Cloud computing provider DigitalOcean (NYSE: DOCN) will be reporting earnings tomorrow before the bell. Here’s what to expect.

DigitalOcean beat analysts’ revenue expectations by 0.9% last quarter, reporting revenues of $198.5 million, up 12.1% year on year. It was a satisfactory quarter for the company, with a solid beat of analysts’ EBITDA estimates but EPS guidance for next quarter missing analysts’ expectations.

Is DigitalOcean a buy or sell going into earnings? Read our full analysis here, it’s free.

This quarter, analysts are expecting DigitalOcean’s revenue to grow 10.9% year on year to $200.5 million, in line with the 11% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.34 per share.

Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. DigitalOcean has missed Wall Street’s revenue estimates three times over the last two years.

Looking at DigitalOcean’s peers in the data and analytics software segment, some have already reported their Q4 results, giving us a hint as to what we can expect. Commvault Systems delivered year-on-year revenue growth of 21.1%, beating analysts’ expectations by 6.9%, and Palantir reported revenues up 36%, topping estimates by 6.8%. Commvault Systems traded down 7.5% following the results while Palantir was up 23.7%.

Read our full analysis of Commvault Systems’s results here and Palantir’s results here.

Stocks, especially growth stocks where cash flows further in the future are more important to the story, have had a good 2024. An economic soft landing (so far), the start of the Fed's rate cutting campaign, and the election of Donald Trump were positives for the market, and while some of the data and analytics software stocks have shown solid performance, the group has generally underperformed, with share prices down 2.8% on average over the last month. DigitalOcean’s stock price was unchanged during the same time and is heading into earnings with an average analyst price target of $41.92 (compared to the current share price of $40).

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