DigitalOcean (DOCN) Morgan Stanley Technology, Media & Telecom Conference 2026 summary

Strategic priorities and business evolution

• Achieved $1 billion ARR milestone, focusing on making the platform enterprise-ready and plugging critical capability gaps over the past two years.

• Reinvented go-to-market approach to better serve scaling customers and leaned into AI by focusing on inferencing rather than AI training.

• Maintained disciplined focus on these two pillars, executing effectively on both.

Financial performance and growth outlook

• Q4 delivered $51 million in incremental ARR, the highest organic ARR in company history, with top customer cohorts now driving growth.

• $1 million customer cohort grew 123% YoY with zero churn over four quarters.

• AI customer revenue reached $120 million, growing at 150% quarter-over-quarter, driven by differentiated Inference Cloud capabilities.

• Guidance for 21% growth in 2024, 25% by 2026, and 30%+ by 2027, targeting a rule of 50+ for profitability.

• Robust RPO grew 500% YoY in Q4, with existing data center capacity alone supporting 30%+ growth next year.

Capacity expansion and capital planning

• Bringing on 31 MW of incremental capacity in 2024, a 70% increase, with no further commitments yet but active planning for 2027 and 2028.

• Equipment investment per MW estimated at $20–$25 million, including full stack cloud infrastructure, not just GPUs.

• Financing strategy favors aligning equipment payments with revenue generation, using a mix of cash, debt, and leases.

• Unlevered free cash flow guidance for 2026 is 18–20%, dropping to 12% when lease payments are included.