Digitalocean Holdings, Inc. · NYSE:DOCN

Digitalocean — Q1 2023 Earnings Presentation

23 slides from Digitalocean's earnings presentation, May 9, 2023

1. Slide 1: Earnings Presentation Q1 2023

   Earnings Presentation Q1 2023

2. Slide 2: Safe Harbor

   Safe Harbor This presentation contains forward-looking statements that involve This presentation includes statistical and other industry and market data that substantial risks and uncertainties. In some cases, you can identify we obtained from industry publications and research, surveys and studies

3. Slide 3: Our Mission

   Our Mission DigitalOcean simplifies cloud computing so builders can spend more time creating software that changes the world. digitalocean.com

4. Slide 4: Key Performance Indicators

   Key Performance Indicators Q1’22 Q1’23 Y-o-Y Growth Strong Revenue Growth $127.3M $165.1M +30% Scaling ARR $523.7M $669.1M +28% Adjusted EBITDA Margin 29% 34% +500 bps ARPU1 $76.45 $88.35 +16% Adjusted Free Cash Flow Margin 4% 16% +1200 bps Repurchases of Common Stock $150.0M $265.9M +77% 1 The ARPU

5. Slide 5: Large and Rapidly Growing Market Opportunity

   Large and Rapidly Growing Market Opportunity Individuals and Companies with <500 Employees IaaS PaaS $195Bn $78Bn $98Bn 26% CAGR $36Bn $116Bn $62Bn 2023 2026 Source: IDC: Worldwide Software and Public Cloud Services Spending Guide (Jan. 2023) 5

6. Slide 6: What is the Problem DigitalOcean Solves for SMBs?

   What is the Problem DigitalOcean Solves for SMBs? Complex systems: Enterprise-focused vendors have complicated implementation processes which limit onboarding for startups and SMBs. Onerous pricing: Existing providers have intricate and unpredictable pricing models that lack transparency. Lack of su

7. Slide 7: DigitalOcean's Offerings are Highly Differentiated

   DigitalOcean’s Offerings are Highly Differentiated Simplicity Support Community Open Infrastructure and Platform Live, personal support to all Free knowledge base with tens Enabling faster, lower cost Technologies that can be spun customers regardless of their of thousands of pieces of innovation wi

8. Slide 8: DigitalOcean Offers a Cloud Platform Purpose Built for Developers and SMBs

   DigitalOcean Offers a Cloud Platform Purpose Built for Developers and SMBs Cloud Developer & VPS Hosting Infrastructure SMB Cloud 2012-2015 2015-2018 2018-2023+ Droplets: Simple and scalable Key components underpinning cloud Essential elements to help developers and virtual machines such as Volumes,

9. Slide 9: Global Infrastructure Supports Customers in 190 Countries

   Global Infrastructure Supports Customers in 190 Countries 15 Data Centers Across 9 Regions Customers in 190 Countries London Amsterdam Frankfurt Toronto New York Asia San Francisco 23% Europe of revenue 29% Bangalore of revenue North America 38% Singapore of revenue RoW 10% of revenue Sydney Notes:

10. Slide 10: 147K Customers Paying More Than $50 per Month

    147K Customers Paying More Than $50 per Month Builders and Scalers (K) +43% Revenue Contribution from Builders And Scalers +2% digitalocean.com 10

11. Slide 11: Customer Concentration, Revenue Contribution and Growth

    Customer Concentration, Revenue Contribution and Growth Customer Customer Customer ARR Growth2 % ARPU3 Growth2,5 Growth2% Growth4 % (figures as of y-o-y q-o-q q-o-q Mar-23) Total1 12% $88 29% 1,860 0% Scalers 39% $1,962 24% 366 2% Builders 43% $135 41% 1,959 2% Learners 5% $15 19% -465 0% 1. Scalers

12. Slide 12: Financials

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13. Slide 13: Balanced Profile of Growth and Profitability

    Balanced Profile of Growth and Profitability Revenue (M) Adjusted EBITDA (M) 35% 34% 23% 38.5% 34% 32% Revenue YoY Revenue Growth Adjusted EBITDA Adjusted EBITDA Margin Notes: 2023E based on the midpoint of financial outlook as of May 9, 2023 digitalocean.com 13

14. Slide 14: Return on Invested Capital Drivers

    Return on Invested Capital Drivers Diluted Weighted Average Shares Adjusted Free Cash Flow (M) Outstanding 21.5% 13% 6% Adj. Free Cash Flow Adj. Free Cash Flow Margin Notes: 2023E based on the midpoint of financial outlook as of May 9, 2023 digitalocean.com 14

15. Slide 15: Healthy Customer Economics

    Healthy Customer Economics Net Dollar Retention Rate ARPU digitalocean.com 15

16. Slide 16: Financial Outlook

    Financial Outlook Metric Q2 2023 FY 2023 FY 2023 (as of 2/16) (as of 5/9) Revenue $169.5-$170.5M $700-$720M $700-$720M Adjusted EBITDA Margin 37-38% 38-39% 38-39% Non-GAAP Diluted Net Income Per Share $0.40-$0.41 $1.65-$1.69 $1.70-$1.73 Adjusted Free Cash Flow Margin NA 21-22% 21-22% Fully Diluted W

17. Slide 17: Appendix

    Appendix digitalocean.com

18. Slide 18: Financial Highlights and KPIs

    Financial Highlights and KPIs Q1’21 Q2’21 Q3’21 Q4’21 Q1’22 Q2’22 Q3’22 Q4’22 Q1’23 Revenue (M) $93.7 $103.8 $111.4 $119.7 $127.3 $133.9 $152.1 $163.0 $165.1 Revenue Growth 29% 35% 37% 37% 36% 29% 37% 36% 30% ARR (M) $388 $426 $455 $490 $524 $544 $641 $659 $669 ARR Increase (M) $31 $38 $28 $35 $34 $

19. Slide 19: Adjusted EBITDA and Adjusted EBITDA Margin

    Adjusted EBITDA and Adjusted EBITDA Margin (1) Other income (expense), net primarily consists of interest and accretion income from our marketable securities. digitalocean.com

20. Slide 20: Non-GAAP Net Income and Non-GAAP Diluted Net Income Per Share

    Non-GAAP Net Income and Non-GAAP Diluted Net Income Per Share (1) The income tax effects of non-GAAP adjustments are calculated based on the applicable statutory tax rate for the relevant jurisdiction, except for those items which are non-taxable or subject to valuation allowances for which the tax

21. Slide 21: Adjusted Free Cash Flow and Adjusted Free Cash Flow Margin

    Adjusted Free Cash Flow and Adjusted Free Cash Flow Margin digitalocean.com 21

22. Slide 22: Non-GAAP Operating Expenses

    Non-GAAP Operating Expenses digitalocean.com 22

23. Slide 23: Non-GAAP Operating Expenses (cont.)

    Non-GAAP Operating Expenses (cont.) digitalocean.com 23

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