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Mar 31, 2022
DigitalOcean Q1 2022 Earnings Report
DigitalOcean's Q1 2022 performance reflected strong growth and free cash flow amidst an uncertain macro environment.
Key Takeaways
DigitalOcean reported a strong start to 2022 with revenue of $127.3 million, a 36% year-over-year increase. The company's ARR reached $524 million, representing a 35% year-over-year growth. DigitalOcean generated a 4% free cash flow margin and net dollar retention rate of 117%.
Revenue increased by 36% year-over-year, reaching $127.3 million.
ARR grew by 35% year-over-year, ending the quarter at $524 million.
Net Dollar Retention Rate was 117%, up from 107% in Q1 2021.
Average Revenue Per Customer increased by 28% year-over-year to $68.90.
Forward Guidance
DigitalOcean expects revenue between $133 to $135 million, non-GAAP operating margin of 10% to 11%, and non-GAAP diluted net income per share of $0.09 to $0.10 for the second quarter of 2022. For the full year 2022, the company expects revenue of $564 to $568 million, non-GAAP operating margin of 13% to 15%, free cash flow in the range of 8% to 10% of revenue, and non-GAAP diluted net income per share of $0.70 to $0.71.
Positive Outlook
- Total revenue of $133 to $135 million is expected for Q2 2022.
- Non-GAAP operating margin of 10% to 11% is expected for Q2 2022.
- Non-GAAP diluted net income per share of $0.09 to $0.10 is expected for Q2 2022.
- Total revenue of $564 to $568 million is expected for full year 2022.
- Free cash flow in the range of 8% to 10% of revenue is expected for full year 2022.
Challenges Ahead
- A reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis without unreasonable effort.
- Stock-based compensation expense-related charges are impacted by the timing of employee stock transactions.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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