Yet, DigitalOcean's revenue rose 35% in 2021 and grew 34% to $576 million in 2022. They also warned that DigitalOcean didn't have sufficient scale to survive in that crowded market.

When DigitalOcean went public in March 2021, the critics claimed it would struggle to compete against larger cloud infrastructure platforms like Amazon Web Services (AWS) and Microsoft Azure. DigitalOcean is still growing in a tough macro environment Its stock has already pulled back from its all-time highs, but it still isn't cheap at 8 times this year's bookings. Therefore, Roblox hasn't proven that its business model - which mainly relies on Robux sales - is actually sustainable. Rolling out new generative AI tools for its platform could help it attract new creators or convince its existing players to create and monetize their own games.įor 2023, analysts expect its bookings to grow 19% to $3.4 billion - but its net loss could still widen to $1.1 billion. Roblox's DAUs reached 66.1 million in the first quarter of 2023, while its declining ABPDAU - which was largely caused by its expansion into overseas markets with lower average bookings per user - seemed to finally bottom out. It also increasingly relied on lower-margin overseas and older users to drive its bookings growth, and that pressure caused its net loss to widen from $492 million in 2021 to $924 million in 2022.īut if we look at Roblox's quarterly growth in bookings, daily active users (DAUs), total hours engaged, and average bookings per daily active user (ABPDAU), we can spot some clear signs of improvement over the past year.ĭata source: Roblox.

Roblox's bookings soared 45% in 2021 but only grew 5% to $2.9 billion in 2022 as the pandemic-induced tailwinds dissipated. However, that growth spurt ended as the pandemic passed and its core audience of tween users returned to school. Roblox's growth accelerated during the pandemic as students stayed home and spent more time creating and playing its games.

But will Roblox or DigitalOcean be a better long-term play on that secular trend? Roblox's growth metrics are improving It enables smaller businesses to test and scale their AI services on its cloud.īoth moves seem like smart ways to capitalize on the expansion of the generative AI market, which Valuates Reports estimates will grow at a dizzying compound annual growth rate (CAGR) of 32% from 2022 to 2031. DigitalOcean just acquired Paperspace, another small cloud infrastructure platform provider that equips its servers with high-end graphics processing units (GPUs) for processing AI tasks.

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