DigitalOcean Holdings Inc (DOCN)

Operating return on assets (Operating ROA)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021
Operating income	US$ in thousands	11,896	-25,697	-11,186
Total assets	US$ in thousands	1,460,970	1,815,630	2,101,000
Operating ROA		0.81%	-1.42%	-0.53%

December 31, 2023 calculation

Operating ROA = Operating income ÷ Total assets
= $11,896K ÷ $1,460,970K
= 0.81%

Operating return on assets (Operating ROA) is a key financial metric that indicates the efficiency of DigitalOcean Holdings Inc in generating operating profits from its assets. A higher Operating ROA suggests that the company is effectively utilizing its assets to generate operating income.

For DigitalOcean Holdings Inc, the Operating ROA has shown improvement over the past three years. In 2021, the Operating ROA was -0.53%, indicating that the company experienced operating losses relative to its assets. However, there was a significant turnaround in 2022, with the Operating ROA improving to -1.42%, although still negative.

The most recent data for Dec 31, 2023, reveals a positive Operating ROA of 0.81%, signifying that DigitalOcean Holdings Inc has been able to generate operating profits from its assets during that period. This improvement suggests a positive shift in the company's operational efficiency and profitability.

Overall, the increasing trend in Operating ROA from negative values in the past to a positive figure in the latest period indicates a positive development in the company's asset utilization and operational performance. It showcases the company's ability to generate operating income efficiently from its asset base, which is a positive signal for investors and stakeholders.