DigitalOcean Holdings, the cloud for developers, startups, and SMBs, announced its financial results for the third quarter of 2021. The company stated that during the quarter, revenue growth was accelerated to 37% and the net dollar retention rate was increased to 116%. DigitalOcean also stated that average revenue per customer increased by 28% year-over-year.
Financial highlights
- Revenue was $111.4 million, an increase of 37% year-over-year.
- Annual Run-Rate Revenue (ARR) ended the quarter at $455 million, an increase of 36% year-over-year.
- GAAP Gross Profit of $67.9 million or 61% of revenue, and adjusted Gross Profit of $89.0 million or 80% of revenue.
- Adjusted EBITDA was $36.4 million and adjusted EBITDA margin was 33% of revenue as compared to adjusted EBITDA of $26.4 million and adjusted EBITDA margin of 33% in the prior-year period.
- Capital expenditures were $26.7 million or 24% of revenue as compared to $26.1 million or 32% of revenue in the prior-year period.
- Cash, cash equivalents, and restricted cash were $592.0 million with zero debt as of September 30, 2021.
DigitalOcean also shared a financial outlook for the fourth quarter and for the full year. For the fourth quarter, the company expects:
- Total revenue of $117 to $119 million.
- Adjusted EBITDA margin of 30% to 31%.
- Fully diluted weighted average shares outstanding of 122 to 124 million shares.
For the full year, the company expects:
- Total revenue of $426 to $428 million.
- Adjusted EBITDA margin of 30% to 31%.
- Fully diluted weighted average shares outstanding of 116 to 118 million shares.
- Capital expenditures as a percentage of revenue of 25% to 26%.
Yancey Spruill, CEO of DigitalOcean said,
“We are excited about the continued acceleration across our business. We are building the foundation for durable 30%+ revenue growth with strong free cash flow generation driven by investments in product innovation to support our customers’ needs and sales and marketing initiatives to further penetrate our massive market opportunity.”