Release Date: November 04, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Paddy, there was a lot of product innovation that you discussed. Can you talk about how these innovations feed into the installed base and the timing of their impact on financials, given the net dollar retention rate at 97%? A: We are seeing a lot of product innovation aimed at enabling our scalars to run larger workloads on DigitalOcean. While there's no magical answer for translating product innovation to financial impact, we are starting to see customers sign multi-year contracts and migrate from other clouds. This takes time, given our large customer base, but we are seeing positive leading indicators.
Q: Matt, the EBITDA guidance for Q4 has a wide range. What factors could lead to the lower or higher end of this range? A: The range is due to the timing of ramping R&D spend, particularly using contractors to accelerate product development. The timing of these expenses, whether they hit in Q4 or Q1, causes the range. We don't anticipate a significant change in overall expense levels, maintaining our trailing margin profile into next year.
Q: Are you seeing adoption of the GPU droplet more with builders and scalars or new customers, and how is the mix between on-demand and multi-year contracts? A: We see adoption across the board, with new customers and existing ones deploying live workloads. Contracts are more common for live workloads, while on-demand is used for experimentation. Our GenAI platform is also seeing interest from companies without deep AI/ML expertise.
Q: How should we think about the seasonality of the business and the size of the beat this quarter compared to last? A: There's no significant seasonality affecting the beat size. We focus on annual guidance, which can cause quarterly variations. We're encouraged by steady growth and improving metrics, with managed hosting and AI businesses performing well.
Q: Given the pace of change in the GPUs as a service market, what have you learned about your AI services strategy, and how do you differentiate from competitors like SageMaker or Bedrock? A: We've learned that our customers, often without deep AI expertise, look for easy-to-use platforms. Our GenAI platform stands out for its simplicity, allowing customers to quickly integrate AI into their applications. We focus on making complex processes simple and scalable, differentiating us from broader, more complex platforms.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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