Despite beating analysts’ expectations in its most recent quarter, DigitalOcean’s weak guidance may be a warning sign for the industry.
The cloud computing industry has largely avoided the worst of the current economic downturn as companies continue to race to migrate legacy systems to the cloud. In fact, the cloud market’s growth is accelerating, with end-user public spending poised to reach nearly $600 billion in 2023.
According to SiliconAngle, DigitalOcean’s guidance for next quarter has disappointed analysts:
The company offered a forecast of between $160 million and $162 million in fourth-quarter revenue, below Wall Street’s target of $164 million. It also said it’s looking at earnings of 18 to 19 cents per share, below the consensus of 26 cents.
The guidance is bad news for the cloud industry and may be further indication the sector is not as well insulated from economic uncertainty as some would hope.