DigitalOcean Holdings Inc (DOCN)
Pretax margin
| Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before tax but after interest (EBT) (ttm) | US$ in thousands | 68,882 | 8,209 | -14,081 | -42,850 | -54,759 | -23,126 | -25,569 | -35,911 | -30,643 | -18,201 |
| Revenue (ttm) | US$ in thousands | 712,480 | 692,884 | 675,008 | 650,061 | 614,129 | 576,322 | 532,986 | 492,299 | 462,227 | 428,561 |
| Pretax margin | 9.67% | 1.18% | -2.09% | -6.59% | -8.92% | -4.01% | -4.80% | -7.29% | -6.63% | -4.25% |
March 31, 2024 calculation
Pretax margin = EBT (ttm) ÷ Revenue (ttm)
= $68,882K ÷ $712,480K
= 9.67%
DigitalOcean Holdings Inc's pretax margin has displayed fluctuating performance over the past few quarters. The company's pretax margin improved significantly to 9.67% as of March 31, 2024, compared to the previous quarter's margin of 1.18% as of December 31, 2023. This improvement indicates better efficiency in generating profits before accounting for taxes.
However, prior to this improvement, the company experienced negative pretax margins in the three consecutive quarters leading up to March 31, 2024. These negative margins suggest that DigitalOcean Holdings Inc was not generating enough income to cover its operating expenses and taxes.
It is important to note that the negative trend in pretax margin from June 30, 2022, to December 31, 2023, raises concerns about the company's profitability and financial health. Management may need to focus on cost control measures, revenue growth strategies, or operational efficiencies to sustain positive pretax margins in the future and ensure long-term profitability.
Peer comparison
Mar 31, 2024