11Monยท

DigitalOcean Q3โ€™25 Earnings Highlights

$DOCN (-10.8%)


๐Ÿ”น Revenue: $230M (Est. $226.58M) ๐ŸŸข; UP +16% YoY

๐Ÿ”น EPS (Adj.): $0.54 (Est. $0.49) ๐ŸŸข

๐Ÿ”น ARR: $919M; UP +16% YoY


Guidance

๐Ÿ”น FYโ€™25 Revenue: $896โ€“$897M (Est. $891M) ๐ŸŸก

๐Ÿ”น FYโ€™25 EPS (Adj.): $2.00โ€“$2.05 (Est. $2.09) ๐Ÿ”ด

๐Ÿ”น FYโ€™25 Adj. EBITDA Margin: 40.7%โ€“41.0%

๐Ÿ”น FYโ€™25 Adj. FCF Margin: 18%โ€“19%

๐Ÿ”น Q4โ€™25 Revenue: $237โ€“$238M

๐Ÿ”น Q4โ€™25 EPS (Adj.): $0.35โ€“$0.40

๐Ÿ”น Q4โ€™25 Adj. EBITDA Margin: 38.5%โ€“39.5%


Customers & Growth

๐Ÿ”น >$100K ARR customers: Count UP +26%; revenue from this cohort UP +41% YoY; now 26% of total revenue

๐Ÿ”น >$1M ARR customers: $110M total ARR; UP +72% YoY

๐Ÿ”น Incremental ARR: $44M (company record)

๐Ÿ”น Net Dollar Retention: 99% (vs. 97% in Q3โ€™24)


Cash Flow & Balance Sheet

๐Ÿ”น Gross Profit: $137M; UP +17% YoY; Margin 60%

๐Ÿ”น Adjusted EBITDA: $100M; UP +15% YoY; Margin 43%

๐Ÿ”น Net Cash from Ops: $96M (42% margin)

๐Ÿ”น Adjusted FCF: $85M (37% margin)

๐Ÿ”น Cash & Equivalents: $237M

๐Ÿ”น RPO: $47M (vs. $10M in Q3โ€™24)

๐Ÿ”น 2026 Convertible Notes: Repurchased $1.188B principal at a $56M discount; Share repurchases: 0.1M in Q3 (cumulative $1.6B / 34.9M shares since IPO)


Product & Platform

๐Ÿ”น New: Spaces Cold Storage, Network File Storage, Managed Databases Storage Autoscaling

๐Ÿ”น Gradient AI: Multi-Modal support, Function Calling, Guardrails; direct AI revenue >2x YoY (5th straight quarter)


Management Commentary

๐Ÿ”ธ โ€œDigitalOceanโ€™s unified agentic cloud is driving accelerated momentumโ€ฆ strongest incremental organic ARR in our history.โ€ โ€“ CEO Paddy Srinivasan

๐Ÿ”ธ โ€œOur momentum gives us confidence to deliver our 2027 18โ€“20% growth targets a year earlier in 2026.โ€

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