Strong

Momentum

Million

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<p class="has-drop-cap">DigitalOcean Holdings, Inc. (NYSE: DOCN) has <a href="https://investors.digitalocean.com/news/news-details/2024/DigitalOcean-Announces-First-Quarter-2024-Financial-Results/default.aspx" target="_blank" aria-label="reported a robust start to 2024 (opens in a new tab)" rel="noopener noreferrer nofollow" class="deco-link">reported a robust start to 2024</a>, underpinned by solid 12% year-over-year revenue growth, reaching $185 million for the first quarter. This growth is attributed to the strong performance of its core cloud services and the burgeoning demand for its AI platform.</p>
<p>The company’s profitability metrics have also seen a significant uptick, with a net income margin of 8% and an impressive adjusted EBITDA margin of 40%. The annual run-rate revenue (ARR) growth to $749 million, marking a 12% increase from the previous year, further underscores DigitalOcean’s growing market presence and operational efficiency.</p>
<p>The company’s financial health is further evidenced by its gross profit, which surged by 20% year-over-year to $112 million, accounting for 61% of the revenue. Additionally, DigitalOcean’s strategic financial management has led to a notable improvement in its liquidity position, with cash and cash equivalents standing at $419 million as of March 31, 2024. <br><br>Notably, this financial stability is complemented by a disciplined approach to capital allocation, as seen in the adjusted free cash flow of $34 million, up from $26 million in the first quarter of 2023.</p>
<h3 id="digitalocean-holdings-beats-eps-and-revenue-forecasts-for-q1">DigitalOcean Holdings Beats EPS and Revenue Forecasts for Q1</h3>
<p>When juxtaposed against the pre-set expectations for the quarter, DigitalOcean’s performance reveals a narrative of exceeding benchmarks. Analysts had projected earnings per share (<a href="https://tokenist.com/investing/how-to-value-a-stock/" rel="noopener noreferrer nofollow" class="deco-link">EPS</a>) of $0.38 and revenue of $182.61 million for the quarter. <br><br>The results surpassed these expectations, with the company reporting an EPS of $0.43 on a non-GAAP basis and revenue of $185 million. This outperformance indicates DigitalOcean’s robust business model and ability to capitalize on the growing demand for cloud and AI solutions among startups and growing technology businesses.</p>
<p>The company’s ability to meet and exceed revenue expectations speaks volumes about its competitive positioning and operational effectiveness. <br><br>Furthermore, the growth in ARPU to $95.13, an 8% increase over the first quarter of 2023, and the strategic expansion of its customer base, particularly among Builders and Scalers, who saw an 8% increase in numbers and a 13% growth in revenue year-over-year, are testament to DigitalOcean’s compelling value proposition and its success in driving customer engagement and retention.</p>
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<h3 id="digitalocean-holdings-expects-momentum-to-sustain-through-2024">DigitalOcean Holdings Expects Momentum to Sustain Through 2024</h3>
<p>DigitalOcean has provided guidance that reflects its confidence in sustaining momentum through 2024. For the second quarter, the company anticipates revenue to be in the range of $188 to $189 million, with an adjusted EBITDA margin between 37% to 38%. <br><br>The non-GAAP diluted net income per share is expected to be between $0.38 to $0.40. For the full year, DigitalOcean projects total revenue to be between $760 to $775 million, with an adjusted EBITDA margin of 36% to 38%, and adjusted free cash flow margin in the range of 19% to 21% of revenue.</p> <iframe src="https://tokenist.substack.com/embed" width="100%" height="320" style="border:1px solid #EEE; background:white;" frameborder="0" scrolling="no"></iframe>
<p><em>Disclaimer: The author does not hold or have a position in any securities discussed in the article.</em></p>
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<p>The post <a rel="noopener noreferrer nofollow" href="https://tokenist.com/digitalocean-holdings-shows-strong-revenue-growth-reaching-185-million-in-q1/">DigitalOcean Holdings Shows Strong Revenue Growth, Reaching $185 Million in Q1</a> appeared first on <a rel="noopener noreferrer nofollow" href="https://tokenist.com">Tokenist</a>.</p>

DigitalOcean Holdings Shows Strong Revenue Growth, Reaching $185 Million in Q1

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