Cloud computing provider DigitalOcean (NYSE: DOCN) will be reporting earnings tomorrow before market hours. Here's what you need to know.
DigitalOcean beat analysts' revenue expectations by 1.6% last quarter, reporting revenues of $180.9 million, up 11% year on year. It was a mixed quarter for the company, with a decent beat of analysts' billings estimates but management forecasting growth to slow.
Is DigitalOcean a buy or sell going into earnings? Read our full analysis here, it's free.
This quarter, analysts are expecting DigitalOcean's revenue to grow 10.6% year on year to $182.6 million, slowing from the 29.7% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.38 per share.
The majority of analysts covering the company have reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. DigitalOcean has missed Wall Street's revenue estimates twice over the last two years.
Looking at DigitalOcean's peers in the data and analytics software segment, some have already reported their Q1 results, giving us a hint as to what we can expect. Commvault Systems delivered year-on-year revenue growth of 9.7%, beating analysts' expectations by 5.1%, and Palantir reported revenues up 20.8%, topping estimates by 2.7%. Commvault Systems traded up 3.2% following the results while Palantir was down 15.1%.
Read our full analysis of Commvault Systems's results here and Palantir's results here.
Investors in the data and analytics software segment have had fairly steady hands going into earnings, with share prices down 1.7% on average over the last month. DigitalOcean is down 5.4% during the same time and is heading into earnings with an average analyst price target of $38.8 (compared to the current share price of $33.98).
Unless you’ve been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) semiconductor stock benefitting from the rise of AI. Click here to access our free report on our favorite semiconductor growth story.