Digitalocean Holdings, Inc. · NYSE:DOCN

Digitalocean — Q1 2025 Earnings Presentation

30 slides from Digitalocean's earnings presentation, May 6, 2025

  1. Slide 1: Earnings Presentation Q1 2025

    Earnings Presentation Q1 2025 May 6, 2025 2025 DigitalOcean. All rights reserved

  2. Slide 2: Safe Harbor

    Safe Harbor The statements in the presentation regarding our financial outlook are management; (12) the effects of acquisitions and their integration; (13) general forward-looking statements within the meaning of Section 27A of the Securities Act market, political, economic, and business conditions,

  3. Slide 3: Q1 2025 Highlights

    Q1 2025 Highlights 2025 DigitalOcean. All rights reserved

  4. Slide 4: Strong execution on the DigitalOcean Strategy

    Strong execution on the DigitalOcean Strategy Growth Strategy Financial Targets Target 4M Digital Native Enterprises DNE 2027 1820% Revenue growth and mid-teens aFCF Simplest, Scalable, Approachable Cloud 2027 20% Revenue growth and 40% Weighted Rule of 40 Growth = Add NEW Digital Native En

  5. Slide 5: Q1 2025 Highlights

    Q1 2025 Highlights Strong financial Grew revenue 14% year-over-year, increased results results NDR to 100%, and grew AI ARR over 160% YoY Increased product Released more than five times the amount of product velocity features vs Q1 2024 Traction with Digital Drove 41% year-over year revenue growth w

  6. Slide 6: Core cloud computing platform enhancements & use cases

    Core cloud computing platform enhancements & use cases Core Cloud Releases Core Cloud Customer Showcase ● DOKS 1K node scaling - GA Appwrite: Signed a two-year committed deal, ● DBaaS Large plans for MySQL 20TB) and selecting DigitalOcean over the hyperscalers, PostgreSQL 30TB - GA driven by bo

  7. Slide 7: AI/ML platform enhancements & use cases

    AI/ML platform enhancements & use cases AI/ML Releases AI/ML Customer Showcase WindBorne: Leverages DigitalOcean GPU ● NVIDIA HGX H200s GPUs Droplets to build a record-breakingly accurate ● AMD Instinct MI300X GPUs deep learning-based global medium-range ● 5,000 Customers and 8,000 Agents forecast

  8. Slide 8: Continued revenue acceleration, with positive trends in Net Dollar Retention

    Continued revenue acceleration, with positive trends in Net Dollar Retention Q1’24 Q1’25 Y-o-Y Growth Revenue $185M $211M 14% Revenue Growth 12% 14% 200 bps Annual Run-rate Revenue (“ARR”) $739M $843M 14% Incremental ARR $15M $23M 53% Net Dollar Retention Rate (“NDR”) 97% 100% 300 bps Average Reve

  9. Slide 9: Material and accelerating traction with higher spending Digital Native Enterprises

    Material and accelerating traction with higher spending Digital Native Enterprises 2,500 bps 400 bps Note: Refer to the Appendix for definitions of key metrics. 2025 DigitalOcean. All rights reserved 9

  10. Slide 10: Consistently delivering strong profitability metrics

    Consistently delivering strong profitability metrics Note: Refer to the Appendix for definitions of key metrics. 2025 DigitalOcean. All rights reserved 10

  11. Slide 11: Front-loaded 2025 capital program - on track to deliver 16–18% for FY 2025

    Front-loaded 2025 capital program - on track to deliver 1618% for FY 2025 ● Higher Q1 cash outflows driven by: ○ $18 million additional growth capital above Q4 2024 - largely tied to capacity in new Atlanta data center ○ Annual employee bonus payments of $14 million ● 2025 Capex plan was intentio

  12. Slide 12: Refinancing of 2026 Convertible on track

    Refinancing of 2026 Convertible on track ● Announced an $800M credit facility completing the first step Key Terms in refinancing our existing 2026 convertible notes ● $800M Secured Credit Facility ● Facility includes Term Loan A, which combines an attractive cash interest rate with flexibility of de

  13. Slide 13: With strong Q1 performance, maintaining current financial outlook for full year

    With strong Q1 performance, maintaining current financial outlook for full year Metric Q2 2025 FY 2025 FY 2025 FY Delta (as of 2/25 (as of 5/6 Revenue $215.5$217.5M $870$890M $870$890M No change Revenue Growth 12%13% 11.5%14% 11.5%14% No change Adjusted EBITDA Margin 38%40% 37%40% 37%40%

  14. Slide 14: Appendix

    Appendix 2025 DigitalOcean. All rights reserved

  15. Slide 15: Our mission is to simplify cloud and AI so builders can spend more time creating software

    Our mission is to simplify cloud and AI so builders can spend more time creating software that changes the world 2025 DigitalOcean. All rights reserved

  16. Slide 16: We operate in large and growing market

    We operate in large and growing market $400B in 2025, growing 23%1 Public Cloud Market AI EXPANSION Our focus is on: $140B Digital Native Large Enterprises2 enterprises AI EXPANSION $260B $140B 4M Digital Native Medium Enterprises2 enterprises Individuals & 171K Small enterprises DNEs on DO3 NON

  17. Slide 17: DigitalOcean Differentiators

    DigitalOcean Differentiators Pay less for reliable, highly capable infrastructure Simple that just works. Build your business on a solid—yet flexible—foundation Scalable with expert support. Get the most out of your infrastructure with robust Approachable developer resources and hands-on help when y

  18. Slide 18: DigitalOcean offers comprehensive cloud and AI services that are developer-friendly and built to scale

    DigitalOcean offers comprehensive cloud and AI services that are developer-friendly and built to scale with growing Digital Native Enterprises The simplest, Cloud scalable, VPS hosting infrastructure approachable 2012-2015 cloud 2015-2018 2018-2025+ Droplets: Simple and scalable Key components under

  19. Slide 19: We address the needs of Digital Native Enterprises

    We address the needs of Digital Native Enterprises 2025 DigitalOcean. All rights reserved 19

  20. Slide 20: Our global Infrastructure Supports Customers in approximately 190 Countries

    Our global Infrastructure Supports Customers in approximately 190 Countries 17 Data Centers Across 9 Regions Customers in 190 Countries Amsterdam Toronto London Frankfurt New York San Francisco Atlanta Asia Europe 24% 28% Bangalore of revenue North America of revenue 37% of revenue Singapore RoW 11

  21. Slide 21: Financial Highlights and Key Business Metrics

    Financial Highlights and Key Business Metrics Q1ʼ23 Q2ʼ23 Q3ʼ23 Q4ʼ23 Q1ʼ24 Q2ʼ24 Q3ʼ24 Q4ʼ24 Q1ʼ25 Revenue (M) $165.1 $169.8 $177.1 $180.9 $184.7 $192.5 $198.5 $204.9 $210.7 Revenue Growth Year-over-year 30% 27% 16% 11% 12% 13% 12% 13% 14% ARR (M) $661 $679 $708 $723 $739 $770 $794 $820 $843 ARR In

  22. Slide 22: Healthy Profitability Metrics

    Healthy Profitability Metrics Adjusted Free Cash Flow M Adjusted EBITDA M 42% 40% 39% 22% 17% 17% Adj. Free Cash Flow Adj. Free Cash Flow Margin Adjusted EBITDA Adjusted EBITDA Margin Notes: 2025E based on the midpoint of financial outlook as of May 6, 2025 2025 DigitalOcean. All rights reserved

  23. Slide 23: Key Business Metrics Definitions

    Key Business Metrics Definitions Customers Beginning in the fourth quarter of 2024, we changed our methodology to calculate customer count as the average number of customers as of the last day of the month for each month in the most recent quarter. Customers are classified in separate categories bas

  24. Slide 24: Key Business Metrics Definitions and Other

    Key Business Metrics Definitions and Other Net Dollar Retention Rate We calculate net dollar retention rate monthly by starting with the revenue from all customers, including Testers, Learners, Builders, Scalers and Scalers+ for our IaaS and PaaS/SaaS offerings during the corresponding month 12 mont

  25. Slide 25: Adjusted EBITDA and Adjusted EBITDA Margin

    Adjusted EBITDA and Adjusted EBITDA Margin 1 For the three months ended March 31, 2024, non-GAAP stock-based compensation excludes $0.1 million as it is presented in restructuring related charges. 2 For the three months ended March 31, 2024, primarily consists of executive reorganization charges.

  26. Slide 26: Non-GAAP Net Income

    Non-GAAP Net Income 1 For the three months ended March 31, 2024, non-GAAP stock-based compensation excludes $0.1 million as it is presented in restructuring related charges. 2 For the three months ended March 31, 2024, primarily consists of executive reorganization charges. 3 For the periods in f

  27. Slide 27: Non-GAAP Diluted Net Income per Share

    Non-GAAP Diluted Net Income per Share 1) For the three months ended March 31, 2024, non-GAAP stock-based compensation excludes $0.1 million as it is presented in restructuring related charges. 2 For the three months ended March 31, 2024, primarily consists of executive reorganization charges. 3 Fo

  28. Slide 28: Adjusted Free Cash Flow and Adjusted Free Cash Flow Margin

    Adjusted Free Cash Flow and Adjusted Free Cash Flow Margin 1 For the three months ended March 31, 2024, primarily consists of executive reorganization charges. 2025 DigitalOcean. All rights reserved 28

  29. Slide 29: TTM Adjusted Free Cash Flow and TTM Adjusted Free Cash Flow Margin

    TTM Adjusted Free Cash Flow and TTM Adjusted Free Cash Flow Margin 1 For the periods ended June 30, 2023 through December 31, 2023, primarily consists of salary continuation charges and executive reorganization charges, including CEO search firm fees and other legal and professional service costs.

  30. Slide 30: Non-GAAP Operating Expenses

    Non-GAAP Operating Expenses 1 For the three months ended March 31, 2024, amounts have been recast to conform with current period presentation. Refer to Note 2. Summary of Significant Accounting Policies, Prior Period Reclassification, included in Part II, Item 8 of our Annual Report on Form 10K fi

DigitalOcean Holdings — Q1 2025 Earnings Presentation on 6ix