DigitalOcean (DOCN) Q4 2024 earnings summary

Executive summary

• Q4 2024 revenue grew 13% year-over-year to $205M, with full-year revenue at $781M, both up 13%.

• Net dollar retention improved to 99% in Q4, up from 96% a year ago, and average revenue per customer rose 14% year-over-year.

• Adjusted EBITDA margin was 42% for Q4 and the full year, with adjusted free cash flow margin at 18% in Q4.

• Higher spend customer cohorts (Builders, Scalers, Scalers+) represented 88% of revenue, with Scalers+ revenue up 37% year-over-year and now 22% of total revenue.

• Product innovation accelerated, with 49 new products/features in Q4 and over four times more features released versus Q4 2023.

Financial highlights

• Q4 revenue: $205M (13% YoY growth); full year: $781M (13% YoY growth).

• Q4 gross margin: 62% (up 500 bps YoY); full year: 60% (up 300 bps YoY).

• Adjusted EBITDA: $86M in Q4 (42% margin); $328M in FY2024 (42% margin).

• Non-GAAP diluted EPS for Q4: $0.49 (up 11% YoY); FY2024: $1.92 (up 21% YoY).

• Adjusted free cash flow: $37M in Q4 (18% margin); $135M in FY2024 (17% margin).

Outlook and guidance

• Q1 2025 revenue guidance: $207–209M; adjusted EBITDA margin 38–40%; non-GAAP diluted EPS $0.41–$0.46.

• Full year 2025 revenue guidance: $870–890M (13% growth midpoint); adjusted EBITDA margin 37–40%; non-GAAP diluted EPS $1.85–$1.95.

• Adjusted free cash flow margin for 2025: 16–18%, with Q1 margin expected to dip due to front-loaded investments.