DigitalOcean Holdings Inc
Q3 2025 Earnings
Market Reaction
S&P 500 over the same 30 days: +0.89%.
Did DOCN Beat Earnings? Q3 2025 Results
DigitalOcean delivered a strong third quarter, posting revenue of $229.63 million, up 15.7% year-over-year and ahead of the $226.58 million consensus estimate, while non-GAAP diluted EPS of $0.54 cleared the $0.49 analyst expectation by 9.47%, a result that stands in sharp contrast to those <a href="https://247wallst.com/investing/2025/11/05/digitalocean-ends-win-streak-on-q3-earnings-miss/">anticipating a stumble</a> from the cloud provider. The headline beat was underpinned by record incremental organic ARR of $44 million and direct AI revenue more than doubling year-over-year for the fifth consecutive quarter, as the company's push to position itself as a "unified agentic cloud" continued to gain commercial traction. Larger customers proved especially potent, with accounts above $100K in annual run-rate growing revenue 41% year-over-year and now comprising 26% of total revenue. Adjusted EBITDA reached $99.79 million at a 43% margin, supported by sharply lower capital expenditures. Looking ahead, DigitalOcean raised its full-year 2025 revenue guidance to $896-$897 million and said it expects to achieve its 2027 growth targets of 18-20% a full year early, in 2026.
- Direct AI revenue more than doubled year-over-year for the fifth consecutive quarter
- Customers with >$100K ARR grew revenue 41% YoY, now representing 26% of total revenue
- Customers with >$1M ARR driving $110M total ARR, up 72% YoY
- Record incremental organic ARR of $44 million, highest in company history
- Net Dollar Retention Rate improved to 99% from 97% in Q3 2024
- Remaining Performance Obligation grew to $47 million from $10 million year-over-year
“DigitalOcean's unified agentic cloud is driving accelerated momentum in Q3. Revenue increased 16% year over year and we delivered the strongest incremental organic ARR in our history.”
DigitalOcean CEO, on the earnings call
Forward Guidance & Outlook
For Q4 2025, DigitalOcean expects revenue of $237-$238 million, adjusted EBITDA margin of 38.5%-39.5%, and non-GAAP diluted EPS of $0.35-$0.40 on approximately 111-112 million fully diluted shares. For full-year 2025, the company raised guidance to revenue of $896-$897 million, adjusted EBITDA margin of 40.7%-41.0%, adjusted free cash flow margin of 18%-19%, and non-GAAP diluted EPS of $2.00-$2.05 on approximately 106-107 million fully diluted shares. Management expressed confidence in achieving 2027 growth targets of 18-20% a full year earlier in 2026.
DOCN YoY Financials
Figures from SEC filings and company reports. Not investment advice.