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Jun 30, 2023
DigitalOcean Q2 2023 Earnings Report
DigitalOcean's Q2 2023 financial results were announced, demonstrating solid revenue growth and accelerating profitability margins.
Key Takeaways
DigitalOcean reported a 27% year-over-year increase in revenue, reaching $170 million for Q2 2023. The company's ARR grew by 25% year-over-year, ending the quarter at $682 million. While a loss from operations was reported at $1.5 million, adjusted EBITDA stood at $72 million. The company also announced an agreement to acquire Paperspace.
Revenue increased by 27% year-over-year to $170 million.
ARR reached $682 million, a 25% increase year-over-year.
Gross profit was $102 million, representing 60% of revenue.
Adjusted EBITDA was $72 million, with a 43% margin.
Forward Guidance
For Q3 2023, DigitalOcean expects revenue between $172.5 to $174.0 million and an adjusted EBITDA margin of 38% to 39%. For the full year 2023, they anticipate revenue of $680 to $685 million and an adjusted EBITDA margin of 38% to 39%.
Positive Outlook
- Total revenue of $172.5 to $174.0 million is expected for Q3 2023.
- Adjusted EBITDA margin of 38% to 39% is expected for Q3 2023.
- Fully diluted weighted average shares outstanding of approximately 105 to 106 million shares is expected for Q3 2023.
- Total revenue of $680 to $685 million is expected for the full year 2023.
- Adjusted EBITDA margin of 38% to 39% is expected for the full year 2023.
Challenges Ahead
- The company is still evaluating the impact of tax errors for Q2 results and the Q3 and full year forecast.
- Q3 2023 and full year 2023 non-GAAP diluted net income per share estimates are not yet available.
- A reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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