Companies /Technology

DigitalOcean Holdings Inc

NYSE: DOCN Software - Infrastructure
$122.04
â–² $7.05 (+6.13%) today
Markets open · 1:31pm ET

Q2 2025 Earnings

Reported Aug 5, 2025, 7:01am ET · SEC source
$0.59
Beat +26.18%
EPS · est. $0.47
$218.7M
Beat +0.96%
Revenue · est. $216.6M
−9.0%
Trailing market
DOCN vs S&P since report
6 quarters
Consecutive EPS beats

Market Reaction

% change · around the report
−9%0+9%+18%Aug 5Aug 6report 7:01am ETearnings−0.1%+21.1%
−9%0+9%+18%Aug 5Aug 6earnings−0.1%+21.1%
DOCN +21.1%S&P 500 −0.1%
−9%0+9%+18%Aug 5Aug 6report 7:01am ETearnings−0.1%+21.1%
−9%0+9%+18%Aug 5Aug 6earnings−0.1%+21.1%
DOCN +21.1%NASDAQ −0.1%
0+20%Aug 4Aug 13report 7:01am ETearnings+1.9%+2.5%
0+20%Aug 4Aug 13earnings+1.9%+2.5%
DOCN +2.5%S&P 500 +1.9%
0+20%Aug 4Aug 13report 7:01am ETearnings+2.8%+2.5%
0+20%Aug 4Aug 13earnings+2.8%+2.5%
DOCN +2.5%NASDAQ +2.8%
+28.88%
Day of report
+4.77%
Next session
−13.67%
One week
−5.89%
30 days

S&P 500 over the same 30 days: +3.07%.

Did DOCN Beat Earnings? Q2 2025 Results

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.

Key Takeaways
  • 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

Forward Guidance & Outlook

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

Q2 2025 vs Q2 2024 · SEC filings Q2 2024 Q2 2025
$0$70.0M$140.0M$210.0M$192.5M$218.7MRevenue$114.1M$130.9MGross Profit$22.3M$35.6MOperating Income$19.1M$37.0MNet Income
$0$70.0M$140.0M$210.0MRevenueGross ProfitOperating IncomeNet Income

Figures from SEC filings and company reports. Not investment advice.