Cloud and AI Service Provider DigitalOcean Stock Soars - Here's Why

Zinger Key Points
  • DigitalOcean beats Q1 expectations with revenue up 12% to $184.73M and adjusted EPS of $0.43.
  • DOCN shares rise 5.89% premarket after reporting strong growth and positive fiscal outlook.

DigitalOcean Holdings Inc DOCN shares are trading higher Friday after it reported fiscal first-quarter results.

Revenue grew 12% year over year to $184.73 million, beating the analyst consensus estimate of $182.58 million.

Adjusted EPS of $0.43 surpassed the analyst consensus estimate of $0.38.

Annual Run-Rate Revenue (ARR) ended the quarter at $749 million, up 12% year over year, and Average Revenue Per Customer (ARPU) increased 8% year over year to $95.13.

Builders and Scalers (customers spending over $50 per month) grew 8% Y/Y, and their revenue rose 13% Y/Y in the quarter.

Adjusted EBITDA rose 33% Y/Y to $74 million, with a margin of 40% vs. 34% a year ago.

As of March 31, 2024, cash, cash equivalents, and marketable securities stood at $419 million. 

“The first quarter was a strong start to the year as we position the company to be the leading cloud and AI platform for growing technology businesses,” said Paddy Srinivasan, CEO of DigitalOcean. 

Outlook: For the second quarter, DOCN expects adjusted EPS of $0.38 – $0.40 vs. $0.39 estimate and revenue of $188 million – $189 million vs. street view of $187.09 million.

For fiscal 2024, the company expects revenue of $760 million—$775 million (prior $755 million—$775 million) vs. the consensus of $766.36 million and adjusted EPS of $1.60 – $1.67 vs. the $1.63 estimate.

DigitalOcean Holdings replaced Agiliti Inc in the S&P SmallCap 600 on May 7. 

DigitalOcean Holdings stock gained over 29% in the last six months. Investors can gain exposure to the stock via the Global X Cloud Computing ETF CLOU and the First Trust Cloud Computing ETF SKYY.

Price Action: DOCN shares are up 5.14% at $34.26 at the last check Friday.

Photo via Shutterstock

Market News and Data brought to you by Benzinga APIs
Comments
Loading...
Date
ticker
name
Actual EPS
EPS Surprise
Actual Rev
Rev Surprise
Posted In: EarningsNewsGuidanceTop StoriesMoversTechBriefsStories That Matterwhy it's moving
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!