NEW YORK - DigitalOcean Holdings , Inc. (NYSE: DOCN) has announced a new feature for its Managed MongoDB (NASDAQ:MDB) service that allows customers to scale their database storage independently from other compute resources. This update aims to provide users with more flexibility and cost-efficiency when managing their data storage needs.
Previously, DigitalOcean customers looking to expand their Managed MongoDB storage had to upgrade their entire database plan, which included additional compute capacity. The new scalable storage feature enables users to adjust their storage capacity separately, potentially reducing costs by avoiding unnecessary upgrades to processing power and memory.
According to Darpan Dinker, VP of AI/ML and PaaS at DigitalOcean, the ability to independently scale storage aligns with the practical and financial needs of their customers. The company asserts that the process of upgrading storage is automatic and incurs minimal downtime, simplifying the scaling process.
The collaboration with MongoDB ensures that DigitalOcean's Managed MongoDB service remains fully managed and certified by MongoDB. Annick Bangos, Senior Director of Partner OEM at MongoDB, highlighted the importance of adaptable data infrastructure, particularly as organizations engage with data-heavy applications like generative AI.
DigitalOcean's scalable storage offering for Managed MongoDB is designed to provide users with the following benefits:
- Independent (LON:IOG) scaling of storage without affecting compute resources.
- Cost efficiency through granular billing that reflects actual storage usage.
- Ease of use with automated provisioning and straightforward pricing.
The company's focus on simplifying cloud computing reflects its commitment to helping developers and growing businesses to rapidly deploy and scale their applications. This service update is a part of DigitalOcean's broader suite of managed offerings aimed at reducing infrastructure management overhead for its customers.
This announcement is based on a press release statement from DigitalOcean Holdings, Inc. The company's stock is publicly traded on the New York Stock Exchange under the ticker DOCN.
In other recent news, DigitalOcean Holdings Inc (NYSE:DOCN). reported a 12% year-over-year revenue increase in its third quarter of 2024, largely due to the success of its AI/ML platform, which saw a nearly 200% rise in annual recurring revenue (ARR). The company has also raised its full-year revenue guidance and announced the launch of 42 new features, as well as strategic partnerships aimed at enhancing its cloud services. Despite challenges in its managed hosting service, Cloudways, the firm remains optimistic about future growth, particularly in AI capabilities.
The company's revenue guidance for Q4 2024 is set between $199 million to $201 million, with an expected full-year non-GAAP diluted earnings per share of $1.70 to $1.75. Looking ahead, management anticipates baseline growth in the low to mid-teens for 2025, backed by a commitment to operational leverage and product innovation, especially in AI capabilities. An Investor Day is also planned for late March or early Q2 2025 to discuss long-term strategies and financial outlook.
However, it's worth noting that the managed hosting service, Cloudways, has faced challenges since a price increase in April, impacting the net dollar retention rate. Additionally, a decrease in annual recurring revenue (ARR) from 30 to 17 was reported, attributed to the previous quarter's surge in AI capacity as an anomaly. Despite these challenges, DigitalOcean's AI strategy, including the launch of NVIDIA (NASDAQ:NVDA) H100 Tensor Core GPU droplets and early access to a GenAI platform for select customers, has reportedly decreased troubleshooting time by 35% and is contributing significantly to revenue growth.
InvestingPro Insights
DigitalOcean's recent feature update for its Managed MongoDB service aligns well with its financial performance and market position. According to InvestingPro data, the company's revenue growth stands at 12.08% for the last twelve months as of Q3 2023, indicating steady expansion. This growth is further supported by a robust gross profit margin of 60.18%, suggesting efficient cost management in its service offerings.
An InvestingPro Tip highlights that DigitalOcean has a perfect Piotroski Score of 9, which is a positive indicator of the company's financial strength and potential for future growth. This score aligns with the company's efforts to enhance its services and potentially improve its market position.
Another relevant InvestingPro Tip notes that DigitalOcean's liquid assets exceed short-term obligations, indicating a strong financial position to support ongoing innovations and service improvements like the new scalable storage feature.
It's worth noting that DigitalOcean's stock has shown a 42.71% price total return over the past year, suggesting investor confidence in the company's strategy and growth potential. However, with a P/E ratio of 42.48, the stock is trading at a relatively high earnings multiple, which investors should consider in light of the company's growth initiatives and market position.
For readers interested in a more comprehensive analysis, InvestingPro offers additional tips and insights on DigitalOcean. There are 11 more InvestingPro Tips available for DOCN, providing a deeper understanding of the company's financial health and market prospects.
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