The following is a summary of the DigitalOcean Holdings, Inc. (DOCN) Q1 2024 Earnings Call Transcript:

Financial Performance:

• DigitalOcean's Q1 2024 revenue was $184.7 million, up 12% YoY.

• The gross margin improved to 61% and the adjusted EBITDA margin remained stable at 40%.

• The company generated $34 million from adjusted free cash flow, accounting for 19% of the revenue.

• Managed hosting product revenue grew by 34% YoY to $22 million.

• AI and machine learning platforms resulted in $4 million in revenue, with an annualized increase of 128% for an ARR of $19 million.

• The GAAP diluted net income per share was $0.15, while non-GAAP came in at $0.43.

• The firm ended the quarter with $419 million in cash and cash equivalents.

Business Progress:

• DigitalOcean retained a steady revenue from new customers, while the Net Dollar Retention improved.

• The company added new products and upgraded existing ones including daily Droplet backups, improvements in the snapshots capability, and new additions to premium Droplet offerings.

• The company expanded its managed hosting offering for Cloudways customers.

• An AI platform as a service offering and an infrastructure as a service platform were introduced, both recording substantial growth.

• The company is committed to enhancing customer success metrics and increasing Net Dollar Retention by accelerating its product roadmap.

• DigitalOcean plans to invest more in its AI solutions, potentially impacting free cash flow margins.

• The year 2024 projects a non-GAAP diluted earnings-per-share between $1.60 to $1.67.

• Expecting an incremental revenue and higher ARR in Q2 2024, the firm continues to build its capabilities in compute, bandwidth, and storage, as well as advanced services like reporting, security enhancements, and global load balancing.

More details: DigitalOcean IR

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