DigitalOcean Holdings, Inc. reported significant financial performance improvements for the third quarter and the first nine months of 2024, as detailed in its latest 10-Q filing. For the three months ended September 30, 2024, the company generated revenue of $198.5 million, a 12% increase from $177.1 million in the same period of 2023. For the nine months ended September 30, 2024, revenue reached $575.7 million, up 12% from $512.0 million year-over-year. The growth was driven by increased contributions from its Builders and Scalers customer segments, which accounted for 88% of total revenue in Q3 2024.
Gross profit for Q3 2024 was $119.4 million, compared to $106.7 million in Q3 2023, maintaining a gross margin of 60%. However, total operating expenses rose to $94.8 million from $71.3 million in the prior year, primarily due to increased general and administrative costs, which more than doubled to $40.4 million. Despite the rise in expenses, net income attributable to common stockholders surged to $32.9 million in Q3 2024, compared to $19.2 million in Q3 2023. For the nine-month period, net income increased significantly to $66.2 million from $3.5 million in the previous year.
The company’s cash and cash equivalents as of September 30, 2024, totaled $439.9 million, a substantial increase from $317.2 million at the end of 2023. This increase was attributed to higher cash collections from sales and a reduction in cash used in financing activities, which included share repurchases totaling $29.6 million for the nine months ended September 30, 2024.
DigitalOcean's strategic developments included the acquisition of Paperspace Co. in July 2023 for $100.4 million, which has been integrated into its financial statements since the acquisition date. The company also initiated a share repurchase program in February 2024, allowing for the repurchase of up to $140 million of common stock through fiscal year 2025.
The company reported a net dollar retention rate of 97% and an average revenue per user (ARPU) of $102.51 for Q3 2024, reflecting a strong customer base of approximately 638,000 active users. The company continues to focus on enhancing its product offerings, particularly in AI/ML, while managing its operating expenses effectively.
About DigitalOcean Holdings, Inc.
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