DigitalOcean Holdings Inc (DOCN)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | |
|---|---|---|---|
| Gross profit margin | 59.02% | 63.23% | 60.19% |
| Operating profit margin | 1.72% | -4.46% | -2.61% |
| Pretax margin | 3.86% | -4.01% | -4.25% |
| Net profit margin | 2.80% | -4.82% | -4.55% |
DigitalOcean Holdings Inc's profitability ratios have shown some fluctuations over the past three years. The gross profit margin has decreased slightly from 63.23% in 2022 to 59.02% in 2023, although it remained relatively stable compared to 2021. This indicates a decrease in the percentage of revenue retained after accounting for the cost of goods sold.
The operating profit margin has improved significantly from a negative figure of -4.46% in 2022 to a positive 1.72% in 2023. This suggests that the company has been able to better control its operating expenses relative to its revenue, resulting in a positive operational performance.
However, the pretax margin and net profit margin have also shown improvement in 2023 compared to the previous years, with positive figures of 3.86% and 2.80% respectively. This indicates that the company has been able to generate profits before and after accounting for taxes at a higher rate relative to its revenue in 2023.
Overall, DigitalOcean Holdings Inc's profitability ratios have shown mixed results over the past three years. While the company has made progress in improving its operational and net profitability margins in 2023, there may be areas for further optimization to enhance overall profitability in the future.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | |
|---|---|---|---|
| Operating return on assets (Operating ROA) | 0.81% | -1.42% | -0.53% |
| Return on assets (ROA) | 1.33% | -1.53% | -0.93% |
| Return on total capital | 3.07% | -0.97% | -0.71% |
| Return on equity (ROE) | — | -58.45% | -3.37% |
DigitalOcean Holdings Inc's profitability ratios show mixed performance over the past three years.
- Operating return on assets (Operating ROA) improved from negative levels in 2021 and 2022 to 0.81% in 2023, indicating the company is generating operating income more efficiently from its assets.
- Return on assets (ROA) also improved significantly from negative figures in 2021 and 2022 to 1.33% in 2023, suggesting that the company is more effective in generating profits relative to its total assets.
- Return on total capital showed a positive trend, increasing from negative levels in 2021 and 2022 to 3.07% in 2023, indicating the company's ability to generate profits from both debt and equity capital.
- Return on equity (ROE) was not provided for 2023, but it had a substantial improvement from -58.45% in 2022 to -3.37% in 2021, showcasing a better return on shareholders' equity.
Overall, the company's profitability ratios have shown improvement, particularly in 2023, indicating enhanced operational efficiency and a better utilization of assets and capital to generate profits.