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Mar 31, 2023
DigitalOcean Q1 2023 Earnings Report
DigitalOcean reported strong first-quarter results, demonstrating a compelling balance of growth and profitability, and returned capital to shareholders through buybacks.
Key Takeaways
DigitalOcean announced its Q1 2023 financial results, with revenue growing 30% year-over-year to $165.1 million. The company reported a net loss of $34.9 million, or $(0.37) per share, and a non-GAAP diluted net income per share of $0.28. They generated $36 million in operating cash flow and $26 million in adjusted free cash flow. Additionally, DigitalOcean returned $266 million to shareholders by repurchasing nearly 8 million shares.
Revenue was $165.1 million, up 30% year-over-year.
ARR ended the quarter at $669.1 million, representing 28% year-over-year growth.
Net loss attributable to common stockholders was $34.9 million.
Non-GAAP diluted net income per share was $0.28.
DigitalOcean
DigitalOcean
Forward Guidance
Based on information available as of May 9, 2023, DigitalOcean expects for the second quarter of 2023 total revenue of $169.5 to $170.5 million, adjusted EBITDA margin of 37% to 38%, non-GAAP diluted net income per share of $0.40 to $0.41, and fully diluted weighted average shares outstanding of approximately 103 million shares. For the full year 2023, the company expects total revenue of $700 to $720 million, adjusted EBITDA margin of 38% to 39%, adjusted free cash flow margin in the range of 21% to 22% of revenue, non-GAAP diluted net income per share of $1.70 to $1.73 and fully diluted weighted average shares outstanding of approximately 103 to 105 million shares.
Positive Outlook
- Total revenue of $169.5 to $170.5 million for Q2 2023.
- Adjusted EBITDA margin of 37% to 38% for Q2 2023.
- Non-GAAP diluted net income per share of $0.40 to $0.41 for Q2 2023.
- Total revenue of $700 to $720 million for full year 2023.
- Adjusted EBITDA margin of 38% to 39% for full year 2023.
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.
- The future fair market value of our common stock is difficult to predict.
- Our future hiring and retention needs are difficult to predict and subject to constant change.
- These factors could be material to our results computed in accordance with GAAP.