DigitalOcean Holdings Inc (DOCN)

Return on equity (ROE)

		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	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021
Net income (ttm)	US$ in thousands	49,918	19,409	-6,596	-17,868	-25,292	-27,045	-29,104	-38,859	-34,287	-19,503
Total stockholders’ equity	US$ in thousands	-286,072	-313,698	-358,773	-267,579	-202,608	47,569	27,010	47,260	427,386	578,197	906,433	858,084	845,110
ROE		—	—	—	—	—	-56.85%	-107.75%	-82.22%	-8.02%	-3.37%

March 31, 2024 calculation

ROE = Net income (ttm) ÷ Total stockholders’ equity
= $49,918K ÷ $-286,072K
= —

DigitalOcean Holdings Inc's return on equity (ROE) has been fluctuating over the past few quarters, indicating instability in the company's profitability in relation to shareholders' equity. The negative ROE figures in the recent quarters of December 2022, September 2022, and June 2022 are concerning as they suggest that the company is not generating sufficient profits relative to its equity base.

The significant negative ROE of -107.75% in September 2022 and -82.22% in June 2022 are particularly alarming, implying that DigitalOcean's net income was not substantial enough to cover its equity, resulting in a net loss for shareholders during those periods. These very low or negative ROE figures could be attributed to operational challenges, high expenses relative to revenue, or poor financial management.

It is worth noting that there was an improvement in ROE in the most recent quarter compared to the previous quarters, moving from negative figures to undisclosed data, indicating a potential turnaround in the company's profitability. However, further financial analysis and monitoring of future ROE figures will be essential to assess the sustainability of this improvement and to determine if the company is effectively utilizing its equity to generate profits for its shareholders.