DigitalOcean Holdings (DOCN) Company Report

DigitalOcean (DOCN) has accelerated its growth outlook, now projecting 18%-20% growth for next year, a full year ahead of its previous guidance, driven by strong performance in its core cloud and AI businesses.
The company's AI cloud business is a significant growth driver, achieving 100%+ year-over-year growth for five consecutive quarters and is expected to contribute mid to high teens of total revenue by the end of next year, primarily from inferencing workloads.
To support this growth, DigitalOcean is adding 30 megawatts of new data center capacity for AI deployments, financed through equipment leases, while aiming to maintain mid to high teens free cash flow margins.
DigitalOcean is also seeing an uptick in customer migrations from hyperscalers, enabled by product enhancements and an improved go-to-market strategy, attracting larger customers with $100K+ spend growing 41% and $1M+ customers growing 72% last quarter.

3 days ago

Transcript

DigitalOcean Provides Accelerated Growth Outlook and Details AI Expansion Strategy

DOCN

Guidance Update

New Projects/Investments

Revenue Acceleration/Inflection

DigitalOcean has provided an 18%-20% growth outlook for next year, pulling forward its 2027 guidance by a full year, driven by addressing core product gaps and strong cloud business incubation.
The company reported significant customer growth, with 100K+ customers increasing by 41% and million-dollar+ customers growing by 72% last quarter.
Its AI business has experienced 100%+ year-over-year growth for five consecutive quarters and is projected to reach mid to high teens of total run rate by the end of next year, primarily from inferencing workloads.
DigitalOcean plans to add 30 MW of new data center capacity to accelerate AI deployments, financing this expansion through equipment leases and other capital sources while aiming to maintain mid to high teens free cash flow margins.
The company is seeing an uptick in workload migrations from hyperscalers due to product enhancements and an improved go-to-market strategy, positioning itself as a key multi-cloud option.

3 days ago

Transcript

DigitalOcean (DOCN) Accelerates Growth Outlook and Expands AI Capacity

DOCN

Guidance Update

Revenue Acceleration/Inflection

New Projects/Investments

DigitalOcean (DOCN) has pulled forward its 18%-20% growth outlook for next year by a full year, ahead of the guidance given at the April Analyst Day.
The company's AI business has demonstrated over 100% year-over-year growth for five consecutive quarters and is projected to contribute mid to high teens of total run rate by the end of next year, primarily driven by inferencing workloads.
DigitalOcean plans to add 30 megawatts of new capacity in the first half of next year, significantly increasing its current 40-45 megawatts of facilities, and is financing this expansion through equipment leases and other capital sources while maintaining mid to high teens free cash flow margins.
The company is experiencing increased customer migrations from hyperscalers, positioning itself as a strong multi-cloud option due to product enhancements and an improved go-to-market strategy, including the Direct Virtual Private Cloud Connection.

3 days ago

Transcript

DOCN Reports Strong Q3 2025 Performance and Raises Full-Year Outlook

DOCN

Earnings

Guidance Update

Revenue Acceleration/Inflection

DigitalOcean (DOCN) reported strong Q3 2025 results, exceeding guidance with revenue of $229.6 million, representing 16% year-over-year growth, and an incremental organic ARR of $44 million.
The company demonstrated robust profitability, achieving a GAAP Gross Profit margin of 60% and an Adjusted EBITDA margin of 43% in Q3 2025.
DOCN raised its full-year 2025 outlook, with revenue guidance now set at $896-$897 million and adjusted free cash flow margin guidance at 18%-19%.
Growth in large customers was notable, with customers having over $1 million annualized run-rate reaching $110 million in total ARR, a 72% year-over-year increase.

Nov 5, 2025, 1:00 PM

Presentation

DigitalOcean Reports Strong Q3 2025 Results, Raises 2025 and 2026 Outlook

DOCN

Earnings

Guidance Update

New Projects/Investments

DigitalOcean (DOCN) reported strong Q3 2025 financial results, with revenue of $230 million, a 16% year-over-year increase, and achieved its highest organic incremental ARR at $44 million.
The company demonstrated robust profitability in Q3 2025, with a 60% gross margin, 43% adjusted EBITDA margin, and 37% adjusted free cash flow margin.
Growth was significantly driven by AI native customers, whose revenue more than doubled year-over-year for the fifth consecutive quarter, and by customers with over $1 million in annualized run rate, which grew 72% year-over-year to $110 million in ARR.
DOCN raised its full-year 2025 revenue guidance to $896-$897 million (approximately 15% year-over-year growth) and now expects to achieve 18%-20% revenue growth in 2026, a full year ahead of its prior target, supported by increased investments in 30 megawatts of incremental data center capacity and GPU capacity.

Nov 5, 2025, 1:00 PM

Transcript

DigitalOcean Announces Strong Q3 2025 Financial Results and Raises Full-Year Guidance

DOCN

Earnings

Guidance Update

Share Buyback

DigitalOcean reported Q3 2025 revenue of $230 million, an increase of 16% year-over-year, and net income of $158 million, up 381% year-over-year, which included one-time benefits from an income tax benefit of $70 million and a gain on extinguishment of debt of $48 million.
Adjusted EBITDA for Q3 2025 was $100 million, a 15% year-over-year increase, resulting in a 43% margin. Non-GAAP diluted net income per share was $0.54.
The company raised its full-year 2025 revenue guidance to $896 to $897 million and its Adjusted EBITDA margin guidance to 40.7% to 41.0%.
Annual Run-Rate Revenue (ARR) ended Q3 2025 at $919 million, an increase of 16% year-over-year, and the Net Dollar Retention Rate (NDR) improved to 99% from 97% in Q3 2024.
DigitalOcean repurchased 0.1 million shares during Q3 2025, contributing to cumulative share repurchases of $1.6 billion and 34.9 million shares since its IPO through September 30, 2025.

Nov 5, 2025, 12:07 PM

8-K

DigitalOcean Announces Strong Third Quarter 2025 Financial Results and Raises 2025 Outlook

DOCN

Earnings

Guidance Update

Revenue Acceleration/Inflection

DigitalOcean reported Q3 2025 revenue of $230 million, an increase of 16% year-over-year, and raised its full-year 2025 revenue guidance to $896 to $897 million.
Net Income for Q3 2025 was $158 million, a 381% year-over-year increase, and Adjusted EBITDA reached $100 million, up 15% year-over-year. The company also raised its full-year Adjusted EBITDA margin guidance to 41%.
The company achieved incremental ARR of $44 million, marking the highest incremental organic ARR in its history. Revenue from customers with over $1 million in annual run-rate grew 72% year-over-year, contributing $110 million to total ARR.
DigitalOcean repurchased approximately $1,188 million in aggregate principal of its 2026 Convertible Notes at a $56 million discount to par.

Nov 5, 2025, 12:05 PM

Press Release

DigitalOcean Holdings Discusses AI Strategy and Growth Initiatives

DOCN

New Projects/Investments

Revenue Acceleration/Inflection

Debt Issuance

DigitalOcean is strategically focusing on AI inferencing workloads, which are becoming a more predictable source of revenue for the company and are closer to its core business.
The company has released over 250 product features in the last four quarters, including inference-optimized Droplets and enhanced networking, contributing to the 35% growth of its "scalers plus" customer segment, which now accounts for 25% of the portfolio.
DigitalOcean is strengthening its sales-led growth motion and expanding customer acquisition through new channels, including an AI front door and partnerships like the exclusive VPS offering with Laravel.
The company recently completed a $625 million convertible notes offering to retire existing debt, and with over 40% EBITDA, it is in a strong financial position to invest in durable growth, particularly in AI-native companies.

Sep 11, 2025, 5:50 PM

Transcript

DigitalOcean Holdings Discusses Strategic Focus on AI Inference and Product Enhancements

DOCN

New Projects/Investments

Revenue Acceleration/Inflection

Convertible Preferred Issuance

DigitalOcean is strategically shifting its focus towards inference-based workloads, which are becoming a smaller part of its resource allocation, due to their closer alignment with the company's DNA and more durable revenue potential.
The company has released approximately 250 new features over the last four quarters, enhancing core compute, storage, and networking capabilities, specifically to attract and retain larger "Scalers+" customers, a cohort that now represents 25% of the portfolio and is growing at 35%.
DigitalOcean's AI strategy is built on an IPA (Infrastructure, Platform, Agents) stack, with most current revenue derived from the AI infrastructure layer, while its Gradient AI platform is gaining mindshare with 6,000 unique customers and over 15,000 agents deployed.
In August 2025, DigitalOcean completed a $625 million convertible notes offering to retire existing 2026 notes, providing significant financial flexibility with an EBITDA exceeding 40% to invest in growth, particularly in durable inference workloads.

Sep 11, 2025, 5:50 PM

Transcript

DigitalOcean Holdings Discusses Strategic Focus on AI Inference, Product Enhancements, and Growth Initiatives

DOCN

Product Launch

New Projects/Investments

Debt Issuance

DigitalOcean is strategically shifting its focus to AI inferencing workloads, which align with its core DNA and offer more favorable unit economics compared to training.
The company has made significant product enhancements, releasing approximately 250 updates in the last four quarters, to better serve larger customers (scalers plus), who now account for 25% of the portfolio and are growing 35%.
DigitalOcean is strengthening its growth strategy by investing in a sales-led growth motion alongside its traditional product-led growth, and opening new customer acquisition channels, including an AI front door and partnerships.
While most current AI revenue comes from the infrastructure layer, DigitalOcean anticipates its Gradient AI platform (middle layer) will become the primary revenue driver in the future, with 6,000 unique customers and over 15,000 agents deployed.
The company recently completed a $625 million convertible notes offering to retire existing debt, strengthening its financial position and providing optionality for future growth investments.

Sep 11, 2025, 5:50 PM

Transcript

Earnings Transcripts

Quarterly earnings call transcripts for DigitalOcean Holdings.

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