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DigitalOcean (DOCN) Reports Earnings Tomorrow. What To Expect

StockStory - Tue Feb 20, 1:00AM CST

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Cloud computing provider DigitalOcean (NYSE: DOCN) will be reporting earnings tomorrow after the bell. Here's what you need to know.

Last quarter DigitalOcean reported revenues of $177.1 million, up 16.4% year on year, beating analyst revenue expectations by 2.1%. It was a mixed quarter for the company, with strong revenue guidance for next quarter, which topped analysts' expectations. On the other hand, its net revenue retention fell.

Is DigitalOcean buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting DigitalOcean's revenue to grow 9.3% year on year to $178.1 million, slowing down from the 36.2% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.37 per share.

DigitalOcean Total Revenue

Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company missed Wall St's revenue estimates twice over the last two years.

Looking at DigitalOcean's peers in the data and analytics software segment, some of them have already reported Q4 earnings results, giving us a hint of what we can expect. Commvault Systems delivered top-line growth of 11.1% year on year, beating analyst estimates by 4.1% and Teradata reported revenues up 1.1% year on year, exceeding estimates by 0.3%. Commvault Systems traded flat on the results, and Teradata was down 11.5%.

Read our full analysis of Commvault Systems's results here and Teradata's results here.

There has been positive sentiment among investors in the data and analytics software segment, with the stocks up on average 2.9% over the last month. DigitalOcean is up 14.8% during the same time, and is heading into the earnings with analyst price target of $36.2, compared to share price of $40.0.

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