DigitalOcean Holdings Inc (DOCN)

Debt-to-capital ratio

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

December 31, 2023 calculation

Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $1,477,800K ÷ ($1,477,800K + $-313,698K)
= 1.27

The debt-to-capital ratio for DigitalOcean Holdings Inc has been increasing over the past three years, indicating a higher level of leverage relative to its capital structure. In 2021, the ratio was 0.72, suggesting that the company had a lower reliance on debt to finance its operations compared to the subsequent years. By the end of 2023, the ratio had risen to 1.27, signifying a significant increase in the proportion of debt used to fund the company's operations compared to its total capital.

This upward trend in the debt-to-capital ratio may raise concerns among investors and creditors about the company's financial risk and ability to meet its debt obligations. It is crucial for DigitalOcean Holdings Inc to carefully manage its debt levels to maintain a healthy balance between debt and equity in its capital structure, ensuring long-term financial stability and sustainability.