DigitalOcean Q2 2022 Earnings Report
Key Takeaways
DigitalOcean announced its Q2 2022 financial results, reporting a revenue of $133.9 million, a 29% increase year-over-year. The company's ARR reached $544.1 million, representing a 28% year-over-year growth. Despite macroeconomic headwinds, DigitalOcean is taking actions to deliver 30% growth with improving profitability and cash flow.
Revenue was $133.9 million, an increase of 29% year-over-year.
ARR ended the quarter at $544.1 million, representing 28% year-over-year growth.
Net Dollar Retention Rate (NDR) was 112%.
Average Revenue Per Customer (ARPU) was $71.76, an increase of 24% from the second quarter of 2021.
DigitalOcean
DigitalOcean
Forward Guidance
Based on information available as of August 8, 2022, DigitalOcean expects for the third quarter of 2022 total revenue of $145.5 to $147 million, Non-GAAP operating margin of 17% to 18%, Non-GAAP diluted net income per share of $0.22 to $0.23. For the full year 2022, DigitalOcean expects total revenue of $564 to $568 million, Non-GAAP operating margin of 15% to 16%, free cash flow in the range of 9% to 10% of revenue, and Non-GAAP diluted net income per share of $0.74 to $0.75.
Positive Outlook
- Total revenue of $145.5 to $147 million for Q3 2022.
- Non-GAAP operating margin of 17% to 18% for Q3 2022.
- Non-GAAP diluted net income per share of $0.22 to $0.23 for Q3 2022.
- Total revenue of $564 to $568 million for full year 2022.
- Non-GAAP diluted net income per share of $0.74 to $0.75 for full year 2022.
Challenges Ahead
- Macroeconomic factors beyond the company's control may impact financial performance.
- Uncertainty regarding expenses that may be incurred in the future.
- Stock-based compensation expense-related charges are impacted by the timing of employee stock transactions.
- Future fair market value of common stock is difficult to predict.
- Future hiring and retention needs are difficult to predict.