DigitalOcean Holdings Inc (NYSE:DOCN) shares are trading higher Friday after it reported fiscal first-quarter results.

Revenue grew 12% year over year to $184.73 million, beating the analyst consensus estimate of $182.58 million.

Adjusted EPS of $0.43 surpassed the analyst consensus estimate of $0.38.

Annual Run-Rate Revenue (ARR) ended the quarter at $749 million, up 12% year over year, and Average Revenue Per Customer (ARPU) increased 8% year over year to $95.13.

Builders and Scalers (customers spending over $50 per month) grew 8% Y/Y, and their revenue rose 13% Y/Y in the quarter.

Adjusted EBITDA rose 33% Y/Y to $74 million, with a margin of 40% vs. 34% a year ago.

As of March 31, 2024, cash, cash equivalents, and marketable securities stood at $419 million.

"The first quarter was a strong start to the year as we position the company to be the leading cloud and AI platform for growing technology businesses," said Paddy Srinivasan, CEO of DigitalOcean.

Outlook: For the second quarter, DOCN expects adjusted EPS of $0.38 – $0.40 vs. $0.39 estimate and revenue of $188 million – $189 million vs. street view of $187.09 million.

For fiscal 2024, the company expects revenue of $760 million—$775 million (prior $755 million—$775 million) vs. the consensus of $766.36 million and adjusted EPS of $1.60 – $1.67 vs. the $1.63 estimate.

DigitalOcean Holdings replaced Agiliti Inc in the S&P SmallCap 600 on May 7.

DigitalOcean Holdings stock gained over 29% in the last six months. Investors can gain exposure to the stock via the Global X Cloud Computing ETF (NASDAQ:CLOU) and the First Trust Cloud Computing ETF (NASDAQ:SKYY).

Price Action: DOCN shares are up 5.14% at $34.26 at the last check Friday.

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