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NEW YORK - DigitalOcean Holdings , Inc. (NYSE:DOCN) saw its shares soar 18.3% in premarket trading on Tuesday after the cloud infrastructure provider reported better-than-expected fourth quarter results and issued an optimistic outlook for 2025.
The company posted adjusted earnings per share of $0.49, surpassing the analyst consensus of $0.38. Revenue for the quarter came in at $205 million, up 13% YoY and above Wall Street estimates of $200.16 million.
DigitalOcean’s CEO Paddy Srinivasan highlighted the company’s momentum, stating, "We are entering 2025 with increasing momentum - in Q4 alone, we released more than four times as many products and features than we did in Q4 of the prior year, increased net dollar retention to 99%, grew revenue 13% year-over-year and delivered 18% adjusted free cash flow margin."
Looking ahead, DigitalOcean provided upbeat guidance for both the first quarter and full year 2025. For Q1, the company expects EPS of $0.41-$0.46 on revenue of $207-209 million, both ranges coming in above analyst projections. The full-year 2025 outlook was similarly strong, with EPS forecast at $1.85-$1.95 and revenue between $870-890 million, also topping consensus estimates.
The company’s focus on higher-spending customers appears to be paying off, with revenue from its top 500+ customers growing 37% YoY in the fourth quarter. This segment now represents 22% of DigitalOcean’s total revenue.
"Our focused efforts on our Higher Spend Customers and our continued traction in AI drove quarterly revenue for our top 500+ customers, representing 22% of total revenue, to grow at 37% year-over-year," Srinivasan added.
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