Latest news with #DOCN
Yahoo
3 days ago
- Business
- Yahoo
Q1 Earnings Outperformers: DigitalOcean (NYSE:DOCN) And The Rest Of The Data Storage Stocks
The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let's take a look at how DigitalOcean (NYSE:DOCN) and the rest of the data storage stocks fared in Q1. Data is the lifeblood of the internet and software in general, and the amount of data created is accelerating. As a result, the importance of storing the data in scalable and efficient formats continues to rise, especially as its diversity and associated use cases expand from analyzing simple, structured datasets to high-scale processing of unstructured data such as images, audio, and video. The 5 data storage stocks we track reported a strong Q1. As a group, revenues beat analysts' consensus estimates by 3% while next quarter's revenue guidance was in line. In light of this news, share prices of the companies have held steady as they are up 4% on average since the latest earnings results. Started by brothers Ben and Moisey Uretsky, DigitalOcean (NYSE: DOCN) provides a simple, low-cost platform that allows developers and small and medium-sized businesses to host applications and data in the cloud. DigitalOcean reported revenues of $210.7 million, up 14.1% year on year. This print exceeded analysts' expectations by 1%. Despite the top-line beat, it was still a mixed quarter for the company with a solid beat of analysts' EBITDA estimates but EPS guidance for next quarter missing analysts' expectations significantly. 'The momentum we generated in 2024 in both core cloud and AI continued into Q1, as we grew total revenue 14% year-over-year, our highest quarterly growth rate since Q3 2023, with AI ARR continuing to grow north of 160% year-over-year, and we delivered more than 50 new product features, over 5 times as many as we delivered in Q1 of last year.' said Paddy Srinivasan, CEO of DigitalOcean. DigitalOcean delivered the weakest performance against analyst estimates and weakest full-year guidance update of the whole group. Unsurprisingly, the stock is down 15% since reporting and currently trades at $27.83. Read our full report on DigitalOcean here, it's free. Originally formed in 1988 as part of Bell Labs, Commvault (NASDAQ: CVLT) provides enterprise software used for data backup and recovery, cloud and infrastructure management, retention, and compliance. Commvault Systems reported revenues of $275 million, up 23.2% year on year, outperforming analysts' expectations by 4.8%. The business had a very strong quarter with a solid beat of analysts' billings estimates and an impressive beat of analysts' EBITDA estimates. Commvault Systems delivered the biggest analyst estimates beat and highest full-year guidance raise among its peers. The market seems happy with the results as the stock is up 8.3% since reporting. It currently trades at $179.45. Is now the time to buy Commvault Systems? Access our full analysis of the earnings results here, it's free. Formed in 2011 with the merger of Membase and CouchOne, Couchbase (NASDAQ:BASE) is a database-as-a-service platform that allows enterprises to store large volumes of semi-structured data. Couchbase reported revenues of $56.52 million, up 10.1% year on year, exceeding analysts' expectations by 1.7%. It was a satisfactory quarter as it also posted an impressive beat of analysts' EBITDA estimates but a significant miss of analysts' billings estimates. Couchbase delivered the slowest revenue growth in the group. Interestingly, the stock is up 6.6% since the results and currently trades at $19.79. Read our full analysis of Couchbase's results here. Founded in 2013 by three French engineers who spent decades working for Oracle, Snowflake (NYSE:SNOW) provides a data warehouse-as-a-service in the cloud that allows companies to store large amounts of data and analyze it in real time. Snowflake reported revenues of $1.04 billion, up 25.7% year on year. This print beat analysts' expectations by 3.4%. Aside from that, it was a satisfactory quarter as it also recorded an impressive beat of analysts' EBITDA estimates but a miss of analysts' billings estimates. Snowflake delivered the fastest revenue growth among its peers. The company added 26 enterprise customers paying more than $1 million annually to reach a total of 606. The stock is up 18.1% since reporting and currently trades at $211.65. Read our full, actionable report on Snowflake here, it's free. Started in 2007 by the team behind Google's ad platform, DoubleClick, MongoDB offers database-as-a-service that helps companies store large volumes of semi-structured data. MongoDB reported revenues of $549 million, up 21.9% year on year. This number surpassed analysts' expectations by 4.1%. It was a very strong quarter as it also logged EPS guidance for next quarter exceeding analysts' expectations and a solid beat of analysts' EBITDA estimates. The company added 110 enterprise customers paying more than $100,000 annually to reach a total of 2,506. The stock is up 2.1% since reporting and currently trades at $204. Read our full, actionable report on MongoDB here, it's free. Thanks to the Fed's rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn't send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump's November win lit a fire under major indices and sent them to all-time highs. However, there's still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy. Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Growth Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
Yahoo
31-05-2025
- Business
- Yahoo
DigitalOcean Holdings, Inc. (DOCN): A Bull Case Theory
We came across a bullish thesis on DigitalOcean Holdings, Inc. (DOCN) on Rene Sellmann's Substack. In this article, we will summarize the bulls' thesis on DOCN. DigitalOcean Holdings, Inc. (DOCN)'s share was trading at $28.82 as of 27th May. DOCN's trailing and forward P/E were 25.50 and 15.02 respectively according to Yahoo Finance. Copyright: melpomen / 123RF Stock Photo DigitalOcean stands out as a capital-disciplined, customer-focused cloud provider serving startups, developers, and small to mid-sized businesses underserved by hyperscalers like AWS and Azure. Its core advantage lies in offering a frictionless experience—simple pricing, rapid deployment, and intuitive UX—tailored for teams that value speed, control, and predictability. While traditionally viewed as a 'starter cloud,' DigitalOcean has begun reversing customer churn by expanding platform depth and targeting higher-value accounts. The number of customers spending over $100K annually rose 41% YoY in Q1, showing early success in its move upmarket. Metrics such as Net Dollar Retention (a proxy for monetization and satisfaction), growth in Scalers+ accounts, and free cash flow margin form the essential dashboard for tracking its operational execution, with rising GPU workloads and GenAI adoption offering long-term upside. Despite lacking the scale advantages of hyperscalers, DigitalOcean operates in a stable, cash-generative segment of cloud infrastructure where recurring revenue, modest churn, and growing capital efficiency create increasing predictability. Its niche is defensible because hyperscalers over-serve this segment with complexity, and most smaller competitors lack its support quality, developer brand, or productized experience. The business is not without risks—particularly from low-end competition and evolving CapEx needs—but its focused approach, improving retention, and solid FCF profile position it well. It won't become AWS, but it does not have to. By continuing to execute against its playbook—prioritizing customer value, simplicity, and operational leverage—DigitalOcean can carve out a durable, profitable space in a structurally sound and often misunderstood corner of the cloud market. For a deeper look into another technology stock, be sure to check out our article on Microsoft Corporation (MSFT), wherein we summarized a bullish thesis by Ray Myers on Substack. Since our coverage, the stock is up 0.40%. DigitalOcean Holdings, Inc. (DOCN) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 20 hedge fund portfolios held DOCN at the end of the first quarter which was 18 in the previous quarter. While we acknowledge the risk and potential of DOCN as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than DOCN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock. READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock. Disclosure: None. This article was originally published at Insider Monkey. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
19-05-2025
- Business
- Yahoo
DOCN Q1 Earnings Call: Large Enterprise Momentum and AI Investments Drive Results
Cloud computing provider DigitalOcean (NYSE: DOCN) reported Q1 CY2025 results exceeding the market's revenue expectations , with sales up 14.1% year on year to $210.7 million. The company expects next quarter's revenue to be around $216.5 million, close to analysts' estimates. Its non-GAAP profit of $0.56 per share was 25.8% above analysts' consensus estimates. Is now the time to buy DOCN? Find out in our full research report (it's free). Revenue: $210.7 million vs analyst estimates of $208.6 million (14.1% year-on-year growth, 1% beat) Adjusted EPS: $0.56 vs analyst estimates of $0.44 (25.8% beat) Adjusted Operating Income: $62.27 million vs analyst estimates of $53.38 million (29.6% margin, 16.7% beat) The company reconfirmed its revenue guidance for the full year of $880 million at the midpoint Management reiterated its full-year Adjusted EPS guidance of $1.90 at the midpoint Operating Margin: 17.9%, up from 6.2% in the same quarter last year Free Cash Flow was -$821,000, down from $36.71 million in the previous quarter Net Revenue Retention Rate: 100%, up from 99% in the previous quarter Annual Recurring Revenue: $843 million at quarter end, up 14.1% year on year Billings: $210.9 million at quarter end, up 14.1% year on year Market Capitalization: $2.83 billion DigitalOcean's latest quarterly results reflected continued growth with management crediting strong demand from larger digital native enterprises and the expansion of AI-related services as primary drivers. CEO Paddy Srinivasan highlighted the company's focus on scaling with these customers, noting a 41% year-over-year increase in revenue from clients spending over $100,000 annually. This expansion was further supported by product innovation and increased account engagement, particularly through enhanced support for complex workloads in both core cloud and AI infrastructure. Looking ahead, management emphasized a cautious yet optimistic outlook for the remainder of the year, citing the diverse customer base and robust demand for AI inferencing capabilities. Srinivasan stated, "We have taken a very appropriately cautious approach to projecting the outlook for the rest of the year," acknowledging macroeconomic uncertainty while reaffirming guidance for both revenue and profitability. The ongoing rollout of AI platform features and investments in capacity are expected to support future growth, with management monitoring evolving customer needs and potential financing strategies to enable larger-scale deals. DigitalOcean's management attributed quarterly performance to customer mix shifts, product innovation, and targeted go-to-market efforts. The company's ability to serve rapidly growing digital native enterprises and expand AI workloads drove both the top line and improved operating metrics. Enterprise customer expansion: Revenue from customers spending over $100,000 annually grew 41% year-over-year, supported by targeted engagement and new product capabilities tailored to larger workloads. AI workload acceleration: The company's AI annual recurring revenue (ARR) grew over 160% year-over-year, with most new AI business focused on real-world inferencing workloads. Access to advanced GPUs from NVIDIA and AMD underpinned this growth. Product innovation pace: Over 50 new products and features were released in the quarter—five times more than the prior year's comparable period—without a significant increase in R&D spending as a percentage of revenue. Enhanced customer engagement: DigitalOcean doubled named account coverage to its top 3,000 customers, assigning dedicated managers and technical specialists to deepen relationships and identify new workload opportunities. Capacity and infrastructure strategy: The opening of a new Atlanta data center enabled the company to win larger, multi-year deals, but required substantial upfront capital investment, influencing short-term free cash flow. Management's outlook for the next quarter and full year centers on sustained expansion with digital native enterprises and increased adoption of AI offerings, with a focus on maintaining operational efficiency and managing capital investments. AI and cloud platform adoption: Management expects continued demand for AI inferencing and scalable cloud solutions to fuel revenue growth, especially as larger customers migrate more workloads to DigitalOcean's infrastructure. Capacity investments and financing: The company is evaluating additional funding strategies, including leasing arrangements, to support rapid deployment of infrastructure needed for larger customer commitments without compromising free cash flow. Customer diversification and macro risks: While customer concentration risk remains low, management is monitoring for changes in macroeconomic conditions that could impact usage trends or delay enterprise purchasing decisions. Jason Ader (William Blair): Asked about timing for general availability of the GenAI platform and differentiation in the AI market; management expects GA by end of Q2 or early Q3 and highlighted their full-stack approach to AI inferencing. Pinjalim Bora (JPMorgan): Inquired about macro environment impacts; management stated that observed trends are reflected in guidance and noted cautious optimism due to diversified customer base. Gabriela Borges (Goldman Sachs): Sought clarity on the nature of large multi-year deals; management explained these deals are enabled by new enterprise features and staged migration capabilities, with more such opportunities expected. James Fish (Piper Sandler): Probed on capital expenditure needs for supporting large deals; management clarified that recent CapEx was front-loaded for new capacity and outlined plans to maintain flexibility for future large contracts. Kingsley Crane (Canaccord Genuity): Asked about expansion of the named account model; management described the current focus on top 3,000 customers and a data-driven approach to scaling targeted engagement. In the coming quarters, the StockStory team will be monitoring (1) the general availability and customer adoption of DigitalOcean's GenAI platform, (2) progress on winning and onboarding large-scale enterprise and AI inferencing deals, and (3) the company's execution on alternative capital strategies to support infrastructure growth. Continued innovation in core cloud offerings and expansion of targeted account engagement models will also be key areas of focus. DigitalOcean currently trades at a forward price-to-sales ratio of 3.5×. Should you load up, cash out, or stay put? See for yourself in our free research report. Market indices reached historic highs following Donald Trump's presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth. While this has caused many investors to adopt a "fearful" wait-and-see approach, we're leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years. Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
Yahoo
06-05-2025
- Business
- Yahoo
DigitalOcean Growth Rate Ticks Higher
Key Points Revenue is growing at a higher rate than in the same period last year, continuing a positive trend that began in the prior quarter. Customers continue to increase their spending on the platform, with improving retention rates and average revenue per user. Large capex spending in the first half of the year is expected to drive further revenue growth acceleration in the second half of 2025. Here's our initial take on DigitalOcean's (NYSE: DOCN) fiscal 2025 first-quarter financial results. Key Metrics Metric Q1 FY24 Q1 FY25 Change vs. Expectations Revenue $185 million $210.7 million +14% Beat Earnings per share $0.15 $0.39 +160% Beat Avg. revenue per customer (ARPU) $95.13 $108.56 +14% n/a Net dollar retention rate 99% 100% +100 bps n/a Spending on Capacity Is Renewing Growth for DigitalOcean Over the past year and a half, DigitalOcean's growth rates have slowed significantly, with revenue growth falling from 30% in the first quarter of 2023 to 12% revenue growth in Q1 of fiscal 2024. However, the cloud infrastructure-as-a-service platform operator is starting to build some momentum -- if modest -- in the right direction. After reporting 13% revenue growth in Q4 of 2024, a 2-percentage-point increase from 11% growth in the prior year, revenue increased 14% to start fiscal 2025, another 2-percentage-point acceleration year over year. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue » It's also doing a better job of retaining -- and growing -- customers and their spending. Net dollar retention rate (NRR) was 100%, up from 97% (indicating a certain degree of customer churn when combined with revenue growth) in the year-ago quarter. This was also the first quarter in nearly two years that DigitalOcean's NRR was 100% or above. The company continues to deliver on its efforts to transition its focus and products to "digital native" companies, and the results are improving. Revenue from customers that spend $100,000 per year or more in ARR was up 41% and now represents 23% of total revenue. The number of higher-spend customers, which the company defines as customers who spend more than $600 per year, increased 9% and now represents 88% of total revenue. DigitalOcean's strategy is delivering solid bottom-line results too. Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) margin was 41%, down a little from recent quarters but up from the year-ago period, while GAAP gross margin of 61% continues a positive margin trend. Both GAAP and adjusted earnings metrics continue to trend higher.
Yahoo
24-04-2025
- Business
- Yahoo
DigitalOcean Holdings, Inc. (DOCN): Among Billionaire George Soros' Small-Cap Stocks with Huge Upside Potential
We recently published a list of . In this article, we are going to take a look at where DigitalOcean Holdings, Inc. (NYSE:DOCN) stands against Billionaire George Soros' other small-cap stocks with huge upside potential. When a legendary investor like George Soros makes a move, Wall Street pays attention. However, most of the limelight is taken by mega-cap stocks, with no one paying heed to the many small-cap stocks that form an important part of Soros' portfolio. Digging out these small-cap stocks is important. In some cases, these are the mega-cap stocks of the future. In other cases, these provide amazing returns in a very short period of time. The key is to get in early. And what better way to get in early than to do it when the big guys do. We therefore decided to compile a list of stocks in billionaire George Soros' portfolio that have the most upside. To come up with our list of billionaire George Soros' 10 Small-Cap stocks with huge upside potential, we first looked at his top 50 stock holdings. We then filtered out the companies to look at only the ones with a market cap below $10 billion. After arriving at his top small-cap holdings list, we then looked at the median analyst price targets on those stocks and then ranked them by their upside potential. A close up view of a laptop computer, the cloud computing platform displayed on the screen. DigitalOcean Holdings, Inc. (NYSE:DOCN) operates a cloud computing platform. It offers on-demand platform tools and infrastructure for developers at growing tech firms. The company also provides infrastructure-as-a-service (IaaS) solutions, platform-as-a-service (PaaS) solutions, software-as-a-service (SaaS) solutions, and IP address management and domain name system management. According to the median analyst price target, the stock still has an upside of 64.92%. The firm's product innovation has accelerated over the past few quarters. It increased its product launches from 42 in Q3 2024 to 49 in Q4 2024. As per the guidance, 50+ product launches are expected in the first quarter of 2025. In addition to product innovation, the company's AI opportunity presents an impressive growth potential. It's recently launched GenAI platform could be a game changer. Based on DigitalOcean (NYSE:DOCN)'s outlook in machine learning and artificial intelligence, Morgan Stanley upgraded the firm at the beginning of this year from Equal-Weight to Overweight with an increased price target of $41. Later on, Citi also initiated coverage of the stock with a Buy rating and a $45 price target. Analyst Josh Baer mentioned: 'DigitalOcean's larger customers are demanding more product capabilities and the company is delivering.' Based on analysts' optimism, DOCN's prospects look promising. Overall, DOCN ranks 6th on our list of Billionaire George Soros' small-cap stocks with huge upside potential. While we acknowledge the potential of DOCN as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than DOCN but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock. READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at Insider Monkey. Sign in to access your portfolio
