Cloud computing platform DigitalOcean (NYSE: DOCN) will be reporting earnings this Wednesday morning. Here’s what you need to know.
DigitalOcean beat analysts’ revenue expectations by 1% last quarter, reporting revenues of $218.7 million, up 13.6% year on year. It was a strong quarter for the company, with full-year EPS guidance exceeding analysts’ expectations and a solid beat of analysts’ EBITDA estimates.
Is DigitalOcean a buy or sell going into earnings? Read our full analysis here, it’s free for active Edge members.
This quarter, analysts are expecting DigitalOcean’s revenue to grow 14.1% year on year to $226.5 million, improving from the 12.1% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.49 per share.
Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. DigitalOcean has a history of exceeding Wall Street’s expectations, beating revenue estimates every single time over the past two years by 1.4% on average.
Looking at DigitalOcean’s peers in the data and analytics software segment, some have already reported their Q3 results, giving us a hint as to what we can expect. Commvault delivered year-on-year revenue growth of 18.4%, beating analysts’ expectations by 1.1%, and Palantir Technologies reported revenues up 62.8%, topping estimates by 8%. Commvault traded down 19.4% following the results.
Read our full analysis of Commvault’s results here and Palantir Technologies’s results here.
Investors in the data and analytics software segment have had fairly steady hands going into earnings, with share prices down 1.2% on average over the last month. DigitalOcean is up 7.5% during the same time and is heading into earnings with an average analyst price target of $42 (compared to the current share price of $41.27).
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