DigitalOcean Holdings Inc
Q2 2026 Earnings
Market Reaction
Did DOCN Beat Earnings? Q2 2026 Results
DigitalOcean Holdings, Inc. delivered a blowout second quarter for fiscal 2026, posting non-GAAP diluted EPS of $0.45 against a consensus estimate of $0.26, a beat of 72.94% that extended the company's winning streak to four consecutive quarters of topping EPS expectations. Revenue came in at $281.18 million, edging past the $278.82 million consensus and growing 28.6% year-over-year, as the company's accelerating pivot toward AI-native cloud infrastructure proved to be the central driver of outperformance; AI Customer ARR surged 212% year-over-year to $234.00 million, while RPO ballooned to $894.00 million from just $71.00 million a year ago, signaling robust committed future demand. Adjusted EBITDA of $113.56 million held a 40% margin even as R&D spending climbed to $57.52 million to fund capacity expansion, and some observers have flagged execution risk tied to the company's aggressive financing posture. Looking ahead, DigitalOcean raised full-year 2026 revenue guidance to $1.17-$1.18 billion and expressed confidence in exceeding 50% revenue growth in 2027.
- AI Customer ARR grew 212% year-over-year to $234 million
- Million-dollar-plus customer ARR grew 214% year-over-year to $259 million
- Record $93 million of incremental ARR added during the quarter, up 191%
- Revenue from $100K+ customers grew 98% and now represents 35% of total revenue
- Revenue from $500K+ customers grew 160% and represents 26% of total revenue
- Revenue from $1M+ customers grew 214% and represents 23% of total revenue
- 85% of AI customer ARR comes from inference and core cloud rather than bare metal
- Early Inference Engine customers drove total token consumption up approximately 30x in 60 days
“Our growth rate is accelerating, as revenue grew 29% year-over-year, more than double our growth rate a year ago. The acceleration is coming from our highest spending customers and sophisticated AI Natives, and we are now beginning to land nine-figure annual commitments. Early Inference Engine customers drove their total token consumption up approximately 30x in the last 60-days, and 85% of our AI customer ARR now comes from inference and core cloud rather than bare metal. Just as important is how we are growing: attractive margins, positive free cash flow, capacity delivered on or ahead of schedule, and a stronger balance sheet. Our customer momentum and early product traction give us confidence to raise our 2026 revenue outlook to approximately 30%, reaching 35% or more by Q4 2026, and strengthen our conviction in our ability to exceed 50% growth in 2027.”
DigitalOcean CEO, on the earnings call
Forward Guidance & Outlook
For Q3 2026, DigitalOcean expects revenue of $304-$307 million (32-34% YoY growth), adjusted EBITDA margin of 38-39%, and non-GAAP diluted EPS of $0.28-$0.30 on approximately 126-127 million diluted shares. Full-year 2026 guidance was raised to revenue of $1.170-$1.180 billion (30-31% YoY growth), adjusted EBITDA margin of 38.5-39.5%, adjusted free cash flow margin of 11-13%, and non-GAAP diluted EPS of $1.35-$1.40 on approximately 122-123 million diluted shares. Management expressed confidence in reaching 35% or more revenue growth by Q4 2026 and exceeding 50% growth in 2027.
DOCN YoY Financials
Figures from SEC filings and company reports. Not investment advice.