DigitalOcean Holdings, Inc. (NYSE: DOCN), the cloud provider for startups and small businesses, today announced its financial results for the third quarter of 2023.
The company reported revenue of $177 million, up 16% year-over-year, and net income of $19 million, up from $9 million in the same period last year.
The company also saw improvement in its key metrics, such as annual run-rate revenue (ARR), gross profit margin, adjusted EBITDA margin, and free cash flow margin. ARR reached $713 million, representing 11% year-over-year growth. Gross profit margin was 60%, up from 58% in the third quarter of 2022. Adjusted EBITDA margin was 43%, up from 40% in the same period last year. Free cash flow margin was 24%, up from 21% in the third quarter of 2022.
“We are encouraged by the stabilization we saw in our key revenue growth metrics in Q3, and we continued to both invest in our platform and drive further margin improvements.” said Yancey Spruill, CEO of DigitalOcean. “We added several new products and features for our customers while also generating strong free cash flow.”
The company also provided guidance for the fourth quarter and the full year of 2023. For the fourth quarter, the company expects revenue of $178 million and adjusted EBITDA margin of 36% to 37%. For the full year, the company expects revenue of $690 million and adjusted EBITDA margin of 38% to 39%.
DigitalOcean is a leading cloud platform that offers simple, scalable, and affordable solutions for developers, entrepreneurs, and small businesses. The company has more than one million customers across 195 countries and regions.