0001582961FALSE2024Q312/310.33330.33330.3333211xbrli:sharesiso4217:USDiso4217:USDxbrli:sharesdocn:segmentxbrli:puredocn:trading_daydocn:installmentdocn:purchase_period00015829612024-01-012024-09-3000015829612024-10-2800015829612024-09-3000015829612023-12-3100015829612024-07-012024-09-3000015829612023-07-012023-09-3000015829612023-01-012023-09-300001582961us-gaap:CommonStockMember2024-06-300001582961us-gaap:AdditionalPaidInCapitalMember2024-06-300001582961us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-06-300001582961us-gaap:RetainedEarningsMember2024-06-3000015829612024-06-300001582961us-gaap:CommonStockMember2024-07-012024-09-300001582961us-gaap:AdditionalPaidInCapitalMember2024-07-012024-09-300001582961us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-07-012024-09-300001582961us-gaap:RetainedEarningsMember2024-07-012024-09-300001582961us-gaap:CommonStockMember2024-09-300001582961us-gaap:AdditionalPaidInCapitalMember2024-09-300001582961us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-09-300001582961us-gaap:RetainedEarningsMember2024-09-300001582961us-gaap:CommonStockMember2023-06-300001582961us-gaap:AdditionalPaidInCapitalMember2023-06-300001582961us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-06-300001582961us-gaap:RetainedEarningsMember2023-06-3000015829612023-06-300001582961us-gaap:CommonStockMember2023-07-012023-09-300001582961us-gaap:AdditionalPaidInCapitalMember2023-07-012023-09-300001582961us-gaap:RetainedEarningsMember2023-07-012023-09-300001582961us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-07-012023-09-300001582961us-gaap:CommonStockMember2023-09-300001582961us-gaap:AdditionalPaidInCapitalMember2023-09-300001582961us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-09-300001582961us-gaap:RetainedEarningsMember2023-09-3000015829612023-09-300001582961us-gaap:CommonStockMember2023-12-310001582961us-gaap:AdditionalPaidInCapitalMember2023-12-310001582961us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-12-310001582961us-gaap:RetainedEarningsMember2023-12-310001582961us-gaap:CommonStockMember2024-01-012024-09-300001582961us-gaap:AdditionalPaidInCapitalMember2024-01-012024-09-300001582961us-gaap:RetainedEarningsMember2024-01-012024-09-300001582961us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-01-012024-09-300001582961us-gaap:CommonStockMember2022-12-310001582961us-gaap:AdditionalPaidInCapitalMember2022-12-310001582961us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-12-310001582961us-gaap:RetainedEarningsMember2022-12-3100015829612022-12-310001582961us-gaap:CommonStockMember2023-01-012023-09-300001582961us-gaap:AdditionalPaidInCapitalMember2023-01-012023-09-300001582961us-gaap:RetainedEarningsMember2023-01-012023-09-300001582961us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-01-012023-09-3000015829612024-10-012024-09-300001582961srt:NorthAmericaMemberus-gaap:GeographicConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2024-07-012024-09-300001582961srt:NorthAmericaMemberus-gaap:GeographicConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2023-07-012023-09-300001582961srt:NorthAmericaMemberus-gaap:GeographicConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2024-01-012024-09-300001582961srt:NorthAmericaMemberus-gaap:GeographicConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2023-01-012023-09-300001582961srt:EuropeMemberus-gaap:GeographicConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2024-07-012024-09-300001582961srt:EuropeMemberus-gaap:GeographicConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2023-07-012023-09-300001582961srt:EuropeMemberus-gaap:GeographicConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2024-01-012024-09-300001582961srt:EuropeMemberus-gaap:GeographicConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2023-01-012023-09-300001582961srt:AsiaMemberus-gaap:GeographicConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2024-07-012024-09-300001582961srt:AsiaMemberus-gaap:GeographicConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2023-07-012023-09-300001582961srt:AsiaMemberus-gaap:GeographicConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2024-01-012024-09-300001582961srt:AsiaMemberus-gaap:GeographicConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2023-01-012023-09-300001582961docn:OtherGeographicalAreasMemberus-gaap:GeographicConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2024-07-012024-09-300001582961docn:OtherGeographicalAreasMemberus-gaap:GeographicConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2023-07-012023-09-300001582961docn:OtherGeographicalAreasMemberus-gaap:GeographicConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2024-01-012024-09-300001582961docn:OtherGeographicalAreasMemberus-gaap:GeographicConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2023-01-012023-09-300001582961us-gaap:GeographicConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2024-07-012024-09-300001582961us-gaap:GeographicConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2023-07-012023-09-300001582961us-gaap:GeographicConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2024-01-012024-09-300001582961us-gaap:GeographicConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2023-01-012023-09-300001582961country:USus-gaap:GeographicConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2024-07-012024-09-300001582961country:USus-gaap:GeographicConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2024-01-012024-09-300001582961country:USus-gaap:GeographicConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2023-01-012023-09-300001582961country:USus-gaap:GeographicConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2023-07-012023-09-300001582961country:US2024-09-300001582961country:US2023-12-310001582961country:SG2024-09-300001582961country:SG2023-12-310001582961country:DE2024-09-300001582961country:DE2023-12-310001582961country:NL2024-09-300001582961country:NL2023-12-310001582961docn:OtherCountriesMember2024-09-300001582961docn:OtherCountriesMember2023-12-310001582961docn:PaperspaceCoAcquisitionMember2023-07-050001582961docn:PaperspaceCoAcquisitionMember2023-07-052023-07-050001582961docn:PaperspaceCoAcquisitionMember2024-01-012024-09-300001582961docn:PaperspaceCoAcquisitionMemberus-gaap:TrademarksAndTradeNamesMember2023-07-050001582961docn:PaperspaceCoAcquisitionMemberus-gaap:TrademarksAndTradeNamesMember2023-07-052023-07-050001582961docn:PaperspaceCoAcquisitionMemberdocn:DevelopedTechnologyMember2023-07-050001582961docn:PaperspaceCoAcquisitionMemberdocn:DevelopedTechnologyMember2023-07-052023-07-050001582961docn:PaperspaceCoAcquisitionMemberus-gaap:CustomerRelationshipsMember2023-07-050001582961docn:PaperspaceCoAcquisitionMemberus-gaap:CustomerRelationshipsMember2023-07-052023-07-050001582961docn:PaperspaceCoAcquisitionMember2023-07-012023-09-300001582961docn:PaperspaceCoAcquisitionMember2023-01-012023-09-300001582961docn:PaperspaceCoAcquisitionMember2024-07-052024-07-050001582961docn:PaperspaceCoAcquisitionMember2024-07-012024-09-300001582961docn:CloudwaysLtdMember2022-09-012022-09-010001582961docn:CloudwaysLtdMemberdocn:EarnedOnSeptember12023Member2023-09-012023-09-010001582961docn:CloudwaysLtdMemberdocn:EarnedOnSeptember12023Member2022-09-012022-09-010001582961docn:CloudwaysLtdMemberdocn:EarnedOnMarch12024Member2022-09-012022-09-010001582961docn:CloudwaysLtdMemberdocn:EarnedOnMarch12024Member2024-03-012024-03-010001582961docn:CloudwaysLtdMemberdocn:EarnedOnSeptember12024Member2022-09-012022-09-010001582961docn:CloudwaysLtdMemberdocn:EarnedOnSeptember12024Member2024-09-012024-09-010001582961docn:CloudwaysLtdMemberus-gaap:SubsequentEventMembersrt:ScenarioForecastMember2024-11-012024-11-040001582961docn:EarnedOnJanuary42024Memberdocn:SnapShooterLimitedMember2024-01-042024-01-040001582961us-gaap:USTreasurySecuritiesMember2023-12-310001582961us-gaap:USTreasurySecuritiesMember2024-01-012024-03-310001582961us-gaap:CommercialPaperMember2023-12-310001582961us-gaap:CommercialPaperMember2024-01-012024-03-3100015829612024-01-012024-03-310001582961us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CashMember2024-09-300001582961us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CashMember2024-09-300001582961us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CashMember2024-09-300001582961us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2024-09-300001582961us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2024-09-300001582961us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2024-09-300001582961us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2024-09-300001582961us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2024-09-300001582961us-gaap:FairValueMeasurementsRecurringMember2024-09-300001582961us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CashMember2023-12-310001582961us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CashMember2023-12-310001582961us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CashMember2023-12-310001582961us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2023-12-310001582961us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2023-12-310001582961us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2023-12-310001582961us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001582961us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001582961us-gaap:FairValueMeasurementsRecurringMember2023-12-310001582961us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMember2023-12-310001582961us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMember2023-12-310001582961us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMember2023-12-310001582961us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperMember2023-12-310001582961us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperMember2023-12-310001582961us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperMember2023-12-310001582961docn:ConvertibleSeniorNotesDue2026Memberus-gaap:SeniorNotesMember2021-11-300001582961us-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:ConvertibleDebtMember2024-09-300001582961us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:ConvertibleDebtMember2024-09-300001582961us-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:ConvertibleDebtMember2023-12-310001582961us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:ConvertibleDebtMember2023-12-310001582961us-gaap:ConvertibleDebtMember2024-09-300001582961us-gaap:ConvertibleDebtMember2023-12-310001582961us-gaap:MachineryAndEquipmentMember2024-09-300001582961us-gaap:MachineryAndEquipmentMember2023-12-310001582961us-gaap:FurnitureAndFixturesMember2024-09-300001582961us-gaap:FurnitureAndFixturesMember2023-12-310001582961us-gaap:LeaseholdsAndLeaseholdImprovementsMember2024-09-300001582961us-gaap:LeaseholdsAndLeaseholdImprovementsMember2023-12-310001582961us-gaap:SoftwareDevelopmentMember2024-09-300001582961us-gaap:SoftwareDevelopmentMember2023-12-310001582961docn:EquipmentFinanceLeaseMember2024-09-300001582961docn:EquipmentFinanceLeaseMember2023-12-310001582961docn:CreditFacilityMemberus-gaap:RevolvingCreditFacilityMember2021-11-300001582961docn:CreditFacilityMemberus-gaap:RevolvingCreditFacilityMember2022-03-310001582961docn:CreditFacilityMember2024-09-300001582961docn:CreditFacilityMembersrt:MinimumMember2024-09-300001582961docn:KayBankNationalAssociationMemberdocn:CreditFacilityMember2024-01-012024-09-300001582961docn:CreditFacilityMemberus-gaap:LineOfCreditMemberdocn:VariableRateComponentOneMembersrt:MinimumMember2024-01-012024-09-300001582961docn:CreditFacilityMemberus-gaap:LineOfCreditMemberdocn:VariableRateComponentOneMembersrt:MaximumMember2024-01-012024-09-300001582961docn:CreditFacilityMemberus-gaap:RevolvingCreditFacilityMembersrt:MinimumMember2024-01-012024-09-300001582961docn:CreditFacilityMemberus-gaap:RevolvingCreditFacilityMembersrt:MaximumMember2024-01-012024-09-300001582961docn:CreditFacilityMember2024-07-012024-09-300001582961docn:CreditFacilityMember2023-07-012023-09-300001582961docn:CreditFacilityMember2024-01-012024-09-300001582961docn:CreditFacilityMember2023-01-012023-09-300001582961docn:ConvertibleSeniorNotesDue2026Memberus-gaap:SeniorNotesMemberus-gaap:OverAllotmentOptionMember2021-11-012021-11-300001582961docn:ConvertibleSeniorNotesDue2026Memberus-gaap:SeniorNotesMember2024-07-012024-09-300001582961docn:ConvertibleSeniorNotesDue2026Memberus-gaap:SeniorNotesMember2023-07-012023-09-300001582961docn:ConvertibleSeniorNotesDue2026Memberus-gaap:SeniorNotesMember2024-01-012024-09-300001582961docn:ConvertibleSeniorNotesDue2026Memberus-gaap:SeniorNotesMember2023-01-012023-09-300001582961docn:A2024ShareBuybackProgramMember2024-02-200001582961docn:A2024ShareBuybackProgramMember2024-07-012024-09-300001582961docn:A2024ShareBuybackProgramMember2024-01-012024-09-300001582961docn:A2024ShareBuybackProgramMember2024-09-300001582961docn:A2024ShareBuybackProgramMember2023-12-310001582961us-gaap:EmployeeStockOptionMember2024-01-012024-09-3000015829612023-01-012023-12-310001582961us-gaap:EmployeeStockOptionMember2024-09-300001582961us-gaap:RestrictedStockUnitsRSUMember2024-01-012024-09-300001582961us-gaap:RestrictedStockUnitsRSUMember2023-12-310001582961us-gaap:RestrictedStockUnitsRSUMember2024-09-300001582961us-gaap:PerformanceSharesMember2023-12-310001582961us-gaap:PerformanceSharesMember2024-01-012024-09-300001582961us-gaap:PerformanceSharesMember2024-09-300001582961us-gaap:PerformanceSharesMembersrt:MinimumMember2024-01-012024-09-300001582961us-gaap:PerformanceSharesMembersrt:MaximumMember2024-01-012024-09-300001582961us-gaap:PerformanceSharesMembersrt:MaximumMember2021-06-102021-06-100001582961us-gaap:PerformanceSharesMember2021-06-102021-06-100001582961us-gaap:PerformanceSharesMember2024-02-212024-02-210001582961us-gaap:PerformanceSharesMember2023-03-010001582961us-gaap:PerformanceSharesMember2024-04-110001582961docn:MRSUMembersrt:ChiefExecutiveOfficerMember2024-02-122024-02-120001582961docn:MRSUMemberus-gaap:ShareBasedCompensationAwardTrancheOneMembersrt:ChiefExecutiveOfficerMember2024-02-120001582961docn:MRSUMemberus-gaap:ShareBasedCompensationAwardTrancheTwoMembersrt:ChiefExecutiveOfficerMember2024-02-120001582961docn:MRSUMemberus-gaap:ShareBasedCompensationAwardTrancheThreeMembersrt:ChiefExecutiveOfficerMember2024-02-120001582961docn:MRSUMemberdocn:ShareBasedPaymentArrangementTrancheFourMembersrt:ChiefExecutiveOfficerMember2024-02-120001582961docn:MRSUMembersrt:ChiefExecutiveOfficerMember2024-02-120001582961docn:MRSUMemberus-gaap:ShareBasedCompensationAwardTrancheOneMembersrt:ChiefExecutiveOfficerMember2024-02-122024-02-120001582961docn:MRSUMemberdocn:ShareBasedPaymentArrangementIfThreeYearStockPriceTargetsAchievedTrancheOneMembersrt:ChiefExecutiveOfficerMember2024-02-122024-02-120001582961docn:MRSUMemberdocn:ShareBasedPaymentArrangementIfThreeYearStockPriceTargetsAchievedTrancheTwoMembersrt:ChiefExecutiveOfficerMember2024-02-122024-02-120001582961docn:MRSUMemberdocn:FormerChiefExecutiveOfficerMember2024-01-012024-03-310001582961docn:MRSUMemberdocn:FormerChiefExecutiveOfficerMember2024-03-310001582961docn:MRSUMembersrt:ChiefExecutiveOfficerMember2024-09-300001582961docn:MRSUMembersrt:ChiefExecutiveOfficerMember2024-01-012024-09-300001582961us-gaap:EmployeeStockMemberdocn:A2021EmployeeStockPurchasePlanMember2021-03-012021-03-310001582961us-gaap:EmployeeStockMemberdocn:A2023OfferingMember2023-11-210001582961us-gaap:EmployeeStockMemberdocn:A2023OfferingMember2024-05-202024-05-200001582961us-gaap:EmployeeStockMemberdocn:A2023OfferingMember2024-05-200001582961us-gaap:EmployeeStockMemberdocn:A2022EmployeeStockPurchasePlanMember2024-07-012024-09-300001582961us-gaap:EmployeeStockMemberdocn:A2022EmployeeStockPurchasePlanMember2023-07-012023-09-300001582961us-gaap:EmployeeStockMemberdocn:A2022EmployeeStockPurchasePlanMember2024-01-012024-09-300001582961us-gaap:EmployeeStockMemberdocn:A2022EmployeeStockPurchasePlanMember2023-01-012023-09-300001582961us-gaap:CostOfSalesMember2024-07-012024-09-300001582961us-gaap:CostOfSalesMember2023-07-012023-09-300001582961us-gaap:CostOfSalesMember2024-01-012024-09-300001582961us-gaap:CostOfSalesMember2023-01-012023-09-300001582961us-gaap:ResearchAndDevelopmentExpenseMember2024-07-012024-09-300001582961us-gaap:ResearchAndDevelopmentExpenseMember2023-07-012023-09-300001582961us-gaap:ResearchAndDevelopmentExpenseMember2024-01-012024-09-300001582961us-gaap:ResearchAndDevelopmentExpenseMember2023-01-012023-09-300001582961us-gaap:SellingAndMarketingExpenseMember2024-07-012024-09-300001582961us-gaap:SellingAndMarketingExpenseMember2023-07-012023-09-300001582961us-gaap:SellingAndMarketingExpenseMember2024-01-012024-09-300001582961us-gaap:SellingAndMarketingExpenseMember2023-01-012023-09-300001582961us-gaap:GeneralAndAdministrativeExpenseMember2024-07-012024-09-300001582961us-gaap:GeneralAndAdministrativeExpenseMember2023-07-012023-09-300001582961us-gaap:GeneralAndAdministrativeExpenseMember2024-01-012024-09-300001582961us-gaap:GeneralAndAdministrativeExpenseMember2023-01-012023-09-300001582961us-gaap:RestructuringChargesMember2024-07-012024-09-300001582961us-gaap:RestructuringChargesMember2023-07-012023-09-300001582961us-gaap:RestructuringChargesMember2024-01-012024-09-300001582961us-gaap:RestructuringChargesMember2023-01-012023-09-300001582961docn:MarketBasedRestrictedStockUnitMember2024-01-012024-09-300001582961docn:MarketBasedRestrictedStockUnitMember2024-07-012024-09-300001582961us-gaap:PerformanceSharesMemberus-gaap:ShareBasedCompensationAwardTrancheTwoMember2021-06-102021-06-100001582961us-gaap:PerformanceSharesMemberus-gaap:ShareBasedCompensationAwardTrancheOneMember2021-06-102021-06-100001582961us-gaap:PerformanceSharesMemberus-gaap:ShareBasedCompensationAwardTrancheThreeMember2021-06-102021-06-100001582961us-gaap:EmployeeStockOptionMember2024-07-012024-09-300001582961us-gaap:EmployeeStockOptionMember2023-07-012023-09-300001582961us-gaap:EmployeeStockOptionMember2023-01-012023-09-300001582961us-gaap:RestrictedStockUnitsRSUMember2024-07-012024-09-300001582961us-gaap:RestrictedStockUnitsRSUMember2023-07-012023-09-300001582961us-gaap:RestrictedStockUnitsRSUMember2023-01-012023-09-300001582961us-gaap:PerformanceSharesMember2024-07-012024-09-300001582961us-gaap:PerformanceSharesMember2023-07-012023-09-300001582961us-gaap:PerformanceSharesMember2023-01-012023-09-300001582961docn:ConvertibleNotesMember2024-07-012024-09-300001582961docn:ConvertibleNotesMember2023-07-012023-09-300001582961docn:ConvertibleNotesMember2024-01-012024-09-300001582961docn:ConvertibleNotesMember2023-01-012023-09-300001582961us-gaap:EmployeeStockOptionMember2024-07-012024-09-300001582961us-gaap:EmployeeStockOptionMember2023-07-012023-09-300001582961us-gaap:EmployeeStockOptionMember2024-01-012024-09-300001582961us-gaap:EmployeeStockOptionMember2023-01-012023-09-300001582961us-gaap:RestrictedStockUnitsRSUMember2024-07-012024-09-300001582961us-gaap:RestrictedStockUnitsRSUMember2023-07-012023-09-300001582961us-gaap:RestrictedStockUnitsRSUMember2024-01-012024-09-300001582961us-gaap:RestrictedStockUnitsRSUMember2023-01-012023-09-300001582961us-gaap:PerformanceSharesMember2024-07-012024-09-300001582961us-gaap:PerformanceSharesMember2023-07-012023-09-300001582961us-gaap:PerformanceSharesMember2024-01-012024-09-300001582961us-gaap:PerformanceSharesMember2023-01-012023-09-300001582961us-gaap:ConvertibleDebtSecuritiesMember2024-07-012024-09-300001582961us-gaap:ConvertibleDebtSecuritiesMember2023-07-012023-09-300001582961us-gaap:ConvertibleDebtSecuritiesMember2024-01-012024-09-300001582961us-gaap:ConvertibleDebtSecuritiesMember2023-01-012023-09-300001582961docn:BratinSahaMember2024-01-012024-09-300001582961docn:BratinSahaMember2024-07-012024-09-300001582961docn:BratinSahaMember2024-09-30

美國
證券交易委員會
華盛頓特區20549
表格 10-Q
（標記1） 
☒ 根據1934年《證券交易法》第13條或第15（d）條提交的季度報告
報告季度截止日期2024年9月30日
或者
 ☐ 根據1934年證券交易法第13或15(d)節的轉型報告書
轉型期從______至______
委員會文件編號： 001-40252
數字海洋控股有限公司。
（按其章程規定的確切註冊人名稱）
特拉華州 45-5207470
（國家或其他管轄區的
公司成立或組織）		 （IRS僱主
唯一識別號碼）
第101 6th Avenue
紐約, 紐約 10013
(總部地址及郵政編碼)
(646) 827-4366
(註冊人電話號碼，包括區號)
在法案第12(b)條的規定下注冊的證券：
每一類的名稱交易代碼在所有註冊的交易所上註冊的名稱
每股普通股，每股面值0.000025美元DOCN紐約證券交易所
請勾選以下選項以指示註冊人是否在過去12個月內(或在註冊人需要提交此類報告的較短時間內)已提交證券交易法1934年第13或15(d)條所要求提交的所有報告，並且在過去90天內已受到此類報告提交要求的影響。是根據交易所法規12b-2中「大型加速文件報告人」，「加速文件報告人」，「小型報告公司」和「新興增長公司」的定義，請勾選發行人是否爲大型加速文件報告人。
請在以下勾選方框表示註冊人是否已在Regulation S-T Rule 405規定的前12個月(或在註冊人需要提交此類文件的較短期間內)提交了每個互動數據文件。是否   ☒
勾選以下選框，指示申報人是大型加速評估提交人、加速評估提交人、非加速評估提交人、小型報告公司或新興成長型公司。關於「大型加速評估提交人」、「加速評估提交人」、「小型報告公司」和「新興成長型公司」的定義，請參見《交易所法規》第12億.2條。
大型加速報告人☒加速文件提交人☐
非加速文件提交人☐較小的報告公司☐
  新興成長公司☐
如果新興成長企業，通過勾選表示註冊人已選擇不使用根據交易所法第13(a)條提供的任何新的或修訂的財務會計準則的延長過渡期。 ☐
勾選表示註冊人是一個外殼公司（根據交易所法規則12億.2的定義）。 是 ☐ 否 ☒
截至2024年10月28日， 92,282,286 註冊人普通股的每股面值爲0.000025美元，共發行了股數。


目錄
第一部分 財務信息
項目1。基本報表（未經審計）
三個月和 有九起類似訴訟針對JAVELIN的要約收購和合並被提起，稱違反信託責任，尋求公正補償，包括但不限於，禁止交易的達成、撤銷、解除已經交易的事項，以及發送費用、補貼成本，包括合理的律師費和費用。唯一的佛羅里達州訴訟從未向被告送達，該案件於2017年1月20日自願撤回並關閉。2016年4月25日，馬里蘭法院頒佈了一項命令，將馬里蘭案件合併成一起訴訟，標題爲JAVELIN Mortgage Investment Corp.股東訴訟（案號24-C-16-001542），並指定一個馬里蘭案件的律師作爲臨時首席聯合法律顧問。2016年5月26日，臨時首席律師提交了經修訂的釩化鐵質量投訴，聲稱違反信託責任的集體索賠，教唆和共謀違反信託責任以及浪費。2016年6月27日，被告提出了駁回合併修訂集體投訴申請的動議，聲稱未陳述可以獲得救濟的規定。在2017年3月3日，聽證會召開了駁回動議，法院保留了裁定。法院數次推遲動議陳述的裁定。2024年2月14日，法院頒佈裁定，支持被告的駁回動議，並駁回所有原告的權利，無需上訴。在2024年3月11日，原告提出了對法院裁定的上訴通知。2024年7月3日，原告自願撤回之前提出的上訴通知。 和202 九月 30、2024和2023年
綜合所得簡化聯合財務報表 對於三和 有九起類似訴訟針對JAVELIN的要約收購和合並被提起，稱違反信託責任，尋求公正補償，包括但不限於，禁止交易的達成、撤銷、解除已經交易的事項，以及發送費用、補貼成本，包括合理的律師費和費用。唯一的佛羅里達州訴訟從未向被告送達，該案件於2017年1月20日自願撤回並關閉。2016年4月25日，馬里蘭法院頒佈了一項命令，將馬里蘭案件合併成一起訴訟，標題爲JAVELIN Mortgage Investment Corp.股東訴訟（案號24-C-16-001542），並指定一個馬里蘭案件的律師作爲臨時首席聯合法律顧問。2016年5月26日，臨時首席律師提交了經修訂的釩化鐵質量投訴，聲稱違反信託責任的集體索賠，教唆和共謀違反信託責任以及浪費。2016年6月27日，被告提出了駁回合併修訂集體投訴申請的動議，聲稱未陳述可以獲得救濟的規定。在2017年3月3日，聽證會召開了駁回動議，法院保留了裁定。法院數次推遲動議陳述的裁定。2024年2月14日，法院頒佈裁定，支持被告的駁回動議，並駁回所有原告的權利，無需上訴。在2024年3月11日，原告提出了對法院裁定的上訴通知。2024年7月3日，原告自願撤回之前提出的上訴通知。 和202 九月 30、2024和2023年
三和九個財務報表的股東赤字的簡明綜合報表 有九起類似訴訟針對JAVELIN的要約收購和合並被提起，稱違反信託責任，尋求公正補償，包括但不限於，禁止交易的達成、撤銷、解除已經交易的事項，以及發送費用、補貼成本，包括合理的律師費和費用。唯一的佛羅里達州訴訟從未向被告送達，該案件於2017年1月20日自願撤回並關閉。2016年4月25日，馬里蘭法院頒佈了一項命令，將馬里蘭案件合併成一起訴訟，標題爲JAVELIN Mortgage Investment Corp.股東訴訟（案號24-C-16-001542），並指定一個馬里蘭案件的律師作爲臨時首席聯合法律顧問。2016年5月26日，臨時首席律師提交了經修訂的釩化鐵質量投訴，聲稱違反信託責任的集體索賠，教唆和共謀違反信託責任以及浪費。2016年6月27日，被告提出了駁回合併修訂集體投訴申請的動議，聲稱未陳述可以獲得救濟的規定。在2017年3月3日，聽證會召開了駁回動議，法院保留了裁定。法院數次推遲動議陳述的裁定。2024年2月14日，法院頒佈裁定，支持被告的駁回動議，並駁回所有原告的權利，無需上訴。在2024年3月11日，原告提出了對法院裁定的上訴通知。2024年7月3日，原告自願撤回之前提出的上訴通知。 和202 九月 30、2024和2023年
的現金流簡明彙總表 有九起類似訴訟針對JAVELIN的要約收購和合並被提起，稱違反信託責任，尋求公正補償，包括但不限於，禁止交易的達成、撤銷、解除已經交易的事項，以及發送費用、補貼成本，包括合理的律師費和費用。唯一的佛羅里達州訴訟從未向被告送達，該案件於2017年1月20日自願撤回並關閉。2016年4月25日，馬里蘭法院頒佈了一項命令，將馬里蘭案件合併成一起訴訟，標題爲JAVELIN Mortgage Investment Corp.股東訴訟（案號24-C-16-001542），並指定一個馬里蘭案件的律師作爲臨時首席聯合法律顧問。2016年5月26日，臨時首席律師提交了經修訂的釩化鐵質量投訴，聲稱違反信託責任的集體索賠，教唆和共謀違反信託責任以及浪費。2016年6月27日，被告提出了駁回合併修訂集體投訴申請的動議，聲稱未陳述可以獲得救濟的規定。在2017年3月3日，聽證會召開了駁回動議，法院保留了裁定。法院數次推遲動議陳述的裁定。2024年2月14日，法院頒佈裁定，支持被告的駁回動議，並駁回所有原告的權利，無需上訴。在2024年3月11日，原告提出了對法院裁定的上訴通知。2024年7月3日，原告自願撤回之前提出的上訴通知。 和202 九月 30、2024和2023年
事項二
第3項。
事項4。
第二部分.其他信息
項目1。
項目1A。
事項二
第3項。
事項4。
項目5。
項目6。


有關前瞻性聲明之特別說明
這份季度10-Q表格對我們及我們所在的行業作出了大量的風險和不確定性的前瞻性聲明。除了本季度10-Q表格中包含的歷史事實之外的所有陳述，包括關於我們未來業務的運營結果或財務狀況、業務策略和計劃以及管理層對未來經營的目標，都是前瞻性聲明。在某些情況下，您可以根據這些單詞識別前瞻性聲明："anticipate,""believe,""contemplate,""continue,""could,""estimate,""expect,""intend," "may,""plan,""potential,""predict,""project,""should,""target,""will"或"would"或這些單詞的否定或其他類似的詞或表達式。
您不應該把前瞻性聲明當作未來事件的預測依據。我們主要基於我們對未來可能影響我們業務、財務狀況和經營結果的事件和趨勢的當前預期和預測，對本季度10-Q表格中包含的前瞻性聲明的事件結果受風險、不確定性和其他因素的影響進行描述。這些風險、不確定性和其他因素的描述在I部分、項1A.「風險因素」以及我們的年度報告10-k的其他地方。此外，我們在一個極具競爭和快速變化的環境中運營。新的風險和不確定性時常會出現，我們無法預測所有可能影響本季度10-Q表格中包含的前瞻性聲明的風險和不確定性。前瞻性聲明所反映的結果、事件和環境可能無法實現或發生，實際結果、事件或環境可能與前瞻性聲明中描述的不同。
此外，陳述"我們相信"和類似陳述反映了我們對相關主題的信仰和觀點。這些陳述基於我們作爲本季度10-Q表格的日期可獲得的信息。雖然我們認爲這些可獲得的信息爲這些陳述提供了合理的基礎，但該等信息可能是有限或不完整的。我們的陳述不應被看作表明我們對所有相關信息進行了全面的調查或審查。這些陳述本質上是不確定的，投資者應該警惕不要過分依賴這些陳述。
此季度10-Q表中所作的前瞻性聲明僅涉及聲明所作的日期的事件。我們不承擔更新此季度10-Q表中所作的任何前瞻性聲明以反映此季度10-Q表的日期之後發生的事件或情況或反映新信息或突發事件的義務，除非法律另有規定。我們可能無法實際實現所披露的計劃、意圖或預期，並且您不應過度依賴我們的前瞻性聲明。我們的前瞻性聲明不反映任何未來收購、合併、剝離、合資或投資的潛在影響。
我們可能會透過我們的投資者關係網站（https://investors.digitalocean.com/）向投資者公佈重要的業務和財務資訊。因此，我們鼓勵投資者和其他對我們公司感興趣的人士查看我們在網站上提供的信息，並跟進我們向證券交易委員會提交的申報文件、網絡廣播、新聞發佈和電話會議。

第一部分 - 財務信息
項目 1. 基本報表
數字海洋控股有限公司。
縮表合併資產負債表
（以千為單位，除股份數以外）
（未經審計）
2024年9月30日2023年12月31日
流動資產:
現金及現金等價物$439,872 $317,236 
有價證券— 94,532 
應收帳款，扣除對信用損失的備抵金額為$5,664 15.15,848，分別為
68,936 62,186 
預付費用及其他流動資產43,198 29,040 
全部流動資產552,006 502,994 
物業及設備，扣除折舊後淨值371,000 305,444 
限制性現金1,747 1,747 
商譽348,674 348,322 
無形資產，扣除累計攤銷123,110 140,151 
營運租賃權利資產，淨額121,430 155,201 
递延税款贷项2,035 1,994 
其他資產6,476 5,114 
資產總額$1,526,478 $1,460,967 
流動負債：
應付賬款$12,946 $3,957 
已發生其他費用28,065 31,046 
逐步認列的收入5,575 5,340 
營運租賃負債，流動68,113 81,320 
其他流動負債61,311 70,982 
流動負債合計176,010 192,645 
递延所得税负债3,518 3,533 
長期負債1,483,470 1,477,798 
營運租賃負債，非流動73,556 91,161
其他長期負債1,627 9,528 
總負債1,738,181 1,774,665 
承諾和事前措施（附註8）
优先股（$0.0001面值；3,333,333股已授权）0.000025HEICO股票由不可撤銷信託持有。10,000,000 授權股份為 0 於2024年9月30日和2023年12月31日發行並流通的股份數）
— — 
普通股（$0.0001面值；授權50,000,000股，截至2023年12月31日和2024年6月30日止已發行18735946和18724596股）0.000025HEICO股票由不可撤銷信託持有。750,000,000 授權股份為 92,397,303 和 90,243,442 於2024年9月30日和2023年12月31日分別發行和流通的股份數）
2 2 
資本公積額額外增資65,701 30,989 
累積其他全面損失(398)(452)
累積虧損(277,008)(344,237)
股東權益的赤字為(211,703)(313,698)
總負債及股東權益赤字$1,526,478 $1,460,967 
請參閱簡明合併基本報表附註
2
數字海洋控股有限公司。
綜合營業損益匯縮陳述
（以千為單位，除每股金額外）
（未經審計）
結束於三個月的期間九個月結束了
九月三十日，九月三十日，
2024202320242023
營業收入$198,484 $177,062 $575,690 $512,010 
營業成本 79,043 70,329 226,826 209,562 
毛利潤119,441 106,733 348,864 302,448 
營業費用：
研發費用37,377 32,627 105,388 109,468 
銷售和市場推廣費用17,036 19,015 57,970 53,346 
總務與行政40,422 20,064 127,034 117,861 
重組及其他費用— (441)— 20,862 
營業費用總計94,835 71,265 290,392 301,537 
營業收入24,606 35,468 58,472 911 
其他收入（費用）：
利息費用(2,262)(2,333)(6,887)(6,634)
利息收入和其他收入，淨7,297 3,979 17,120 18,967 
其他收益，淨額5,035 1,646 10,233 12,333 
稅前收入29,641 37,114 68,705 13,244 
所得稅效益（費用）3,308 (17,939)(2,479)(9,774)
歸屬於普通股股東的淨利潤$32,949 $19,175 $66,226 $3,470 
每股淨利潤歸屬於普通股股東
基礎$0.36 $0.22 $0.72 $0.04 
稀釋$0.33 $0.20 $0.70 $0.04 
用於計算歸屬普通股股東每股凈利潤的加權平均股份
基礎92,145 87,667 91,413 90,769 
稀釋102,591 102,674 102,678 97,747 
請參閱簡明合併基本報表附註
3
數字海洋控股有限公司。
綜合損益簡明合併財務報表
（以千為單位）
（未經審計）
結束於三個月的期間九個月結束了
九月三十日，九月三十日，
2024202320242023
歸屬於普通股股東的淨利潤$32,949 $19,175 $66,226 $3,470 
其他綜合損益：
外币翻译调整，税后净额179 (373)42 (43)
可变现证券的未实现利润，扣除税款后的净额—299121,069
其他全面收益（損失）179 (74)54 1,026 
綜合收益$33,128 $19,101 $66,280 $4,496 
請參閱簡明合併基本報表附註
4
數字海洋控股有限公司。
股東權益總赤字簡明合併財務報表
（以千為單位，除股份數以外）
（未經審計）
普通股資本公積金累積其他綜合虧損累積虧損總計
股份金額
2024年6月30日餘額91,698,027 $2 $56,748 $(577)$(309,957)$(253,784)
根據股權激勵計劃發行普通股，扣除預扣稅款後的淨利潤997,103 — (3,474)— — (3,474)
根據員工股票購買計劃發行普通股，扣除預扣稅款後的淨利潤— — — — — — 
回購和養老普通股，包括相關成本(297,827)— (11,370)— — (11,370)
股份報酬— — 23,797 — — 23,797 
其他綜合收益— — — 179 — 179 
歸屬於普通股股東的淨利潤— — — — 32,949 32,949 
2024年9月30日結餘92,397,303 $2 $65,701 $(398)$(277,008)$(211,703)
普通股資本公積金累計其他綜合損失累積虧損總計
股份金額
2023年6月30日結餘88,628,893 $2 $— $(948)$(266,633)$(267,579)
根據股權獎勵計劃發行普通股，扣除預扣稅款後的淨利潤915,901 — (1,208)— — (1,208)
根據員工股票購買計劃發行普通股，扣除預扣稅款後的淨利潤— — — — — — 
普通股的回購及養老，包括相關費用(3,350,349)— 3,205 — (110,295)(107,090)
股份報酬— — (1,997)— — (1,997)
其他全面損失— — — (74)— (74)
歸屬於普通股股東的淨利潤— — — — 19,175 19,175 
截至2023年9月30日的結餘86,194,445 $2 $— $(1,022)$(357,753)$(358,773)
請參閱簡明合併基本報表附註
5
數字海洋控股有限公司。
股東總賬戶赤字摘要表
（以千為單位，除股份數以外）
（未經審計）
普通股資本公積金累計其他綜合損失累積虧損總計
股份金額
2023年12月31日餘額90,243,442 $2 $30,989 $(452)$(344,237)$(313,698)
股權激勵計劃下發行普通股，扣除代扣稅後的淨額2,854,890 — (9,318)— — (9,318)
員工股票購買計劃下發行普通股，扣除代扣稅後的淨額94,162 — 2,231 — — 2,231 
回購和養老普通股，包括相關成本(795,191)— (28,080)— 1,003 (27,077)
股份報酬— — 69,879 — — 69,879 
其他綜合收益— — — 54 — 54 
歸屬於普通股股東的淨利潤— — — — 66,226 66,226 
2024年9月30日結餘92,397,303 $2 $65,701 $(398)$(277,008)$(211,703)

普通股資本公積金累積其他綜合損失累積虧損總計
股份金額
2022年12月31日結餘96,732,507 $2 $263,957 $(2,048)$(214,342)$47,569 
根據股權激勵計劃發行普通股，扣除代扣稅款後的凈利潤3,230,294 — (506)— — (506)
根據員工股票購買計劃發行普通股，扣除代扣稅款後的凈利潤120,348 — 2,797 — — 2,797 
回購和養老普通股，包括相關成本(13,888,704)— (332,817)— (146,881)(479,698)
股份報酬— — 66,569 — — 66,569 
其他綜合收益— — — 1,026 — 1,026 
歸屬於普通股股東的淨利潤— — — — 3,470 3,470 
截至2023年9月30日的結餘86,194,445 $2 $— $(1,022)$(357,753)$(358,773)

請參閱簡明合併基本報表附註
6
數字海洋控股有限公司。
簡明財務報表現金流量表
（以千為單位）
（未經審計）
截至9月30日的九個月
20242023
營運活動
歸屬於普通股股東的淨利潤$66,226 $3,470 
調整淨利潤以達經營活動所提供之淨現金流量：
折舊與攤提100,825 87,085 
股份報酬67,659 65,589 
預期信貸虧損撥備12,018 11,416 
營運租賃權益資產和負債，淨額2,861 5,783 
投資資產的折價及償債溢價的淨增加2,569 (2,262)
非現金利息費用5,987 5,958 
長期資產損失356 1,140 
推延所得稅— 561 
增值稅儲備的釋出— (819)
其他(2,572)484 
營運資產和負債的變化：
應收帳款(18,768)(16,777)
預付費用及其他流動資產(13,594)(7,569)
應付帳款和應計費用1,136 (15,870)
逐步認列的收入235 (561)
其他資產和負債(13,552)16,798 
經營活動產生的淨現金流量211,386 154,426 
投資活動
資本支出 - 物業和設備(132,886)(67,077)
資本支出 - 內部使用的軟件開發(6,492)(4,075)
收購企業支付的現金，扣除取得的現金淨額— (99,340)
資產收購支付的現金— (2,500)
可轉換證券的購買— (352,313)
到期的可交易證券91,675 773,335 
購買有市場價值有價證券的利息— (151)
有價證券利息的收益— 151 
出售設備所得款項42 236 
投資活動提供的淨現金流量（使用）(47,661)248,266 
融資活動
與股權激勵計劃下發行普通股相關的收入11,890 15,358 
員工購股計劃下發行普通股的收入2,231 2,797 
財務租賃的本金偿还(4,097)(947)
與股權獎勵淨結算有關的員工薪資稅款(21,166)(15,594)
回購和養老普通股，包括相關成本(29,878)(474,950)
籌集資金的淨現金流量(41,020)(473,336)
匯率變動對現金、現金等價物和受限現金的影響(69)(55)
現金、現金等值物和受限制現金增加（減少）122,636 (70,699)
請參閱簡明合併基本報表附註
7
數字海洋控股有限公司。
簡明財務報表現金流量表
（以千為單位）
（未經審計）
截至9月30日的九個月
20242023
現金、現金等價物和受限現金-期初318,983 151,807 
現金、現金等價物和受限現金-期末$441,619 $81,108 
現金流資訊的補充揭示：
支付利息的現金$824 $595 
支付稅款的現金，扣除退款13,442 2,034 
經營現金流支付經營租賃費用。64,397 51,038 
非現金投資和融資活動：
資本化股份報酬$2,221 $980 
收到但尚未支付的固定資產和設備，包括應付帳款和應付其他費用9,395 15,804 
營運租賃負債換取的經營租賃資產27,717 65,828 
財務租賃負債換取的財務租賃資產88 11,958 
請參閱簡明合併基本報表附註
8
數字海洋控股有限公司。
基本報表附註
(以千為單位，股票和每股金額除外)

註1。 業務和組織的性質
DigitalOcean Holdings，Inc.及其子公司（統稱為“公司”，“我們”，“我們的”）是一家領先的雲計算平台，為初創企業和不斷成長的數字原生業務提供按需基礎設施、平台和軟體工具。公司的創立理念是，雲端的轉型好處應該易於利用、廣泛可及、可靠且負擔得起。公司的平台使雲計算變得更加簡單，讓客戶能夠快速推動創新，提高生產力和靈活性。公司提供基礎設施即服務（IaaS）方面的關鍵解決方案，包括Droplet虛擬機器、存儲和網絡服務；平台即服務（PaaS）方面的解決方案，包括托管數據庫和托管Kubernetes服務；軟體即服務（ saas-云计算 ）方面的解決方案，包括托管主機和市場服務；以及人工智能和機器學習（AI/ML）方面的解決方案，包括機器、筆記本和部署服務。
公司採用控股公司結構，主要業務通過其完全擁有的營運附屬公司在全球執行。
註2. 重要會計政策摘要
報表根據呈報基礎和合併原則編制。
附表為未經核數的中期簡明合併基本報表，根據美國普遍公認會計原則（“U.S. GAAP”）編製，包括公司及所有全資子公司的賬目。所有公司間賬目和交易已在合併中消除。 管理層認為，未經核數的簡明合併基本報表反映了所有調整（包括正常的往來調整），為公司截至2024年9月30日的財務狀况、2024年9月30日和2023年9月30日結束的三個月和九個月的營運結果、2024年9月30日和2023年9月30日結束的九個月現金流和2024年9月30日和2023年9月30日結束的三個月和九個月股東權益的公平陳述所需進行的調整。
估計的使用
根據美國通用會計原則要求管理層繼續進行估計、判斷和假設，以影響簡明合併基本報表及附註中所報告和披露的金額。實際結果可能與這些估計有所不同。這些估計包括但不限於與營業收入確認、應收帳款和相關備抵、長壽資產的有用壽命和實現性、內部使用軟件開發成本的資本化、以及股票報酬的會計處理，包括對績效授予條件概率的估計，用於確定租賃負債的增量借貸利率，對透過業務組合取得的無形和有形資產的公允價值和有用壽命的估計擔保，資產負債的攜負價值。管理層將其估計建基於歷史經驗和各種其他管理認為合理的假設，其結果形成對資產和負債攜帶價值進行判斷的基礎。
受限現金
下表將調解現金、現金等價物和受限現金，根據簡明綜合現金流量表：
九月三十日，
20242023
現金及現金等價物$439,872 $79,361 
限制性現金(1)
1,747 1,747 
現金、現金等價物和限制性現金的總額$441,619 $81,108 
___________________
(1)包括存放在與用於保證租賃協議的信用證相關的金融機構。
應收帳款減除預期信用損失之註銷
應收帳款主要代表在賬截至日未開立發票的已確認收入，主要在隨後一個月開立和收回。交易應收帳款按原始發票金額扣除根據未來收回概率的預估信用損失準備計提。管理層
9

根據歷史損失模式、客戶發票逾期天數、合理且可支持的未來經濟環境預測來調整歷史損失數據，並評估與特定帳戶相關的潛在損失風險的適當性，以確保賬款充足。當管理層得知可能進一步降低收款可能性的情況時，將對應款項記錄特定呆帳，將應收款減至管理層合理認為將收回的金額。公司通過預期信用損失的存儲增加預期信用損失的評估並在無法收回的情況下將應收賬款及相關呆帳進行調整。
以下表格顯示了我們預期信用損失撥備的變動，為所呈報期間。
金額
截至2023年12月31日的結餘$5,848 
預期信貸虧損撥備12,018 
呆帳及其他(12,202)
截至2024年9月30日的餘額$5,664 
遞延收益
2023年12月30日，遞延營業收入爲$。5,575 和 $5,340 截至2024年9月30日和2023年12月31日，分別。2024年9月30日和2023年結束的三個月內認定的營業收入分別爲$441 和 $624，$3,375 和 $3,424 分別在2024年9月30日和2023年結束的九個月中，分別財務報表中的每個遞延營業收入餘額的起始點。
公司與客戶合同中存在與未在我們的簡明合併基本報表中確認的未來服務相關的履約義務。儘管我們的客戶協議通常不會強制客戶按特定用量或期限履行合同，但我們只有少量合同的原始條款超過一年承諾期，並要求客戶在該期間內最少支出一定金額。截至2024年9月30日，我們預計將有約$的營業收入在未來幾個期間中確認。10,053 年內來自超過一年承諾的剩餘履約義務的營業收入預計將在未來幾個期間內確認。這些合同的加權平均剩餘期限爲 1.9 年。營業收入的金額和時間確認主要受客戶使用情況驅動。
分段信息
公司的首席運營決策者（CEO）審查以合併方式呈現的分離財務信息，以進行定期的運營決策、資源分配和評估財務績效。因此，公司已 之一 操作和報告部分。
地理信息
根據公司客戶的賬單地址確定的收入如下：
三個月已結束九個月已結束
九月三十日九月三十日
2024202320242023
北美39 %37 %38 %38 %
歐洲28 29 29 29 
亞洲23 24 23 23 
其他10 10 10 10 
總計100 %100 %100 %100 %
來自美國客戶的營業收入爲 33%和32三個月截至2024年9月30日和九個月截至2024年9月30日的總營業收入分別爲%， 30三個月截至2023年9月30日和九個月截至2023年9月30日的總營業收入分別爲%，
10

長期資產包括財產和設備以及租賃。 根據資產的實際位置，公司長期資產的淨地理位置如下：
2024年9月30日2023 年 12 月 31 日
美國$256,291 $233,557 
新加坡31,284 43,425 
德國
51,753 62,224 
荷蘭
69,690 46,170 
其他
83,412 75,269 
總計$492,430 $460,645 
信貸風險集中
現金及現金等價物，市場證券，受限現金和貿易應收賬款在彙編的合併資產負債表中的金額面臨信貸風險的集中。儘管公司將現金及現金等價物存放在多家金融機構，但存款有時可能超過聯邦保險限額。公司認爲持有其現金及現金等價物的金融機構財務穩健，因此這些餘額不存在相應的最小信貸風險。
公司的客戶群體包括大量分散在各地的客戶。 截至2024年9月30日和2023年12月31日，沒有一個客戶佔應收賬款淨額的10%或以上。此外，在截至2024年9月30日和2023年3個月和9個月的時間內，沒有一個客戶佔營業收入的10%或以上。
最新的會計準則 - 待採用。
2023年12月，財務會計準則委員會（「FASB」）發佈了會計準則更新（「ASU」）2023-09，所得稅（主題740）—所得稅披露改進（「ASU 2023-09」）。ASU 2023-09要求企業在有效稅率協調錶中披露特定類別，並提供符合定量門檻的調節項目的額外信息。此外，ASU 2023-09還要求披露州收入稅支出與聯邦收入稅支出的某些內容。ASU 2023-09中的修訂要求從2024年12月15日後的起始財政年度開始採用。允許提前爲尚未發佈的年度基本報表進行採納。雖然允許追溯應用，但修訂應以前瞻性的方式應用。公司目前正在評估採納對其財務披露的影響。
2023年11月，財務會計準則委員會發布了亞利桑那州立大學第2023-07號《分部報告（主題280）：改進應報告的分部披露（「亞利桑那州立大學2023-07」）。亞利桑那州立大學2023-07擴大了公共實體的分部披露範圍，要求定期向首席運營決策者披露重大分部支出，這些支出包含在每項報告的分部損益衡量標準中，其他細分市場的金額和構成說明，以及應申報分部的損益和資產的中期披露。亞利桑那州立大學2023-07對2023年12月15日之後開始的財政年度以及2024年12月15日之後開始的財政年度內的過渡期有效，允許提前申請。該公司目前正在評估採用亞利桑那州立大學2023-07對其合併財務報表和披露的影響。
注3. 收購、商譽和無形資產
Paperspace Co
2023年7月5日（「Paperspace收購日」），公司完成了一項業務組合，收購了Paperspace Co.（「Paperspace」）的 100%，總現金對價爲$100,399包含在支付考慮中的，是爲支持某些收購後賠償責任的按金帳戶上交的$11,100 在截至2024年9月30日的三個月內，賠償期限到期，剩餘的賠償按金基金根據收購協議分發給參與的Paperspace股東。
這項收購已被視爲業務組合，並自 Paperspace 收購日期起，Paperspace 運營的結果被包括在隨附的簡明綜合財務報表中。Paperspace 先進科技的收購和整合將擴展公司平台的
11

公司的產品使客戶能夠更輕鬆地測試、開發和部署人工智能和機器學習（「AI/ML」）應用，並增強和改進現有的AI/ML應用。
2024年9月30日結束的九個月內，商譽增加了$352 購買的可識別資產和負債承擔的已確認金額 有形資產收購：
數量
給出的對價公允價值
現金的考慮的公允價值$100,399 
融資租賃權利使用資產，淨額
已識別淨資產總額
現金及現金等價物$1,376 
應收賬款1,042 
預付費用和其他流動資產4 
資產和設備，淨值4,515 
經營租賃資產淨額4,398 
收購中記錄的商譽11,958 
其他
367 
無形資產37,690 
負債承擔:
應付賬款及應計費用(1,608)
遞延收入(105)
經營租賃負債，流動負債(1,475)
非流動經營租賃負債(2,923)
融資租賃負債，流動(5,707)
金融租賃負債，非流動負債(6,251)
遞延稅款負債(1,074)
總購買價款分配42,207 
公司按假定無殘值的週期性消耗這些無形資產（有效壽命）進行攤銷。58,192 
已識別無形資產和其預計有用壽命的公允價值分配如下：$100,399 
加權平均有用壽命 商標/商號
估算公允價值
加權平均使用壽命
(年)
商標/商號$300 1
開發技術24,120 5
客戶關係13,270 5
無形資產總額$37,690 
2023年7月5日，Paperspace的資產和負債以預估公允價值計量。公允價值的預估代表管理層最佳預估並需要進行一系列關於未來事件和不確定性的複雜判斷。第三方估值專家被聘請協助管理層對這些資產和負債的估值。
12

商譽主要歸因於將Paperspace的愛文思控股技術整合到公司的平台中，這將擴展公司的產品範圍，從而實現來自新老客戶的增量營業收入，以及在更小程度上不符合獨立確認要求的無形資產，包括通過收購獲得的現有員工。 不預計其中一部分商譽可用於所得稅的抵扣。
以下表格列出了Cornerstone重組，Cornerstone收購和RP Finance合併對Rafael，Cornerstone和RP Finance的假設合併後運營結果，假設這些事件在2022年8月1日同時發生，並於2024年4月30日和2023年4月30日進行。
以下未經審計的專項信息總結了公司與Paperspace的合併結果，假設公司收購Paperspace於2022年1月1日結束，但不一定反映公司和Paperspace實際操作的合併結果，也不一定預示未來的運營結果。 未經審計的專項信息反映了直接與Paperspace收購相關的某些調整，包括額外的已取得資產攤銷以及非經常性收購和整合成本的時間安排，以及公司認爲合理的其他調整以便專項報告。如果Paperspace在2022年1月1日被收購，對截至2023年9月30日三個和九個月的營業收入都不會產生重大影響。
2023年9月30日止三個月2023年9月30日止九個月
$17,708 $(7,500)
收購額外報酬
額外報酬指的是合併後的服務的報酬，因爲支付取決於Paperspace創始人、Cloudways賣方和Snapshooter Limited創始人在每個支付日期的繼續僱用。額外報酬成本與支付給某些Paperspace創始人的費用爲$10,120，其中有5,060 在2024年7月5日賺取並支付了$5,060 在截至2024年9月30日的三個月內賺取了$
支付給Cloudways賣方的額外報酬成本爲$38,830，其中有16,851 已於2023年9月1日賺取並支付，$7,326 2024年3月1日賺得並支付了$7,326 2024年9月1日賺得並支付了$。2024年10月30日，Cloudways賣家從公司辭職。爲表彰Cloudways賣家的貢獻，公司同意在辭職日期後支付剩餘的$7,326 。
支付給SnapShooter Limited創始人的額外報酬成本爲$1,000 在2024年1月4日賺取並支付。
注意事項4：供應鏈融資計劃流動證券
以下是截至2023年12月31日的簡化綜合資產負債表中可供出售的有價證券彙總，不包括已被歸類爲現金及現金等價物的證券。公司截至2024年9月30日並不持有可供出售的有價證券，因爲這些證券在截至2024年3月31日的三個月內到期後被重新分配至現金及貨幣市場基金。
2023 年 12 月 31 日
攤銷成本未實現收益總額未實現虧損總額公允價值
美國國債$69,456 $6 $(6)$69,456 
商業票據25,088 — (12)25,076 
有價證券總額$94,544 $6 $(18)$94,532 
投資的利息收入爲$4,991 和 $5,007 ，截至2024年9月30日和2023年的三個月分別爲$15,393 和 $19,071 分別爲截至2024年和2023年9月30日的九個月的。
注意事項 5。 公允價值測量
按照循環計量的方法衡量我們的金融資產的公允價值如下:
13

2024年9月30日
一級二級總費用
現金及現金等價物：
現金$65,195 $— $65,195 
貨幣市場基金374,677 — 374,677 
現金及現金等價物總額$439,872 $— $439,872 
2023 年 12 月 31 日
I 級二級總計
現金和現金等價物：
現金$54,871 $— $54,871 
貨幣市場基金262,365 — 262,365 
現金及現金等價物總額$317,236 $— $317,236 
有價證券：
美國國債$69,456 $— $69,456 
商業票據— 25,076 25,076 
有價證券總額$69,456 $25,076 $94,532 
公司將其高度流動的貨幣市場基金和美國國庫債券分類爲公允價值層級1，因爲它們的價值是基於活躍市場中的報價市場價格進行估值的。公司將其商業票據投資分類爲層級2，因爲它們是使用除了直接或間接在市場上可觀察到的報價價格以外的輸入進行估值的，包括用於相同基礎安全性的已就緒價格來源，這些可能並未活躍交易。截至2024年9月30日和2023年12月31日，公司沒有第3級金融資產。
未被確認爲重複長期計入公平價值的金融工具
公司以公允價值報告財務工具，但不包括到期於2026年12月1日的 0% 到期日爲2026年12月1日的可轉換高級票據（「可轉換票據」）。不以公允價值計量的金融工具將定期以公允價值進行計量，以便進行季度披露。 未按公允價值記錄的財務工具的賬面價值和估計公允價值如下:
2024年9月30日2023年12月31日
賬面價值公正價值賬面價值公正價值
可轉換債券$1,483,470 $1,335,000 $1,477,798 $1,235,625 
截至2024年9月30日和2023年12月31日，可轉換票據的賬面價值已扣除未攤銷的債券發行成本$16,530 和 $22,202，分別爲。
可轉換債券的總公允價值是基於期間最後交易日的收盤價格確定的。由於交易活動有限，公司將公允價值分類爲公允價值計量層次結構中的層級2。
註記6。 資產負債表細節
14

資產和設備，淨值
財產和設備，淨額包括以下各項：
2024年9月30日2023 年 12 月 31 日
計算機和設備$764,120 $657,505 
傢俱和固定裝置1,511 1,511 
租賃權改進6,973 6,820 
內部使用的軟件92,537 84,279 
融資租賃下的設備12,297 11,938 
財產和設備，毛額$877,438 $762,053 
減去：累計折舊$(432,524)$(387,083)
減去：累計攤銷 (73,914)(69,526)
財產和設備，淨額 $371,000 $305,444 
截至2024年6月30日止三個月，固定資產的折舊費用爲$百萬和$百萬，分別。28,675 和 $22,912 ，截至2024年9月30日和2023年的三個月分別爲$79,294 和 $66,956 分別爲截至2024年和2023年9月30日的九個月的。
公司爲自用計算機軟件開發投入的成本分別爲2024年和2023年的$ ，計入「固定資產-淨額」中的自用軟件成本中。與自用軟件相關的攤銷費用爲$8,713 和 $5,070 截至2024年9月30日和2023年的九個月，分別爲，該費用已計入財產和設備淨額內的內部軟件成本。與內部軟件相關的攤銷費用爲$1,563 和 $1,991 ，截至2024年9月30日和2023年的三個月分別爲$4,490 和 $6,898 分別爲截至2024年和2023年9月30日的九個月的。
預付賬款和其他流動資產
預付費和其他流動資產包括以下內容：
2024年9月30日2023年12月31日
預付費用$18,769 $15,065 
增值稅和銷售稅應收款19,381 12,607 
其他資產5,048 1,368 
預付款和其他流動資產總計
$43,198 $29,040 
注7。債務
信貸設施
2020年2月和3月，公司與KeyBank National Association作爲行政代理簽訂並隨後修訂第二份修訂和重申信貸協議。2021年11月，公司又修訂了該信貸協議，以修改某些限制債務產生的契約，以允許下面所述的可轉換票據的發行。2022年3月，公司簽訂了第三份修訂和重申信貸協議（「信貸設施」），旨在修改下列規定：
（i）移除原有信貸設施的貸款期限組成部分，該部分已經支付清；
（ii）將循環信貸設施的最高借款限額從$150,000增加到$250,000;
(iii) 延長到期日;
(iv) 將現有的最大淨槓桿率金融契約替換爲最大優先擔保淨槓桿率金融契約;
(v) 廢除維持最低債務服務覆蓋比率的財務約定要求;
(vi) 減少應用於循環信貸額度未償餘額的利率以及循環信貸額度未使用部分的年度承諾費;
15

(vii) 將美元貸款的基準參考利率從LIBOR替換爲基於擔保隔夜融資利率加習慣性調整的前瞻性期限利率（「調整後的期限SOFR」）.
截至2024年9月30日，公司可用借款額度爲$250,000 在信貸額度內，於任何一項等額或高於$的未償轉換票據到期日之前前90天之一日之早日到期。(a)2027年3月29日；或(b)公司發行的任何未償等額或高於$的可轉換票據的到期日之前的90天。100,000.
信貸額度由公司的幾乎所有資產構成的一級抵押擔保。信貸額度包含某些財務和業務約定，包括最大優先擔保淨槓桿率金融契約(x)，在低於此水平時支付當季度利息、分期償還本金、款項或利息之間的選擇、提供財務信息等。 3.50x. 截至2024年9月30日，公司符合信貸協議下的所有契約。
美元貸款未償餘額的年利率爲(i)調整後期限SOFR加上(ii)差別費率，差別費率會根據優先擔保淨槓桿率的變動而變動。 1.25可以降低至0.75%每年2.00基於循環信貸額度的平均未用金額，年度承諾費會變動。年度承諾費率固定，不會根據借款人的信用等級變動。 0.20可以降低至0.75%每年0.30信貸額度上未使用餘額的年度承諾費（利隨本清）爲$。128 截至2024年和2023年9月30日爲止的三個月，以及$381 和 $379 分別爲截至2024年和2023年9月30日的九個月的。
因融資滯後的攤銷爲$，截至2024年6月30日的3個月和2023年的3個月。105 截至2024年9月30日和2023年的三個月，以及$315 截至2024年9月30日和2023年的九個月。
可轉換債券
2021年11月，公司發行了 $1,500,000 超額認購期權授予初始買方$，公司通過私募方式發行了合共$的可轉換票據。200,000。可轉換票據是公司的高級無擔保債務，不帶利息，可轉換票據的本金金額不累積。除非提前轉換、贖回或回購，否則可轉換票據將於2026年12月1日到期。截至2024年和2023年9月30日結束的三個月推遲融資費用攤銷爲$1,893 和 $1,883，$5,672 和 $5,643 分別爲截至2024年和2023年9月30日的九個月的。
2024年9月30日結束的三個月內，未達成任何允許持有人轉換可轉換票據的情況。
註釋8.承諾和事後約定
購買承諾
截至2024年9月30日，公司與各網絡和互聯網服務提供商有長期帶寬使用承諾，並與各供應商簽訂了採購訂單。自2023年12月31日以來，公司的採購承諾沒有發生實質性變化。
租約
截至2024年9月30日，公司負債$167,301 未折現的租賃固定支付義務估計金額，用於租用idc概念設施的共同租用空間，以及在簡明合併資產負債表中未包括的尚未開始的辦公空間，這些租賃預計將在2024年10月至2025年8月之間開始，具有加權平均租期 6年。
信用證
在與某些辦公空間運營租賃的執行相結合的情況下，信用證金額爲$2被髮行並於2023年6月30日和2024年12月31日保持未兌現狀態。信用證未作出提款。這些資金被列入簡明合併資產負債表的限制性現金中，因爲它們與長期運營租賃有關，幷包括在簡明合併現金流量表的現金、現金等價物和限制性現金的開始和結束中。信用證將在每年基礎上減少，直至2022年末，從2023年1月1日開始，目前持有的存款是租賃到期日所需的最低閾值。1,747 截至2024年9月30日和2023年12月31日，已發行流通。信用證未發生任何提款。這些資金被列入簡明合併資產負債表中的受限現金，因爲它們與長期經營租約有關，幷包括在簡明合併現金流量表中的現金、現金等價物和受限現金的期初和期末金額。信用證在每年減少，直至2022年底，並且自2023年1月1日以來，持有的存款金額爲租賃到期日所要求的最低閾值。
法律訴訟
16

2024年2月20日，公司董事會批准回購總額最高爲$5,000,000的普通股份（「2024股票回購計劃」）。根據2024股票回購計劃，公司普通股將按照市場現行價格在公開市場或市場之外的協商交易中回購。回購計劃經授權到2025財年。然而，公司並不負責購買任何特定數量的普通股，回購計劃可以在公司的任意時刻根據其自己的決定進行延長、修改、暫停或中止。
注9。股東權益
股票回購計劃
297,106股普通股根據2024股票回購計劃以$69.8的總價購回。在截至2024年6月30日的六個月中，公司回購並註銷了497,364股普通股。所有購買的股份都被註銷，並反映爲普通股的減值價值，超額部分用於股本餘額。與股票回購相關的應計成本分別於2024年6月30日和2023年12月31日爲$1和$0，並被報告爲簡明合併資產負債表中的其他流動負債。截至2024年6月30日，公司在2024股票回購計劃下尚可回購的股票價值爲$4,930,354。140,000 關於其普通股票的回購（2024股票回購計劃）。根據2024股票回購計劃，公司普通股票的回購將以市場現行價格通過公開市場交易或市場外協商交易進行。回購計劃授權至2025財年結束；然而，公司無義務購入任何特定數量的普通股票，該計劃可隨時由公司自主決定延長、修改、暫停或終止。
於2024年9月30日結束的三個月內，公司回購並註銷了 297,827 該公司擁有購買其普通股的授權,金額爲2.5億美元（「2024 股票回購計劃」）。根據該計劃，通過公開市場購買或協商交易脫離市場，以市場價回購公司普通股。11,370於2024年9月30日結束的九個月內，公司回購並註銷了 795,191 股普通股，總購買價格爲29,553與股票回購相關的應計成本分別於2024年6月30日和2013年12月31日爲$1和$0，並被報告爲簡明合併資產負債表中的其他流動負債。2,411 和 $4,885 截至2024年9月30日和2023年12月31日，作爲其他流動負債，分別在簡明綜合資產負債表中報告。截至2024年9月30日，公司在2024年股票回購計劃下仍可回購的股票價值爲美元110,447.
注10。以股票爲基礎的補償
股權激勵計劃
2021年3月，公司董事會通過並且股東批准了《2021年股權激勵計劃》。《2021年股權激勵計劃》是2013年股票計劃的繼任者和延續。《2021年股權激勵計劃》自IPO日期起生效，在2013年股票計劃下未再進行任何授予，然而，在2013年股票計劃下獲得的獎勵將繼續受其現有條款的管轄。《2021年股權激勵計劃》提供授予激勵性股票期權、非法定股票期權、股票增值權、受限制股票、受限制股票單位獎勵（「RSUs」）、業績獎勵和其他授予給員工、董事和顧問的獎勵。通過這些獎勵行使而發行的股份可由持有人轉讓。
股票期權
授予的期權最長有效期爲，自授予之日起，允許行權並且通常在期間內 $244,200，將在歸屬期內按比例確認。 授予的期權最長有效期爲，自授予之日起，允許行權並且通常在期間內歸屬。 公司使用資產和負債的會計方法來計算所得稅。根據這種方法，根據資產和負債的金融報表及稅基之間的暫時區別，使用實施稅率來決定遞延稅資產和遞延稅負債，該稅率適用於預期差異將反轉的年份。稅法的任何修改對遞延稅資產和負債的影響將於生效日期在財務報告期內確認在彙總的綜合收益報表上。. 2024年9月30日結束時的期權交易活動如下：
期權總數加權平均行權價格
（每股）		加權平均剩餘期限
(年)		總內在價值
（以千爲單位）
2024年1月1日未行使的期權3,289,019 $9.43 4.17$89,671 
行使(1,696,804)7.03 
被剝奪或取消的(32,987)16.30 
截至2024年9月30日應收款項1,559,228 $11.86 5.40$44,484 
截至2024年9月30日，已獲授而可行使1,526,692 11.72 5.3843,777 
截至2024年9月30日，已獲授及未獲授但預計將獲授的1,558,803 $11.86 5.40$44,475 
總體內在價值代表普通股公允價值與在金錢期權行權價之間的差額。截至2024年9月30日和2023年結束的九個月內，行使期權的總體內在價值爲$。47,392 和 $64,463，分別爲。
17

不 期權是在2024年9月30日結束的九個月內授予的。在2024年9月30日和2023年結束的九個月內，已授予給參與者並獲得的股票期權的估計總公允價值爲$5,201 和 $10,284，分別爲。
截至2024年9月30日，未經認可的與未獲授予的RSUs相關的補償成本爲$470 未認定的以股票爲基礎的補償淨額，扣除預計作廢的補償，與未行使的已授予股票期權有關，預計將在加權平均期間內確認 0.21年。
RSUs支付
通常應於授予後一段時間內認購公司的普通股，之後該股應該逐漸歸還。 公司使用資產和負債的會計方法來計算所得稅。根據這種方法，根據資產和負債的金融報表及稅基之間的暫時區別，使用實施稅率來決定遞延稅資產和遞延稅負債，該稅率適用於預期差異將反轉的年份。稅法的任何修改對遞延稅資產和負債的影響將於生效日期在財務報告期內確認在彙總的綜合收益報表上。. 2024年9月30日截至的九個月RSU活動情況如下:
股份加權平均授予日公允價值
(每股)
2024年1月1日的未實現餘額6,308,499 $36.07 
已行權2,983,779 37.09 
34,105(1,641,401)37.38 
被剝奪或取消的(1,889,799)36.02 
2024年9月30日的未投資餘額5,761,078 36.23 
已投資並預計在2024年9月30日完全投資4,833,171 $36.17 
截至2024年9月30日，未經認可的與未獲授予的RSUs相關的補償成本爲$161,773 未被認可的股權補償，扣除預估棄權，淨額爲區間權責期內平均加權期。 2.86年。
帶市場條件的績效型RSUs
公司已發行根據每個獎項設定的業績目標而獲得的PRSUs。截至2024年9月30日的九個月內，PRSUs的活動情況如下：
股份加權平均授予日公允價值
（每股）
2024年1月1日的未實現餘額537,715 $35.25 
已行權168,944 36.48 
34,105(96,469)51.25 
被剝奪或取消的(98,833)31.75 
按績效因素調整(305,948)31.75 
2024年9月30日的未投資餘額205,409 $35.64 
At the end of each reporting period, the Company adjusts compensation expense for the PRSUs based on its best estimate of attainment of specified performance metrics. The cumulative effect on current and prior periods of a change in the estimated number of PRSUs that are expected to be earned during the performance period is recognized as an adjustment to earnings in the period of the revision. Compensation cost in connection with the probable number of shares that will vest is recognized using the accelerated attribution method.
LTIP PRSUs
The Company grants Long Term Incentive Plan (“LTIP”) PRSUs to certain executives of the Company typically during the first half of each fiscal year. A percentage of the LTIP PRSUs becomes eligible to vest based on the Company’s financial performance level at the end of each fiscal year. The number of LTIP PRSUs received will depend on the achievement of financial metrics relative to the approved performance targets. Depending on the actual financial metrics achieved relative to the target financial metrics throughout the defined performance period of the award, the number of LTIP PRSUs that vest could range from 0% to 200% of the target amount and are subject to the Compensation Committee’s approval of the level of achievement against the approved performance targets.
18

Assuming the minimum performance level is achieved, one-third of the aggregate number of the achieved LTIP PRSUs shall vest on the later of (i) March 1 of the year after grant or (ii) two trading days following the public release of the Company’s financial results, and the remainder shall vest in 8 equal quarterly installments subject, in each case, to the individual’s continuous service through the applicable vesting date.
On March 1, 2023, the Company granted an LTIP PRSU award (the “2023 LTIP PRSU”). The financial performance level under the PRSUs was the percentage equal to the sum of the revenue growth percentage and profitability percentage, which on February 21, 2024, was determined to be achieved at 38.5% of the target amount. This resulted in a performance factor reduction of 305,948 shares from the original maximum shares achievable of 378,882, excluding forfeitures.
On April 11, 2024, the Company granted an LTIP PRSU award (the “2024 LTIP PRSU”). The financial performance level under the PRSUs can be attained based on the achievement of certain revenue and adjusted free cash flow margin targets. Under the 2024 LTIP PRSU, 75% of the award can be achieved based on the revenue targets and 25% of the award can be achieved based on the adjusted free cash flow margin targets. The target shares granted under the 2024 LTIP PRSU was 84,472. The actual number of shares that are received under the 2024 LTIP PRSU may be higher or lower than the target shares based on the actual financial metrics achieved relative to the target financial metrics for fiscal year 2024.
As of September 30, 2024, there was $2,211 of unrecognized stock-based compensation related to LTIP PRSUs that is expected to be recognized over a weighted-average period of 2.27 years.
MRSUs
On February 12, 2024, Padmanabhan Srinivasan joined the Company in the role of CEO. As part of his compensation package, Mr. Srinivasan received an MRSU with an estimated grant date fair value of approximately $8 million, which vests upon the satisfaction of certain service conditions and the achievement of certain Company stock price goals during a five-year performance period, as described below. A cumulative percentage of the MRSU target is earned based on the achievement of stock price goals, measured based on the average of the Company’s closing stock price over a consecutive 60 trading day period during the performance period as set forth in the table below:
TrancheCompany Stock Price TargetTotal Payout
1$65.00
25% of Target MRSUs
2$100.00
50% of Target MRSUs
3$135.00
100% of Target MRSUs
4$170.00
150% of Target MRSUs
The target number of achievable shares is 193,178 and the maximum number of achievable shares is 289,767. There will be no pro-rata or straight-line interpolation vesting for achievement of a stock price target between the stock price targets, except in the event of a qualifying termination.
If the stock price targets are achieved during the first three years following the grant date (the “First Performance Period”), 50% of the eligible MRSUs will vest on the third anniversary of the grant date and the remaining 50% of the eligible MRSUs will vest on the fifth anniversary of the grant date. Each tranche of MRSUs whose stock price target was not achieved during the First Performance Period that is subsequently achieved during the period between the third anniversary of the grant date and fifth anniversary of the grant date will vest on the fifth anniversary of the grant date.
The unvested balance of 3,000,000 shares related to the former CEO’s MRSU were forfeited and canceled during the first quarter of 2024. There was no unrecognized stock-based compensation related to the former CEO’s MRSU award.
As of September 30, 2024, there was $6,651 of unrecognized stock-based compensation related to the current CEO’s MRSU award that is expected to be recognized over a weighted-average period of 4.42 years.
ESPP
In March 2021, the Company’s Board of Directors adopted, and the stockholders approved, the 2021 Employee Stock Purchase Plan (“ESPP”). Eligible employees enroll in the offering period at the start of each purchase period, whereby they may purchase a number of shares at a price per share equal to 85% of the lesser of (1) the stock price at the employee’s first participation in the offering period or (2) the fair market value of the Company’s common stock on the
19

purchase date. After the end of an offering period, a new offering automatically begins on the date that immediately follows the conclusion of the preceding offering.
2023 Offering
A new offering period commenced on November 21, 2023, and consists of two purchase periods, the first of which had a purchase date of May 20, 2024 and the second will have a purchase date of November 20, 2024 (the “2023 Offering”). In connection with the purchase period that ended on May 20, 2024, there were 94,162 shares of common stock, net of shares withheld for taxes, purchased by employees at a price of $24.15.
The Company recorded stock-based compensation associated with the ESPP of $474 and $689 during the three months ended September 30, 2024 and 2023, respectively, and $1,317 and $1,909 for the nine months ended September 30, 2024 and 2023, respectively. As of September 30, 2024, $1,642 has been withheld on behalf of employees for the second purchase of the 2023 Offering.
Stock-Based Compensation
Stock-based compensation is included in the Condensed Consolidated Statements of Operations as follows:
Three Months EndedNine Months Ended
September 30,September 30,
2024202320242023
Cost of revenue$506 $497 $1,583 $1,350 
Research and development10,828 9,502 29,099 35,280 
Sales and marketing2,063 4,701 9,105 11,759 
General and administrative (1)
9,552 (17,071)27,872 13,263 
Restructuring and other charges— — — 3,937 
Total$22,949 $(2,371)$67,659 $65,589 
(1) Amount includes $31.3 million of recognized stock-based compensation related to our former CEO’s MRSUs that was estimated to be forfeited and therefore reversed for the three and nine months ended September 30, 2023.

Note 11. Net Income per Share Attributable to Common Stockholders
20

The following table presents the calculation of basic and diluted net income per share:
Three Months EndedNine Months Ended
September 30,September 30,
(In thousands, except per share amounts)2024202320242023
Basic net income per share:
Numerator:
Net income attributable to common stockholders$32,949 $19,175 $66,226 $3,470 
Denominator:
Weighted average shares used to compute net income per share92,145 87,667 91,413 90,769 
Basic net income per share attributable to common stockholders$0.36 $0.22 $0.72 $0.04 
Diluted net income per share:
Numerator:
Net income attributable to common stockholders
$32,949 $19,175 $66,226 $3,470 
Interest expense on dilutive convertible notes, net of tax1,244 1,563 5,879 — 
Net income used in diluted calculation$34,193 $20,738 $72,105 $3,470 
Denominator:
Number of shares used in basic calculation 92,145 87,667 91,413 90,769 
Weighted-average effect of dilutive securities:
Stock Options
1,165 5,892 1,552 6,424 
RSUs
805 555 1,230 466 
PRSUs
73 157 80 88 
Convertible Notes8,403 8,403 8,403 — 
Number of shares used in diluted calculation
102,591 102,674 102,678 97,747 
Diluted net income per share attributable to common stockholders
$0.33 $0.20 $0.70 $0.04 
Potentially dilutive securities that were not included in the diluted per share calculations because they would be anti-dilutive were as follows:
Three Months EndedNine Months Ended
September 30,September 30,
(In thousands)2024202320242023
Stock Options2 14 3 26 
RSUs2,519 594 2,666 1,245 
PRSUs— — — 11 
Convertible Notes— — — 8,403 
Total2,521 608 2,669 9,685 
Note 12. Income Taxes
The computation of the provision for, or benefit from, income taxes for an interim period is determined using an estimated annual effective tax rate, adjusted for discrete items, if any. Each quarter, the Company updates the estimated annual effective tax rate and records a year-to-date adjustment to the tax provision as necessary.
For the three and nine months ended September 30, 2024, the Company recorded a tax benefit of $3,308 and a tax expense of $2,479, respectively. The effective tax rate for the three and nine months ended September 30, 2024 was (11.2)% and 3.6%, respectively. The effective tax rate differs from the statutory rate primarily as a result of having a full valuation allowance in the U.S. and the mix of income in the foreign jurisdictions in which the Company conducts business, and excess tax benefits from stock-based compensation and utilization of research and development credits.
21

For the three and nine months ended September 30, 2023, the Company recorded a tax expense of $17,939 and $9,774, respectively. The effective tax rate for the three and nine months ended September 30, 2023, was 48.3% and 73.8%, respectively. The effective tax rate differs from the statutory rate primarily as a result of being able to benefit from current year losses in the U.S., despite maintaining a valuation allowance against the remaining U.S. deferred tax assets, as well as the mix of income in foreign jurisdictions.
The Organization for Economic Co-operation and Development Pillar Two guidelines published to date include transition and safe harbor rules around the implementation of the Pillar Two global minimum tax of 15%. Based on current enacted legislation effective in 2024, the Company is currently below the threshold of Pillar Two tax. The Company is monitoring developments and evaluating the impacts these new rules will have on its future income tax provision and effective income tax rate.
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be considered together with our unaudited condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and our audited consolidated financial statements and the related notes and the discussion under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2023. This discussion, particularly information with respect to our outlook, key trends and uncertainties, our plans and strategy for our business, and our performance and future success, includes forward-looking statements that involve risks and uncertainties as described under the heading “Special Note Regarding Forward-Looking Statements” in this Quarterly Report on Form 10-Q. Actual results could differ materially from those discussed below.
Overview
DigitalOcean is a leading cloud computing platform offering on-demand infrastructure and platform tools for startups and growing digital-native businesses. We were founded with the guiding principle that the transformative benefits of the cloud should be easy to leverage, broadly accessible, reliable and affordable. Our platform simplifies cloud computing, enabling our customers to rapidly accelerate innovation and increase their productivity and agility.
The lifecycle of a customer typically begins with users coming to our platform to explore a new technology or test an idea. Thousands of users come to DigitalOcean every month, paying a small amount to learn and to complete their discrete tasks. In many cases, these early users do not intend to remain on our platform beyond their initial testing. We refer to these users that spend less than or equal to $50 per month and utilize our platform for three months or less as “Testers”. Given their short time on our platform and their relatively small individual and aggregate spend, we do not consider Testers to be a meaningful part of our customer base. Once a user has remained on our platform for longer than three months, or spends greater than $50 per month, we consider them to be active and ongoing customers that have the intention to remain on our platform and to potentially scale their utilization of our products. We divide this customer population into the following three categories:
•Learners: users that both (i) spend less than or equal to $50 for the month-end period and (ii) have been on our platform for more than three months.
•Builders: users that spend greater than $50 and less than or equal to $500 for the month-end period.
•Scalers: users that spend greater than $500 for the month-end period.
As of September 30, 2024, we had approximately 638,000 Learners, Builders and Scalers using our platform to build, deploy and scale applications. We view Learners, Builders and Scalers as the most appropriate measure of our customer population, and Testers have therefore been excluded from the total customer population count.
Our users include software engineers, researchers, data scientists, system administrators, students and hobbyists. Our customers use our platform across numerous industry verticals and for a wide range of use cases, such as web and mobile applications, website hosting, e-commerce, media and gaming, personal web projects, managed services, and, most recently, artificial intelligence and machine learning (AI/ML) applications, among many others. We believe that our focus on simplicity, community, open source and customer support are the four key differentiators of our business, driving a broad range of customers around the world to build their applications on our platform.
22

We offer mission-critical solutions across Infrastructure-as-a-Service (IaaS), including our Droplet virtual machines, storage and networking offerings; Platform-as-a-Service (PaaS), including our Managed Database and Managed Kubernetes offerings; Software-as-a-Service (SaaS), including our Managed Hosting and Marketplace offerings; and AI/ML, including our Machines, Notebooks and Deployments offerings. Our cloud platform was designed with simplicity in mind to ensure that startups and growing digital-native businesses can spend less time managing their infrastructure and more time building innovative applications that drive business growth. Improving the developer experience and increasing productivity are core to our mission. In just minutes, developers can set up thousands of virtual machines, secure their projects, enable performance monitoring and scale up and down as needed.
We generate revenue from the usage of our cloud computing platform by our customers. We recognize revenue based on the customer utilization of our offerings. Our pricing is primarily consumption-based and billed monthly in arrears, making it easy for our customers to track usage on an ongoing basis and optimize their deployments.
We have a highly efficient self-service customer acquisition model, which we complement with a sales force focused on inside sales, targeted outside sales and partnership opportunities to drive revenue growth. Our model enables customers to get started on our platform very quickly and without the need for assistance. We focus heavily on enabling a self-service, low-friction model that makes it easy for users to try, adopt and use our products. For each of the three months ended September 30, 2024 and 2023, our sales and marketing expense was approximately 9% and 11% of our revenue, respectively. The efficiency of our go-to-market model and our focus on the needs of startups and growing digital-native businesses has enabled us to drive organic growth and establish a truly global customer base across a broad range of industries.
Our customers are spread across approximately 190 countries and around two-thirds of our revenue has historically come from customers located outside the United States. For the three months ended September 30, 2024, 39% of our revenue was generated from North America, 28% from Europe, 23% from Asia and 10% from the rest of the world.
Our average revenue per customer (consisting of the aggregate revenue and customer counts for our Learners, Builders and Scalers, but excluding revenue and customer counts for Testers), or ARPU, has increased from $92.06 in the three months ended September 30, 2023 to $102.51 in the three months ended September 30, 2024. We had no material customer concentration as our top 25 customers made up approximately 9% and 7% of our revenue in the three months ended September 30, 2024 and 2023, respectively. Our annual run-rate revenue, or ARR, as of September 30, 2024 was $798 million, up from $713 million as of September 30, 2023. ARR as of the end of each month represents total revenue for that month multiplied by 12.
Growing our Builders and Scalers is a critical focus for us, and we have successfully increased the number of these customers and their percentage of our total revenue. We had approximately 18,000 Scalers as of September 30, 2024, up from approximately 16,000 as of September 30, 2023. We had approximately 145,000 Builders as of September 30, 2024, up from approximately 138,000 as of September 30, 2023. Revenue from Builders and Scalers increased 7% and 19%, respectively, for the three months ended September 30, 2024 from the three months ended September 30, 2023. Revenue from Builders and Scalers as a percentage of total revenue was 88% in the three months ended September 30, 2024 and 86% in the three months ended September 30, 2023.
Key Factors Affecting Our Performance
Increasing Importance of Cloud Computing and Developers
Our future success depends in large part on the continuing adoption of cloud computing, proliferation of cloud-native start ups and businesses and the increasing importance of developers, all of which are driving the adoption of our developer cloud platform. We believe our market opportunity is large and that these factors will continue to drive our growth.
Increasing Usage by Our Existing Customers
Our existing customer base represents a significant opportunity for further sales expansion through increased usage of our platform and adoption of additional product offerings. We are highly focused on gaining a better understanding of the needs and growth plans of our existing customers. This deeper relationship with our customers will help us identify opportunities to educate our customer base on ways to utilize the platform more effectively for their individual use cases, as well as provide a feedback loop to inform our product roadmap. We are focusing our sales and support teams to prevent customer churn by ensuring that our products and services provide a high level of value. Our goal is to continue to increase our revenue from existing customers through the introduction of new products and features tailored to our customer base in addition to expanded customer outreach, focused on larger customers and specific use cases.
23

Growing Our Base of Higher Spend Customers
We believe there is a substantial opportunity to further expand our customer base to attract more businesses that can scale on our platform. We are investing in strategies that we believe will attract Builders and Scalers, including new marketing initiatives that further optimize our self-service revenue funnel to help customers expand their usage and partnership initiatives to identify potential Builders and Scalers. In addition, our Cloudways and Paperspace acquisitions added a significant number of Builders and Scalers as these offerings provide premium managed services and high value AI/ML offerings, respectively.
Investing in Our Platform and Product Offerings
We have a history of, and will continue to invest significantly in, delivering innovative products, features and functionality targeted at our core customer base. The market opportunity for our core IaaS services of compute, storage and networking continues to expand and we are making targeted investments to expand our IaaS revenue. Beyond IaaS, we continue to see large growth opportunities in the PaaS, SaaS and AI/ML markets and, accordingly, we have expanded our portfolio of products and offerings over the last few years. In addition, we may pursue both strategic partnerships and acquisitions, such as our acquisitions of Cloudways and Paperspace, that we believe will be complementary to our business, accelerate customer acquisition, increase usage of our platform and/or expand our product offerings in our core markets. Our results of operations may fluctuate as we make these investments to drive usage and take advantage of our expansive market opportunity.
Macroeconomic Conditions
Unfavorable conditions in the economy both in the United States and abroad, including conditions resulting from changes in gross domestic product growth, supply chain disruptions, inflationary pressures, interest rates, financial and credit market fluctuations, volatility in the capital markets, liquidity concerns at, and failures of, banks and other financial institutions, international trade relations, political turmoil, political instability and transitions of power in regions where we operate, natural catastrophes, outbreaks of contagious diseases, warfare and terrorist attacks on the United States, Europe or elsewhere, including military actions affecting Russia, Ukraine, the Middle East or elsewhere, could cause a decrease in business investments in information technology and negatively affect the growth of our business and our results of operations.
While our business model provides some resilience against these factors, we will continue to monitor the direct and indirect impacts of these or similar circumstances on our business and our results of operations, and will take appropriate measures, as necessary, to minimize potential risk exposure.
Key Business Metrics
We utilize the key metrics set forth below to help us evaluate our business and growth, identify trends, formulate financial projections and make strategic decisions. We are not aware of any uniform standards for calculating these key metrics, and other companies may not calculate similarly titled metrics in a consistent manner, which may hinder comparability. The table below includes the impact of our acquisitions beginning in the period in which they were acquired with respect to the metrics disclosed.
Three Months Ended September 30,
20242023
Learners(1)
474,342 478,730 
Builders(1)
145,412 137,959 
Scalers(1)
17,892 16,305 
ARPU$102.51 $92.06 
ARR (in millions)$798 $713 
Net dollar retention rate97 %96 %
______________
24

(1)Customer count
Learners, Builders & Scalers
While we believe the total number of these customers is an important indicator of the growth of our business and future revenue opportunity, the trends relating to our Builders and Scalers is of particular importance to us as these customers represent a significant majority of our revenue and revenue growth, and they are representative of the startup and growing digital-native business customers that grow on our platform and use multiple products.
ARPU
We believe that our average revenue per customer, which we refer to as ARPU, is a strong indication of our ability to land new customers with higher spending levels and expand usage of our platform by our existing customers. We calculate ARPU on a monthly basis as our total revenue from Learners, Builders and Scalers in that period divided by the total number of Learner, Builder and Scaler customers determined as of the last day of the reported period. For a quarterly or annual period, ARPU is determined as the weighted average monthly ARPU over such three or 12-month period.
ARR
Given the recurring nature of our business, we view annual run-rate revenue as an important indicator of our current progress towards meeting our revenue targets and projected growth rate going forward. We calculate ARR at a point in time by multiplying the revenue of the last month of the reported period by 12. For our ARR calculations, we include the total revenue from all customers, including Testers, Learners, Builders and Scalers.
Net Dollar Retention Rate
Our ability to maintain long-term revenue growth and achieve profitability is dependent on our ability to retain and grow revenue from our existing customers. We have a history of retaining customers for multiple years and in many cases increasing their spend with us over time. To help us measure our performance in this area, we monitor our net dollar retention rate. We calculate net dollar retention rate monthly by starting with the revenue from customers, including Testers, Learners, Builders and Scalers, for our IaaS, PaaS and SaaS offerings during the corresponding month 12 months prior, or the Prior Period Revenue. We then calculate the revenue from these same customers as of the current month, or the Current Period Revenue, including any expansion and net of any contraction or attrition from these customers over the last 12 months. The calculation also includes revenue from customers that generated revenue before, but not in, the corresponding month 12 months prior, but subsequently generated revenue in the current month and are therefore reflected in the Current Period Revenue. We include this group of re-engaged customers in this calculation because our customers frequently use our platform for projects that stop and start over time. We then divide the total Current Period Revenue by the total Prior Period Revenue to arrive at the net dollar retention rate for the relevant month. For our net dollar retention rate calculations, we include the total revenue from customers, including Testers, Learners, Builders and Scalers, for our IaaS, PaaS and SaaS offerings. For a quarterly or annual period, the net dollar retention rate is determined as the average monthly net dollar retention rates over such three or 12-month period.
Components of Results of Operations
Revenue
We offer mission-critical solutions across Infrastructure-as-a-Service (IaaS), including our Droplet virtual machines, storage and networking offerings; Platform-as-a-Service (PaaS), including our Managed Database and Managed Kubernetes offerings; Software-as-a-Service (SaaS), including our Managed Hosting and Marketplace offerings; and AI/ML, including our Machines, Notebooks and Deployments offerings. We recognize revenue based on the customer utilization of these resources. Customer contracts are primarily month-to-month and generally do not include any minimum guaranteed quantities or fees. Fees are billed monthly, and payment is typically due upon invoicing. Revenue is recognized net of allowances for credits and any taxes collected from customers, which are subsequently remitted to governmental authorities.
We may offer sales incentives in the form of promotional and referral credits and grant credits to encourage customers to use our services. These types of promotional and referral credits typically expire in two months or less if not used. For credits earned with a purchase, they are recorded as contract liabilities when earned and recognized at the earlier of redemption or expiration. The majority of credits are redeemed in the month they are earned.
25

Cost of Revenue
Cost of revenue consists primarily of fees related to operating in third-party co-location space at data center facilities, personnel expenses for those directly supporting our co-location facilities and non-personnel costs, including amortization of acquired technology, amortization of capitalized internal-use software development costs, and depreciation of our data center equipment. Third-party co-location facility costs include data center rental fees, power costs, maintenance fees, network and bandwidth. Personnel expenses include salaries, bonuses, benefits, and stock-based compensation.
We intend to continue to invest additional resources in our infrastructure to support our product portfolio and the scalability of our customer base. The level, timing and relative investment in our infrastructure could affect our cost of revenue in the future.
Operating Expenses
Research and Development Expenses
Research and development expenses consist primarily of personnel costs including salaries, bonuses, benefits and stock-based compensation. Research and development expenses also include amortization of capitalized internal-use software development costs for research and development activities, which are amortized over three years, and professional services, as well as costs related to our efforts to add new features to our existing offerings, develop new offerings, and ensure the security, performance, and reliability of our global cloud platform. We expect research and development expenses to increase in absolute dollars as we continue to invest in our platform and product offerings.
Sales and Marketing Expenses
Sales and marketing expenses consist primarily of personnel costs of our sales, marketing and customer support employees including salaries, bonuses, benefits and stock-based compensation. Sales and marketing expenses also include costs for marketing programs, commissions, advertising and professional service fees. We expect sales and marketing expenses to increase in absolute dollars as we enhance our product offerings and implement new marketing and sales strategies.
General and Administrative Expenses
General and administrative expenses consist primarily of personnel costs of our human resources, legal, finance and other administrative functions including salaries, bonuses, benefits, and stock-based compensation. General and administrative expenses also include provision for expected credit losses, software, payment processing fees, business insurance, depreciation and amortization expenses, rent and facilities costs, impairment of long-lived assets, acquisition related compensation, and other administrative costs. General and administrative expenses may increase in absolute dollars as we continue to grow our business.
Restructuring and other charges
Restructuring and other charges consist primarily of personnel costs, such as notice period, employee severance payments and termination benefits, as well as stock-based compensation related to vesting of certain equity awards. The restructuring plan was substantially completed by the end of the third quarter of 2023.
Other Income, net
Other income, net consists primarily of accretion/amortization of premium/discounts and interest income from our marketable securities, amortization of deferred financing fees on our convertible notes, loss on extinguishment of debt, and gains or losses on foreign currency exchange.
Income Tax (Expense) Benefit
Income tax (expense) benefit is attributable to the mix of income in the jurisdictions in which we conduct business. We maintain a full valuation allowance on our U.S. federal and state deferred tax assets as we have concluded that it is more likely than not that the deferred assets will not be realized. We regularly assess all available evidence, including cumulative historic losses and forecasted earnings. Given our current earnings and anticipated future earnings, we believe that there is a reasonable possibility that sufficient positive evidence may become available in a future period to reach a conclusion that the U.S. valuation allowance will no longer be needed. Release of all, or a portion of, the valuation allowance would result in the recognition of U.S. federal and state deferred tax assets and a corresponding decrease to income tax expense in the period the release is recorded.
26

Results of Operations
The following table sets forth our results of operations for the periods presented:
Three Months EndedNine Months Ended
September 30,September 30,
2024202320242023
(in thousands)
Revenue$198,484 $177,062 $575,690 $512,010 
Cost of revenue(1)
79,043 70,329 226,826 209,562 
Gross profit119,441 106,733 348,864 302,448 
Operating expenses:
Research and development(1)
37,377 32,627 105,388 109,468 
Sales and marketing(1)
17,036 19,015 57,970 53,346 
General and administrative(1)
40,422 20,064 127,034 117,861 
Restructuring and other charges(1)
— (441)— 20,862 
Total operating expenses94,835 71,265 290,392 301,537 
Income from operations24,606 35,468 58,472 911 
Other income, net5,035 1,646 10,233 12,333 
Income before income taxes29,641 37,114 68,705 13,244 
Income tax benefit (expense)3,308 (17,939)(2,479)(9,774)
Net income attributable to common stockholders$32,949 $19,175 $66,226 $3,470 
___________________
(1)    Includes stock-based compensation as follows:
Three Months EndedNine Months Ended
September 30,September 30,
2024202320242023
(in thousands)
Cost of revenue$506 $497 $1,583 $1,350 
Research and development10,828 9,502 29,099 35,280 
Sales and marketing2,063 4,701 9,105 11,759 
General and administrative(1)
9,552 (17,071)27,872 13,263 
Restructuring and other charges— — — 3,937 
Total stock-based compensation$22,949 $(2,371)$67,659 $65,589 
(1) Amount includes $31.3 million of recognized stock-based compensation related to our former CEO’s MRSUs that was estimated to be forfeited and therefore reversed for the three and nine months ended September 30, 2023.
27

The following table sets forth our results of operations as a percentage of revenue for the periods presented:
Three Months EndedNine Months Ended
September 30,September 30,
2024202320242023
Revenue100 %100 %100 %100 %
Cost of revenue40 40 39 41 
Gross profit60 60 61 59 
Operating expenses:
Research and development19 18 18 21 
Sales and marketing9 11 10 10 
General and administrative20 11 22 23 
Restructuring and other charges— — — 4 
Total operating expenses*
48 40 50 59 
Income from operations12 20 10 — 
Other income, net3 1 2 2 
Income before income taxes15 21 12 3 
Income tax benefit (expense)2 (10)— (2)
Net income attributable to common stockholders*
17 %11 %12 %1 %
*May not foot due to rounding
Comparison of the Three Months Ended September 30, 2024 and 2023
Revenue
Three Months Ended September 30,
20242023$ Change% Change
(in thousands)
Revenue$198,484 $177,062 $21,422 12 %
Revenue increased $21.4 million, or 12%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The increase was primarily driven by a 11% increase in ARPU to $102.51 from $92.06, and a 15% increase in revenue from Builders and Scalers. The increase in ARPU was primarily driven by continued adoption of our products by our customers leading to higher average usage on our platform.
Cost of Revenue
Three Months Ended September 30,
20242023$ Change% Change
(in thousands)
Cost of revenue$79,043 $70,329 $8,714 12 %
Cost of revenue increased $8.7 million, or 12%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The increase is primarily due to increases of $5.4 million in depreciation and amortization due to our continued investment in AI/ML offerings and infrastructure, $1.9 million in co-location costs and $1.1 million in third-party license fees. Gross profit remained consistent at 60% for the three months ended September 30, 2024 and 2023, primarily due to decreases in co-location costs and bandwidth expenses as a percentage of revenue as a result of our ongoing cost optimization efforts, offset entirely by our continued investment in AI/ML offerings.
28

Operating Expenses
Three Months Ended September 30,
20242023$ Change% Change
(in thousands)
Research and development$37,377 $32,627 $4,750 15 %
Sales and marketing17,036 19,015 (1,979)(10 %)
General and administrative40,422 20,064 20,358 101 %
Restructuring and other charges— (441)441 (100 %)
Total operating expenses$94,835 $71,265 $23,570 33 %
Research and development expenses increased $4.8 million, or 15%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The increase is primarily due to increases of $6.0 million in personnel costs and $0.3 million in professional services costs, partially offset by higher capitalized internal-use software development costs of $1.8 million.
Sales and marketing expenses decreased $2.0 million, or 10%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The decrease is primarily due to a $2.8 million decrease in personnel costs, largely due to the reversal of stock-based compensation from forfeited RSUs, partially offset by a $0.6 million increase in advertising expenses.
General and administrative expenses increased $20.4 million, or 101%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The increase is primarily due to a $31.3 million reversal of stock-based compensation attributed to our former CEO’s forfeited MRSUs during the three months ended September 30, 2023 and a $2.0 million increase in other operating costs, partially offset by decreases of $8.7 million in personnel costs and $4.4 million in professional service costs.
There were $0.4 million in Restructuring and other charges during the three months ended September 30, 2023 and no such charges during the three months ended September 30, 2024. These charges were primarily due to one-time severance and benefit payments, as well as stock-based compensation related to vesting of certain equity awards in connection with the restructuring we announced in February 2023, which was substantially completed by the third quarter of 2023.
Other Income, net
Three Months Ended September 30,
20242023$ Change% Change
(in thousands)
Other income, net$5,035 $1,646 $3,389 206 %
Other income, net increased $3.4 million, or 206%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023, primarily due to gains from foreign currency fluctuations from our operations.
Income Tax Benefit (Expense)
Three Months Ended September 30,
20242023$ Change% Change
(in thousands)
Income tax benefit (expense)$3,308 $(17,939)$21,247 (118 %)
Income tax benefit increased $21.2 million, or 118%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023, primarily as a result of lower pretax income for the three months ended September 30, 2024 compared to the three months ended September 30, 2023, due to higher excess tax benefit taken from stock-based compensation and utilization of research and development credits in 2024 compared to 2023.
Comparison of the Nine Months Ended September 30, 2024 and 2023
29

Revenue
Nine Months Ended September 30,
20242023$ Change% Change
(in thousands)
Revenue$575,690 $512,010 $63,680 12 %
Revenue increased $63.7 million, or 12%, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The increase in revenue was primarily driven by a 10% increase in ARPU to $99.02 from $90.43; and a 14% increase in revenue from Builders and Scalers. The increase in ARPU was primarily driven by continued adoption of our products by our customers leading to higher average usage of our platform.
Cost of Revenue
Nine Months Ended September 30,
20242023$ Change% Change
(in thousands)
Cost of revenue$226,826 $209,562 $17,264 8 %
Cost of revenue increased $17.3 million, or 8%, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The increase is primarily due to increases of $13.2 million in depreciation and amortization from acquired finance leases and acquired developed technology, as well as our continued investment in AI/ML offerings and infrastructure, $3.0 million in co-location costs, $2.2 million in third-party license fees and $2.0 million in partnership costs, partially offset by decreases of $2.3 million in bandwidth expenses and $1.0 million in ancillary equipment. Gross profit increased to 61% for the nine months ended September 30, 2024 from 59% for the nine months ended September 30, 2023, primarily due to decreases in co-location costs, ancillary equipment and bandwidth expenses as a percentage of revenue as a result of our ongoing cost optimization efforts, offset by our continued investment in AI/ML offerings.
Operating Expenses
Nine Months Ended September 30,
20242023$ Change% Change
(in thousands)
Research and development$105,388 $109,468 $(4,080)(4 %)
Sales and marketing57,970 53,346 4,624 9 %
General and administrative127,034 117,861 9,173 8 %
Restructuring and other charges— 20,862 (20,862)(100 %)
Total operating expenses$290,392 $301,537 $(11,145)(4 %)
Research and development expenses decreased $4.1 million, or 4%, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The decrease is primarily due to $4.5 million of higher capitalized internal-use software development costs and a $0.4 million decrease in personnel costs, partially offset by a $1.2 million increase in professional services costs.
Sales and marketing expenses increased $4.6 million, or 9%, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The increase is primarily due to increases of $3.7 million in advertising expenses, $1.4 million in amortization of acquired intangibles assets and $0.8 million in other operating costs, offset by a $1.3 million decrease in personnel costs largely due to the reversal of stock-based compensation from forfeited RSUs.
General and administrative expenses increased $9.2 million, or 8%, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The increase is primarily due to a $31.3 million reversal of stock-based compensation attributed to our former CEO’s forfeited MRSUs during the nine months ended September 30, 2024 , an increase of $2.0 million in other operating costs and an increase of $1.1 million in payment processing costs due to revenue growth, partially offset by decreases of $22.6 million in personnel costs and $3.4 million in professional services costs.
30

There were $20.9 million in Restructuring and other charges during the nine months ended September 30, 2023 and no such charges during the nine months ended September 30, 2024. The 2023 charges were primarily due to one-time severance and benefit payments, as well as stock-based compensation related to vesting of certain equity awards in connection with the restructuring we announced in February 2023, which was substantially completed by the third quarter of 2023.
Other Income, net
Nine Months Ended September 30,
20242023$ Change% Change
(in thousands)
Other income, net$10,233 $12,333 $(2,100)(17 %)
Other income, net decreased $2.1 million, or 17%, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, primarily due to a decrease in interest income from marketable securities as they were reallocated at maturity to cash and money market funds during the three months ended March 31, 2024, offset by gains from foreign currency fluctuations from our operations.
Income Tax Expense
Nine Months Ended September 30,
20242023$ Change% Change
(in thousands)
Income tax expense
$(2,479)$(9,774)$7,295 (75 %)
Income tax expense decreased $7.3 million, or 75%, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, primarily as a result of higher excess tax benefit from stock-based compensation and utilization of research and development credits taken in 2024.
Liquidity and Capital Resources
We have funded our operations since inception primarily with cash flow generated by operations, private offerings of our equity and debt securities, borrowings under our existing credit facility and capital expenditure financings. Cash provided from these sources is used primarily for operating expenses, such as personnel and co-location costs, and capital expenditures, including our investments in AI/ML and core product offerings. From time to time, we may also use excess cash for share repurchases and investments in marketable securities and cash equivalents.
We believe our existing cash and cash equivalents, cash flow from operations and availability under our Credit Facility (as defined below) will be sufficient to support working capital and capital expenditure requirements and our outstanding contractual commitments for at least the next 12 months and in the long term.
In February 2024, our Board of Directors approved an additional repurchase program of up to an aggregate of $140 million of our common stock through fiscal year 2025. For the nine months ended September 30, 2024, we repurchased and retired 795,191 shares of common stock for an aggregate purchase price of $29.6 million. The program will expire on December 31, 2025.
As of September 30, 2024, we had $167.3 million of estimated undiscounted fixed payment obligations for leases of co-location space at data center facilities and, to a lesser extent, office space, that have not yet commenced and were not included on the Condensed Consolidated Balance Sheets. These leases are expected to commence between October 2024 and August 2025, and have a weighted average lease term of 6 years.
As of September 30, 2024, we had $439.9 million in cash and cash equivalents. Our cash and cash equivalents primarily consist of cash and money market funds.
We may from time to time seek to retire or purchase our outstanding equity or debt, including the repurchase of our common stock or the Convertible Notes, through cash purchases and/or exchanges for equity securities, in open market purchases, privately negotiated transactions or otherwise. Such repurchases or exchanges, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions, and other factors. The amounts involved in any such transactions, individually or in the aggregate, may be material. Further, any such purchases or exchanges may result in us acquiring and retiring a substantial amount of such indebtedness, which could impact the trading liquidity of such indebtedness.
31

The following table summarizes our cash flows for the periods presented:
Nine Months Ended September 30,
(In thousands)
20242023
Net cash provided by operating activities$211,386 $154,426 
Net cash (used in) provided by investing activities(47,661)248,266 
Net cash used in financing activities(41,020)(473,336)
Increase (decrease) in cash, cash equivalents and restricted cash122,636 (70,699)
Operating Activities
Our largest source of operating cash is cash collections from sales to our customers. Our primary uses of cash from operating activities are for personnel costs, co-location costs, payment processing fees, bandwidth and connectivity, server maintenance and software licensing fees.
Net cash provided by operating activities was $211.4 million and $154.4 million for the nine months ended September 30, 2024 and 2023, respectively. The increase was primarily driven by an increase in cash collections from higher revenues. These increases were partially offset by payments for leases, acquisition related compensation and cash bonuses.
Investing Activities
Net cash used in investing activities was $47.7 million for the nine months ended September 30, 2024 compared to $248.3 million for the nine months ended September 30, 2023. The decrease in cash provided by investing activities was primarily driven by a $329.2 million reallocation of our marketable securities portfolio to cash equivalents and an increase of $65.8 million in cash payments for capital expenditures, partially offset by a $2.5 million decrease in cash activity for asset acquisitions.
Financing Activities
Net cash used in financing activities of $41.0 million and $473.3 million for the nine months ended September 30, 2024 and 2023, respectively, was primarily due to the repurchase and retirement of our common stock for $29.9 million and $475.0 million, respectively.
Contractual Obligations and Commitments
Except as disclosed in Note 8. Commitments and Contingencies in our condensed consolidated financial statements, there have been no material changes to our obligations under our operating leases and purchase commitments as compared to those disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
Critical Accounting Policies and Estimates
Our condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States. The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses, and related disclosures. On an ongoing basis, we evaluate our estimates and assumptions. Our actual results may differ from these estimates under different assumptions or conditions.
There have been no material changes to our critical accounting policies as compared to those disclosed in the Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
Recently Adopted Accounting Pronouncements
For information on recently issued accounting pronouncements, see Note 2, Summary of Significant Accounting Policies, in our Notes to condensed consolidated financial statements included in Part I, Item 1. “Financial Statements and Supplementary Data” included in this Form 10-Q.
Non‑GAAP Financial Measures
To supplement our condensed consolidated financial statements, which are prepared and presented in accordance with generally accepted accounting principles in the United States, or GAAP, we provide investors with non-GAAP financial measures including: (i) adjusted EBITDA and adjusted EBITDA margin and (ii) non-GAAP net income and non-
32

GAAP diluted net income per share. These measures are presented for supplemental informational purposes only, have limitations as analytical tools and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP. Our calculations of each of these measures may differ from the calculations of measures with the same or similar titles by other companies and therefore comparability may be limited. Because of these limitations, when evaluating our performance, you should consider each of these non-GAAP financial measures alongside other financial performance measures, including the most directly comparable financial measure calculated in accordance with GAAP and our other GAAP results. A reconciliation of each of our non-GAAP financial measures to the most directly comparable financial measure calculated in accordance with GAAP is set forth below.
Adjusted EBITDA and Adjusted EBITDA Margin
We define adjusted EBITDA as net income attributable to common stockholders, adjusted to exclude depreciation and amortization, stock-based compensation, interest expense, acquisition related compensation, acquisition and integration related costs, income tax expense, restructuring and other charges, restructuring related charges, impairment of long-lived assets, and other income, net. We define adjusted EBITDA margin as adjusted EBITDA as a percentage of revenue. We believe that adjusted EBITDA, when taken together with our GAAP financial results, provides meaningful supplemental information regarding our operating performance and facilitates internal comparisons of our historical operating performance on a more consistent basis by excluding certain items that may not be indicative of our business, results of operations or outlook. In particular, we believe that the use of adjusted EBITDA is helpful to our investors as it is a measure used by management in assessing the health of our business, evaluating our operating performance, and for internal planning and forecasting purposes.
Our calculation of adjusted EBITDA and adjusted EBITDA margin may differ from the calculations of adjusted EBITDA and adjusted EBITDA margin by other companies and therefore comparability may be limited. Because of these limitations, when evaluating our performance, you should consider adjusted EBITDA and adjusted EBITDA margin alongside other financial performance measures, including our net income attributable to common stockholders and other GAAP results.
The following table presents a reconciliation of Net income attributable to common stockholders, the most directly comparable financial measure stated in accordance with GAAP, to adjusted EBITDA for each of the periods presented:
Three Months EndedNine Months Ended
September 30,September 30,
(In thousands)2024202320242023
GAAP Net income attributable to common stockholders$32,949 $19,175 $66,226 $3,470 
Adjustments:
Depreciation and amortization35,810 30,554 100,825 87,085 
Stock-based compensation(1)
22,949 28,731 67,512 92,754 
Interest expense2,262 2,333 6,887 6,634 
Acquisition related compensation3,193 7,995 11,439 22,576 
Acquisition and integration related costs— 2,366 — 5,113 
Income tax expense(3,308)17,939 2,479 9,774 
Restructuring and other charges(1)
— (441)— 20,862 
Restructuring related charges(1)(2)
162 (29,484)4,025 (26,757)
Impairment of long-lived assets— 587 356 1,140 
Other income, net(3)
(7,297)(3,979)(17,120)(18,967)
Adjusted EBITDA$86,720 $75,776 $242,629 $203,684 
As a percentage of revenue:
Net income margin 17 %11 %12 %1 %
Adjusted EBITDA margin44 %43 %42 %40 %
___________________
33

(1)For the nine months ended September 30, 2024, non-GAAP stock-based compensation excludes $0.1 million as it is presented in Restructuring related charges. There were no reclassifications of stock-based compensation for the three months ended September 30, 2024. For the three and nine months ended September 30, 2023, non-GAAP stock-based compensation excludes $31.3 million, reversal related to the former CEO’s forfeited MRSU award that is reported in Restructuring related charges.
(2)For the three and nine months ended September 30, 2024, primarily consists of executive reorganization charges. For the three and nine months ended September 30, 2023, primarily consists of the $31.3 million reversal of stock-based compensation related to the former CEO’s forfeited MRSU award, partially offset by salary continuation charges, executive reorganization charges including severance, CEO search firm fees, and other legal and professional service costs.
(3)For the three and nine months ended September 30, 2024 and 2023, primarily consists of interest and accretion income from our cash and cash equivalents and marketable securities.
Non-GAAP Net Income and Non-GAAP Diluted Net Income Per Share
We define non-GAAP net income as net income attributable to common stockholders, excluding stock-based compensation, acquisition related compensation, amortization of acquired intangibles, acquisition and integration related costs, restructuring and other charges, restructuring related charges, impairment of long-lived assets, and other unusual or non-recurring transactions as they occur. We define non-GAAP diluted net income per share as non-GAAP net income divided by the weighted-average diluted shares outstanding, which includes the potentially dilutive effect of our stock options, RSUs, PRSUs, and Convertible Notes.
We believe non-GAAP diluted net income per share provides our management and investors consistency and comparability with our past financial performance and facilitates period-to-period comparisons of operations, as this metric generally eliminates the effects of unusual or non-recurring items from period to period for reasons unrelated to overall operating performance.
The following table presents a reconciliation of Net income attributable to common stockholders, the most directly comparable financial measure stated in accordance with GAAP, to Non-GAAP Net income for each of the periods presented:
34

Three Months EndedNine Months Ended
September 30,September 30,
(In thousands, except per share amounts)2024202320242023
GAAP Net income attributable to common stockholders$32,949 $19,175 $66,226 $3,470 
Stock-based compensation(1)
22,949 28,731 67,512 92,754 
Acquisition related compensation3,193 7,995 11,439 22,576 
Amortization of acquired intangible assets5,571 5,651 17,041 13,231 
Acquisition and integration related costs— 2,366 — 5,113 
Restructuring and other charges(1)
— (441)— 20,862 
Restructuring related charges(1)(2)
162 (29,484)4,025 (26,757)
Impairment of long-lived assets— 587 356 1,140 
Non-GAAP income tax adjustment(3)
(13,150)9,011 (24,573)(14,393)
Non-GAAP Net income$51,674 $43,591 $142,026 $117,996 
Non-cash charges related to convertible notes(4)
$1,590 $1,563 $4,764 $4,684 
Non-GAAP Net income used to compute net income per share, diluted$53,264 $45,154 $146,790 $122,680 
GAAP Net income per share attributable to common stockholders, diluted$0.33 $0.20 $0.70 $0.04 
Stock-based compensation(1)
0.22 0.27 0.66 0.87 
Acquisition related compensation0.03 0.07 0.11 0.21 
Amortization of acquired intangible assets0.05 0.05 0.16 0.12 
Acquisition and integration related costs— 0.02 — 0.05 
Restructuring and other charges(1)
— — — 0.20 
Restructuring related charges(1)(2)
— (0.28)0.03 (0.25)
Impairment of long-lived assets— — — 0.01 
Non-cash charges related to convertible notes(4)
0.02 0.02 0.04 0.04 
Non-GAAP income tax adjustment(3)
(0.13)0.09 (0.27)(0.13)
Non-GAAP Net income per share, diluted*
$0.52 $0.44 $1.43 $1.16 
GAAP Weighted-average shares used to compute net income per share, diluted102,591102,674102,67897,747
Weighted-average dilutive effect of potentially dilutive securities— — — 8,403
Non-GAAP Weighted-average shares used to compute net income per share, diluted102,591102,674102,678106,150
*May not foot due to rounding
______________
(1)For the nine months ended September 30, 2024, non-GAAP stock-based compensation excludes $0.1 million as it is presented in Restructuring related charges. There were no reclassifications of stock-based compensation for the three months ended September 30, 2024. For the three and nine months ended September 30, 2023, non-GAAP stock-based compensation excludes $31.3 million, reversal related to the former CEO’s forfeited MRSU award that is reported in Restructuring related charges.
(2)For the three and nine months ended September 30, 2024, primarily consists of executive reorganization charges. For the three and nine months ended September 30, 2023, primarily consists of the $31.3 million reversal of stock-
35

based compensation related to the former CEO’s forfeited MRSU award, partially offset by salary continuation charges, executive reorganization charges including severance, CEO search firm fees, and other legal and professional service costs.
(3)For the three and nine months ended September 30, 2024, we used a tax rate of 16%, which we believe is a reasonable estimate of our long-term effective tax rate applicable to non-GAAP pre-tax income for 2024. For the three and nine months ended September 30, 2023, we used a tax rate of 17%, which we believe was a reasonable estimate of our long-term effective tax rate applicable to non-GAAP pre-tax income for 2023.
(4)Consists of non-cash interest expense for amortization of deferred financing fees related to the Convertible Notes.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There have been no material changes in market risk from the information provided in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
We maintain “disclosure controls and procedures,” as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2024. Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer, concluded that, as of September 30, 2024, our disclosure controls and procedures were not effective due to the material weakness in our internal control over financial reporting described below.
Material Weakness in Internal Control over Financial Reporting
As previously disclosed, we identified a material weakness in our internal control over financial reporting that continued to exist as of September 30, 2024. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of a company’s annual or interim financial statements will not be prevented or detected on a timely basis. We did not design and maintain effective controls over the accounting for income taxes. Specifically, we did not have the appropriate skills and level of experience to assess complicated tax matters. Additionally, we did not properly identify, risk assess, design and maintain effective controls related to the income tax provision, including controls related to the evaluation of tax deductions and the impact on our tax provision. This material weakness resulted in immaterial errors to the income tax expense, deferred taxes, accrued tax liabilities and income tax disclosures which were adjusted in the Company's revised consolidated financial statements for the year ended December 31, 2022. The material weakness also resulted in material errors to the income tax expense, deferred taxes and accrued tax liabilities which were adjusted in the Company's restated condensed consolidated financial statements for the three months ended March 31, 2023. This material weakness could result in a misstatement of the aforementioned account balances or disclosures that would result in a material misstatement to the annual or interim financial statements that would not be prevented or detected.
Remediation Plan with Respect to Material Weakness
As of September 30, 2024, all remediation efforts planned to address the material weakness have been designed and implemented by management. The controls and procedures we have implemented are subject to ongoing testing to measure their effectiveness over a sustained period of financial reporting cycles. The remediation measures we have taken include:
a.In March 2023, we hired a VP of Tax with over 25 years of tax leadership experience.
b.In the second quarter of 2023, we supplemented our tax resources through the use of a third-party tax advisor and we continue utilizing the third-party tax advisor.
36

c.In the first and second quarters of 2024, we augmented our team with additional tax personnel who have the appropriate knowledge, training and experience to analyze, record and disclose tax accounting matters timely and accurately, and to design and maintain appropriate accounting policies, procedures and controls over income taxes, commensurate with our financial reporting requirements.
d.Since the beginning of 2024, we have trained process owners on and evaluated our newly implemented controls to address the identification, accounting, reporting and review of complex tax transactions and concluded the controls were designed effectively.
We have executed our remediation plan for the material weakness and continue to report the status of the remediation plan to the Audit Committee on a regular basis.
We have made substantial progress remediating the material weakness, and we believe our remediation plan will be sufficient to remediate the identified material weakness. However, the completion of these remediation measures requires evaluation of effectiveness of internal control over a sustained period of financial reporting prior to reaching a determination that the material weakness has been fully remediated. As we continue to validate and test our internal control over financial reporting, we may determine that additional actions to be taken for the implementation of the remediation plan are necessary or appropriate.
Changes in Internal Control Over Financial Reporting
There was no change in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the quarter ended September 30, 2024 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Inherent Limitations on Effectiveness of Controls
Our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
37

PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
From time to time, we are involved in various legal proceedings arising from the normal course of business activities. We are not presently a party to any litigation the outcome of which, if determined adversely to us, would in our estimation, have a material adverse effect on our business, operating results, cash flows or financial condition. Defending such proceedings can be costly and can impose a significant burden on management and employees. The results of any current or future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.
ITEM 1A. RISK FACTORS
Please refer to Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023 for a description of certain significant risks and uncertainties to which our business, financial condition and results of operations are subject. There have been no material changes to the risk factors discussed in our Annual Report on Form 10-K for the year ended December 31, 2023, except as set forth below.
If we fail to effectively onboard and integrate new members of our executive leadership team and senior management, our business and future growth prospects could be harmed.
Our success largely depends on our ability to effectively onboard and integrate new members of our executive leadership team and senior management. In 2024, we hired a new Chief Executive Officer, Chief Product and Technology Officer, Chief Ecosystem and Growth Officer and Chief Revenue Officer, in addition to other new members of senior management. The ability of these new members of leadership and senior management to understand our business, operations, and strategic plans will be critical to the Company and our management’s ability to make informed decisions about our strategic direction and operations. Leadership transitions can be inherently difficult to manage, particularly when there is more than one transition occurring within the leadership and senior management teams in a short period of time. Ensuring that new executives and management gain detailed knowledge of our operations may take time and resources. An inadequate onboarding process or transition may cause disruption to our business due to, among other things, diverting management’s attention away from the Company’s financial and operational goals or causing a deterioration in morale.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
(c) Issuer Purchases of Equity Securities
The following table provides information with respect to repurchases of shares of common stock by the Company during the three months ended September 30, 2024:
Period
Total Number of Shares Purchased
Average Price Paid per Share
Total Number of Shares Purchased as Part of Publicly Announced Program(1)
Approximate Dollar Value (in thousands) of Shares that May Yet Be Purchased Under the Program(1)
July 1-31, 2024— $0.00— $121,817 
August 1-31, 2024133,096 $36.60133,096 $116,946 
September 1-30, 2024164,731 $39.45164,731 $110,447 
Total297,827 $38.18297,827 
(1)On February 20, 2024, the Company’s Board of Directors approved the repurchase of up to an aggregate of $140 million of the Company’s common stock (the “2024 Share Buyback Program”). Pursuant to the 2024 Share Buyback Program, repurchases of the Company’s common stock will be made at prevailing market prices through open market purchases or in negotiated transactions off the market. The repurchase program is authorized through fiscal year 2025; however, the Company is not obligated to acquire any particular amount of common stock and the program may be extended, modified, suspended or discontinued at any time at the Company’s discretion.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
38

ITEM 5. OTHER INFORMATION
Trading Arrangements
On August 13, 2024, Bratin Saha, the Company’s Chief Product and Technology Officer, adopted a trading plan intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act (the “Saha 10b5-1 Plan”). The Saha 10b5-1 Plan contemplates the sale of up to 166,104 shares of the Company’s common stock between November 18, 2024 and June 17, 2025.
39

ITEM 6. EXHIBITS
Incorporated by Reference
Exhibit No.Exhibit DescriptionFormFile No.ExhibitFiling DateFiled Herewith
31.1X
31.2X
32.1*X
101.INSInline XBRL Instance DocumentX
101.SCHInline XBRL Taxonomy Extensions SchemaX
101.CALInline XBRL Taxonomy Extension Calculation LinkbaseX
101.DEFInline XBRL Taxonomy Extension Definition LinkbaseX
101.LABInline XBRL Taxonomy Extension Label LinkbaseX
101.PREInline XBRL Taxonomy Extension Presentation LinkbaseX
104Cover Page Interactive File (formatted as Inline XBRL and contained in Exhibit 101)X
___________________
*    Furnished herewith and not deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof, regardless of any general incorporation language in such filing.
The agreements and other documents filed as exhibits to this report are not intended to provide factual information or other disclosure other than with respect to the terms of the agreements or other documents themselves, and you should not rely on them for that purpose. In particular, any representations and warranties made by us in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual state of affairs as of the date they were made or at any other time.

40

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
DigitalOcean Holdings, Inc.
Date:November 4, 2024By:/s/ Padmanabhan Srinivasan
Padmanabhan Srinivasan
Chief Executive Officer
(Principal Executive Officer)
Date:November 4, 2024By:/s/ W. Matthew Steinfort
W. Matthew Steinfort
Chief Financial Officer
(Principal Financial Officer)
41