DigitalOcean Holdings Inc (DOCN)

Debt-to-capital ratio

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021
Long-term debt	US$ in thousands	1,485,370	1,477,800	1,470,270	1,462,680
Total stockholders’ equity	US$ in thousands	-202,955	-313,698	47,569	578,197
Debt-to-capital ratio		1.16	1.27	0.97	0.72

December 31, 2024 calculation

Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $1,485,370K ÷ ($1,485,370K + $-202,955K)
= 1.16

The debt-to-capital ratio for DigitalOcean Holdings Inc has shown an increasing trend over the past four years. It stood at 0.72 on December 31, 2021, indicating that 72% of the company's capital structure was financed through debt. By December 31, 2022, the ratio increased to 0.97, suggesting that the company's reliance on debt for financing had risen further to 97%.

In the subsequent years, the trend continued with the ratio reaching 1.27 on December 31, 2023, and then slightly decreasing to 1.16 by December 31, 2024. These figures signify that the company's debt obligations relative to its total capital also increased during those periods, perhaps reflecting an aggressive debt utilization strategy to support growth initiatives or operational needs.

It's important to note that a higher debt-to-capital ratio can indicate higher financial risk and may lead to increased interest expenses and repayment obligations. Investors and analysts typically monitor this ratio closely to assess a company's leverage and financial health, as it provides insights into how much of the company's operations are financed through debt.