DigitalOcean Focuses on Profits as Growth Slows
Cloud computing customers of all stripes are looking for ways to save money. DigitalOcean (NYSE: DOCN), a small developer-focused cloud computing platform, is not immune to this trend. While DigitalOcean's revenue jumped 36% year over year in the fourth quarter, the company guided for approximately 23% growth in 2023.
DigitalOcean had set a goal of hitting $1 billion in annual revenue by 2024, along with a free cash flow margin of at least 20%. The company is pushing back the first part of that goal while pulling in the second half. Given the tough economic environment, which is out of the company's control, DigitalOcean now expects to reach its $1 billion revenue target by 2025.
There's little the company can do to speed this up, so instead it's focusing on bringing costs down and accelerating its free cash flow generation. DigitalOcean now expects to reach a free cash flow margin of 20% this year.
Source Fool.com
