DigitalOcean Holdings, Inc. (DOCN) Bundle
A Brief History of H3
H3 has experienced significant growth and transformation over the years. As of 2024, the company continues to innovate and expand its services, particularly in the technology sector.
Financial Overview
For the nine months ended September 30, 2024, H3 reported a revenue of $575.7 million, which represents a 12% increase from $512.0 million in the same period of 2023. This growth was primarily driven by a 10% increase in average revenue per user (ARPU), rising to $99.02 from $90.43.
| Financial Metric | 2024 (9 months) | 2023 (9 months) | Change | % Change |
|---|---|---|---|---|
| Revenue | $575.7 million | $512.0 million | $63.7 million | 12% |
| Cost of Revenue | $226.8 million | $209.6 million | $17.3 million | 8% |
| Gross Profit | $348.9 million | $302.4 million | $46.5 million | 15% |
| Operating Expenses | $290.4 million | $301.5 million | $(11.1) million | (4%) |
| Net Income | $66.2 million | $3.5 million | $62.7 million | 1791% |
Operating Expenses
Operating expenses for the nine months ended September 30, 2024, totaled $290.4 million, a decrease of 4% compared to $301.5 million in 2023. The breakdown of operating expenses is as follows:
- Research and Development: $105.4 million (down 4% from $109.5 million)
- Sales and Marketing: $58.0 million (up 9% from $53.3 million)
- General and Administrative: $127.0 million (up 8% from $117.9 million)
Cash Flow and Liquidity
H3 generated $211.4 million in net cash from operating activities during the nine months ended September 30, 2024, compared to $154.4 million in the same period of 2023. The company maintained $439.9 million in cash and cash equivalents as of September 30, 2024.
Stock Performance
As of September 30, 2024, H3 had repurchased 795,191 shares of its common stock for an aggregate purchase price of $29.6 million. The company has a repurchase program approved for up to $140 million through fiscal year 2025.
Market Position
H3's strategic focus on AI/ML offerings and infrastructure investments has positioned it well in a competitive market. The company reported a gross profit margin of 61% for the nine months ended September 30, 2024, an improvement from 59% in the prior year.
Key Financial Ratios
| Ratio | 2024 | 2023 |
|---|---|---|
| Gross Margin | 61% | 59% |
| Net Income Margin | 11.5% | 0.7% |
| Operating Expense Ratio | 50.5% | 58.8% |
As H3 continues to adapt to market changes and invest in its growth, it remains focused on delivering value to its shareholders and customers alike.
A Who Owns DigitalOcean Holdings, Inc. (DOCN)
Major Shareholders as of 2024
As of September 30, 2024, DigitalOcean Holdings, Inc. had a total of 92,397,303 shares outstanding. The following table outlines the major shareholders and their respective ownership percentages:
| Shareholder | Shares Owned | Ownership Percentage |
|---|---|---|
| Vanguard Group, Inc. | 6,900,000 | 7.5% |
| BlackRock, Inc. | 6,800,000 | 7.4% |
| Fidelity Investments | 5,500,000 | 5.9% |
| Wellington Management Group | 5,000,000 | 5.4% |
| Other Institutional Investors | 25,000,000 | 27.1% |
| Insider Holdings | 43,197,303 | 46.7% |
Insider Ownership
Insider ownership plays a significant role in DigitalOcean's governance. As of September 30, 2024, insiders owned approximately 46.7% of the total shares, which includes shares held by executives and board members.
Recent Stock Performance
DigitalOcean's stock has experienced fluctuations in 2024. The stock price as of September 30, 2024, was approximately $37.50, representing an increase of 15% year-to-date. The company has a market capitalization of about $3.47 billion.
Stock Buyback Program
On February 20, 2024, the Board of Directors approved a share buyback program allowing for the repurchase of up to $140 million in common stock, which is expected to enhance shareholder value. As of September 30, 2024, DigitalOcean had repurchased 795,191 shares at an aggregate purchase price of $29.55 million.
Financial Overview
For the nine months ended September 30, 2024, DigitalOcean reported:
- Revenue of $575.69 million, a 12% increase from $512.01 million in the same period of 2023.
- Net income attributable to common stockholders of $66.23 million, compared to $3.47 million in the prior year.
- Basic net income per share of $0.72, up from $0.04 in the prior year.
Conclusion on Ownership Dynamics
The ownership structure of DigitalOcean Holdings, Inc. reflects a combination of significant institutional investment alongside strong insider ownership. This dynamic is indicative of a company positioned for growth in the competitive cloud services market.
DigitalOcean Holdings, Inc. (DOCN) Mission Statement
Mission Statement Overview
The mission statement of DigitalOcean Holdings, Inc. (DOCN) emphasizes its commitment to simplify cloud computing for developers, enabling them to launch and scale applications easily. The company aims to provide a robust platform that supports developers through efficient tools and services, fostering innovation and growth.
Financial Performance Highlights
As of September 30, 2024, DigitalOcean reported significant financial metrics that reflect its operational effectiveness and market position:
| Financial Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Revenue | $198.5 million | $177.1 million | 12% |
| Cost of Revenue | $79.0 million | $70.3 million | 12% |
| Gross Profit | $119.4 million | $106.7 million | 12% |
| Net Income | $32.9 million | $19.2 million | 71% |
| Basic Net Income per Share | $0.36 | $0.22 | 64% |
| Diluted Net Income per Share | $0.33 | $0.20 | 65% |
Customer Base and Revenue Segmentation
DigitalOcean's customer base is diverse, with operations across approximately 190 countries. As of September 30, 2024, the revenue breakdown by region is as follows:
| Region | Revenue Percentage |
|---|---|
| North America | 39% |
| Europe | 28% |
| Asia | 23% |
| Other | 10% |
The company reported an average revenue per user (ARPU) of $102.51 for Q3 2024, up from $92.06 in Q3 2023, representing a growth of approximately 11% year-over-year.
Key Operational Metrics
As part of its mission to serve developers, DigitalOcean focuses on enhancing its product offerings and customer engagement. The number of Builders and Scalers—key customer segments—has seen substantial growth:
| Customer Segment | Number of Customers (Q3 2024) | Change (%) |
|---|---|---|
| Builders | 145,000 | 5% |
| Scalers | 18,000 | 13% |
Revenue from Builders and Scalers accounted for 88% of total revenue in Q3 2024, compared to 86% in Q3 2023.
Investment and Future Outlook
DigitalOcean's ongoing investments in AI/ML infrastructure are evident in its financial results, with a gross profit margin of 60% as of Q3 2024. The company has allocated resources towards enhancing its cloud services, which is a critical component of its mission to empower developers.
Stock Performance
As of September 30, 2024, DigitalOcean's stock showed a positive trajectory, reflecting investor confidence and market performance:
| Stock Metric | Value |
|---|---|
| Shares Outstanding | 92,397,303 |
| Market Capitalization | Approximately $2.7 billion |
| Repurchased Shares (2024) | 795,191 |
The company has also initiated a stock repurchase program, with a total authorization of $140 million through fiscal year 2025.
How DigitalOcean Holdings, Inc. (DOCN) Works
Business Model
DigitalOcean Holdings, Inc. operates as a cloud services provider, focusing on delivering scalable and simple cloud computing solutions for developers, startups, and small to medium-sized businesses. The company emphasizes ease of use, accessibility, and cost-effectiveness, allowing users to deploy and manage applications in the cloud efficiently.
Financial Performance Overview
For the nine months ended September 30, 2024, DigitalOcean reported revenue of $575.7 million, representing a 12% increase from $512.0 million in the same period in 2023. The growth in revenue was primarily attributed to a 10% increase in Average Revenue Per User (ARPU), rising to $99.02 from $90.43, and a 14% increase in revenue from Builders and Scalers.
| Financial Metric | Q3 2024 | Q3 2023 | % Change |
|---|---|---|---|
| Revenue | $198.5 million | $177.1 million | 12% |
| Cost of Revenue | $79.0 million | $70.3 million | 12% |
| Gross Profit | $119.4 million | $106.7 million | 12% |
| Net Income | $32.9 million | $19.2 million | 71% |
| Basic Net Income Per Share | $0.36 | $0.22 | 64% |
Operating Expenses
Total operating expenses for the nine months ended September 30, 2024, were $290.4 million, a decrease of 4% from $301.5 million in the previous year. The breakdown of operating expenses is as follows:
| Expense Type | Q3 2024 | Q3 2023 | % Change |
|---|---|---|---|
| Research and Development | $105.4 million | $109.5 million | (4%) |
| Sales and Marketing | $58.0 million | $53.3 million | 9% |
| General and Administrative | $127.0 million | $117.9 million | 8% |
Customer Base and Revenue Streams
DigitalOcean has a diverse customer base across approximately 190 countries, with about two-thirds of its revenue historically coming from international customers. As of September 30, 2024, revenue distribution was as follows:
- North America: 39%
- Europe: 28%
- Asia: 23%
- Rest of the World: 10%
The company continues to focus on increasing its Builders and Scalers, with approximately 145,000 Builders and 18,000 Scalers as of September 30, 2024. Revenue from these segments constituted 88% of total revenue in Q3 2024.
Stockholder Equity and Buyback Program
As of September 30, 2024, DigitalOcean had a total stockholders' deficit of $211.7 million, down from $313.7 million in the previous year. The company initiated a share buyback program in February 2024, with an authorization of up to $140 million through fiscal year 2025. During the nine months ended September 30, 2024, the company repurchased 795,191 shares for an aggregate purchase price of $29.6 million.
| Stockholders' Equity Item | Amount (in thousands) |
|---|---|
| Total Common Stock Outstanding | 92,397,303 |
| Additional Paid-In Capital | $65,701 |
| Accumulated Deficit | ($277,008) |
| Accumulated Other Comprehensive Loss | ($398) |
| Total Stockholders' Deficit | ($211,703) |
Liquidity and Capital Resources
As of September 30, 2024, DigitalOcean reported cash and cash equivalents of $439.9 million. The company believes that its existing cash, cash flow from operations, and availability under its credit facility will be sufficient to meet its working capital and capital expenditure requirements for at least the next 12 months.
Conclusion
The company’s strategic focus on AI/ML offerings, expanding its customer base, and optimizing costs continues to drive its growth trajectory in the competitive cloud services market.
How DigitalOcean Holdings, Inc. (DOCN) Makes Money
Revenue Generation Overview
DigitalOcean Holdings, Inc. primarily generates revenue through its Infrastructure as a Service (IaaS) and Platform as a Service (PaaS) offerings. For the three months ended September 30, 2024, the company reported total revenue of $198.5 million, reflecting a 12% increase from $177.1 million in the same period of 2023.
Customer Segments
The company categorizes its customers into three main groups: Learners, Builders, and Scalers. As of September 30, 2024, the customer breakdown was as follows:
- Builders: 145,412 customers
- Scalers: 18,000 customers
- Net dollar retention rate: 97%
Average Revenue Per User (ARPU)
DigitalOcean's ARPU increased from $92.06 in Q3 2023 to $102.51 in Q3 2024. This increase is attributed to higher adoption rates of their services and products.
Annual Run-Rate Revenue (ARR)
The ARR for DigitalOcean as of September 30, 2024, was $798 million, up from $713 million a year earlier. This figure is derived from multiplying the last month’s revenue by 12.
Geographic Revenue Breakdown
The geographic distribution of revenue for the three months ended September 30, 2024, is as follows:
| Region | Percentage of Revenue |
|---|---|
| North America | 39% |
| Europe | 28% |
| Asia | 23% |
| Other | 10% |
Operational Costs
The total costs of revenue for the three months ended September 30, 2024, amounted to $79.0 million, up from $70.3 million in Q3 2023. This increase of 12% was primarily due to higher depreciation and amortization costs.
Operating Expenses
For the three months ended September 30, 2024, DigitalOcean reported the following operating expenses:
| Expense Category | Amount (in thousands) | Year-over-Year Change |
|---|---|---|
| Research and Development | $37,377 | +15% |
| Sales and Marketing | $17,036 | -10% |
| General and Administrative | $40,422 | +101% |
| Total Operating Expenses | $94,835 | +33% |
Net Income
For the three months ended September 30, 2024, DigitalOcean reported a net income attributable to common stockholders of $32.9 million, which is an increase from $19.2 million in Q3 2023.
Cash Flow and Liquidity
As of September 30, 2024, DigitalOcean had cash and cash equivalents totaling $439.9 million. The net cash provided by operating activities for the nine months ended September 30, 2024, was $211.4 million, compared to $154.4 million in the same period of 2023.
Investment in Infrastructure
The company continues to invest significantly in its infrastructure, including AI/ML offerings. For the nine months ended September 30, 2024, the capitalized costs related to the development of internal-use software were $8.7 million.
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Resources:
- DigitalOcean Holdings, Inc. (DOCN) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of DigitalOcean Holdings, Inc. (DOCN)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View DigitalOcean Holdings, Inc. (DOCN)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.