DigitalOcean Holdings Inc (DOCN) 2023 Q3 法說會逐字稿

Hello, good afternoon. My name is Jeremy, and I will be your conference operator today. At this time, I would like to welcome everyone to the DigitalOcean Q3 2023 Earnings Conference Call. (Operator Instructions)

你好，下午好。我叫傑瑞米，今天我將擔任你們的會議操作員。現在，我歡迎大家參加 DigitalOcean 2023 年第三季財報電話會議。 （操作員說明）

I would now like to turn the call over to Rob Bradley, Vice President of Investor Relations.

我現在想將電話轉給投資者關係副總裁 Rob Bradley。

Thank you, Jeremy, and welcome, everyone, to DigitalOcean's Third Quarter 2023 Earnings Call. Joining me today is Yancey Spruill, our Chief Executive Officer; and Matt Steinfort, our Chief Financial Officer.

謝謝傑里米，歡迎大家參加 DigitalOcean 的 2023 年第三季財報電話會議。今天加入我的是我們的執行長 Yancey Spruill；和我們的財務長馬特斯坦福特。

Before we get started, I want to cover our safe harbor statement. During this conference call, we will be making forward-looking statements, including our financial outlook for the fourth quarter and full year as well as statements about goals and business outlook, industry trends, market opportunities and expectations for future financial performance and similar items. All of these statements are subject to risks, uncertainties and assumptions. You can review more information about these in the Risk Factors section of our filings with the SEC. We remind everyone that our actual results may differ, and we undertake no obligation to revise or update any forward-looking statements.

在我們開始之前，我想先介紹一下我們的安全港聲明。在本次電話會議中，我們將做出前瞻性陳述，包括第四季度和全年的財務展望，以及有關目標和業務前景、行業趨勢、市場機會以及對未來財務業績和類似項目的預期的陳述。所有這些陳述都受到風險、不確定性和假設的影響。您可以在我們向 SEC 提交的文件的「風險因素」部分中查看有關這些內容的更多資訊。我們提醒大家，我們的實際結果可能有所不同，我們不承擔修改或更新任何前瞻性聲明的義務。

Finally, we will be discussing non-GAAP financial measures on our call, and reconciliations between our GAAP and non-GAAP financial results can be found in our earnings press release, which was issued earlier this afternoon and in the investor presentation, which can be found on our investor website.

最後，我們將在電話會議上討論非 GAAP 財務指標，我們的 GAAP 和非 GAAP 財務業績之間的調節可以在我們今天下午早些時候發布的收益新聞稿和投資者介紹中找到。在我們的投資者網站上找到。

With that, let me turn the call over to our CEO, Yancey Spruill. Yancey?

接下來，讓我將電話轉給我們的執行長 Yancey Spruill。揚西？

Thanks, Rob. Good afternoon, and thank you all for joining us today. I'm pleased to share our solid Q3 results, representing another quarter with an attractive balance of growth and profitability.

謝謝，羅布。下午好，感謝大家今天加入我們。我很高興與大家分享我們第三季的穩健業績，這代表著又一個季度在成長和獲利能力之間實現了有吸引力的平衡。

This afternoon, I'll share an update on the search for our next CEO, some broader macro observations that have been informed by customer and partner interactions and briefly recap some of the exciting product announcements that we've made recently. I will also highlight a recent customer win that gives us enthusiasm for our product trajectory before turning the call over to Matt to go over the financial results and updated financial outlook.

今天下午，我將分享有關尋找下一任執行長的最新情況、透過客戶和合作夥伴互動獲得的一些更廣泛的宏觀觀察結果，並簡要回顧我們最近發布的一些令人興奮的產品公告。我還將重點介紹最近贏得的客戶，這讓我們對我們的產品軌跡充滿熱情，然後將電話轉給馬特，以查看財務業績和最新的財務前景。

On the CEO transition front, the search process is well underway, and the Board is making good progress in our recruitment of a new CEO. There has been very strong interest from numerous leading technology executives, and we are confident that we will hire an outstanding executive with extensive cloud infrastructure expertise.

在執行長交接方面，搜尋過程正在順利進行，董事會在招募新執行長方面也取得了良好進展。許多領先的技術主管對此表現出了濃厚的興趣，我們相信我們將聘請一位擁有豐富雲端基礎設施專業知識的傑出主管。

The Board of Directors is deeply engaged with several candidates, and we will continue to move these candidates through the interview process as the search progresses. It is still too early to communicate a specific time line for the hiring of a new CEO, but the Board is working with focus and deliberate speed to fill this critical role.

董事會正在與幾位候選人進行深入接觸，隨著搜尋的進展，我們將繼續推動這些候選人通過面試過程。現在就任命新執行長的具體時間表進行溝通還為時過早，但董事會正在集中精力、審慎的速度來填補這一關鍵角色。

Third quarter results were encouraging as the business delivered solid performance from both the top and bottom line perspective. Revenue grew 16% year-over-year to $177 million in our first quarter having lapped the Q3 2022 pricing actions. And as we indicated, we have started to see at the tail end of Q2, we continue to see positive signs through Q3 and in early Q4 that there are abating trends from the growth headwinds from our cohort, that we have seen over the past 12 to 18 months.

第三季的業績令人鼓舞，因為從營收和利潤的角度來看，該業務都取得了穩健的業績。繼 2022 年第三季的定價行動之後，我們第一季的營收年增 16%，達到 1.77 億美元。正如我們所指出的，我們在第二季末開始看到，我們在第三季和第四季初繼續看到積極的跡象，我們在過去 12 年中看到的成長逆風趨勢正在減弱至18 個月。

Our margin profile for the core DigitalOcean business was very strong for the quarter and enabled us to absorb the incremental cost from our Paperspace acquisition while remaining within our targeted range of adjusted EBITDA and free cash flow margins. The combination of a stabilizing revenue growth rate and the efficiency we have created in our core business, is allowing us to deliver robust free cash flow margins.

本季我們核心 DigitalOcean 業務的利潤率非常強勁，使我們能夠吸收收購 Paperspace 帶來的增量成本，同時保持在調整後 EBITDA 和自由現金流利潤率的目標範圍內。穩定的收入成長率和我們在核心業務中創造的效率相結合，使我們能夠提供強勁的自由現金流利潤率。

As we look to accelerate our top line growth rate, we continue to build distinct revenue growth drivers through product and infrastructure investments. A big portion of our focus over the past several months has been on our ongoing efforts to deliver on our product road map and continue to add critical capabilities that enable our customers to build and scale their own businesses.

當我們希望加快營收成長率時，我們繼續透過產品和基礎設施投資建立獨特的收入成長動力。在過去的幾個月裡，我們的很大一部分重點是持續努力實現我們的產品路線圖，並繼續增加關鍵功能，使我們的客戶能夠建立和擴展自己的業務。

Through numerous interactions with customers, prospects and partners, we continue to fine-tune and evolve how we can best serve customers as they navigate the complexities of the cloud markets. The consistent sentiment from our customers is that simplicity is foundational to our value proposition and relying on DigitalOcean to remove the complexities of the cloud is a productivity multiplier for them.

透過與客戶、潛在客戶和合作夥伴的大量互動，我們不斷調整和發展我們如何能夠在客戶應對複雜的雲端市場時為他們提供最好的服務。我們的客戶一致認為，簡單性是我們價值主張的基礎，依靠 DigitalOcean 消除雲端的複雜性對他們來說是生產力倍增器。

We are focused on enhancing our platform's performance, reliability, security and scalability, which enables us to retain and grow the spend of our customers and positions us to win new customers.

我們專注於增強平台的效能、可靠性、安全性和可擴展性，這使我們能夠保留和增加客戶的支出，並使我們能夠贏得新客戶。

Over the past several months, we have delivered an increase in velocity of product releases and announcements as we focus on meeting our customers' evolving needs. In September, we launched Managed Kafka a new fully managed database service, Managed Kafka is critical tool for businesses whose model involves significant data streaming. However, for small and medium business customers, it often comes with increased complexity.

在過去的幾個月裡，我們加快了產品發布和公告的速度，因為我們專注於滿足客戶不斷變化的需求。 9 月份，我們推出了 Managed Kafka，這是一項全新的完全託管資料庫服務，對於其模型涉及大量資料流的企業來說，Managed Kafka 是至關重要的工具。然而，對於中小型企業客戶來說，它通常會增加複雜性。

With our new fully Managed Kafka as a service offering, companies can focus on their development environment and not be slowed down by complex processes. Customers have provided strong positive feedback about Managed Kafka citing that it is allowing them to focus their time and resources on their customer-facing activities, referring to their increased productivity as a game changer.

借助我們全新的完全託管的 Kafka 即服務產品，公司可以專注於其開發環境，而不會因複雜的流程而減慢速度。客戶對託管 Kafka 提供了強烈的正面回饋，稱它使他們能夠將時間和資源集中在面向客戶的活動上，並稱其作為遊戲規則改變者提高了生產力。

In September, we also introduced premium general purpose Droplets extending the premium features of enhanced CPU, memory and storage to offer improved performance to a broader way of cloud-native applications. Our first-generation premium dedicated Droplets saw broad adoption and drove strong ARPU growth when launched in the beginning of 2021 as customers expanded their computing capabilities and migrated certain workloads to this premium compute offering. Now we've taken it one step further and expanded the opportunity for more customers to use these enhanced features with this new premium general-purpose offering.

9 月份，我們還推出了高級通用 Droplet，擴展了增強型 CPU、記憶體和儲存的高級功能，為更廣泛的雲端原生應用程式提供了改進的效能。我們的第一代高級專用 Droplet 於 2021 年初推出，隨著客戶擴展其運算能力並將某些工作負載遷移到這款高階運算產品，該產品獲得了廣泛採用並推動了 ARPU 的強勁成長。現在，我們更進一步，透過這項新的高級通用產品，為更多客戶提供了使用這些增強功能的機會。

And just a few weeks ago, we introduced scalable storage for Postgres and MySQL managed databases to help customers better utilize their cloud spend by scaling to meet their storage requirements without needing to similarly scale their compute and memory configurations. This introduction is a deliberate effort to better enable customer productivity on our platform.

就在幾週前，我們為 Postgres 和 MySQL 託管資料庫推出了可擴展存儲，透過擴展來滿足其存儲需求，從而幫助客戶更好地利用其雲端支出，而無需類似地擴展其計算和內存配置。此次推出是為了更好地提高我們平台上客戶的工作效率而做出的努力。

By introducing scalable storage, we are better serving our customers as they can monitor and optimize their utilization to get the best return on their investment.

透過引入可擴展存儲，我們可以更好地為客戶提供服務，因為他們可以監控和優化其利用率，以獲得最佳的投資回報。

On the Paperspace front, we continue to be very excited by the addition of their AI/ML capabilities and the expanded market opportunity that this business creates for DigitalOcean. While we are still only a few months into the integration process, the demand for Paperspace services has been very strong. And we continue to learn more about the market and how customers are leveraging our capabilities to develop and grow their businesses.

在 Paperspace 方面，我們仍然對他們的 AI/ML 功能的增加以及該業務為 DigitalOcean 創造的擴大的市場機會感到非常興奮。雖然我們的整合過程還只有幾個月的時間，但對 Paperspace 服務的需求非常強勁。我們繼續更多地了解市場以及客戶如何利用我們的能力來發展和發展他們的業務。

To give you a sense for one such use case, I'll provide an overview of one of the exciting customers we recently added to the Paperspace platform. Company is Nomic, which was founded in 2022 to improve the explainability and accessibility of artificial intelligence. Today, Nomic has released 2 products: an open-source AI model, GPT4ALL for all, which is the third fastest growing repository in GitHub history. And Atlas, a tool that allows users to visualize unstructured data sets used to build large language models.

為了讓您了解這樣一個用例，我將概述我們最近添加到 Paperspace 平台的令人興奮的客戶之一。該公司是 Nomic，成立於 2022 年，旨在提高人工智慧的可解釋性和可訪問性。今天，Nomic 發布了 2 個產品：一個開源 AI 模型，GPT4ALL for all，這是 GitHub 歷史上成長第三快的儲存庫。 Atlas 是一款允許使用者視覺化用於建立大型語言模型的非結構化資料集的工具。

Nomic, selected DigitalOcean excess high-performance compute, along with our intuitive software, customer support and reliability. Their co-founder was quoted as saying, "Our team loves Paperspace. It's far more intuitive than other compute providers. It allows us to spend less time managing infrastructure and more time building great products for our customers." Their testimony to DigitalOcean's combination of simplicity, reliability and support along with the current demand environment that we see excite us for the opportunity ahead.

Nomic 選擇了 DigitalOcean 超強的高效能運算，以及我們直覺的軟體、客戶支援和可靠性。他們的共同創辦人表示：「我們的團隊喜歡Paperspace。它比其他運算提供者直觀得多。它使我們能夠花更少的時間管理基礎設施，而有更多的時間為我們的客戶建立出色的產品。”他們對 DigitalOcean 的簡單性、可靠性和支援的結合以及我們所看到的當前需求環境的見證讓我們對未來的機會感到興奮。

The RFPs that we are seeing span across multiple verticals for multiple applications and demonstrate the opportunity for new customers to join our platform to not only build their AI applications but also to scale their products while utilizing the breadth of our IaaS and PaaS capabilities.

我們看到的RFP 跨越多個應用程式的多個垂直領域，並展示了新客戶加入我們平台的機會，不僅可以建立他們的AI 應用程序，還可以在利用我們廣泛的IaaS 和PaaS 功能的同時擴展他們的產品。

In summary, we're making good progress with our efforts to bring on a new CEO. And during this transition, our business is seeing stabilizing revenue trends while continuing to deliver significant free cash flow. We are seeing very encouraging signals that our top line growth rate is stabilizing relative to the last 6 quarters of deceleration.

總而言之，我們在任命新執行長方面取得了良好進展。在這轉型過程中，我們的業務收入趨勢穩定，同時繼續提供大量自由現金流。我們看到非常令人鼓舞的訊號，顯示我們的營收成長率相對於過去 6 個季度的減速正在趨於穩定。

We continue to work to reaccelerate our growth rate through targeted product and go-to-market initiatives. The improved operating leverage we have created in the business over the past year is enabling us to make strategic investments while still delivering compelling free cash flow margins. We remain excited about our near and long-term potential in the large outstanding $100 billion addressable market for SMB cloud infrastructure in which we compete.

我們繼續努力透過有針對性的產品和上市計劃來重新加快我們的成長速度。過去一年，我們在業務中創造的營運槓桿有所改善，使我們能夠進行策略性投資，同時仍提供引人注目的自由現金流利潤率。我們對我們在 1000 億美元的中小企業雲端基礎設施潛在市場中的近期和長期潛力感到興奮。

As we approach the end of the year, I'd like to thank each and every member of the DigitalOcean team for their commitment to our customers and for delivering these solid results.

隨著年底的臨近，我要感謝 DigitalOcean 團隊的每位成員對我們客戶的承諾以及交付的這些紮實成果。

With that, I'd like to turn it over to Matt to provide details on our financial outlook results and our outlook for the balance of the year.

至此，我想將其轉交給馬特，以提供有關我們的財務前景結果和今年剩餘前景的詳細資訊。

Thanks, Yancey, and welcome to all of you who are joining us on today's earnings call as we review our solid Q3 results.

謝謝 Yancey，並歡迎大家參加今天的財報電話會議，我們將回顧第三季的穩健業績。

In Q3, we continued to execute our strategy of accelerating the achievement of our long-term margin targets in the core DigitalOcean business while positioning the company for accelerated future growth through both organic and inorganic investment in our platform despite the ongoing macro headwinds. We have driven these margin improvements by achieving the savings that we had identified at the beginning of this year, which included improvements in our gross margin as we grew into capacity investments made in 2022 and the achievement of identified savings in both headcount and nonheadcount-related expenses.

在第三季度，我們繼續執行我們的策略，加速實現 DigitalOcean 核心業務的長期利潤目標，同時透過對我們平台的有機和無機投資來加速公司的未來成長，儘管宏觀阻力持續存在。我們透過實現今年年初確定的節省來推動利潤率的提高，其中包括隨著我們在 2022 年進行產能投資而實現的毛利率提高，以及在人員和非人員相關方面實現確定的節省花費。

As we have continued to execute on these savings, we have increased our overall profitability and free cash flow margin significantly. Allowing us the flexibility to make targeted investments in growth.

隨著我們繼續執行這些節約措施，我們的整體獲利能力和自由現金流利潤率顯著提高。讓我們能夠靈活地進行有針對性的成長投資。

During the first 3 quarters, we have continued to invest in organic growth by our product road map, as Yancey described. And in July, we invested inorganically in the acquisition of Paperspace, which meaningfully increases our total addressable market.

正如 Yancey 所描述的，在前三個季度，我們繼續透過產品路線圖投資於有機成長。 7 月份，我們進行了無機投資，收購了 Paperspace，這有意義地增加了我們的總目標市場。

With our strong balance sheet, our continued focus on improving operating leverage and our commitment to share repurchases, we have made material progress driving earnings per share, increasing 22% year-over-year.

憑藉強大的資產負債表、持續關注提高營運槓桿以及對股票回購的承諾，我們在推動每股收益方面取得了實質進展，年增 22%。

As we approach 2024, our strategy remains the same. We will continue to drive operating leverage while balancing investment across organic and inorganic growth opportunities and share repurchases.

隨著 2024 年的臨近，我們的策略保持不變。我們將繼續提高營運槓桿，同時平衡有機和無機成長機會的投資以及股票回購。

With that context in mind, I will review the highlights of the third quarter. Revenue in the third quarter was $177.1 million, which was an increase of 16% year-over-year and 4% quarter-over-quarter. In our first full quarter that laps the pricing increase we implemented in early Q3 2022.

考慮到這一背景，我將回顧第三季的亮點。第三季營收為1.771億美元，年增16%，季增4%。在我們第一個完整季度中，我們在 2022 年第三季初實施了價格上漲。

Contributing to this growth was Cloudways, which grew 11% quarter order and the addition of Paperspace, the AI platform we acquired in early July, which contributed $3 million to our results for Q3 and which surpassed the $1 million in monthly revenue mark in September.

Cloudways 為這一增長做出了貢獻，該季度訂單增長了11%，另外我們在7 月初收購的AI 平台Paperspace 為我們第三季度的業績貢獻了300 萬美元，並且9 月份的月收入突破了100萬美元大關。

Profitability was very strong as we delivered $75.8 million of adjusted EBITDA, a 43% margin for the second consecutive quarter. Adjusted EBITDA margin improvements are the result of improving gross margins as we grew into the incremental data center and bandwidth capacity investments that we had made in late 2022 and the ongoing benefit of the efficiency improvements that we had identified in Q1 of this year and have been realizing throughout the year.

獲利能力非常強勁，調整後 EBITDA 達到 7,580 萬美元，連續第二季利潤率為 43%。調整後 EBITDA 利潤率的提高是毛利率提高的結果，因為我們在 2022 年底進行了增量資料中心和頻寬容量投資，以及我們在今年第一季度確定的效率改進的持續效益全年實現。

Free cash flow was also a highlight in the quarter as we generated $56 million, which was 32% of revenue. This 500 basis point improvement from Q2 was a result of both lower capital expense and working capital timing. Given the working capital timing dynamic, coupled with our anticipated near-term Paperspace investments, we expect free cash flow margin in Q4 to be lower than Q3 levels. While free cash flow margins can be lumpy quarter-to-quarter, we continue to be confident in our full year free cash flow margin expectations.

自由現金流也是本季的一大亮點，我們產生了 5,600 萬美元，佔營收的 32%。較第二季提高 500 個基點是資本支出降低和營運資金安排的結果。考慮到營運資金時間動態，再加上我們預期的近期 Paperspace 投資，我們預計第四季的自由現金流利潤率將低於第三季的水平。儘管自由現金流利潤率可能會按季度波動，但我們仍然對全年自由現金流利潤率預期充滿信心。

Finally, non-GAAP earnings per share was $0.44, which is a 22% year-over-year increase as we have increased our profit margins while having simultaneously reduced our shares outstanding through our systematic share buyback program.

最後，非 GAAP 每股收益為 0.44 美元，年增 22%，因為我們提高了利潤率，同時透過系統性股票回購計畫減少了流通股。

As expected, net dollar retention declined in Q3 to the mid-90s, coming in at 96% as we lapped the price increase that was implemented in July of 2022. Fortunately, despite the difficult year-over-year comp in Q3, we did continue to see evidence of the ongoing stabilization of market demand that had started to show signs of bottoming in Q2.

正如預期的那樣，隨著我們在2022 年7 月實施的價格上漲，第三季淨美元保留率下降至90 年代中期，達到96%。幸運的是，儘管第三季同比比較困難，但我們還是做到了繼續看到市場需求持續穩定的證據，該需求已開始顯示出第二季觸底的跡象。

As it has been for most of 2022, churn remained stable at historical levels, around 11% to 12% for each of the months in Q3, which is consistent with historical churn levels in early 2022 prior to the market slowdown.

與 2022 年大部分時間一樣，客戶流失率保持穩定在歷史水平，第三季每個月的客戶流失率約為 11% 至 12%，這與 2022 年初市場放緩之前的歷史客戶流失水平一致。

Contraction, which has historically been in the 12% range in early 2022, showed improvement as we progress through the quarter, ending at 15% after starting the quarter at over 16%. We also saw positive signs and expansion in Q3, which was the final metric we said we needed to see for stabilization as it had continued to decline in Q2, albeit at a decelerating rate.

收縮率在 2022 年初一直處於 12% 的範圍內，隨著本季度的進展，收縮率有所改善，季度初收縮率超過 16%，最終收縮率達到 15%。我們在第三季也看到了積極的跡象和擴張，這是我們所說的穩定所需的最終指標，因為它在第二季繼續下降，儘管速度正在減速。

In Q3, expansion stopped declining for the first time in over a year and was fairly consistent at 23%. While we have not yet seen a meaningful improvement in NDR, we are encouraged by the relative stability of the key component metrics in Q3. We expect NDR to improve in Q4 and early 2024, driven in part by the continued strength of the Cloudways business and more favorable year-over-year comparison.

第三季度，擴張一年多來首次停止下降，並保持在 23% 的穩定水平。雖然我們尚未看到 NDR 出現有意義的改善，但第三季關鍵組成部分指標的相對穩定性令我們感到鼓舞。我們預計 NDR 將在第四季度和 2024 年初有所改善，部分原因是 Cloudways 業務的持續強勁以及更有利的同比比較。

From a customer perspective, our durable customer acquisition and graduation model remains solid despite the challenging growth environment. We graduated 4,000 builders and scalers on our platform in the quarter, and we now have more than 154,000 on the DigitalOcean platform. These customers who spend more than $50 per month with DigitalOcean continue to represent 86% of our overall revenue and remain a key focus of our product, sales and customer success investments.

從客戶的角度來看，儘管成長環境充滿挑戰，但我們持久的客戶獲取和畢業模型仍然穩固。本季度，我們的平台上有 4,000 名建構者和擴展者畢業，現在 DigitalOcean 平台上有超過 154,000 名建造者和擴展者。這些每月在 DigitalOcean 上花費超過 50 美元的客戶繼續占我們總收入的 86%，並且仍然是我們產品、銷售和客戶成功投資的重點。

Average monthly revenue per customer, or ARPU, was $92.06, which was an increase of 6% year-over-year, which, like NDR, faced a difficult year-over-year comp as we lapped the price increase from last July.

每位客戶的平均每月收入 (ARPU) 為 92.06 美元，年成長 6%，與 NDR 一樣，由於我們經歷了去年 7 月的價格上漲，因此面臨著困難的同比增長。

Before providing guidance for Q4 and for the full year 2023, it is important to understand where we are in the 2024 planning process. We are working diligently to finalize our plan and budget for 2024 with a focus on delivering double-digit growth with healthy profit and free cash flow margins.

在第四季度和 2023 年全年提供指導之前，了解我們在 2024 年規劃過程中所處的階段非常重要。我們正在努力敲定 2024 年的計畫和預算，重點是實現兩位數的成長、健康的利潤和自由現金流利潤率。

Our strategy will remain the same in 2024. We will continue to drive operating leverage in the core DigitalOcean business while investing to take advantage of the compelling market opportunity we have with Paperspace.

到 2024 年，我們的策略將保持不變。我們將繼續提高 DigitalOcean 核心業務的營運槓桿，同時投資利用 Paperspace 所擁有的引人注目的市場機會。

As we shared last quarter, despite the continued market pressures, we believe we have a solid foundation for double-digit top line growth for 2024 with our steady self-serve funnel generating around 5% growth, Cloudways generating around 3% growth and Paperspace producing at least 3% growth. Key to growing faster than this, we'll be getting NDR above 100% at some point in 2024, which we are working aggressively to accomplish.

正如我們上季度分享的那樣，儘管市場壓力持續存在，我們相信我們為2024 年兩位數的營收成長奠定了堅實的基礎，我們穩定的自助服務管道實現了5% 左右的成長，Cloudways 實現了3% 左右的成長，Paperspace 產生了至少3%的成長。要實現更快的成長，關鍵是我們將在 2024 年的某個時候將 NDR 提高到 100% 以上，我們正​​在積極努力實現這一目標。

We look forward to providing more specifics on our plan -- our next earnings call in February when we report our Q4 and full year results.

我們期待在二月的下一次財報電話會議上提供有關我們計劃的更多細節，屆時我們將報告第四季度和全年業績。

In terms of financial guidance for Q4 of 2023, we are targeting revenue to be $178 million. For the fourth quarter, we expect adjusted EBITDA margins to be in the range of 36% to 37%. And non-GAAP earnings per share to be $0.36 to $0.37 based on approximately 100 million to 101 million in weighted average fully diluted shares outstanding. For the full year, we are targeting revenue to be $690 million.

就 2023 年第四季的財務指引而言，我們的目標收入為 1.78 億美元。我們預計第四季度調整後 EBITDA 利潤率將在 36% 至 37% 之間。根據約 1 億至 1.01 億股加權平均完全稀釋已發行股票計算，非公認會計原則每股收益為 0.36 至 0.37 美元。我們的全年營收目標為 6.9 億美元。

Given the strong performance driving margin improvement in our core DigitalOcean business, we continue to project adjusted EBITDA margins to be in the range of 38% to 39% for the full year despite our increased investment in our Paperspace AI/ML business. We project non-GAAP earnings per share to be in the range of $1.52 to $1.54, with weighted average fully diluted shares outstanding for 2023 of 102 million to 103 million.

鑑於我們核心 DigitalOcean 業務的強勁業績推動了利潤率的提高，儘管我們增加了對 Paperspace AI/ML 業務的投資，但我們仍預計全年調整後 EBITDA 利潤率將在 38% 至 39% 的範圍內。我們預計非 GAAP 每股盈餘將在 1.52 至 1.54 美元之間，2023 年加權平均完全稀釋流通股為 1.02 億至 1.03 億股。

And finally, given the strong progress we have made on improving margins in our core DigitalOcean business for the full year 2023, free cash flow will be 21% to 22% of revenue, consistent with our initial February guide despite the incremental investment we are making into our Paperspace business.

最後，鑑於我們在提高2023 年全年核心DigitalOcean 業務的利潤率方面取得了巨大進展，儘管我們正在進行增量投資，但自由現金流將佔收入的21% 至22%，這與我們最初的2月份指南一致進入我們的 Paperspace 業務。

That concludes our formal remarks, and we'll now open the call up to Q&A.

我們的正式演講到此結束，現在我們將開始問答環節。

(Operator Instructions) Our first question comes from the line of Raimo Lenschow from Barclays.

（操作員說明）我們的第一個問題來自巴克萊銀行的 Raimo Lenschow。

And congrats on a great quarter, and it's nice to see the stabilization and improvement. My first question is on Paperspace. Can you kind of talk a little bit about what you're seeing in the customer base in terms of how you see the adoption there? Because like at the moment for us, AI is a lot of like big companies and copilots and stuff like that. Can you talk a little bit about like practical use cases, how like SMBs are using this? And what are you seeing there in terms of excitement about that? And then I had one follow-up on financials.

恭喜這個季度的出色表現，很高興看到穩定和進步。我的第一個問題是關於 Paperspace 的。您能談談您在客戶群中看到的情況以及您如何看待那裡的採用嗎？因為就像現在對我們來說，人工智慧很像大公司和副駕駛之類的東西。您能否談談實際用例，中小企業如何使用它？您對此感到興奮嗎？然後我對財務進行了一項跟進。

Well, the customer base, I think, Nomic, that we provide an example is a good example of -- there are diverse array of use cases, verticals, people targeting, building large language models for specific use cases. Creating tools that enable people to use AI productively. These are tech-enabled businesses, I don't know that we would call them SMBs because I think they have aspirations to grow very rapidly, supporting a broad set of use cases.

嗯，我認為 Nomic 的客戶群就是一個很好的例子——有各種各樣的用例、垂直行業、目標人群、為特定用例建立大型語言模型。創建使人們能夠有效率地使用人工智慧的工具。這些是技術支援的企業，我不知道我們會稱它們為中小企業，因為我認為它們渴望快速成長，並支援廣泛的用例。

But the good news is the value proposition that we offer and the complementary aspect of the Paperspace platform, which is built around simplicity is making it easy for people to come on to the platform. And I think that's been a distinguishing characteristic for us over the life of DigitalOcean and exciting to see that value proposition be weighted heavily as we move into the AI opportunity.

但好消息是我們提供的價值主張以及 Paperspace 平台的互補方面，該平台以簡單性為基礎，使人們可以輕鬆使用該平台。我認為這對我們來說是 DigitalOcean 整個生命週期中的一個顯著特徵，令人興奮的是，當我們進入人工智慧機會時，看到價值主張受到重視。

Okay. Perfect. And then a question -- quick question on the free cash flow. So obviously, a very strong performance this quarter. And you called out CapEx and working capital a little bit as factors there. But how do you think about that -- those 2 factors that you mentioned there in terms of like, in theory, some of that could be driven forward? Or was it just timing?

好的。完美的。然後是一個問題——關於自由現金流的快速問題。顯然，本季的表現非常強勁。您指出資本支出和營運資本是其中的一些因素。但你如何看待這一點——你提到的這兩個因素，例如理論上，其中一些因素可以被推動？或只是時間問題？

Thanks, Raimo. We are still staying with our full year guide for this year of 21% to 22%, and that's -- we will have some of the working capital catch up in the fourth quarter. It's -- looking at free cash flow margin on a quarterly basis, it's tough just because it's a lot influenced by timing of payments. So that will normalize in the fourth quarter. And then in the fourth quarter, also given some of the equipment purchases we made when we acquired Paperspace that are coming in, we expect that to hit partially in the fourth quarter as well.

謝謝，雷莫。我們仍然維持今年 21% 至 22% 的全年指導，也就是說，我們將在第四季度彌補一些營運資金。按季度查看自由現金流利潤率，這很困難，因為它在很大程度上受到付款時間的影響。因此，這將在第四季度恢復正常。然後在第四季度，考慮到我們收購 Paperspace 時購買的一些設備，我們預計這也會在第四季度部分實現。

So again, the full year guide of 21% to 22% is still the right way to be thinking about it in the -- it's great that we have the margins size we do this quarter, which is evidence, again, of the core DO business. As we said, we were going to drive free cash flow margins into the high 20s and approach 30 by the end of the year, and we've done that. And we're using that as a means of funding the growth opportunity that we have to drive more revenue in the Paperspace business and yet we're still able to come in at 21% to 22% for the year. So -- and we're really happy with the progress we've made.

因此，全年 21% 至 22% 的指導仍然是正確的思考方式——很高興我們有本季度的利潤規模，這再次證明了核心 DO商業。正如我們所說，我們計劃將自由現金流利潤率提高到 20 多歲，並在年底前接近 30，我們已經做到了。我們將其用作為成長機會提供資金的一種手段，我們必須在 Paperspace 業務中推動更多收入，但今年我們仍然能夠實現 21% 至 22% 的成長。所以——我們對所取得的進展感到非常滿意。

All right. Our next question comes from the line of Mike Cikos from Needham & Co.

好的。我們的下一個問題來自 Needham & Co. 的 Mike Cikos。

This is Matt Calitri on for Mike Cikos over at Needham. I know you hit on this a little bit, but kind of coming from a different angle. Is there anything onetime or anything, I guess, that sticks out as far as just the timing of expenses that you would call out in the reduction to the implied 4Q EBITDA guide?

我是馬特·卡利特里 (Matt Calitri)，在尼達姆 (Needham) 替補邁克·西科斯 (Mike Cikos)。我知道你有點想到這一點，但有點不同的角度。我想，是否有任何一次性或任何事情，就您在隱含的第四季度 EBITDA 指南削減中提到的費用時間而言，是突出的？

Timing of the expenses related to the EBITDA. The sequential decline in EBITDA. No, it's -- I mean this is -- again, it's -- with Paperspace being on board, that's clearly causing some -- a couple of basis point impact on the margins. It's just a different margin business given it's not at scale. And then as we invest to grow the business into next year, both the core DigitalOcean business, and the Paperspace business, it's -- there's nothing that's kind of onetime in nature.

與 EBITDA 相關的費用的時間表。 EBITDA 連續下降。不，我的意思是，Paperspace 的加入，這顯然對利潤率造成了一些基點的影響。這只是一個不同的保證金業務，因為它還沒有達到規模。然後，當我們投資將業務發展到明年時，無論是核心 DigitalOcean 業務還是 Paperspace 業務，本質上沒有什麼是一次性的。

It's again, the guide for EBITDA of what is 38% to 39% for the year is the right way to think about it. I don't get caught up in the margin kind of the quarter-over-quarter margin fluctuations. It's -- you got to think about it over a longer period.

再說一遍，今年 EBITDA 的指導值為 38% 至 39%，這是正確的思考方式。我不會陷入季度環比利潤波動的困擾。這是——你必須考慮更長的時間。

Got you. That's helpful. And then in any way, is the customer base showing any potential signs of greater caution given news on the broader macro or digital native pressures in the SMB space?

明白你了。這很有幫助。然後，無論如何，鑑於中小企業領域更廣泛的宏觀或數位原生壓力的消息，客戶群是否表現出任何潛在的更謹慎的跡象？

I think what we said is we're pleased with -- churn has been relatively stable now for several quarters as we move through the year. We saw improvement in contraction as we move through Q3 and that continues at a better level than it was 6 months ago. And we're seeing stabilizing signs and expansion. And so I think those are the biggest telltale signs for us as it relates to what our customers and new customers and existing customers are seeing that things seem to be stabilizing.

我認為我們所說的是我們感到滿意的——在今年的幾個季度裡，客戶流失率一直相對穩定。隨著第三季的到來，我們看到收縮有所改善，並且繼續保持比 6 個月前更好的水平。我們看到了穩定和擴張的跡象。因此，我認為這些對我們來說是最明顯的跡象，因為它與我們的客戶、新客戶和現有客戶所看到的情況似乎正在穩定有關。

Our next question comes from the line of Josh Baer from Morgan Stanley.

我們的下一個問題來自摩根士丹利的喬許貝爾（Josh Baer）。

Congrats on the good quarter. Was hoping you could break out some of the metrics around Paperspace, the contribution to ARR and just how to think about the contribution to the different customer cohorts?

恭喜季度表現良好。希望您能夠分解出有關 Paperspace 的一些指標、對 ARR 的貢獻以及如何考慮對不同客戶群的貢獻？

So from an ARR standpoint, the -- the -- I think we said it was 2.8 million in the quarter. It's going to be just a little over 3, we're going to end up around 6 for the year. So from an ARR standpoint, it's going to be north of 12 because that's where the quarter is ending. But from a customer account standpoint, it added about, I want to say, 12,000 customers in total to the customer base. And again, the average revenue per customer there is a lot bigger. So it's closer to -- average is 900-ish. So they tended to be added to the scalers segment and the builder segment.

因此，從 ARR 的角度來看，我認為我們說過本季為 280 萬。預計會是 3 多一點，今年我們的目標是 6 左右。因此，從 ARR 的角度來看，它將在 12 之上，因為那是季度結束的時間。但從客戶帳戶的角度來看，我想說，它總共增加了約 12,000 名客戶。再說一次，每個客戶的平均收入要高得多。所以它更接近——平均值是 900 左右。因此，它們往往被添加到縮放器部分和建構器部分。

Great. And apologies if I missed this. Just looking at CapEx as a percent of revenue is pretty low. I understand that can be lumpy and it is a priority to invest in Paperspace. But how should we think about the trajectory of that CapEx spend? And -- and is it a good leading indicator sort of for your demand and top line growth?

偉大的。如果我錯過了這一點，我深表歉意。僅考慮資本支出佔收入的百分比相當低。我知道這可能會很不穩定，因此投資 Paperspace 是首要任務。但我們該如何考慮資本支出的軌跡？而且—這對於您的需求和營收成長來說是一個很好的領先指標嗎？

No, I don't think it's a good leading indicator of the demand because it is lumpy. We were originally tracking to be about 15% for the year. What we said with Paperspaces will be closer to 17% in CapEx as percentage of revenue for the year. And some of that is just -- it's lumpy. I mean we ordered gear right out of the gate when we bought Paperspace and we increased that amount because we're seeing a lot of really good demand and just the supply chain around GPUs, it's unpredictable. And so we didn't get everything that we ordered in Q3, in Q3, and we're going to get -- start to get some of that in Q4 and then we'll start to get some more of it in early next year.

不，我認為這不是一個很好的需求先行指標，因為它是不穩定的。我們最初預計今年的成長率約為 15%。我們所說的 Paperspaces 資本支出佔今年收入的比例將接近 17%。其中一些只是——它是不穩定的。我的意思是，當我們購買 Paperspace 時，我們立即訂購了設備，並且增加了數量，因為我們看到了很多非常好的需求，而且只是圍繞 GPU 的供應鏈，這是不可預測的。所以我們沒有得到我們在第三季度訂購的所有東西，在第三季度，我們將在第四季度開始得到其中一些，然後我們將在明年初開始得到更多。 。

So it really is working capital and the timing of that CapEx purchase, but it's not -- that's why we're saying for the full year, we're still sticking to the 21% to 22% free cash flow and still the target of around 17% CapEx as a percentage of revenue for the year.

因此，這確實是營運資本和資本支出購買的時機，但事實並非如此——這就是為什麼我們說全年我們仍然堅持 21% 到 22% 的自由現金流，並且仍然是資本支出佔當年收入的比例約為17%。

Our next question comes from the line of Patrick Walravens from JMP.

我們的下一個問題來自 JMP 的 Patrick Walravens。

Great. And it's nice to see the business stabilizing. So my question is on with Paperspace, how are your GPU cloud data centers different than your traditional CPU cloud data centers that you had with DigitalOcean, and what's that GPU cloud data center footprint look like today? And where are you going to take it? Obviously, it's been a big issue in the industry lately.

偉大的。很高興看到業務穩定下來。我的問題是關於 Paperspace，你們的 GPU 雲端資料中心與 DigitalOcean 的傳統 CPU 雲端資料中心有何不同？現在的 GPU 雲端資料中心佔地面積如何？你要把它帶到哪裡？顯然，這是最近業界的一大問題。

Well, GPU servers have heat -- different heat consumption, much higher heat consumption. So the physical footprint is less dense than you might with standard compute. I think that's one of the principal differences. We're still evaluating, as Matt mentioned, in the 2024 planning process around what the level of investment pacing and that may include how to think about evolving the data center infrastructure for both companies for the combined company and incorporate the fact that it's going to be a mix of GPU and standard compute CPU going forward.

嗯，GPU 伺服器有熱量——不同的熱量消耗，更高的熱量消耗。因此，物理足跡的密度低於標準計算的密度。我認為這是主要區別之一。正如馬特所提到的，我們仍在評估 2024 年的規劃過程中投資節奏的水平，其中可能包括如何考慮為合併後的公司發展兩家公司的數據中心基礎設施，並考慮到它將未來將是GPU 和標準運算CPU 的混合體。

I don't think any decisions have been made on that. We've been fortunate some of the Paperspace data center footprints are very close in proximity, including one particular case in the same building. And we'll see how we evolve that as the demand.

我認為尚未就此做出任何決定。我們很幸運，Paperspace 資料中心的一些佔地面積非常接近，包括同一棟大樓中的一個特殊案例。我們將看到如何根據需求來發展它。

We're learning a lot. Obviously, the demand is incredibly strong. And we're seeing what our -- where we're playing in that market and how we're going to grow it and how we're going to need to add to the capacity footprint to support that growth, not just in terms of buying servers, but the physical input and are looking to make decisions on that as we get into next year.

我們學到了很多。顯然，需求非常強勁。我們正在了解我們在該市場中的地位以及我們將如何發展它以及我們將如何增加產能足跡以支持這種增長，而不僅僅是在方面購買服務器，但購買物理投入，並希望在進入明年時就此做出決定。

Our next question comes from the line of Jim Fish from Piper Sandler.

我們的下一個問題來自 Piper Sandler 的 Jim Fish。

This is Quinton on for Jim Fish. First, we've seen significant product launches in the kind of, call it, noncore compute side of DigitalOcean with storage and Managed Kafka kind of the most recent ones. Can you talk about how the team is thinking about bundling or potentially packaging those noncore compute with maybe compute and Paperspace coming on and how we kind of can adapt to some of the go-to-market motions with that?

這是昆頓為吉姆·菲什配音的節目。首先，我們看到了一些重要的產品發布，例如 DigitalOcean 的非核心運算端，帶有儲存和託管 Kafka 等最新產品。您能否談談團隊如何考慮將這些非核心計算與即將出現的計算和 Paperspace 捆綁或潛在打包，以及我們如何適應一些上市動議？

Well, we've incorporated some of the -- for combined customers, some of the feature functionality, security and other tools that make it easy and seamless across the board to use the AI and the standard products. I think bundling some of the items that I highlighted, scalable storage, the Premium Droplets reflect this concept of bundling, which we've been talking about for a year to 2 years with investors that is a real opportunity for us to -- as we learn more about customer use cases in industry verticals, the decoupling of compute from network bandwidth and storage is a key theme that we keep hearing and security and other attributes of the product set.

嗯，我們已經為聯合客戶整合了一些功能、安全性和其他工具，使人們可以輕鬆、無縫地全面使用人工智慧和標準產品。我認為將我強調的一些項目（可擴展存儲）捆綁在一起，Premium Droplet 反映了捆綁的概念，我們已經與投資者討論了一到兩年，這對我們來說是一個真正的機會——因為我們了解更多有關行業垂直領域的客戶用例的信息，計算與網路頻寬和儲存的解耦是我們不斷聽到的一個關鍵主題，以及產品集的安全性和其他屬性。

And so I think having a strong foundation now with standard and AI compute strong foundation in bandwidth and security and other capabilities in storage, it's giving us the building blocks to be able to do bundling and unbundling to better meet our customers' needs as we -- as we highlighted today with the recent launch of scalable storage. If the use case needs more storage, but doesn't need more compute, let's give them that option, and that's a more efficient growth path for customers.

因此，我認為現在擁有堅實的基礎，包括標準和人工智慧運算，在頻寬和安全性以及其他儲存功能方面的強大基礎，它為我們提供了能夠進行捆綁和分拆的構建塊，以更好地滿足客戶的需求，因為我們 - - 正如我們今天透過最近推出的可擴展儲存所強調的那樣。如果用例需要更多存儲，但不需要更多計算，讓我們為他們提供該選項，這對客戶來說是一條更有效的成長路徑。

So I think that's going to be a continuing theme. And as we get into next year, we'll have more to say about sort of more integrated product bundling as it relates to both AI and standard compute. But that's certainly the process of bundling in packaging is a pretty significant opportunity for us.

所以我認為這將是一個持續的主題。當我們進入明年時，我們將更多地討論與人工智慧和標準運算相關的更整合的產品捆綁。但毫無疑問，捆綁包裝的過程對我們來說是一個非常重要的機會。

Makes sense. And then, obviously, you talked a little bit about wanting -- in the search for a new CEO, you're wanting a leader that has the kind of core cloud experience. But as you think about kind of the skills of the background, are you looking for someone with more technical background? Or are you looking for an operational or sales kind of leader. Maybe any sort of color you can give on the fact like underlying skills would be helpful.

說得通。然後，顯然，您談到了一些想要的問題——在尋找新執行長時，您想要一位擁有核心雲端經驗的領導者。但是，當您考慮背景技能時，您是否正在尋找具有更多技術背景的人？或者您正在尋找營運或銷售類型的領導者。也許你可以對事實賦予任何色彩，例如潛在技能，都會有所幫助。

Yes. The Board is very engaged right now in finding a CEO. As we've described in the prepared remarks. It's an active process. It's a deliberate process, but it's moving with as fast as possible without sacrificing the screens needed to canvass the market. There's not a time line to announce anything and we sort of spoke to -- we're clearly looking for somebody with cloud experience, but I'm not going to speak any more to the process or to the candidate pool beyond that.

是的。董事會目前正在積極尋找執行長。正如我們在準備好的評論中所描述的那樣。這是一個主動的過程。這是一個深思熟慮的過程，但它正在盡可能快地進行，而不會犧牲市場調查所需的螢幕。沒有宣布任何事情的時間表，我們也進行了交談——我們顯然正在尋找具有雲端運算經驗的人，但除此之外，我不會再談論流程或候選人庫。

Our next question comes from the line of Kingsley Crane from Canaccord Genuity.

我們的下一個問題來自 Canaccord Genuity 的 Kingsley Crane 系列。

We noticed on Cloudways website that no longer offers infrastructure services from SMB cloud competitors like Vultr only including options for public clouds like AWS and GCP. So are you actively converting customers over DigitalOcean infrastructure? Is this primarily a new business dynamic?

我們在 Cloudways 網站上註意到，不再提供來自 Vultr 等中小企業雲端競爭對手的基礎設施服務，僅包括 AWS 和 GCP 等公有雲的選項。那麼您是否正在透過 DigitalOcean 基礎設施積極轉換客戶？這主要是一種新的業務動態嗎？

It's mostly a new business dynamic. We still have such to support customers on each of those platforms. But from a go-forward basis, we still offer the options to go multi-cloud through the hyperscalers or through our platform. But we continue to support partners that drive opportunities through some of those other providers. And clearly, we have a healthy installed base of customers that are leveraging other providers as well.

這主要是一種新的商業動態。我們仍然有這樣的支援每個平台上的客戶。但從長遠來看，我們仍然提供透過超大規模或透過我們的平台進行多雲的選擇。但我們繼續支持合作夥伴透過其他一些提供者推動機會。顯然，我們擁有健康的客戶群，他們也在利用其他提供者。

That's a change that was made earlier this year in Q2.

這是今年早些時候第二季做出的改變。

Okay. Very helpful. And the second one would be, how is the momentum behind the Hatch accelerator program? How important of the customer ramping mechanism has it become for you? And is there an opportunity to include Paperspace as part of the program?

好的。很有幫助。第二個問題是，Hatch 加速器計畫背後的動力如何？客戶成長機制對您來說有多重要？是否有機會將 Paperspace 納入該計劃？

There's certainly an opportunity to include Paperspace as part of the program and the Hatch program is something that's been a part of the company for a long time, and -- and as we look for ways to accelerate the business and drive more adoption through the self-serve funnel and it's certainly one of the areas that we continue to invest in. But it's certainly an opportunity to bring in both Cloudways and Paperspace into that kind of a program.

當然有機會將 Paperspace 作為該計劃的一部分，而 Hatch 計劃長期以來一直是公司的一部分，並且 - 當我們尋找加速業務並通過自我推動更多採用的方法時-服務漏斗，這肯定是我們繼續投資的領域之一。但這無疑是將Cloudways 和Paperspace 引入此類計劃的機會。

Our next question comes from the line of Jason Ader from William Blair.

我們的下一個問題來自威廉布萊爾的傑森阿德爾。

I just wanted to ask about the go-to-market strategy and how that...

我只是想問一下進入市場的策略以及如何...

Jason, we can't really hear you. Can you speak a little louder?

傑森，我們真的聽不到你說話。你能說大聲一點嗎？

Is that any better?

這樣好點了嗎？

Much.

很多。

Okay. Sorry. I was asking about the go-to-market strategy and just as you look out, especially over the next couple of years, how would you frame sort of where you've been, what you're doing now in terms of maybe some changes and then where you want to go just from an overall go-to-market standpoint? Because I know you've been very much sort of kind of bottom-up driven historically?

好的。對不起。我問的是進入市場的策略，正如你所看到的那樣，特別是在接下來的幾年裡，你會如何根據可能的一些變化來框架你已經在哪裡，你現在正在做什麼那麼從整體進入市場的角度來看，您想走向何方？因為我知道你在歷史上一直是一種由下而上的驅動方式？

That's a good question, Jason. The self-serve funnel has been the primary vehicle for adding new customers as you think about net new logos. Clearly, the NDR drives revenue growth from the cohort. But in terms of driving new go-to-market around acquiring new customers. It's been primarily through the self-serve funnel. And as we said, it delivers a very healthy, kind of, call it, in the $33 million to $35 million range of new revenue.

這是個好問題，傑森。當您考慮網路新商標時，自助服務漏斗一直是新增客戶的主要工具。顯然，NDR 推動了該群體的收入成長。但在圍繞獲取新客戶推動新的市場進入方面。它主要是透過自助服務管道進行的。正如我們所說，它帶來了 3300 萬至 3500 萬美元的非常健康的新收入。

We've invested over the past, call it, several years to try to expand the go-to-market channels to include more of a direct sales motion where we would target customers that are on some of the larger clouds and maybe at the smaller end of their customer base that where the improved customer service and more of direct exposure to the company and ability to talk with customer service people would be attractive, also the economic it would be a cost savings and where the simplicity is valuable to them.

過去我們已經投資了幾年，試圖擴大進入市場的管道，包括更多的直接銷售活動，我們的目標客戶是一些較大的雲端上的客戶，也許是較小的雲端上的客戶。他們的客戶群認為，改進的客戶服務、更多地直接接觸公司以及與客戶服務人員交談的能力將是有吸引力的，而且經濟上這將節省成本，並且簡單性對他們來說是有價值的。

So that's something that we've invested in. I'd say that's still very early innings. And one of the things that we've learned over the course of this year and through the slowdown or some of the product enhancements and capabilities that you would need in order to attract the customer off of one of the larger hyperscalers. And so that's clearly feeding into our product road map and the capabilities that we're working to develop right now.

所以這就是我們投資的東西。我想說這還處於早期階段。這是我們在今年過程中學到的一件事，透過經濟放緩或一些產品增強和功能，您需要這些產品增強和功能來吸引大型超大規模企業之一的客戶。因此，這顯然融入了我們的產品路線圖和我們目前正在努力開發的功能。

There's also the opportunity to expand the partner channel. We have a lot of partners on our platform today, in web agencies and developers building websites for other the companies. But historically, we've treated them very much just like a customer. So they come on and they have their own requirements and we meet those requirements, but we didn't treat them really differently as a partner, and we're investing to expand the capability there because that's a great source of potentially us reaching parts of the market. We might not otherwise reach, you wouldn't self identify and come to our platform.

還有擴大合作夥伴管道的機會。今天，我們的平台上有很多合作夥伴，包括網路代理商和為其他公司建立網站的開發人員。但從歷史上看，我們一直像對待客戶一樣對待他們。因此，他們來了，他們有自己的要求，我們滿足了這些要求，但我們並沒有真正區別對待他們作為合作夥伴，我們正在投資擴大那裡的能力，因為這是我們潛在達到部分目標的重要來源。市場。否則我們可能無法到達，您也不會自我識別並來到我們的平台。

So we're -- we think as you think about it over the next several years, that the ratio of new sales to self-serve should be -- it would be great to get it to be 50-50. But we've got a bit of ways to go to get there. We're still very nascent, I'd say, in the channels outside of the self-serve motion that's been the foundation of the company's growth.

因此，我們認為，正如您在未來幾年中所思考的那樣，新銷售額與自助服務的比率應該是——如果您能達到 50-50，那就太好了。但我們還有很長的路要走。我想說，在自助服務以外的管道方面，我們仍處於起步階段，而自助服務是公司發展的基礎。

Great. Just one quick follow-up on that. It would be helpful, I think, for investors as you go forward just to provide some proof points on some of those newer channels and maybe anecdotes of customers that you've taken away from the hyperscalers, et cetera, just because I think that would be helpful for everyone to kind of just understand how that motion is working.

偉大的。只是對此進行快速跟進。我認為，對於投資者來說，當你繼續前進時，提供一些關於一些較新管道的證據，也許還有你從超大規模提供者那裡奪走的客戶軼事等等，這將是有幫助的，只是因為我認為這將有助於每個人了解該動議是如何運作的。

Great. It's a good suggestion, Jason. Thank you.

偉大的。這是個好建議，傑森。謝謝。

Our next question comes from the line of Jaiden Patel from JPMorgan.

我們的下一個問題來自摩根大通的 Jaiden Patel。

I'm on for Pinjalim Bora. Any early feedback on the managed cost of service so maybe some of the use cases there. And do you think it could be a tailwind to growth next year?

我參加的是 Pinjalim Bora。關於服務管理成本的任何早期回饋，也許是其中的一些用例。您認為這可能成為明年成長的動力嗎？

Well, as I mentioned, the feedback has been very good, very positive. We have lots of businesses on the platform that are big data streaming, whether it's e-commerce or gaming or other businesses where there's a lot of data and a lot of data streaming, which is the use case or a principal use case that's highly aligned and very productive or more productive on Kafka than other services. So it's a natural fit for our customer base.

嗯，正如我所提到的，回饋非常好、非常積極。我們平台上有很多業務都是大數據流，無論是電子商務還是遊戲或其他有大量資料和大量資料流的業務，這是高度一致的用例或主要用例與其他服務相比，Kafka 的生產力非常高或更高。因此，它非常適合我們的客戶群。

And the feedback has been great because, again, others have Kafka, but it's not built with simplicity as we cited in the in the script, the feedback has been very positive as it's a productivity enabler for our customers because they don't have to spend as much time managing Kafka, which other solutions are more complex and that's giving them more productivity to focus on their customer-facing activity.

反饋很好，因為其他人也有 Kafka，但它的構建並不像我們在腳本中引用的那樣簡單，反饋非常積極，因為它為我們的客戶提高了生產力，因為他們不必花同樣多的時間來管理Kafka ，其他解決方案更複雜，這使他們能夠提高生產力，專注於面向客戶的活動。

So we absolutely -- it won't be material or significant this quarter as the adoption ramps was launched late last quarter or just recently, but we will see that becoming a more meaningful contributor as we move through 2024.

因此，我們絕對不會在本季度產生重大影響，因為採用率在上個季度末或最近才啟動，但隨著 2024 年的到來，我們將看到它成為更有意義的貢獻者。

Okay. And then on Paperspace, it seems like it's doing well. Are you still baking in less than $5 million in contribution for Paperspace for the second half of this year?

好的。然後在 Paperspace 上，似乎表現不錯。今年下半年您還在為 Paperspace 捐款不到 500 萬美元嗎？

I think what we've said is it's -- I mean, we disclosed the actual revenue in the -- for the third quarter. And we said that the run rate is 1 million in September. So just extrapolate that, it puts us about 6.

我認為我們所說的是——我的意思是，我們披露了——第三季的實際收入。我們說9月的運作率為100萬。因此，只要推斷一下，大約就是 6。

Our next question comes from the line of Wamsi Mohan from Bank of America.

我們的下一個問題來自美國銀行的瓦姆西·莫漢 (Wamsi Mohan)。

This is (inaudible). We said taking the question on behalf of Wamsi. I was wondering if you could talk more about the underlying drivers in terms of the mix, in terms of the ARPU growth, especially for the upsell and the attach? And how are you thinking about like the trajectory for the ARPU growth?

這是（聽不清楚）。我們說代表瓦姆西回答這個問題。我想知道您是否可以更多地談論混合方面、ARPU 成長方面的潛在驅動因素，特別是追加銷售和附加？您如何看待 ARPU 成長的軌跡？

So the ARPU growth, again, year-over-year, we said was 6%, which was low relative to historical based on the difficult comp on a price changes. But if you look at the products that we announced during this year, you talked to a number of them, but we had launched a number of them earlier this year, and we have a road map that is designed to kind of appeal to the larger set of our customers, products and capabilities like integrated -- sorry, identity and access management IM or role-based access control virtual private clouds, certain capabilities that really resonate with some of the customers that have gotten to more scale on our platform. That's really where the focus is in our development in the near term.

因此，我們所說的 ARPU 同比成長率為 6%，基於價格變化的困難比較，該成長率相對於歷史水準較低。但是，如果你看看我們今年宣布的產品，你會與其中的一些產品進行交談，但我們在今年早些時候推出了其中一些產品，並且我們有一個路線圖，旨在吸引更大的客戶我們的客戶、產品和功能集，例如整合的身份和存取管理IM 或基於角色的存取控制虛擬私有雲，某些功能確實與一些在我們的平台上規模更大的客戶產生了共鳴。這確實是我們近期發展的重點。

That enables us not only to continue to kind of take a big share of our own customers' workloads as they grow, so they don't have to move off to the cloud -- other cloud providers. it also enables us, as I mentioned earlier, to accelerate the direct sales. If you're trying to poach customers, longer customers of the larger providers, these are some of the same capabilities you need. So that's really where the focus is on driving ARPU is on being able to provide the capabilities that enable our customers to continue to scale on our platform as we better meet and deliver on their requirements.

這使我們不僅能夠在客戶的成長過程中繼續分擔他們的大部分工作負載，這樣他們就不必轉移到雲端——其他雲端提供者。正如我之前提到的，它還使我們能夠加速直接銷售。如果你想挖客戶，大型供應商的長期客戶，這些都是你需要的一些相同的功能。因此，推動 ARPU 的真正重點在於能夠提供使我們的客戶能夠在我們的平台上繼續擴展的功能，同時我們更好地滿足和滿足他們的需求。

If I could follow up, could you guys talk more about like what's the health of the SMB customer at the moment? And if there's any improvement in the usage trend?

如果我可以跟進，你們能多談談中小企業客戶目前的健康狀況嗎？使用趨勢是否有改善？

Yes. We talked about this earlier. If you look at it from a macro standpoint, you think of what's been going on in the market, our customers have not been growing as fast their own businesses as they were historically. And we see that through the expansion that they get with us. A year ago, we were seeing expansion from our customers that were growing in the high 30s. And we've seen that be declining month-over-month for well over a year down into the 22%, 23% range, but that's stabilized. And so our customers -- the decline in their growth appears to be stabilizing in a similar vein because we're seeing that stabilization expansion.

是的。我們之前談過這個。如果你從宏觀的角度來看，你會想到市場上正在發生的事情，我們的客戶並沒有像歷史上那樣快速發展自己的業務。我們透過他們與我們一起實現的擴張看到了這一點。一年前，我們看到 30 多歲的客戶不斷成長。我們看到這一數字在一年多的時間裡逐月下降，跌至 22%、23% 的範圍內，但目前已經穩定。因此，我們的客戶——他們的成長下降似乎正在以類似的方式穩定下來，因為我們看到了穩定的擴張。

What we also saw with the customer base over the beginning of this year was that they were optimizing their spend and that they were reducing the amount that they were investing in software, and that causes contraction. And while the contraction is still elevated relative to historical, it's around 15% right now. Historically, it was pretty consistently around 12%. That has been stable for the past 2 quarters and actually has started to improve.

今年年初，我們也從客戶群中看到，他們正在優化支出，並減少了軟體投資金額，這導致了收縮。雖然收縮率相對於歷史水準仍然較高，但目前約為 15%。從歷史上看，這一比例一直穩定在 12% 左右。過去兩個季度這一情況一直穩定，並且實際上已經開始改善。

So we think that just like we saw the downturn perhaps earlier than others because of the usage-based nature of our platform we don't have renewal cycles and when a customer needs to spend less with us, they just spend less. And so we saw the impact early and we'll likely see the return early because of the nature of the business model.

因此，我們認為，就像我們可能比其他人更早看到經濟衰退一樣，因為我們平台的基於使用的性質，我們沒有更新周期，當客戶需要在我們這裡花更少的錢時，他們就會花更少的錢。因此，我們很早就看到了影響，而且由於商業模式的性質，我們可能會很早就看到回報。

Congrats on the quarter.

恭喜本季。

And our final question comes from the line of Michael Turits from KeyBanc.

我們的最後一個問題來自 KeyBanc 的 Michael Turits。

This is Billy on for Michael. Just a quick follow-up to that last question. Good to see some of the leading metrics kind of stabilizing in the business. Anything you'd call out that was notable in different verticals or customer segments?

這是邁克爾的比利。只是對最後一個問題的快速跟進。很高興看到一些領先指標在業務中趨於穩定。您認為在不同垂直行業或客戶群中值得注意的是什麼？

No. Actually, that's something that we spent a lot of time assessing and the nice thing, one of the nice things about DigitalOcean customer base is it's so diverse. 70% of the revenue comes from outside the U.S. There's no single vertical, there's no single use case, there's no single region that drives a disproportionate amount of our business. We really track kind of broad SMB and startup and developer trends. And so the recovery and the stabilization has been has been pretty consistent across all of them. We don't see kind of laggards and we don't see any that have kind of raced ahead. It's again -- part of the appeal is it's a very, very diverse distributed customer base.

不。實際上，我們花了很多時間評估這一點，而 DigitalOcean 客戶群的好處之一就是它非常多樣化。 70% 的收入來自美國以外的地區。沒有單一的垂直領域、沒有單一的用例、沒有單一的地區推動我們的業務量不成比例。我們確實追蹤廣泛的中小企業、新創企業和開發人員的趨勢。因此，所有這些國家的復甦和穩定都是相當一致的。我們沒有看到落後者，也沒有看到任何領先者。這又是——部分吸引力在於它是一個非常非常多樣化的分散式客戶群。

Thank you all for joining us. We're excited to report on a very solid quarter with a lot of encouraging trends, and I appreciate your time this evening, and hope you have a good rest of the day.

感謝大家加入我們。我們很高興能夠報告一個非常穩健的季度，其中有許多令人鼓舞的趨勢，我感謝您今晚的寶貴時間，並希望您今天休息得很好。

That concludes today's call. Have a pleasant day.

今天的電話會議到此結束。祝你有愉快的一天。