DigitalOcean Revenue Grows 35% to $103.8 million in Second Quarter

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Global cloud provider DigitalOcean, focused on delivering its cloud services to developers, startups and SMBs, saw its Annual Run-Rate Revenue (ARR) being increased to $426 million, up 36% year-over-year. DigitalOcean anticipates continued revenue growth, driven by its expanding managed services offerings.

While the cloud provider’s revenue came down to $103.8 million, an increase of 35% year-over-year, loss from operations turned out to be $2.6 million with an operating margin of 3%. In the prior year period, income from operations came down to $1.8 million with an operating margin of 2%.

Photo Yancey Spruill, Chief Executive Officer (CEO) of DigitalOcean
“Adding to the strong quarter, we introduced Managed MongoDB which will continue to drive the revenue growth from our managed service offerings,” said Yancey Spruill, Chief Executive Officer (CEO) of DigitalOcean.

“We had an outstanding second quarter with strong revenue growth acceleration and continued improvement in our capital efficiency,” said Yancey Spruill, Chief Executive Officer (CEO) of DigitalOcean. “We are excited about the progress we have made in leveraging simplicity across our business to better serve our customers and believe we have a path to a durable 30%+ growth rate for 2021 and next year. Adding to the strong quarter, we introduced Managed MongoDB which will continue to drive the revenue growth from our managed service offerings.”

Adjusted EBITDA was $31.4 million, with a 30 percent adjusted EBITDA margin, compared to adjusted EBITDA of $23.9 million and a 31 percent adjusted EBITDA margin in the prior year quarter.

In the prior year period, capital expenditures were $26.0 million, or 25% of revenue, compared to $30.8 million, or 40% of sales in the previous year quarter.

As of June 30, 2021, cash, cash equivalents, and restricted cash totaled $579.4 million, with no debt.

Operational Highlights and Financial Outlook for 2021

For the third quarter of 2021, DigitalOcean is expecting a total revenue of $106 to $109 million with an adjusted EBITDA margin of 30% to 31%. For the full year of 2021, they expect total revenue of $419 to $423 million with an adjusted EBITDA margin of 30% to 31% and capital expenditures as a percentage of the revenue of 25% to 26%.

  • At the conclusion of the quarter, there were about 602K subscribers, up 9% from the second quarter of 2020
  • The average revenue per customer (ARPU) for the period was $58.07, up 25% from the second quarter of 2020
  • In late Q2, DigitalOcean unveiled Managed MongoDB – a new, fully managed Database as a Service (DBaaS) product that lets developers of all skill levels effortlessly spin up MongoDB clusters on DigitalOcean’s cloud platform
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