DigitalOcean (DOCN) To Report Earnings Tomorrow: Here Is What To Expect

Kayode Omotosho /
2022/02/23 6:42 am EST
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Cloud computing provider DigitalOcean (NYSE: DOCN) will be reporting earnings tomorrow before the bell. Here's what you need to know.

Last quarter DigitalOcean reported revenues of $111.4 million, up 37.2% year on year, beating analyst revenue expectations by 2.38%. It was a decent quarter for the company, with a significant improvement in gross margin but decelerating customer growth. The company lost 4,000 customers and ended up with a total of 598,000.

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 36% year on year to $119 million, improving on the 26.2% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.09 per share.

DigitalOcean Total Revenue

The company has a history of exceeding Wall St's expectations, beating revenue estimates every single time since going public on average by 3.91%.

Looking at DigitalOcean's peers in the data and analytics software segment, some of them have already reported Q4 earnings results, giving us a hint what we can expect. Commvault Systems (NASDAQ:CVLT) delivered top-line growth of 7.65% year on year, beating analyst estimates by 3.91% and Amplitude (NASDAQ:AMPL) reported revenues up 75.1% year on year, exceeding estimates by 5.26%. Commvault Systems traded down 1.15% on the results, Amplitude was down 58.9%. Read our full analysis of Commvault Systems's results here and Amplitude's results here.

It seems that the volatility in the software stocks has somewhat calmed down for now, with stocks down on average 1.93% over the last month. DigitalOcean is up 6.33% during the same time, and is heading into the earnings with analyst price target of $101.9, compared to share price of $54.7.

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.