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Sep 30, 2022
DigitalOcean Q3 2022 Earnings Report
DigitalOcean's Q3 2022 financial performance was marked by revenue growth, improved profitability, and a strong free cash flow margin.
Key Takeaways
DigitalOcean reported a 37% year-over-year revenue increase, reaching $152.1 million in Q3 2022. The company's profitability improved, driving a 15% free cash flow margin. The acquisition of Cloudways contributed to the revenue growth, and the company is committed to delivering durable 30% growth with increasing profitability and cash flow.
Revenue was $152.1 million, up 37% year-over-year, including a $4.1 million contribution from Cloudways.
ARR reached $640.6 million, a 41% increase year-over-year.
Gross profit was $97.6 million, representing 64% of revenue, with a 300 basis point improvement year-over-year.
Free cash flow was $22.4 million, compared to $13.5 million in Q3 2021.
DigitalOcean
DigitalOcean
Forward Guidance
DigitalOcean provided financial outlook for the fourth quarter and full year 2022.
Positive Outlook
- Total revenue of $160 to $162 million for Q4 2022.
- Non-GAAP operating margin of 16% for Q4 2022.
- Non-GAAP diluted net income per share of $0.18 to $0.19 for Q4 2022.
- Total revenue of $573 to $575 million for the full year 2022.
- Non-GAAP operating margin of 17% for the full year 2022.