DigitalOcean Holdings Inc (DOCN)
Financial leverage ratio
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 1,639,020 | 1,526,480 | 1,536,790 | 1,485,570 | 1,460,970 | 1,425,140 | 1,497,900 | 1,995,260 | 1,815,630 | 1,623,690 | 1,590,710 | 1,956,830 | 2,101,000 |
| 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 |
| Financial leverage ratio | — | — | — | — | — | — | — | — | 38.17 | 60.11 | 33.66 | 4.58 | 3.63 |
December 31, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $1,639,020K ÷ $-202,955K
= —
The financial leverage ratio measures the extent to which DigitalOcean Holdings Inc is using debt to finance its operations and growth. A higher leverage ratio indicates a higher proportion of debt in the company's capital structure, which can magnify returns in good times but also increase financial risk in challenging times.
Based on the provided data, the financial leverage ratio has shown fluctuation over the analyzed periods. The ratio was 3.63 as of December 31, 2021, indicating that the company was financed by 3.63 times more debt than equity at that time. The ratio then increased to 4.58 by March 31, 2022, and further spiked to 33.66 by June 30, 2022, suggesting a significant increase in debt relative to equity.
Subsequently, there was a notable peak in the financial leverage ratio to 60.11 as of September 30, 2022, which could signal a substantial reliance on debt financing. The ratio declined to 38.17 by December 31, 2022, implying some deleveraging or potentially equity injections during that period.
Moreover, the data show that financial leverage ratios were not available for the periods after March 31, 2023, indicating a lack of data to assess the company's leverage position in those quarters.
Overall, the increasing trend in the financial leverage ratio up to September 30, 2022, suggests a rising level of debt in DigitalOcean Holdings Inc's capital structure, which could pose increased financial risk depending on the company's ability to service its debt obligations in the future. Monitoring the company's leverage ratios in subsequent periods will be crucial to assess its financial health and risk profile.
Peer comparison
Dec 31, 2024