DigitalOcean Holdings Inc (DOCN)

Return on total capital

		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
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	96,028	79,336	94,177	77,942	17,154	-5,332	-34,307	-46,233	-14,730	-18,219	-30,502	-27,096	-14,457
Long-term debt	US$ in thousands	1,485,370	1,483,470	1,481,580	1,479,690	1,477,800	1,475,910	1,474,030	1,472,150	1,470,270	1,468,390	1,466,520	1,464,520	1,462,680
Total stockholders’ equity	US$ in thousands	-202,955	-211,703	-253,784	-286,072	-313,698	-358,773	-267,579	-202,608	47,569	27,010	47,260	427,386	578,197
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%

December 31, 2024 calculation

Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $96,028K ÷ ($1,485,370K + $-202,955K)
= 7.49%

DigitalOcean Holdings Inc's return on total capital has shown varying trends over the period from December 31, 2021, to December 31, 2024. The company had negative returns on total capital for the majority of the analyzed period, with a significant improvement starting from March 31, 2024.

Specifically, the return on total capital was -0.71% as of December 31, 2021, and declined further to -1.43% by March 31, 2022. The trend continued to worsen, reaching a low of -3.64% on March 31, 2023.

However, the company's performance gradually improved starting from December 31, 2023, when the return on total capital turned positive at 1.47%. This positive trend continued to strengthen, with the return on total capital increasing to 7.49% by December 31, 2024.

Overall, the positive trend in return on total capital from December 31, 2023, to December 31, 2024, suggests that DigitalOcean Holdings Inc may have implemented strategies to enhance its capital efficiency and generate higher returns for its investors.