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Jun 30, 2022
DigitalOcean Q2 2022 Earnings Report
DigitalOcean met Q2 targets, improved profitability and cash flow, and increased operating income and free cash flow outlook for fiscal year 2022.
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.