DigitalOcean (DOCN) Reports Q1: Everything You Need To Know Ahead Of Earnings

Adam Hejl /
2023/05/08 4:20 am EDT

Cloud computing provider DigitalOcean (NYSE: DOCN) will be announcing earnings results tomorrow before the bell. Here's what you need to know.

Last quarter DigitalOcean reported revenues of $163 million, up 36.2% year on year, beating analyst revenue expectations by 1.18%. It was a weak quarter for the company, with full year guidance missing analysts' expectations. The company added 535,000 customers to a total of 677,000.

Is DigitalOcean buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting DigitalOcean's revenue to grow 28.9% year on year to $164.1 million, slowing down from the 35.9% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.29 per share.

DigitalOcean Total Revenue

Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company only missed Wall St's revenue estimates once over the last two years, and has on average exceeded top line expectations by 2.09%.

Looking at DigitalOcean's peers in the data and analytics software segment, only Alteryx has so far reported results, delivering top-line growth of 26.1% year on year, missing analyst estimates by 0.49%. The stock was down 8.45% on the results. Read our full analysis of Alteryx's earnings results here.

Tech stocks have had a rocky start in 2022 and while some of the software stocks have fared somewhat better, they have not been spared, with share price declining 6.48% over the last month. DigitalOcean is down 9.82% during the same time, and is heading into the earnings with analyst price target of $38.6, compared to share price of $33.05.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

The author has no position in any of the stocks mentioned.