Cloud computing provider DigitalOcean (NYSE: DOCN) will be announcing earnings results tomorrow before market open. Here's what investors should know.
Last quarter DigitalOcean reported revenues of $152.1 million, up 36.5% year on year, beating analyst revenue expectations by 2.81%. It was a mixed quarter for the company, with a significant improvement in net revenue retention rate but a full year guidance missing analysts' expectations.
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 34.6% year on year to $161.1 million, in line with the 36.7% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.19 per share.
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 2.22%.
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 of what we can expect. Commvault Systems's revenues decreased 3.61% year on year, missing analyst estimates by 4.28% and Palantir reported revenues up 17.5% year on year, exceeding estimates by 0.72%. Commvault Systems traded flat on the results, and Palantir was up 13.5%. Read our full analysis of Commvault Systems's results here and Palantir's results here.
There has been positive sentiment among investors in the software segment, with the stocks up on average 14.3% over the last month. DigitalOcean is up 9.65% during the same time, and is heading into the earnings with with analyst price target of $36.17, compared to share price of $30.46.
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The author has no position in any of the stocks mentioned.