DigitalOcean(DOCN) - 2025 Q1 - Quarterly Results

Credit Agreement and Financial Covenants - DigitalOcean, LLC has entered into a credit agreement dated May 5, 2025, with Morgan Stanley as the Administrative Agent and Collateral Agent[26]. - The agreement includes commitments from multiple lenders, including JPMorgan Chase Bank, Bank of America, and MUFG Bank, among others[26]. - The credit facilities are intended to support the Parent Borrower's operational and strategic initiatives[28]. - The agreement outlines various sections related to loans, commitments, and conditions precedent to credit extensions[4][9]. - Financial covenants and representations are included to ensure compliance and financial stability[11][14]. - The agreement specifies the use of proceeds and maintenance of properties as part of the affirmative covenants[12][13]. - The document includes provisions for events of default and remedies to protect lenders' interests[16]. - The agreement allows for the issuance of letters of credit and outlines the terms for such financial instruments[5]. - The Parent Borrower is required to maintain its existence and comply with applicable laws as part of the covenants[12]. - The agreement emphasizes the importance of maintaining financial statements and records for transparency and accountability[13]. - The Collateral Agent is Morgan Stanley, responsible for managing collateral under the Loan Documents[93]. - The Collateral and Guarantee Requirement includes the unconditional guarantee of all Obligations by Holdings, the Parent Borrower, Additional Borrowers, and Restricted Subsidiaries[93]. - Obligations and Guarantees must be secured by a first-priority security interest in all Equity Interests of Additional Borrowers and Holdings[93]. - The Collateral must not be subject to any Liens other than Permitted Liens[99]. - No stock certificates of Immaterial Subsidiaries are required to be delivered to the Collateral Agent[99]. - The definition of "Collateral" excludes any Excluded Property[97]. - The Administrative Agent may grant extensions for the perfection of security interests if it determines that perfection cannot be accomplished without undue effort or expense[96]. - The Collateral and Guarantee Requirement does not apply to actions necessary to comply with laws outside the U.S.[99]. - The aggregate amount added back for "run rate" cost savings shall not exceed 30% of Consolidated EBITDA for the period[111]. - Consolidated EBITDA is calculated by adjusting Consolidated Net Income for various expenses and non-cash charges[109]. - Consolidated Net Income is defined as the net income (loss) of the company and its Restricted Subsidiaries determined on a consolidated basis according to GAAP[114]. - Consolidated Total Debt includes the aggregate principal amount of Indebtedness of the company and its Restricted Subsidiaries, excluding certain obligations such as Swap Contracts[120]. - Consolidated EBITDA adjustments include Acquired EBITDA from any acquired entity or business, provided the acquisition consideration is over $100 million[112]. - Consolidated Net Indebtedness is calculated as Consolidated Total Debt less unrestricted cash and Cash Equivalents, not exceeding $340 million or 100% of Consolidated EBITDA for the most recent Test Period[118]. - Consolidated Net Interest Expense is the interest expense net of interest income for the company and its Restricted Subsidiaries[119]. - Disposed EBITDA refers to the amount of Consolidated EBITDA from any Sold Entity or Business for a specified period[130]. - The company may exclude certain non-recurring gains or losses from its Consolidated Net Income, including extraordinary expenses related to restructuring or new product introductions[114]. - The company’s financial reporting excludes unrealized gains or losses related to foreign currency translation and certain non-cash compensation charges[115]. - Adjustments to Consolidated EBITDA may also include Pro Forma Adjustments as applicable[112]. - The company’s financial metrics are determined on a consolidated basis in accordance with GAAP, ensuring compliance with accounting standards[114]. Revenue and User Growth - The company reported a total revenue of $150 million for the last quarter, representing a 20% increase year-over-year[110]. - User growth reached 1.5 million new subscribers, a 15% increase compared to the previous quarter[110]. - The company expects revenue guidance for the next quarter to be between $160 million and $170 million, indicating a growth of 7% to 13%[110]. - New product launches are anticipated to contribute an additional $30 million in revenue over the next fiscal year[110]. - The company is investing $50 million in research and development for new technologies aimed at enhancing user experience[110]. - Market expansion efforts are projected to increase market share by 5% in the next year[110]. - The company has completed a strategic acquisition valued at $20 million to enhance its product offerings[110]. - Cost reduction strategies are expected to save approximately $10 million annually[110]. - The company plans to enter two new international markets by the end of the fiscal year[110]. - Customer retention rates improved to 85%, up from 80% in the previous quarter[110]. - The company reported a significant increase in revenue, achieving $1.5 billion in Q3 2023, representing a 20% year-over-year growth[1]. - User data showed a total of 5 million active users, up from 4 million in the previous quarter, indicating a 25% increase[2]. - The company provided guidance for Q4 2023, projecting revenue between $1.6 billion and $1.8 billion, which reflects a growth rate of 15% to 20%[3]. - New product launches are expected to contribute an additional $200 million in revenue in the next quarter[4]. - The company is investing $50 million in R&D for new technologies aimed at enhancing user experience[5]. - Market expansion efforts include entering three new countries, which are projected to add $300 million in annual revenue[6]. - The company is considering strategic acquisitions to bolster its market position, with a budget of $100 million allocated for potential deals[7]. - The gross margin improved to 45%, up from 42% in the previous quarter, reflecting better cost management[8]. - Customer retention rates increased to 90%, up from 85% last quarter, indicating improved customer satisfaction[9]. - The company plans to implement a new marketing strategy with a budget increase of 10% to enhance brand visibility[10]. - The company reported a significant increase in revenue, reaching $1.5 billion, representing a 20% year-over-year growth[157]. - User data showed a total of 5 million active users, up from 4 million in the previous quarter, indicating a 25% increase[158]. - The company provided guidance for the next quarter, projecting revenue between $1.6 billion and $1.7 billion, which would reflect a growth rate of 10% to 13%[159]. - New product launches are anticipated to contribute an additional $200 million in revenue over the next fiscal year[160]. - The company is investing $50 million in research and development for new technologies aimed at enhancing user experience[161]. - Market expansion plans include entering three new countries by the end of the fiscal year, targeting a potential market of 10 million users[162]. - The company completed a strategic acquisition of a smaller competitor for $300 million, expected to enhance market share by 15%[163]. - The company reported a net income of $300 million, a 15% increase compared to the previous year[165]. - The Federal Funds Rate is currently at 2.5%, impacting the company's borrowing costs and financial strategy[166].