Digitalocean Holdings, Inc. · NYSE:DOCN

Digitalocean — Q3 2024 Earnings Presentation

25 slides from Digitalocean's earnings presentation, Nov 4, 2024

  1. Slide 1: Earnings Presentation Q3 2024

    Earnings Presentation Q3 2024 November 4, 2024

  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 DigitalOcean simplifies cloud computing so builders can spend more time creating software that changes the world. 2024 DigitalOcean. All rights reserved

  4. Slide 4: Key Performance Indicators

    Key Performance Indicators Q3’23 Q3’24 Y-o-Y Growth Revenue $177.1M $198.5M 12% ARR $713.3M $798.3M 12% Adjusted EBITDA Margin 43% 44% 100 bps ARPU $92.06 $102.51 11% Non-GAAP Diluted Net Income Per Share $0.44 $0.52 18% Note: Refer to the Appendix for definition of metrics. 2024 DigitalOcean. All

  5. Slide 5: Large and Rapidly Growing Market Opportunity

    Large and Rapidly Growing Market Opportunity Individuals and Companies with <500 Employees IaaS PaaS $213Bn $96Bn $114Bn 23% CAGR $46Bn $117Bn $68Bn 2024 2027 Source: IDC: Worldwide Software and Public Cloud Services Spending Guide (February 2024) 2024 DigitalOcean. All rights reserved

  6. Slide 6: DigitalOcean Differentiators

    DigitalOcean Differentiators Simplicity Reduce time & effort needed to manage infrastructure Affordable Pricing Significantly reduce your cloud computing costs Premium Support Fast response times & customized services Reliability A stable, reliable, globally distributed platform 2024 DigitalOcean. Al

  7. Slide 7: Cloud Platform Purpose Built for Developers at Startups and Growing Digital-Native Companies

    DigitalOcean Offers a Cloud Platform Purpose Built for Developers at Startups and Growing Digital-Native Companies Cloud Simplest, VPS Hosting Infrastructure scalable Cloud 2012-2015 2015-2018 2018-2024+ Droplets: Simple and Key components Essential elements to help developers and scalable virtual u

  8. Slide 8: We Have a Comprehensive Product Portfolio

    We Have a Comprehensive Product Portfolio. 2024 DigitalOcean. All rights reserved

  9. Slide 9: 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 Asia Europe 23% of revenue 28% Bangalore North America of revenue 39% of revenue Singapore RoW 10% of revenue

  10. Slide 10: Customer Concentration, Revenue Contribution and Growth

    Customer Concentration, Revenue Contribution and Growth 638K $67M Customer ARR Customer Customer Growth % ARPU Growth % Growth Growth% (figures as of y-o-y y-o-y q-o-q q-o-q September-24 Total 1% $103 12% 74 0% Scalers 10% $2,153 19% 274 2% Builders 5% $138 7% 1,987 1% Learners 1% $15 0% 2,187 0%

  11. Slide 11: Financials

    AAA AULA AL TOU

  12. Slide 12: Balanced Profile of Growth and Profitability

    Balanced Profile of Growth and Profitability Revenue (M) Adjusted EBITDA (M) 40.5% 40.0% 40% 34.5% 30% 20% 10% 0% Adjusted EBITDA Adjusted EBITDA Margin Notes: 2024E based on the midpoint of financial outlook as of November 4, 2024 2024 DigitalOcean. All rights reserved

  13. Slide 13: Return on Invested Capital Drivers

    Return on Invested Capital Drivers Non-GAAP Diluted Weighted Average Adjusted Free Cash Flow (M) Shares Outstanding 22% 16% 13% Adj. Free Cash Flow Adj. Free Cash Flow Margin Notes: 2024E based on the midpoint of financial outlook as of November 4, 2024. 2024 DigitalOcean. All rights reserved

  14. Slide 14: Healthy Customer Economics

    Healthy Customer Economics Net Dollar Retention Rate ARPU Refer to the Appendix for definition of metrics. 2024 DigitalOcean. All rights reserved

  15. Slide 15: Financial Outlook

    Financial Outlook Implied Q4 FY 2024 FY 2024 Metric 2024 (as of 8/8) (as of 11/4) Revenue $199$201M $770$775M $775$777M Adjusted EBITDA Margin 3438% 3739% 4041% Non-GAAP Diluted Net Income Per Share $0.27$0.32 $1.60$1.70 $1.70$1.75 Adjusted Free Cash Flow Margin NA 1517% 1517% Non-GAAP Di

  16. Slide 16: Appendix

    SAAS AM AO TOU

  17. Slide 17: Key Business Metrics Definitions

    Key Business Metrics Definitions Customers We divide our customer population into the following categories: ● Testers: users that both (i) spend less than or equal to $50 per month and (ii) utilize our platform for three months or less. ● Learners: users that both (i) spend less than or equal to $50

  18. Slide 18: Key Business Metrics Definitions

    Key Business Metrics Definitions ARR We calculate ARR at a point in time by multiplying the revenue of the last month of the reported period by 12. For our ARR calculations, we include the total revenue from all customers, including Testers, Learners, Builders and Scalers. Net Dollar Retention Rate W

  19. Slide 19: Financial Highlights and Key Business Metrics

    Financial Highlights and Key Business Metrics Q3’22 Q4’22 Q1’23 Q2’23 Q3’23 Q4’23 Q1’24 Q2’24 Q3’24 Revenue (M) $152.1 $163.0 $165.1 $169.8 $177.1 $180.9 $184.7 $192.5 $198.5 Revenue Growth Year-over-year 37% 36% 30% 27% 16% 11% 12% 13% 12% ARR (M) $641 $659 $669 $682 $713 $730 $749 $781 $798 ARR In

  20. Slide 20: Non-GAAP Net Income

    Non-GAAP Net Income 1 For the nine months ended September 30, 2024, non-GAAP stock-based compensation excludes $0.1 million as it is presented in Restructuring related charges. There were no reclassifications of stock-based compensation for the three months ended September 30, 2024. For the three a

  21. Slide 21: Adjusted EBITDA and Adjusted EBITDA Margin

    Adjusted EBITDA and Adjusted EBITDA Margin 1 For the nine months ended September 30, 2024, non-GAAP stock-based compensation excludes $0.1 million as it is presented in Restructuring related charges. There were no reclassifications of stock-based compensation for the three months ended September 30

  22. Slide 22: Non-GAAP Diluted Net Income per Share

    Non-GAAP Diluted Net Income per Share 1 For the nine months ended September 30, 2024, non-GAAP stock-based compensation excludes $0.1 million as it is presented in Restructuring related charges. There were no reclassifications of stock-based compensation for the three months ended September 30, 202

  23. Slide 23: Adjusted Free Cash Flow and Adjusted Free Cash Flow Margin

    Adjusted Free Cash Flow and Adjusted Free Cash Flow Margin 1 For the three and nine months ended September 30, 2024, primarily consists of executive reorganization charges. For the three and nine months ended September 30, 2023, primarily consists of salary continuation charges and executive reorga

  24. Slide 24: Non-GAAP Operating Expenses

    Non-GAAP Operating Expenses 2024 DigitalOcean. All rights reserved

  25. Slide 25: Non-GAAP Operating Expenses (cont.)

    Non-GAAP Operating Expenses (cont.) 1 For the nine months ended September 30, 2024, non-GAAP stock-based compensation excludes $0.1 million as it is presented in Restructuring related charges. For the nine months ended September 30, 2023, non-GAAP stock-based compensation excludes $3.9 million, as

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