DigitalOcean (DOCN) Q2 2025 Earnings
How Did DOCN Stock React to Q2 2025 Earnings?
S&P 500 over the same 30 days: +3.07%.
Did DOCN Beat Earnings? Q2 2025 Results
Yes. DigitalOcean reported Q2 2025 earnings of $0.59 a share on Aug 5, 2025, beating the $0.47 consensus estimate by 26.2%. Revenue was $218.7M against a $216.6M estimate.
DigitalOcean delivered a standout second quarter, posting non-GAAP diluted EPS of $0.59 against a consensus estimate of $0.47, a beat of 26.18%, while revenue of $218.70 million edged past expectations and grew 13.6% year-over-year, signaling that the cloud provider's focused strategy is gaining real traction. The clearest engine behind the outperformance was the rapid expansion of its Scalers+ cohort, high-spending digital native enterprises whose revenue surged 35% year-over-year and now accounts for 24% of total revenue, while net dollar retention improved to 99% and ARPU climbed 12% to $111.70. AI momentum added further fuel, with AI/ML revenue more than doubling year-over-year and the company recording its highest incremental ARR since Q4 2022. The stock's sharp post-earnings move reflected a market reassessing a business that some had viewed skeptically on margin grounds, yet adjusted free cash flow margin expanded to 26% from 19% a year ago. Management raised full-year 2025 revenue guidance to $888 to $892 million and lifted its adjusted EBITDA margin target to 39% to 40%, suggesting confidence that the momentum is sustainable.
- AI/ML revenue more than doubled year-over-year
- Scalers+ customer count grew 23% and revenue from Scalers+ grew 35% year-over-year, reaching 24% of total revenue
- Net Dollar Retention Rate increased to 99% from 97% in Q2 2024
- ARPU increased 12% year-over-year to $111.70
- Incremental ARR of $32 million, the highest since Q4 2022
- Remaining Performance Obligation grew to $53 million from $3 million in Q2 2024
“We delivered another quarter of solid performance across both AI and core cloud. Total revenue grew 14% year-over-year, we achieved the highest incremental ARR since Q4 of 2022, and we more than doubled our AI/ML revenue year-over-year.”
DigitalOcean CEO, on the earnings call
What Was DigitalOcean's Outlook in Q2 2025?
For Q3 2025, DigitalOcean guided total revenue of $226 to $227 million, adjusted EBITDA margin of 39% to 40%, and non-GAAP diluted net income per share of $0.45 to $0.50 on approximately 102 to 103 million fully diluted shares. For full year 2025, the company raised guidance to total revenue of $888 to $892 million (up from prior guidance), adjusted EBITDA margin of 39% to 40%, adjusted free cash flow margin of 17% to 19% of revenue, and non-GAAP diluted net income per share of $2.05 to $2.10 on approximately 103 to 104 million fully diluted shares.
DOCN YoY Financials
| Metric | Q2 2025 | Q2 2024 | Year over year |
|---|---|---|---|
| Revenue | $218.7M | $192.5M | +13.6% |
| Gross Profit | $130.9M | $114.1M | +14.7% |
| Operating Income | $35.6M | $22.3M | +59.5% |
| Net Income | $37.0M | $19.1M | +93.5% |
Figures from SEC filings and company reports. Not investment advice.