NEW YORK - DigitalOcean Holdings, Inc. (NYSE: DOCN) delivered a strong performance in the fourth quarter, surpassing Wall Street's expectations with an adjusted EPS of $0.44, which was $0.07 higher than the analyst estimate of $0.37. The company, known for its cloud computing services optimized for startups and growing digital businesses, also reported revenue of $181 million, exceeding the consensus estimate of $178.08 million.
The company's stock soared 6.5% following the release of its earnings report, indicating a positive market response. This surge was driven by the company's solid guidance and results, as investors reacted favorably to the news.
DigitalOcean's fourth quarter revenue represented an 11% increase YoY, showcasing the company's continued growth trajectory. The company's CEO, Paddy Srinivasan, expressed enthusiasm about the company's position as a preferred platform for developers and the opportunity to embrace product-led growth while investing in AI solutions. CFO Matt Steinfort highlighted the company's strong balance sheet and healthy top-line outlook, which will support expansion initiatives for 2024 and beyond.
Looking ahead, DigitalOcean provided guidance for the first quarter of 2024, with expected revenue between $182 and $183 million, slightly above the analyst consensus of $181.4 million. The adjusted EPS is forecasted to be between $0.37 and $0.39, in line with the consensus estimate. For the full year 2024, the company anticipates revenue to be in the range of $755 to $775 million, compared to the consensus estimate of $765.9 million. The projected EPS for the year is between $1.60 and $1.67, with the midpoint above the consensus of $1.62.
The company's financial outlook reflects management's confidence in DigitalOcean's cash flow generation, which is expected to provide the flexibility to invest in organic growth priorities and strategic mergers and acquisitions, while also enhancing shareholder returns through a new stock repurchase program authorized for up to $140 million through fiscal year 2025.
DigitalOcean's commitment to returning value to shareholders was also evident in its repurchase of 14,487,509 shares, amounting to $488 million, during the fiscal year 2023. The company's strategic acquisition of Paperspace, a leading provider of cloud infrastructure as a service leveraging GPUs, expanded its addressable market and contributed to its double-digit growth foundation.
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