DigitalOcean (DOCN) investor relations material

Executive summary

• Q1 2026 revenue reached $258 million, up 22% year-over-year, driven by strong customer demand, AI adoption, and expansion among Digital Native Enterprise (DNE) customers.

• AI Customer ARR grew 221% to $170 million, with $1M+ customer ARR rising 179% to $183 million; over 80% of AI ARR came from non-bare metal services.

• Launched the AI-Native Cloud with 15+ new products and acquired Katanemo Labs to enhance agentic AI infrastructure.

• Raised $888 million in equity, repaid $500 million in debt, and expanded data center capacity by 60 MW, bringing total committed capacity to 135 MW.

• Raised 2026 revenue growth guidance to 25%-27% and 2027 to 50%+ year-over-year, supported by robust pipeline and new capacity.

Financial highlights

• Q1 2026 revenue: $258 million, up 22% year-over-year; ARR: $1.032 billion.

• Adjusted EBITDA: $105 million (41% margin), up 21% year-over-year.

• Adjusted operating income: $64 million (25% margin); GAAP operating income: $37 million (14% margin).

• Net income attributable to common stockholders was $15.8 million, down from $38.2 million in Q1 2025, with diluted EPS at $0.15 and non-GAAP diluted EPS at $0.44.

• Cash and cash equivalents stood at $741 million at quarter-end.

Outlook and guidance

• Q2 2026 revenue expected at $272–$274 million, up 24–25% year-over-year.

• Full-year 2026 revenue guidance raised to $1.13–$1.145 billion, 25–27% growth, with adjusted EBITDA margin projected at 37–39%.

• 2027 revenue expected to exceed $1.7 billion, 50%+ growth, with ~40% adjusted EBITDA margin.

• Adjusted free cash flow margin for 2026 projected at 9–12% (18–21% excluding start-up costs).

• Non-GAAP diluted EPS for 2026 expected at $1.10–$1.20.