DigitalOcean Announces Second Quarter 2024 Financial Results
DigitalOcean (NYSE: DOCN) announced Q2 2024 financial results, reporting revenue of $192 million, a 13% year-over-year increase. Gross profit rose 15% to $117 million with a 61% margin. GAAP net income was $19 million, and Adjusted EBITDA was $82 million, reflecting a 42% margin. The company also introduced several new products, including GPU droplets for AI/ML applications and Premium CPU Optimized 96 vCPU Droplets. ARR ended the quarter at $781 million, up 15% year-over-year. ARPU grew 9% to $99.45. Guidance for Q3 2024 includes estimated revenue of $196-$197 million and a 37%-38% Adjusted EBITDA margin. Full-year 2024 revenue guidance was adjusted to $770-$775 million with an Adjusted EBITDA margin of 37%-39% and non-GAAP diluted net income per share of $1.60-$1.70.
DigitalOcean (NYSE: DOCN) ha annunciato i risultati finanziari del secondo trimestre 2024, riportando entrate di 192 milioni di dollari, con un aumento del 13% rispetto all'anno precedente. Il profitto lordo è aumentato del 15% arrivando a 117 milioni di dollari, con un margine del 61%. Il reddito netto GAAP è stato di 19 milioni di dollari e l'EBITDA rettificato è stato di 82 milioni di dollari, riflettendo un margine del 42%. L'azienda ha anche introdotto diversi nuovi prodotti, tra cui i droplet GPU per applicazioni AI/ML e droplet Premium CPU Ottimizzati da 96 vCPU. Il ARR ha chiuso il trimestre a 781 milioni di dollari, con un aumento del 15% rispetto all'anno precedente. ARPU è cresciuto del 9% arrivando a 99,45 dollari. Le previsioni per il terzo trimestre 2024 includono entrate stimate di 196-197 milioni di dollari e un margine EBITDA rettificato del 37%-38%. Le previsioni per le entrate dell'intero anno 2024 sono state aggiornate a 770-775 milioni di dollari, con un margine EBITDA rettificato del 37%-39% e un reddito netto diluito per azione non GAAP di 1,60-1,70 dollari.
DigitalOcean (NYSE: DOCN) anunció los resultados financieros del segundo trimestre de 2024, reportando ingresos de 192 millones de dólares, un aumento del 13% en comparación con el año anterior. La utilidad bruta aumentó un 15% a 117 millones de dólares, con un margen del 61%. El ingreso neto GAAP fue de 19 millones de dólares, y el EBITDA ajustado alcanzó los 82 millones de dólares, reflejando un margen del 42%. La compañía también introdujo varios productos nuevos, incluidos droplet GPU para aplicaciones de IA/ML y droplet optimizados de CPU premium de 96 vCPU. El ARR cerró el trimestre en 781 millones de dólares, un 15% más en comparación con el año anterior. El ARPU creció un 9% hasta alcanzar los 99,45 dólares. La guía para el tercer trimestre de 2024 incluye ingresos estimados de 196-197 millones de dólares y un margen de EBITDA ajustado del 37%-38%. La guía de ingresos para el año completo 2024 se ajustó a 770-775 millones de dólares, con un margen de EBITDA ajustado del 37%-39% y un ingreso neto diluido por acción no GAAP de 1,60-1,70 dólares.
디지털오션 (NYSE: DOCN)은 2024년 2분기 재무 결과를 발표하며 1억 9천 2백만 달러의 수익을 보고했으며, 이는 전년 대비 13% 증가했습니다. 총 이익은 15% 증가하여 1억 1천 7백만 달러에 도달하였고, 마진은 61%입니다. GAAP 순이익은 1천 9백만 달러였으며, 조정 EBITDA는 8천 2백만 달러로, 마진은 42%입니다. 이 회사는 AI/ML 애플리케이션을 위한 GPU 드롭렛과 프리미엄 CPU 최적화 96 vCPU 드롭렛 등 여러 신제품도 선보였습니다. ARR은 분기를 7억 8천 1백만 달러로 마감하며 전년 대비 15% 증가했습니다. ARPU는 9% 성장하여 99.45 달러에 달했습니다. 2024년 3분기 가이던스에는 1억 9천 6백만 - 1억 9천 7백만 달러의 예상 수익과 37%-38%의 조정 EBITDA 마진이 포함되어 있습니다. 2024년 전체 연도 수익 가이던스는 7억 7천만 - 7억 7천 5백만 달러로 조정되었으며, 조정 EBITDA 마진은 37%-39%, 비 GAAP 희석 순이익은 주당 1.60-1.70 달러입니다.
DigitalOcean (NYSE: DOCN) a annoncé les résultats financiers du deuxième trimestre 2024, avec un chiffre d'affaires de 192 millions de dollars, soit une augmentation de 13% par rapport à l'année précédente. Le bénéfice brut a augmenté de 15% pour atteindre 117 millions de dollars, avec une marge de 61%. Le bénéfice net GAAP a été de 19 millions de dollars et l'EBITDA ajusté s'est chiffré à 82 millions de dollars, reflet d'une marge de 42%. La société a également lancé plusieurs nouveaux produits, notamment des gouttelettes GPU pour les applications IA/ML et des gouttelettes CPU Premium Optimisées de 96 vCPU. Le ARR a terminé le trimestre à 781 millions de dollars, en hausse de 15% par rapport à l'année précédente. ARPU a crû de 9% pour atteindre 99,45 dollars. Les prévisions pour le troisième trimestre 2024 incluent des revenus estimés entre 196 et 197 millions de dollars et une marge EBITDA ajustée de 37% à 38%. Les prévisions de chiffre d'affaires pour l'année complète 2024 ont été ajustées entre 770 et 775 millions de dollars, avec une marge EBITDA ajustée de 37% à 39% et un bénéfice net dilué non-GAAP par action de 1,60 à 1,70 dollar.
DigitalOcean (NYSE: DOCN) hat die finanziellen Ergebnisse für das zweite Quartal 2024 angekündigt und berichtet von Umsätzen in Höhe von 192 Millionen Dollar, was einem Anstieg von 13% im Vergleich zum Vorjahr entspricht. Der Bruttogewinn stieg um 15% auf 117 Millionen Dollar mit einer Marge von 61%. Der GAAP-Nettogewinn betrug 19 Millionen Dollar, und das bereinigte EBITDA belief sich auf 82 Millionen Dollar, was einer Marge von 42% entspricht. Das Unternehmen stellte auch mehrere neue Produkte vor, darunter GPU-Droplets für KI/ML-Anwendungen und Premium-CPU-optimierte 96 vCPU-Droplets. ARR schloss das Quartal bei 781 Millionen Dollar, was einem Anstieg von 15% im Jahresvergleich entspricht. ARPU wuchs um 9% auf 99,45 Dollar. Die Prognose für das 3. Quartal 2024 umfasst geschätzte Einnahmen von 196 bis 197 Millionen Dollar und eine bereinigte EBITDA-Marge von 37% bis 38%. Die Prognose für die Einnahmen im Gesamtjahr 2024 wurde auf 770 bis 775 Millionen Dollar angepasst, mit einer bereinigten EBITDA-Marge von 37% bis 39% und einem nicht-GAAP-diluted Nettogewinn pro Aktie von 1,60 bis 1,70 Dollar.
- Revenue increased by 13% YoY to $192 million.
- Gross profit rose 15% YoY to $117 million.
- Adjusted EBITDA was $82 million with a 42% margin.
- ARR reached $781 million, a 15% YoY increase.
- GAAP net income was $19 million.
- ARPU increased by 9% to $99.45.
- Revenue from 'Builders and Scalers' grew 15% YoY.
- Released 24 new product features, doubling product velocity.
- Guidance for Q3 2024 revenue of $196-$197 million.
- Updated full-year 2024 revenue guidance to $770-$775 million.
- Adjusted free cash flow decreased to $37 million from $45 million in Q2 2023.
- Adjusted EBITDA margin guidance for Q3 2024 expected to decrease to 37%-38%.
Insights
DigitalOcean's Q2 2024 results demonstrate solid growth and profitability. Revenue increased 13% YoY to
Key positives include:
- Gross profit margin expansion to
61% - Stable Net Dollar Retention Rate at
97% - ARPU growth of
9% to$99.45
DigitalOcean's product innovations are positioning it well in the competitive cloud market. The introduction of GPU droplets with NVIDIA H100 instances is a significant move, democratizing access to high-performance computing for AI/ML workloads. This could attract more developers and startups working on AI projects.
The company's accelerated product development is impressive:
- 24 new features released in Q2
- VPC Peering Beta for enhanced network connectivity
- Premium CPU Optimized 96 vCPU Droplets for compute-intensive tasks
- Managed OpenSearch for simplified data analytics
DigitalOcean's focus on startups and growing tech businesses is yielding results. The
The company's AI strategy is particularly noteworthy. With AI/ML ARR growing over
However, the overall revenue growth of
Revenue of
GAAP Net Income was
“We have delivered another strong quarter of business results and exciting product announcements. In Q2 we saw revenue growth continue to re-accelerate at
Second Quarter 2024 Financial Highlights:
-
Revenue was
$192 million 13% year-over-year. -
Annual Run-Rate Revenue (ARR) ended the quarter at
$781 million 15% year-over-year. -
Gross profit of
$117 million 15% year-over-year, and gross profit margin was61% . -
Net income attributable to common stockholders was
$19 million 10% . -
Adjusted EBITDA was
$82 million 13% year-over-year, and adjusted EBITDA margin was42% . -
Diluted net income per share was
$0.20 $0.48 -
Net cash from operating activities was
$71 million $64 million -
Adjusted free cash flow was
$37 million $45 million -
Cash and cash equivalents was
$443 million
Second Quarter 2024 Operational Highlights:
- On July 9, revived the virtual developer conference, Deploy, where a number of product releases were announced such as VPC Peering Beta and Premium CPU Optimized 96 vCPU Droplets, among others.
- Announced the EA (Early Availability) of GPU droplets which democratizes on-demand access to NVIDIA H100 instances for customers (including DigitalOcean’s approximately 638 thousand customers) with the ability to leverage 1, 8 or more GPUs providing flexible deployment options tailored to various use cases and budgets.
- Released 24 new product features throughout the second quarter, doubling our product velocity from the prior 6 months, which include Managed OpenSearch and 5th Generation Xeon Processors, as well as enhanced data processing and transfer capabilities within our data centers.
-
Average Revenue Per Customer (ARPU) was
$99.45 9% over the second quarter 2023. -
Builders and Scalers, those customers spending more than
$50 7% from the second quarter 2023 and their revenue grew15% year-over-year. -
Net Dollar Retention Rate (NDR) remained stable at
97% as compared to the prior quarter. - The Company repurchased 297,106 shares during the quarter.
Financial Outlook:
DigitalOcean is initiating guidance for the third quarter ending September 30, 2024 as follows:
-
Total revenue of
$196 $197 million -
Adjusted EBITDA margin of
37% to38% . -
Non-GAAP diluted net income per share of
$0.39 $0.41 - Fully diluted weighted average shares outstanding of approximately 102 to 103 million shares.
DigitalOcean is updating guidance for the full year 2024 as follows:
-
Total revenue of
$770 $775 million -
Adjusted EBITDA margin of
37% to39% . -
Adjusted free cash flow margin in the range of
15% to17% of revenue. -
Non-GAAP diluted net income per share of
$1.60 $1.70 - Fully diluted weighted average shares outstanding of approximately 102 to 103 million shares.
A reconciliation of non-GAAP outlook measures to corresponding GAAP measures is not available on a forward-looking basis without unreasonable effort due to the uncertainty regarding, and the potential variability of, expenses that may be incurred in the future. For example, stock-based compensation expense-related charges are impacted by the timing of employee stock transactions, the future fair market value of our common stock, and our future hiring and retention needs, all of which are difficult to predict and subject to constant change. Accordingly, a reconciliation is not available without unreasonable effort and we are unable to assess the probable significance of the unavailable information, although it is important to note that these factors could be material to our results computed in accordance with GAAP.
Conference Call Information:
DigitalOcean will host a conference call today, August 8, 2024, at 5:00 p.m. ET to review its results. The conference call and presentation can be accessed by registering for the webcast at https://events.q4inc.com/attendee/527008089. A live webcast and replay of the conference call in addition to the presentation can be accessed from the DigitalOcean investor relations website at http://investors.digitalocean.com.
About DigitalOcean
DigitalOcean simplifies cloud computing so businesses can spend more time creating software that changes the world. With its mission-critical infrastructure and fully managed offerings, DigitalOcean helps developers at startups and growing digital businesses rapidly build, deploy and scale, whether creating a digital presence or building digital products. DigitalOcean combines the power of simplicity, security, community and customer support so customers can spend less time managing their infrastructure and more time building innovative applications that drive business growth. For more information, visit digitalocean.com.
Forward‑Looking Statements
This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, regarding our performance, including but not limited to statements in the section titled “Financial Outlook.” The forward-looking statements contained in this release and the accompanying earnings call referenced in this release are subject to known and unknown risks, uncertainties, assumptions, and other factors that may cause actual results or outcomes to be materially different from any future results or outcomes expressed or implied by the forward-looking statements. These risks, uncertainties, assumptions, and other factors include, but are not limited to: (1) fluctuations in our financial results make it difficult to project future results; (2) our history of operating losses; (3) our identification of a material weakness in our internal control over financial reporting, which may impact our ability to accurately report our financial statements; (4) our ability to attract and retain customers and/or expand usage of our platform by such customers; (5) our ability to release updates and new features to our platform and adapt and respond effectively to rapidly changing technology or customer needs; (6) breaches in our security measures allowing unauthorized access to our platform, our data, or our customers’ data; (7) the competitive markets in which we participate; (8) general market, political, economic, and business conditions; (9) the operational challenges related to international operations; (10) our ability to successfully integrate acquired businesses, including Paperspace, and achieve expected synergies and benefits; (11) liability we may incur due to the activities of our customers; and (12) our customers’ ability to have continued and unimpeded access to our platform, including as a result of evolving laws and industry standards.
Further information on these and additional risks, uncertainties, assumptions and other factors that could cause actual results or outcomes to differ materially from those included in or contemplated by the forward-looking statements contained in this release are included under the caption “Risk Factors” and elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2023, and subsequent filings and reports we make with the SEC.
We operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this release. The results, events and circumstances reflected in the forward-looking statements may not be achieved or occur. The forward-looking statements made in this release relate only to events as of the date on which the statements are made. We assume no obligation to, and do not currently intend to, update any such forward-looking statements after the date of this release.
About Non-GAAP Financial Measures
To supplement our condensed consolidated financial statements, which are prepared and presented in accordance with generally accepted accounting principles in
Adjusted EBITDA and Adjusted EBITDA Margin
We define adjusted EBITDA as net income (loss) attributable to common stockholders, adjusted to exclude depreciation and amortization, stock-based compensation, interest expense, acquisition related compensation, acquisition and integration related costs, income tax expense, restructuring and other charges, restructuring related charges, impairment of long-lived assets, and other income, net. We define adjusted EBITDA margin as adjusted EBITDA as a percentage of revenue. We believe that adjusted EBITDA, when taken together with our GAAP financial results, provides meaningful supplemental information regarding our operating performance and facilitates internal comparisons of our historical operating performance on a more consistent basis by excluding certain items that may not be indicative of our business, results of operations or outlook. In particular, we believe that the use of adjusted EBITDA is helpful to our investors as it is a measure used by management in assessing the health of our business, evaluating our operating performance, and for internal planning and forecasting purposes.
Our calculation of adjusted EBITDA and adjusted EBITDA margin may differ from the calculations of adjusted EBITDA and adjusted EBITDA margin by other companies and therefore comparability may be limited. Because of these limitations, when evaluating our performance, you should consider adjusted EBITDA and adjusted EBITDA margin alongside other financial performance measures, including our net income (loss) attributable to common stockholders and other GAAP results.
Non-GAAP Net Income and Non-GAAP Diluted Net Income Per Share
We define non-GAAP net income as net income (loss) attributable to common stockholders, excluding stock-based compensation, acquisition related compensation, amortization of acquired intangibles, acquisition and integration related costs, restructuring and other charges, restructuring related charges, impairment of long-lived assets, and other unusual or non-recurring transactions as they occur. We define non-GAAP diluted net income per share as non-GAAP net income divided by the weighted-average diluted shares outstanding, which includes the potentially dilutive effect of our stock options, RSUs, PRSUs, and Convertible Notes.
We believe non-GAAP diluted net income per share provides our management and investors consistency and comparability with our past financial performance and facilitates period-to-period comparisons of operations, as this metric generally eliminates the effects of unusual or non-recurring items from period to period for reasons unrelated to overall operating performance.
Adjusted Free Cash Flow and Adjusted Free Cash Flow Margin
Adjusted free cash flow is a non-GAAP financial measure that we define as Net cash provided by operating activities less purchases of property and equipment, capitalized internal-use software costs, and excluding cash paid for restructuring and other charges, acquisition related compensation, restructuring related charges, and acquisition and integration related costs. Adjusted free cash flow margin is calculated as adjusted free cash flow divided by total revenue.
We believe that adjusted free cash flow and adjusted free cash flow margin are useful indicators of liquidity that provide information to management and investors about the amount of cash generated from our core operations that can be used for strategic initiatives, including investing in our business and selectively pursuing acquisitions and strategic investments. We further believe that historical and future trends in adjusted free cash flow and adjusted free cash flow margin, even if negative, provide useful information about the amount of Net cash provided by operating activities that is available (or not available) to be used for strategic initiatives. One limitation of adjusted free cash flow and adjusted free cash flow margin is that they do not reflect our future contractual commitments. Additionally, adjusted free cash flow does not represent the total increase or decrease in our cash balance for a given period.
Key Business Metrics:
We utilize the key metrics set forth below to help us evaluate our business and growth, identify trends, formulate financial projections and make strategic decisions.
Customers
We divide our customer population into the following categories:
-
Testers: users that both (i) spend less than or equal to
$50 -
Learners: users that both (i) spend less than or equal to
$50 -
Builders: users that spend greater than
$50 $500 -
Scalers: users that spend greater than
$500
We view Learners, Builders and Scalers as the most appropriate measure of our customer population, and Testers have therefore been excluded from the total customer population count. While we believe the total number of these customers is an important indicator of the growth of our business and future revenue opportunity, the trends relating to our Builders and Scalers is of particular importance to us as these customers represent a significant majority of our revenue and revenue growth, and they are representative of the SMB customers that grow on our platform and use multiple products.
ARPU
We calculate ARPU on a monthly basis as our total revenue from Learners, Builders and Scalers in that period divided by the total number of Learner, Builder and Scaler customers determined as of the last day of the reported period. For a quarterly or annual period, ARPU is determined as the weighted average monthly ARPU over such three or 12-month period.
ARR
We calculate ARR at a point in time by multiplying the revenue of the last month of the reported period by 12. For our ARR calculations, we include the total revenue from all customers, including Testers, Learners, Builders and Scalers.
Net Dollar Retention Rate
We calculate net dollar retention rate monthly by starting with the revenue from customers, including Testers, Learners, Builders and Scalers, for our IaaS, PaaS and SaaS offerings during the corresponding month 12 months prior, or the Prior Period Revenue. We then calculate the revenue from these same customers as of the current month, or the Current Period Revenue, including any expansion and net of any contraction or attrition from these customers over the last 12 months. The calculation also includes revenue from customers that generated revenue before, but not in, the corresponding month 12 months prior, but subsequently generated revenue in the current month and are therefore reflected in the Current Period Revenue. We include this group of re-engaged customers in this calculation because our customers frequently use our platform for projects that stop and start over time. We then divide the total Current Period Revenue by the total Prior Period Revenue to arrive at the net dollar retention rate for the relevant month. For our net dollar retention rate calculations, we include the total revenue from customers, including Testers, Learners, Builders and Scalers, for our IaaS, PaaS and SaaS offerings. For a quarterly or annual period, the net dollar retention rate is determined as the average monthly net dollar retention rates over such three or 12-month period.
DIGITALOCEAN HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share amounts) (unaudited) |
|||||||
|
June 30, 2024 |
|
December 31, 2023 |
||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
443,110 |
|
|
$ |
317,236 |
|
Marketable securities |
|
— |
|
|
|
94,532 |
|
Accounts receivable, less allowance for credit losses of |
|
67,435 |
|
|
|
62,186 |
|
Prepaid expenses and other current assets |
|
33,178 |
|
|
|
29,040 |
|
Total current assets |
|
543,723 |
|
|
|
502,994 |
|
|
|
|
|
||||
Property and equipment, net |
|
367,428 |
|
|
|
305,444 |
|
Restricted cash |
|
1,747 |
|
|
|
1,747 |
|
Goodwill |
|
348,674 |
|
|
|
348,322 |
|
Intangible assets, net |
|
128,682 |
|
|
|
140,151 |
|
Operating lease right-of-use assets, net |
|
138,461 |
|
|
|
155,201 |
|
Deferred tax assets |
|
1,939 |
|
|
|
1,994 |
|
Other assets |
|
6,139 |
|
|
|
5,114 |
|
Total assets |
$ |
1,536,793 |
|
|
$ |
1,460,967 |
|
|
|
|
|
||||
Current liabilities: |
|
|
|
||||
Accounts payable |
$ |
9,465 |
|
|
$ |
3,957 |
|
Accrued other expenses |
|
55,839 |
|
|
|
31,046 |
|
Deferred revenue |
|
6,803 |
|
|
|
5,340 |
|
Operating lease liabilities, current |
|
73,998 |
|
|
|
81,320 |
|
Other current liabilities |
|
74,051 |
|
|
|
70,982 |
|
Total current liabilities |
|
220,156 |
|
|
|
192,645 |
|
|
|
|
|
||||
Deferred tax liabilities |
|
3,510 |
|
|
|
3,533 |
|
Long-term debt |
|
1,481,577 |
|
|
|
1,477,798 |
|
Operating lease liabilities, non-current |
|
82,992 |
|
|
|
91,161 |
|
Other long-term liabilities |
|
2,342 |
|
|
|
9,528 |
|
Total liabilities |
|
1,790,577 |
|
|
|
1,774,665 |
|
|
|
|
|
||||
Preferred stock ( |
|
— |
|
|
|
— |
|
Common stock ( |
|
2 |
|
|
|
2 |
|
Additional paid-in capital |
|
56,748 |
|
|
|
30,989 |
|
Accumulated other comprehensive loss |
|
(577 |
) |
|
|
(452 |
) |
Accumulated deficit |
|
(309,957 |
) |
|
|
(344,237 |
) |
Total stockholders’ deficit |
|
(253,784 |
) |
|
|
(313,698 |
) |
|
|
|
|
||||
Total liabilities and stockholders’ deficit |
$ |
1,536,793 |
|
|
$ |
1,460,967 |
|
DIGITALOCEAN HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) (unaudited) |
|||||||||||||||
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
June 30, |
|
June 30, |
||||||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
Revenue |
$ |
192,476 |
|
|
$ |
169,814 |
|
|
$ |
377,206 |
|
|
$ |
334,948 |
|
Cost of revenue |
|
75,139 |
|
|
|
67,354 |
|
|
|
147,783 |
|
|
|
139,233 |
|
Gross profit |
|
117,337 |
|
|
|
102,460 |
|
|
|
229,423 |
|
|
|
195,715 |
|
Operating expenses: |
|
|
|
|
|
|
|
||||||||
Research and development |
|
34,040 |
|
|
|
38,569 |
|
|
|
68,011 |
|
|
|
76,841 |
|
Sales and marketing |
|
20,130 |
|
|
|
16,100 |
|
|
|
40,934 |
|
|
|
34,331 |
|
General and administrative |
|
40,839 |
|
|
|
48,858 |
|
|
|
86,612 |
|
|
|
97,797 |
|
Restructuring and other charges |
|
— |
|
|
|
434 |
|
|
|
— |
|
|
|
21,303 |
|
Total operating expenses |
|
95,009 |
|
|
|
103,961 |
|
|
|
195,557 |
|
|
|
230,272 |
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) from operations |
|
22,328 |
|
|
|
(1,501 |
) |
|
|
33,866 |
|
|
|
(34,557 |
) |
|
|
|
|
|
|
|
|
||||||||
Other income (expense): |
|
|
|
|
|
|
|
||||||||
Interest expense |
|
(2,321 |
) |
|
|
(2,112 |
) |
|
|
(4,625 |
) |
|
|
(4,301 |
) |
Interest income and other income, net |
|
4,802 |
|
|
|
7,594 |
|
|
|
9,823 |
|
|
|
14,988 |
|
Other income, net |
|
2,481 |
|
|
|
5,482 |
|
|
|
5,198 |
|
|
|
10,687 |
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) before income taxes |
|
24,809 |
|
|
|
3,981 |
|
|
|
39,064 |
|
|
|
(23,870 |
) |
Income tax (expense) benefit |
|
(5,671 |
) |
|
|
(3,316 |
) |
|
|
(5,787 |
) |
|
|
8,165 |
|
Net income (loss) attributable to common stockholders |
$ |
19,138 |
|
|
$ |
665 |
|
|
$ |
33,277 |
|
|
$ |
(15,705 |
) |
Net income (loss) per share attributable to common stockholders |
|||||||||||||||
Basic |
$ |
0.21 |
|
|
$ |
0.01 |
|
|
$ |
0.37 |
|
|
$ |
(0.17 |
) |
Diluted |
$ |
0.20 |
|
|
$ |
0.01 |
|
|
$ |
0.35 |
|
|
$ |
(0.17 |
) |
Weighted-average shares used to compute net income (loss) per share attributable to common stockholders |
|||||||||||||||
Basic |
|
91,318 |
|
|
|
89,007 |
|
|
|
91,049 |
|
|
|
92,327 |
|
Diluted |
|
93,832 |
|
|
|
96,247 |
|
|
|
94,005 |
|
|
|
92,327 |
|
DIGITALOCEAN HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited) |
|||||||
|
Six Months Ended June 30, |
||||||
|
2024 |
|
2023 |
||||
Operating activities |
|
|
|
||||
Net income (loss) attributable to common stockholders |
$ |
33,277 |
|
|
$ |
(15,705 |
) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
|
|
|
||||
Depreciation and amortization |
|
65,016 |
|
|
|
56,531 |
|
Stock-based compensation |
|
44,710 |
|
|
|
67,960 |
|
Provision for expected credit losses |
|
7,985 |
|
|
|
7,551 |
|
Operating lease right-of-use assets and liabilities, net |
|
1,423 |
|
|
|
6,848 |
|
Net accretion of discounts and amortization of premiums on investments |
|
2,569 |
|
|
|
(2,689 |
) |
Non-cash interest expense |
|
3,988 |
|
|
|
3,969 |
|
Loss on impairment of long-lived assets |
|
356 |
|
|
|
553 |
|
Deferred income taxes |
|
— |
|
|
|
1,589 |
|
Other |
|
361 |
|
|
|
(464 |
) |
Changes in operating assets and liabilities: |
|
|
|
||||
Accounts receivable |
|
(13,234 |
) |
|
|
(10,795 |
) |
Prepaid expenses and other current assets |
|
(4,346 |
) |
|
|
(6,173 |
) |
Accounts payable and accrued expenses |
|
(3,655 |
) |
|
|
(14,900 |
) |
Deferred revenue |
|
1,462 |
|
|
|
(565 |
) |
Other assets and liabilities |
|
(1,879 |
) |
|
|
6,666 |
|
Net cash provided by operating activities |
|
138,033 |
|
|
|
100,376 |
|
|
|
|
|
||||
Investing activities |
|
|
|
||||
Capital expenditures - property and equipment |
|
(75,534 |
) |
|
|
(46,848 |
) |
Capital expenditures - internal-use software development |
|
(4,046 |
) |
|
|
(2,895 |
) |
Cash paid for asset acquisitions |
|
— |
|
|
|
(2,500 |
) |
Purchase of marketable securities |
|
— |
|
|
|
(318,238 |
) |
Maturities of marketable securities |
|
91,675 |
|
|
|
614,044 |
|
Purchased interest on marketable securities |
|
— |
|
|
|
(151 |
) |
Proceeds from interest on marketable securities |
|
— |
|
|
|
61 |
|
Proceeds from sale of equipment |
|
— |
|
|
|
236 |
|
Net cash provided by investing activities |
|
12,095 |
|
|
|
243,709 |
|
|
|
|
|
||||
Financing activities |
|
|
|
||||
Proceeds related to the issuance of common stock under equity incentive plan |
|
7,948 |
|
|
|
11,669 |
|
Proceeds from the issuance of common stock under employee stock purchase plan |
|
2,231 |
|
|
|
2,797 |
|
Principal repayments of finance leases |
|
(2,720 |
) |
|
|
— |
|
Employee payroll taxes paid related to net settlement of equity awards |
|
(13,469 |
) |
|
|
(10,532 |
) |
Repurchase and retirement of common stock including related costs |
|
(18,183 |
) |
|
|
(368,919 |
) |
Net cash used in financing activities |
|
(24,193 |
) |
|
|
(364,985 |
) |
|
|
|
|
||||
Effect of exchange rate changes on cash, cash equivalents, and restricted cash |
|
(61 |
) |
|
|
(15 |
) |
Increase (decrease) in cash, cash equivalents and restricted cash |
|
125,874 |
|
|
|
(20,915 |
) |
Cash, cash equivalents and restricted cash - beginning of period |
|
318,983 |
|
|
|
151,807 |
|
Cash, cash equivalents and restricted cash - end of period |
$ |
444,857 |
|
|
$ |
130,892 |
|
DIGITALOCEAN HOLDINGS, INC.
RECONCILIATION OF GAAP TO NON-GAAP DATA (unaudited) |
|||||||||||||||
Adjusted EBITDA and Adjusted EBITDA Margin |
|||||||||||||||
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
June 30, |
|
June 30, |
||||||||||||
(In thousands) |
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
GAAP Net income (loss) attributable to common stockholders |
$ |
19,138 |
|
|
$ |
665 |
|
|
$ |
33,277 |
|
|
$ |
(15,705 |
) |
|
|
|
|
|
|
|
|
||||||||
Adjustments: |
|
|
|
|
|
|
|
||||||||
Depreciation and amortization |
|
33,129 |
|
|
|
27,618 |
|
|
|
65,016 |
|
|
|
56,531 |
|
Stock-based compensation(1) |
|
21,833 |
|
|
|
36,429 |
|
|
|
44,563 |
|
|
|
64,023 |
|
Interest expense |
|
2,321 |
|
|
|
2,112 |
|
|
|
4,625 |
|
|
|
4,301 |
|
Acquisition related compensation |
|
3,716 |
|
|
|
6,980 |
|
|
|
8,246 |
|
|
|
14,581 |
|
Acquisition and integration related costs |
|
(19 |
) |
|
|
1,446 |
|
|
|
— |
|
|
|
2,747 |
|
Income tax expense |
|
5,671 |
|
|
|
3,316 |
|
|
|
5,787 |
|
|
|
(8,165 |
) |
Restructuring and other charges(1) |
|
— |
|
|
|
434 |
|
|
|
— |
|
|
|
21,303 |
|
Restructuring related charges(1)(2) |
|
243 |
|
|
|
820 |
|
|
|
3,863 |
|
|
|
2,727 |
|
Impairment of long-lived assets |
|
356 |
|
|
|
— |
|
|
|
356 |
|
|
|
553 |
|
Other income, net(3) |
|
(4,802 |
) |
|
|
(7,594 |
) |
|
|
(9,823 |
) |
|
|
(14,988 |
) |
Adjusted EBITDA |
$ |
81,586 |
|
|
$ |
72,226 |
|
|
$ |
155,910 |
|
|
$ |
127,908 |
|
As a percentage of revenue: |
|
|
|
|
|
|
|
||||||||
Net income (loss) margin |
|
10 |
% |
|
|
— |
% |
|
|
9 |
% |
|
|
(5 |
)% |
Adjusted EBITDA margin |
|
42 |
% |
|
|
43 |
% |
|
|
41 |
% |
|
|
38 |
% |
___________________ |
||
(1) |
For the six months ended June 30, 2024, non-GAAP stock-based compensation excludes |
|
(2) |
For the three and six months ended June 30, 2024, primarily consists of executive reorganization charges. For the three and six months ended June 30, 2023, primarily consists of salary continuation charges. |
|
(3) |
For the three and six months ended June 30, 2024 and 2023, primarily consists of interest and accretion income from our cash and cash equivalents and marketable securities. |
|
Non-GAAP Net Income and Non-GAAP Diluted Net Income Per Share |
|||||||||||||||
|
|
|
|
|
|
||||||||||
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
June 30, |
|
June 30, |
||||||||||||
(In thousands) |
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
GAAP Net income (loss) attributable to common stockholders |
$ |
19,138 |
|
|
$ |
665 |
|
|
$ |
33,277 |
|
|
$ |
(15,705 |
) |
Stock-based compensation(1) |
|
21,833 |
|
|
|
36,429 |
|
|
|
44,563 |
|
|
|
64,023 |
|
Acquisition related compensation |
|
3,716 |
|
|
|
6,980 |
|
|
|
8,246 |
|
|
|
14,581 |
|
Amortization of acquired intangible assets |
|
5,735 |
|
|
|
3,790 |
|
|
|
11,470 |
|
|
|
7,580 |
|
Acquisition and integration related costs |
|
(19 |
) |
|
|
1,446 |
|
|
|
— |
|
|
|
2,747 |
|
Restructuring and other charges(1) |
|
— |
|
|
|
434 |
|
|
|
— |
|
|
|
21,303 |
|
Restructuring related charges(1)(2) |
|
243 |
|
|
|
820 |
|
|
|
3,863 |
|
|
|
2,727 |
|
Impairment of long-lived assets |
|
356 |
|
|
|
— |
|
|
|
356 |
|
|
|
553 |
|
Non-GAAP income tax adjustment(3) |
|
(3,397 |
) |
|
|
(5,844 |
) |
|
|
(11,423 |
) |
|
|
(23,404 |
) |
Non-GAAP Net income |
$ |
47,605 |
|
|
$ |
44,720 |
|
|
$ |
90,352 |
|
|
$ |
74,405 |
|
|
|
|
|
|
|
|
|
||||||||
Non-cash charges related to convertible notes(4) |
$ |
1,588 |
|
|
$ |
1,561 |
|
|
$ |
3,174 |
|
|
$ |
3,121 |
|
Non-GAAP Net income used to compute net income per share, diluted |
$ |
49,193 |
|
|
$ |
46,281 |
|
|
$ |
93,526 |
|
|
$ |
77,526 |
|
|
|
|
|
|
|
|
|
||||||||
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
June 30, |
|
March 31, |
||||||||||||
(In thousands, except per share amounts) |
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
GAAP Net income (loss) per share attributable to common stockholders, diluted |
$ |
0.20 |
|
|
$ |
0.01 |
|
|
$ |
0.35 |
|
|
$ |
(0.17 |
) |
Stock-based compensation(1) |
|
0.21 |
|
|
|
0.35 |
|
|
|
0.44 |
|
|
|
0.60 |
|
Acquisition related compensation |
|
0.04 |
|
|
|
0.07 |
|
|
|
0.08 |
|
|
|
0.14 |
|
Amortization of acquired intangible assets |
|
0.06 |
|
|
|
0.04 |
|
|
|
0.11 |
|
|
|
0.07 |
|
Acquisition and integration related costs |
|
— |
|
|
|
0.01 |
|
|
|
— |
|
|
|
0.03 |
|
Restructuring and other charges(1) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
0.20 |
|
Restructuring related charges(1)(2) |
|
— |
|
|
|
0.01 |
|
|
|
0.04 |
|
|
|
0.03 |
|
Impairment of long-lived assets |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
0.01 |
|
Non-cash charges related to convertible notes(4) |
|
0.02 |
|
|
|
0.01 |
|
|
|
0.03 |
|
|
|
0.03 |
|
Non-GAAP income tax adjustment(3) |
|
(0.03 |
) |
|
|
(0.06 |
) |
|
|
(0.11 |
) |
|
|
(0.22 |
) |
Non-GAAP Net income per share, diluted* |
$ |
0.48 |
|
|
$ |
0.44 |
|
|
$ |
0.91 |
|
|
$ |
0.72 |
|
|
|
|
|
|
|
|
|
||||||||
GAAP Weighted-average shares used to compute net income (loss) per share, diluted |
|
93,832 |
|
|
|
96,247 |
|
|
|
94,005 |
|
|
|
92,327 |
|
Weighted-average dilutive effect of potentially dilutive securities |
|
8,403 |
|
|
|
8,403 |
|
|
|
8,403 |
|
|
|
15,583 |
|
Non-GAAP Weighted-average shares used to compute net income per share, diluted |
|
102,235 |
|
|
|
104,650 |
|
|
|
102,408 |
|
|
|
107,910 |
|
*May not foot due to rounding |
|||||||||||||||
___________________ |
||
(1) |
For the six months ended June 30, 2024, non-GAAP stock-based compensation excludes |
|
(2) |
For the three and six months ended June 30, 2024, primarily consists of executive reorganization charges. For the three and six months ended June 30, 2023, primarily consists of salary continuation charges. |
|
(3) |
For the periods in fiscal year 2024, we used a tax rate of |
|
(4) |
Consists of non-cash interest expense for amortization of deferred financing fees related to the Convertible Notes. |
|
Adjusted Free Cash Flow and Adjusted Free Cash Flow Margin |
|||||||||||||||
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
June 30, |
|
June 30, |
||||||||||||
(In thousands) |
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
GAAP Net cash provided by operating activities |
$ |
71,340 |
|
|
$ |
64,161 |
|
|
$ |
138,033 |
|
|
$ |
100,376 |
|
Adjustments: |
|
|
|
|
|
|
|
||||||||
Capital expenditures - property and equipment |
|
(31,869 |
) |
|
|
(23,534 |
) |
|
|
(75,534 |
) |
|
|
(46,848 |
) |
Capital expenditures - internal-use software development |
|
(2,483 |
) |
|
|
(1,101 |
) |
|
|
(4,046 |
) |
|
|
(2,895 |
) |
Restructuring and other charges |
|
— |
|
|
|
4,665 |
|
|
|
61 |
|
|
|
15,926 |
|
Restructuring related charges(1) |
|
437 |
|
|
|
820 |
|
|
|
4,630 |
|
|
|
2,727 |
|
Acquisition related compensation |
|
— |
|
|
|
— |
|
|
|
8,326 |
|
|
|
— |
|
Acquisition and integration related costs |
|
4 |
|
|
|
93 |
|
|
|
302 |
|
|
|
1,561 |
|
Adjusted free cash flow |
$ |
37,429 |
|
|
$ |
45,104 |
|
|
$ |
71,772 |
|
|
$ |
70,847 |
|
As a percentage of revenue: |
|
|
|
|
|
|
|
||||||||
GAAP Net cash provided by operating activities |
|
37 |
% |
|
|
38 |
% |
|
|
37 |
% |
|
|
30 |
% |
Adjusted free cash flow margin |
|
19 |
% |
|
|
27 |
% |
|
|
19 |
% |
|
|
21 |
% |
___________________ |
||
(1) |
For the three and six months ended June 30, 2024, primarily consists of executive reorganization charges. For the three and six months ended June 30, 2023, primarily consists of salary continuation charges. |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20240808490255/en/
Investor Contact
Melanie Strate
investors@digitalocean.com
Media Contact
press@digitalocean.com
Source: DigitalOcean Holdings, Inc.
FAQ
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