Q2 Earnings Highs And Lows: DigitalOcean (NYSE:DOCN) Vs The Rest Of The Data Storage Stocks

Wrapping up Q2 earnings, we look at the numbers and key takeaways for the data storage stocks, including DigitalOcean (NYSE:DOCN) and its peers.

Data is the lifeblood of the internet and software in general, and the amount of data created is accelerating. As a result, the importance of storing the data in scalable and efficient formats continues to rise, especially as its diversity and associated use cases expand from analyzing simple, structured datasets to high-scale processing of unstructured data such as images, audio, and video.

The 4 data storage stocks we track reported a decent Q2. As a group, revenues beat analysts’ consensus estimates by 2.8% while next quarter’s revenue guidance was 1.7% above.

Valuation multiples for many growth stocks have not yet reverted to their early 2021 highs, but the market was optimistic at the end of 2023 due to cooling inflation. This year has been a different story as mixed inflation signals have led to market volatility. Luckily, data storage stocks have performed well with share prices up 15.2% on average since the latest earnings results.

DigitalOcean (NYSE:DOCN)

Started by brothers Ben and Moisey Uretsky, DigitalOcean (NYSE: DOCN) provides a simple, low-cost platform that allows developers and small and medium-sized businesses to host applications and data in the cloud.

DigitalOcean reported revenues of $192.5 million, up 13.3% year on year. This print exceeded analysts’ expectations by 2%. Overall, it was a strong quarter for the company with a solid beat of analysts’ ARR (annual recurring revenue) and billings estimates.

“We have delivered another strong quarter of business results and exciting product announcements. In Q2 we saw revenue growth continue to re-accelerate at 13%, with AI/ML continuing to accelerate with ARR up over 200% year-over-year, and expanded our leadership team by adding a Chief Product and Technology Officer to accelerate innovation, a Chief Ecosystem and Growth Officer to drive growth and engagement within our developer community and a Chief Revenue Officer to fortify our go-to-market functions,” said Paddy Srinivasan, CEO of DigitalOcean.

DigitalOcean delivered the weakest performance against analyst estimates and weakest full-year guidance update of the whole group. Interestingly, the stock is up 29.7% since reporting and currently trades at $37.75.

Is now the time to buy DigitalOcean? Access our full analysis of the earnings results here, it’s free.

Best Q2: Commvault Systems (NASDAQ:CVLT)

Originally formed in 1988 as part of Bell Labs, Commvault (NASDAQ: CVLT) provides enterprise software used for data backup and recovery, cloud and infrastructure management, retention, and compliance.

Commvault Systems reported revenues of $224.7 million, up 13.4% year on year, outperforming analysts’ expectations by 4.2%. It was a very strong quarter for the company with an impressive beat of analysts’ billings estimates and a solid beat of analysts’ ARR (annual recurring revenue) estimates.

Commvault Systems achieved the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 28.1% since reporting. It currently trades at $157.99.

Is now the time to buy Commvault Systems? Access our full analysis of the earnings results here, it’s free.

MongoDB (NASDAQ:MDB)

Started in 2007 by the team behind Google’s ad platform, DoubleClick, MongoDB offers database-as-a-service that helps companies store large volumes of semi-structured data.

MongoDB reported revenues of $478.1 million, up 12.8% year on year, exceeding analysts’ expectations by 3%. It was still a strong quarter for the company with an impressive beat of analysts’ billings estimates and optimistic revenue guidance for the next quarter.

MongoDB had the highest full-year guidance raise but had the slowest revenue growth in the group. The company added 52 enterprise customers paying more than $100,000 annually to reach a total of 2,189. Interestingly, the stock is up 18.4% since the results and currently trades at $291.

Read our full analysis of MongoDB’s results here.

Snowflake (NYSE:SNOW)

Founded in 2013 by three French engineers who spent decades working for Oracle, Snowflake (NYSE:SNOW) provides a data warehouse-as-a-service in the cloud that allows companies to store large amounts of data and analyze it in real time.

Snowflake reported revenues of $868.8 million, up 28.9% year on year, surpassing analysts’ expectations by 2.1%. Zooming out, it was a weaker quarter for the company with a miss of analysts’ billings estimates.

Snowflake delivered the fastest revenue growth among its peers. The company added 25 enterprise customers paying more than $1m annually to reach a total of 510. The stock is down 15.4% since reporting and currently trades at $114.28.

Read our full, actionable report on Snowflake here, it’s free.

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