DigitalOcean (DOCN) Q3 2025 Earnings
How Did DOCN Stock React to Q3 2025 Earnings?
S&P 500 over the same 30 days: +0.89%.
Did DOCN Beat Earnings? Q3 2025 Results
Yes. DigitalOcean reported Q3 2025 earnings of $0.54 a share on Nov 5, 2025, beating the $0.49 consensus estimate by 9.5%. Revenue was $229.6M against a $226.6M estimate.
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
What Was DigitalOcean's Outlook in Q3 2025?
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
| Metric | Q3 2025 | Q3 2024 | Year over year |
|---|---|---|---|
| Revenue | $229.6M | $198.5M | +15.7% |
| Gross Profit | $136.9M | $119.4M | +14.6% |
| Operating Income | $44.9M | $24.6M | +82.6% |
| Net Income | $158.4M | $32.9M | +380.7% |
Figures from SEC filings and company reports. Not investment advice.