Digitalocean Holdings, Inc. · NYSE:DOCN

Digitalocean — Q4 2024 Earnings Presentation

26 slides from Digitalocean's earnings presentation, Feb 25, 2025

  1. Slide 1: Earnings Presentation Q4 2024

    Earnings Presentation Q4 2024 February 25, 2025

  2. Slide 2: Safe Harbor

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

  3. Slide 3: Our mission

    Our mission 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

  4. Slide 4: Large and Rapidly Growing Market Opportunity

    Large and Rapidly Growing Market Opportunity Individuals and Companies with <500 Employees IaaS PaaS $251Bn $121Bn $138Bn 22% CAGR $60Bn $130Bn $78Bn 2025 2028 Source: IDC's Worldwide Software and Public Cloud Services Spending Guide Feb 2025 2025 DigitalOcean. All rights reserved

  5. Slide 5: 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

  6. Slide 6: 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 businesses Cloud Simplest VPS hosting infrastructure scalable cloud 2012-2015 2015-2018 2018-2025+ Droplets: Simple and Key components Essential elements to help developers and scalabl

  7. Slide 7: We Have a Comprehensive Product Portfolio

    We Have a Comprehensive Product Portfolio. 2025 DigitalOcean. All rights reserved

  8. Slide 8: Global Infrastructure Supports Customers in approximately 190 Countries

    Global Infrastructure Supports Customers in approximately 190 Countries 16 Data Centers Across 9 Regions Customers in 190 Countries Amsterdam Toronto London Frankfurt New York San Francisco Atlanta (Coming soon!) Asia Europe 24% of revenue 28% Bangalore North America of revenue 38% of revenue Singa

  9. Slide 9: Q4'24 Earnings Key Takeaways

    Q4’24 Earnings Key Takeaways Entered 2025 with Increased NDR to 99%, grew revenue 13% momentum year-over-year and delivered 18% free cash flow margin Increased product Released more than four times the amount of product velocity features vs Q4‘23 Traction with Higher Drove 37% year-over year revenue

  10. Slide 10: Key Growth Performance Indicators: Q4 & FY2024

    Key Growth Performance Indicators: Q4 & FY2024 Y-o-Y Y-o-Y Q4’23 Q4’24 FY’23 FY’24 Growth Growth Revenue $181M $205M 13% $693M $781M 13% Annual Run-rate Revenue (“ARR”) $723M $820M 13% Net Dollar Retention Rate (“NDR”) 96% 99% 300 bps 101% 98% 300 bps Average Revenue per User (“ARPU”) $92.63 $105.

  11. Slide 11: Key Profitability Performance Indicators: Q4 & FY2024

    Key Profitability Performance Indicators: Q4 & FY2024 Y-o-Y Y-o-Y Q4’23 Q4’24 FY’23 FY’24 Growth Growth Gross Margin 57% 62% 500 bps 57% 60% 300 bps Adjusted EBITDA Margin 41% 42% 100 bps 40% 42% 200 bps Adjusted Free Cash Flow Margin 16% 18% 200 bps 22% 17% 500 bps Non-GAAP Diluted Net Income

  12. Slide 12: Customer Concentration, Revenue Contribution and Growth

    Customer Concentration, Revenue Contribution and Growth 165K $205M Customer ARPU ARR % of Growth % Growth % Growth % 0.5K Revenue (figures as of YoY YoY YoY Q424 Total Higher Spend 88% 6% 9% 16% Customers Scalers+ 22% 17% 18% 37% Scalers 36% 10% 2% 12% Builders 30% 6% 2% 7% Testers Learners Builde

  13. Slide 13: Financials

    AAA AULA AL TOU

  14. Slide 14: Revenue Details

    Revenue Details Revenue (M) Net Dollar Retention Rate Notes: 2025E based on the midpoint of financial outlook as of February 25, 2025 2025 DigitalOcean. All rights reserved

  15. Slide 15: 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 February 25, 2025 2025 DigitalOcean. All rights res

  16. Slide 16: Financial Outlook

    Financial Outlook Metric Q1 2025 FY 2025 (as of 2/25) Revenue $207$209M $870$890M Revenue Growth 12%13% 11.5%14% Adjusted EBITDA Margin 38%40% 37%40% Non-GAAP Diluted Net Income Per Share $0.41$0.46 $1.85$1.95 Adjusted Free Cash Flow Margin NA 16%18% Non-GAAP Diluted Weighted Average 10310

  17. Slide 17: Appendix

    SAAS AM AO TOU

  18. Slide 18: 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 base

  19. Slide 19: Key Business Metrics Definitions

    Key Business Metrics Definitions ARR Beginning in the fourth quarter of 2024, we changed our methodology to calculate ARR by multiplying the revenue for the most recent quarter by four. For our ARR calculations, we include the total revenue from all customers, including Testers, Learners, Builders, S

  20. Slide 20: Financial Highlights and Key Business Metrics

    Financial Highlights and Key Business Metrics Q4’22 Q1’23 Q2’23 Q3’23 Q4’23 Q1’24 Q2’24 Q3’24 Q4’24 Revenue (M) $163.0 $165.1 $169.8 $177.1 $180.9 $184.7 $192.5 $198.5 $204.9 Revenue Growth Year-over-year 36% 30% 27% 16% 11% 12% 13% 12% 13% ARR (M) $652 $661 $679 $708 $723 $739 $770 $794 $820 ARR In

  21. Slide 21: Adjusted EBITDA and Adjusted EBITDA Margin

    Adjusted EBITDA and Adjusted EBITDA Margin 1 For the year ended December 31, 2024, non-GAAP stock-based compensation excludes $0.1 million as it is presented in Restructuring related charges. For the year ended December 31, 2023, non-GAAP stock-based compensation excludes the $31.3 million reversal

  22. Slide 22: Non-GAAP Net Income

    Non-GAAP Net Income 1 For the year ended December 31, 2024, non-GAAP stock-based compensation excludes $0.1 million as it is presented in Restructuring related charges. For the year ended December 31, 2023, non-GAAP stock-based compensation excludes the $31.3 million reversal related to the former

  23. Slide 23: Non-GAAP Diluted Net Income per Share

    Non-GAAP Diluted Net Income per Share 1 For the year ended December 31, 2024, non-GAAP stock-based compensation excludes $0.1 million as it is presented in Restructuring related charges. For the year ended December 31, 2023, non-GAAP stock-based compensation excludes the $31.3 million reversal rela

  24. Slide 24: Adjusted Free Cash Flow and Adjusted Free Cash Flow Margin

    Adjusted Free Cash Flow and Adjusted Free Cash Flow Margin 1 For the year ended December 31, 2024, primarily consists of executive reorganization charges. For the year ended December 31, 2023, primarily consists of salary continuation charges and executive reorganization charges, including CEO sear

  25. Slide 25: Non-GAAP Operating Expenses

    Non-GAAP Operating Expenses 2025 DigitalOcean. All rights reserved

  26. Slide 26: Non-GAAP Operating Expenses (cont.)

    Non-GAAP Operating Expenses (cont.) 1 For the year ended December 31, 2024, non-GAAP stock-based compensation excludes $0.1 million as it is presented in Restructuring related charges. For the year ended December 31, 2023, non-GAAP stock-based compensation excludes the $31.3 million reversal relate

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