Photo Credit: Gerd Altmann from Pixabay.

According to a recent report, the global serverless architecture is expected to grow at 25% CAGR over the next ten years from $9 billion in 2022. DigitalOcean (NYSE: DOCN) continues to grow inorganically to drive its market reach.

DigitalOcean’s Financials

For the third quarter of the year, revenues grew 37% to $152.1 million, ahead of market estiamtes of $147.5 million. Annual Run-Rate Revenue (ARR) grew 41% to $640.6 million. Non GAAP EPS was $0.38, ahead of the markets estimates of $0.23.

Net Dollar Retention (NDR) rate grew to 118% and Average Revenue Per Customer (ARPU) grew 28% to $79.22.

For the fourth quarter, DigitalOcean forecast revenues of $160-$162 million and an EPS of $0.18-$0.19. The market forecast revenues of $163.11 million and an EPS of $0.25.

For the fiscal year, it forecast revenues of $573-$575 million with an EPS of $0.79-$0.80. The market forecast revenues of $572.46 million and an EPS of $0.75.

DigitalOcean’s Cloudways Acquisition

Recently, DigitalOcean announced its acquisition of Malta-based Cloudways for $350 million. Founded in 2012 by Aaqib Gadit, Pere Hospital, Umair Gadit, and Uzair Gadit, Cloudways is a cloud hosting platform. It contains a feature rich Web App Management Platform that can be used to easily launch cloud servers for the deployment of web apps as well as a user-friendly interface that offers integrated SSH, Git deployment, FREE SSL, API, and CloudwaysBot. It also lets users deploy online web applications like WordPress, Magento, PHP Stack, OpenCart, and Drupal.

Cloudways’ simple onboarding and day-to-day management tool is built for SMBs looking to outsource their on-ramp to the internet, helping them offload the complexities of cloud infrastructure so they can spend more time running and scaling their businesses. By optimizing the performance, value, support, reliability, and flexibility of their infrastructure and application management, organizations can save time and money while they grow their businesses.

DigitalOcean and Cloudways have been partners since 2014. Prior to the acquisition, Cloudways already relied on DigitalOcean infrastructure to power nearly half of its customers. Together, DigitalOcean and Cloudways will serve over 124,000 customers paying over $50 per month, representing approximately 84% of the company’s total revenue. Cloudways was expected to generate $52 million in revenue in fiscal 2022.

DigitalOcean’s stock is currently trading at $27.13 with a market capitalization of $2.7 billion. It was trading at a 52-week high of $66.28 in January last year and reached a 52-week low of $23.38 earlier this month.

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