DigitalOcean Holdings Inc (DOCN)
Profitability ratios
Return on sales
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Gross profit margin | 59.69% | 58.57% | 58.54% | 58.76% | 58.13% | 59.61% | 60.60% | 61.47% | 63.23% | 63.20% | 62.84% | 61.44% | 60.19% |
| Operating profit margin | 11.66% | 9.18% | 10.93% | 7.93% | 1.72% | -1.55% | -5.96% | -7.35% | -4.46% | -4.59% | -6.77% | -6.06% | -2.61% |
| Pretax margin | 12.52% | 10.87% | 12.20% | 9.67% | 1.18% | -2.09% | -6.59% | -8.92% | -4.01% | -4.80% | -7.29% | -6.63% | -4.25% |
| Net profit margin | 10.82% | 10.86% | 9.30% | 7.01% | 2.80% | -0.98% | -2.75% | -4.12% | -4.69% | -5.46% | -7.89% | -7.42% | -4.55% |
Based on the provided data, we can analyze the profitability ratios of DigitalOcean Holdings Inc over multiple quarters.
1. Gross Profit Margin:
- The gross profit margin has shown a fluctuating trend, starting at 60.19% in December 2021 and reaching its peak at 63.23% in December 2022 before gradually declining to 59.69% by December 2024.
- Generally, the company has maintained a gross profit margin above 60%, indicating efficiency in generating revenue after accounting for the cost of goods sold. However, the slight decline in recent quarters may suggest potential challenges in managing production costs.
2. Operating Profit Margin:
- The operating profit margin experienced significant fluctuations, starting at -2.61% in December 2021, hitting lows of -7.35% in March 2023, then improving to 11.66% by December 2024.
- Despite the initial negative margins, the company managed to turn around its operating performance, achieving positive margins in the latter quarters. This indicates improvements in operating efficiency and cost management over time.
3. Pretax Margin:
- The pretax margin also exhibited variability, ranging from -8.92% in March 2023 to a high of 12.52% in December 2024.
- DigitalOcean Holdings Inc showcased a turnaround in profitability, transitioning from negative margins to significantly positive margins by the end of the analyzed period. This improvement reflects the company's ability to enhance its operational performance and control expenses effectively.
4. Net Profit Margin:
- The net profit margin followed a similar trend to the pretax margin, starting at -4.55% in December 2021 and rising to 10.82% by December 2024.
- The consistent improvement in net profit margin signifies the company's success in turning losses into profits and optimizing its overall financial performance over time.
In conclusion, DigitalOcean Holdings Inc demonstrated significant improvements in profitability ratios over the analyzed quarters, indicating increasingly efficient operations and enhanced financial performance. However, the fluctuations observed in some margins suggest the need for continuous monitoring and management of costs to sustain and further improve profitability in the future.
Return on investment
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 5.55% | 4.55% | 5.23% | 3.80% | 0.81% | -0.73% | -2.59% | -2.26% | -1.42% | -1.51% | -2.10% | -1.43% | -0.53% |
| Return on assets (ROA) | 5.16% | 5.38% | 4.45% | 3.36% | 1.33% | -0.46% | -1.19% | -1.27% | -1.49% | -1.79% | -2.44% | -1.75% | -0.93% |
| Return on total capital | 7.49% | 6.24% | 7.67% | 6.53% | 1.47% | -0.48% | -2.84% | -3.64% | -0.97% | -1.22% | -2.01% | -1.43% | -0.71% |
| Return on equity (ROE) | — | — | — | — | — | — | — | — | -56.85% | -107.75% | -82.22% | -8.02% | -3.37% |
DigitalOcean Holdings Inc has shown improvement in its profitability ratios over the past few quarters.
The Operating Return on Assets (Operating ROA) has gradually increased from negative values, reaching 5.55% by December 31, 2024. This indicates that the company is efficiently generating profits from its operating activities relative to its total assets.
Similarly, the Return on Assets (ROA) has also shown a positive trend, with the ratio increasing from negative values to 5.16% by December 31, 2024. This shows that the company is becoming more effective in generating profits from its assets.
The Return on Total Capital has witnessed substantial improvement, with the ratio reaching 7.49% by December 31, 2024. This indicates that the company is generating significant returns for its total invested capital.
However, the Return on Equity (ROE) data is incomplete after September 30, 2022, showing negative values for the previous periods. This indicates that the company has not been effectively generating profits for its shareholders during those periods.
Overall, the improving trend in Operating ROA, ROA, and Return on Total Capital reflects positively on DigitalOcean Holdings Inc's profitability and operational efficiency, signaling a potential turnaround in its financial performance.