY|GXI|III LN|IOT|IRTC|MIPS SS|RBC|SAIA|SPOT|SRT GR|TTD|WING | GoDaddy Inc. | Information Technology | Internet Services & Infrastructure | Bull | NASDAQ | activist, e-commerce, Free Cash Flow, internet services, margin expansion, Payments, recurring revenue, SaaS, share repurchases, turnaround, Value | Login |
| TICKER | COMMENTARY |
|---|---|
| DT | Starboard has made a substantial investment in Dynatrace because we believe the Company is a high-quality, durable observability platform with a long runway for continued growth and an opportunity for significant margin expansion. We believe Dynatrace has an opportunity for significant value creation. Despite the tailwinds supporting the observability sector and Dynatrace's attractive position within this market, the Company's share price performance has been disappointing. Dynatrace has significantly underperformed the broader market, a broad-based technology index, the software sector, and its closest public peer, Datadog, over the last 1, 2, 3, 4, and 5-years. We believe Dynatrace should be able to generate at least 40% incremental margins on future revenue growth. We believe Dynatrace should target at least 500bps of adjusted operating margin expansion by FY2029. We believe Dynatrace can generate more than $3.30 of free cash flow per share by FY2029, nearly double FY2026 levels. |
| DDOG | Dynatrace has significantly underperformed its closest public peer, Datadog, over the last 1, 2, 3, 4, and 5-years. |
| Ticker | Put/Call | Amount Bought | Shares Bought | % Change | Weight % |
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| Industry | Prev Quarter % | Current Quarter % | Change |
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