DigitalOcean Holdings Inc
Q1 2025 Earnings
Market Reaction
S&P 500 over the same 30 days: +7.22%.
Did DOCN Beat Earnings? Q1 2025 Results
DigitalOcean delivered a convincing first-quarter beat on both the top and bottom lines, posting revenue of $210.70 million, up 14.1% year over year and just ahead of the $208.63 million consensus, while non-GAAP diluted EPS of $0.56 cleared the $0.44 estimate by 26.35%, underscoring a period of accelerating profitability alongside steady growth. The clearest driver of the earnings outperformance was a dramatic expansion in operating leverage, with GAAP net income surging 170% year over year to $38.20 million as general and administrative costs fell sharply following prior-year acquisition-related charges. Fueling the revenue picture was DigitalOcean's strategic push into larger digital native enterprises, where AI ARR grew over 160% year over year and customers spending above $100K in ARR now account for 23% of total revenue. The company's newly launched GenAI Platform has already attracted more than 5,000 customers building over 8,000 agents, adding credibility to the AI growth story. Looking ahead, management reiterated full-year 2025 revenue guidance of $870.00 million to $890.00 million, with non-GAAP diluted EPS expected between $1.85 and $1.95.
- 14% year-over-year revenue growth, highest quarterly growth rate since Q3 2023
- AI ARR growing over 160% year-over-year
- Revenue from $100K+ ARR customers grew 41% year-over-year and represents 23% of total revenue
- Scalers+ customer count grew 27% year-over-year
- Net Dollar Retention Rate improved to 100% from 99% in prior quarter
- ARPU increased 14% year-over-year to $108.56
- Scalers+ ARPU grew 11% year-over-year to $29 thousand
“The momentum we generated in 2024 in both core cloud and AI continued into Q1, as we grew total revenue 14% year-over-year, our highest quarterly growth rate since Q3 2023, with AI ARR continuing to grow north of 160% year-over-year, and we delivered more than 50 new product features, over 5 times as many as we delivered in Q1 of last year.”
DigitalOcean CEO, on the earnings call
Forward Guidance & Outlook
For Q2 2025, DigitalOcean expects total revenue of $215.5 to $217.5 million, adjusted EBITDA margin of 38% to 40%, and non-GAAP diluted EPS of $0.42 to $0.47 on approximately 103 to 104 million fully diluted weighted average shares. For full year 2025, the company continues to expect total revenue of $870 to $890 million, adjusted EBITDA margin of 37% to 40%, adjusted free cash flow margin of 16% to 18% of revenue, and non-GAAP diluted EPS of $1.85 to $1.95 on approximately 104 to 105 million fully diluted weighted average shares.
DOCN YoY Financials
Figures from SEC filings and company reports. Not investment advice.