DigitalOcean (DOCN) Q2 2022 Earnings Results

By Amit Chowdhry ● Aug 10, 2022
  • DigitalOcean (DOCN) recently announced its Q2 2022 earnings results. These are the details.

DigitalOcean (DOCN) recently announced its Q2 2022 earnings results. Below are the highlights.

Q2 2022 Financial Highlights:

– Revenue was $133.9 million, an increase of 29% year-over-year.

– Annual Run-Rate Revenue (ARR) ended the quarter at $544.1 million, representing 28% year-over-year growth.

– Gross profit of $86.6 million or 65% of revenue, an increase of 700 basis points year-over-year, and adjusted gross profit of $109.7 million or 82% of revenue.

– Loss from operations was $7.4 million and operating margin was (6)%.

– Non-GAAP income from operations was $22.3 million and non-GAAP operating margin was 17%.

– Net loss per share was $(0.06) and non-GAAP diluted net income per share was $0.20.

– Cash, cash equivalents, and marketable securities was $1.2 billion as of June 30, 2022.

CFO Transition:

DigitalOcean is also announcing that Chief Financial Officer Bill Sorenson plans to retire from the company in 2023 and that it will commence a search for his successor. Sorenson will continue in his capacity throughout the search process and then will serve as an advisor to the company until his departure in August 2023 ensuring a smooth transition and onboarding of a new chief financial officer.

Financial Outlook:

Based on information available as of August 8, 2022, for the third quarter of 2022, the company expects:

– 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.

– Fully diluted weighted average shares outstanding of approximately 113 to 115 million shares.

For the full year 2022, the company 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.

– Non-GAAP diluted net income per share of $0.74 to $0.75.

– Fully diluted weighted average shares outstanding of approximately 117 to 119 million shares

KEY QUOTES:

“We are taking a number of actions in the second half to deliver 30% growth with improving profitability and cash flow despite an uncertain environment driven by macroeconomic factors beyond our control.” 

“Bill has been an incredible partner, leader, and team builder. His financial acumen and experience have been critical over the past three years as we have turned the company around while dealing with a global pandemic, improved our financial profile through raising over $2.5 billion in capital and positioned the company to scale and achieve our first billion of revenue in 2024.”

– Yancey Spruill, CEO of DigitalOcean