MeritValue

DigitalOcean Holdings, Inc.

DOCNdata completeness 100%7 fiscal years on file
The thesis, from the filings

DigitalOcean Holdings, Inc. earns about 3% on invested capital, below its ~9% cost of capital, but has diluted owners by 13% over 5 years — no moat visible in the numbers. The estimate methods put fair value between $1.91 and $43.29 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$428.6M1$576.3M2$692.9M3$780.6M3$901.4M3
Net income−$19.5M4−$27.8M5$19.4M6$84.5M6$259.3M6
Operating cash flow$133.1M7$195.2M8$234.9M9$282.7M9$309.6M9
Capital expenditure$97.1M10$106.4M11$119.3M12$178.2M12$129.1M12
Free cash flow (derived)$36M7$88.8M8$115.6M9$104.6M9$180.5M9
Total debt$2.93B13$1.47B14$1.48B15$2.97B16$2.59B16
Cash & equivalents$1.71B17$140.8M18$317.2M19$428.4M20$254.5M20
Diluted shares93.2M100.8M96.4M94.5M105.3M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
−$2.72
your share of equity
Profit it earned you last year
$24.61
Free cash flow it threw off
$17.14
Debt you’d be carrying
$246.01

10 shares is a claim on −$2.72 of net worth that earned you $24.61 and generated $17.14 of cash last year, against $246.01 of debt.

iii. Is this a good business?
Moat signal · return on invested capital
3% avg · 5y
FY21 -1%FY22 -1%FY23 3%FY24 4%FY25 9%

It earned about 3% on invested capital against a ~9% cost of capital — below the cost of funding. The numbers show no moat.

seeing a moat in the numbers →
Management signal · capital allocation
+13% shares · 5y

Share count is up 13% over 5 years — owners have been diluted. Worth asking what they got for it. Total debt has fallen 11% — deleveraging.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0

The 3 estimate methods that apply put fair value between $1.91 and $43.29 a share. They rest on different assumptions, so where they diverge is the story.

DCF · Growth Exit 10Y
$43.29
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth20.0%
  • fcfBase$115.6M
DCF · Growth Exit 5Y
$13.61
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth20.0%
  • fcfBase$115.6M
Earnings Power Value
$1.91
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$19.4M
  • growthAssumed0.0%
Graham Number
not applicable
book value / share count missing or non-positive — Graham Number undefined

Different models answer different questions — which to trust when →

v. The price question — last, on purpose
Is today’s price fair?
See live price ↗
Type a price. The ledger answers.
Or set your own belief
FCF growth, next 5 years20.0%
Discount rate (WACC)8.93%
Terminal growth2.5%
At your growth, a share is worth $13.61
The three cases
Bear0.0%−$6.5
Base20.0%$13.61
Bull20.0%$13.61

Bear/base/bull growth = 0% / filed history / history + 5pp. Type a price to see the return each case implies.

Default growth 20.0%= this company’s own filed history (median-to-median FCF CAGR, clamped 0–20%). Your adjustments are recorded anonymously. They become the “what do owners actually believe” dataset.

Sources — the receipts
  1. 10-K · period ending 2021-12-31 · accession 0001582961-24-000031 (RevenueFromContractWithCustomerExcludingAssessedTax)
  2. 10-K · period ending 2022-12-31 · accession 0001582961-25-000035 (RevenueFromContractWithCustomerExcludingAssessedTax)
  3. 10-K · period ending 2023-12-31 · accession 0001582961-26-000019 (RevenueFromContractWithCustomerExcludingAssessedTax)
  4. 10-K · period ending 2021-12-31 · accession 0001582961-24-000031 (NetIncomeLoss)
  5. 10-K · period ending 2022-12-31 · accession 0001582961-25-000035 (NetIncomeLoss)
  6. 10-K · period ending 2023-12-31 · accession 0001582961-26-000019 (NetIncomeLoss)
  7. 10-K · period ending 2021-12-31 · accession 0001582961-24-000031 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-12-31 · accession 0001582961-25-000035 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-12-31 · accession 0001582961-26-000019 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-12-31 · accession 0001582961-24-000031 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 10-K · period ending 2022-12-31 · accession 0001582961-25-000035 (PaymentsToAcquirePropertyPlantAndEquipment)
  12. 10-K · period ending 2023-12-31 · accession 0001582961-26-000019 (PaymentsToAcquirePropertyPlantAndEquipment)
  13. 10-K/A · period ending 2021-12-31 · accession 0001582961-23-000038 (LongTermDebtNoncurrent)
  14. 10-K · period ending 2022-12-31 · accession 0001582961-24-000031 (LongTermDebtNoncurrent)
  15. 10-K · period ending 2023-12-31 · accession 0001582961-25-000035 (LongTermDebtNoncurrent)
  16. 10-K · period ending 2024-12-31 · accession 0001582961-26-000019 (LongTermDebtNoncurrent)
  17. 10-K/A · period ending 2021-12-31 · accession 0001582961-23-000038 (CashAndCashEquivalentsAtCarryingValue)
  18. 10-K · period ending 2022-12-31 · accession 0001582961-24-000031 (CashAndCashEquivalentsAtCarryingValue)
  19. 10-K · period ending 2023-12-31 · accession 0001582961-25-000035 (CashAndCashEquivalentsAtCarryingValue)
  20. 10-K · period ending 2024-12-31 · accession 0001582961-26-000019 (CashAndCashEquivalentsAtCarryingValue)