DigitalOcean Holdings, Inc. has recently released its 10-Q report, detailing its operations as a cloud computing platform serving developers, startups, and small and growing digital businesses. The company offers infrastructure-as-a-service (IaaS), platform-as-a-service (PaaS), software-as-a-service (SaaS), and artificial intelligence/machine learning (AI/ML) applications. As of September 30, 2024, DigitalOcean had approximately 638,000 active customers, comprising Learners, Builders, and Scalers, using its platform for various industry verticals and use cases.
In the 10-Q report, DigitalOcean highlighted key factors affecting its performance, including the increasing importance of cloud computing and developers, the growing base of higher spend customers, and investments in platform and product offerings. The company's revenue model is primarily consumption-based and billed monthly in arrears, with an average revenue per customer (ARPU) increasing from $92.06 in the three months ended September 30, 2023, to $102.51 in the three months ended September 30, 2024. DigitalOcean's annual run-rate revenue (ARR) as of September 30, 2024, was $798 million, up from $713 million as of September 30, 2023.
The report also emphasized the company's focus on customer acquisition, with its efficient self-service model and a sales force that drives revenue growth. Notably, around two-thirds of DigitalOcean's revenue historically comes from customers located outside the United States, with approximately 39% of revenue generated from North America, 28% from Europe, 23% from Asia, and 10% from the rest of the world for the three months ended September 30, 2024. Additionally, the company's net dollar retention rate was reported at 97% for the same period, indicating its ability to retain and grow revenue from existing customers.
DigitalOcean's 10-Q report highlighted key business metrics, including the total number of active customers, ARPU, ARR, and net dollar retention rate, as important indicators of the company's growth and future revenue opportunity. The company's focus on increasing usage by existing customers, growing its base of higher spend customers, and investing in platform and product offerings underscores its commitment to driving long-term revenue growth and achieving profitability. The market has reacted to these announcements by moving the company's shares -11.4% to a price of $36.18. For more information, read the company's full 10-Q submission here.
