DigitalOcean (DOCN) Q4 2025 earnings summary

Executive summary

• Achieved 18% revenue growth in Q4 2025, with full-year revenue reaching $901 million and surpassing a $1 billion run rate in December 2025, driven by top customer growth and AI-native adoption.

• AI-native and cloud-native customers are the fastest-growing cohort, with $133 million in ARR from million-dollar customers, up 123% year-over-year.

• AI customer ARR reached $120 million in Q4, growing 150% year-over-year, now 12% of total ARR, with over 70% from inference and core cloud products.

• Top customers are now the primary growth engine, with 0% churn in the $1 million+ ARR cohort over the last 12 months and significant incremental ARR contribution.

• Company is positioned as a vertically integrated AI cloud platform, not just a GPU provider, serving production AI workloads at scale.

Financial highlights

• Q4 2025 revenue was $242 million, up 18% year-over-year; full-year revenue was $901 million.

• Q4 gross profit was $142 million (59% margin); full-year gross profit was $540 million (60% margin).

• Q4 adjusted EBITDA was $99 million (41% margin); full-year adjusted EBITDA was $375 million (42% margin).

• GAAP diluted net income per share was $0.24 for Q4 and $2.52 for the year, up 183% year-over-year.

• Adjusted free cash flow for 2025 was $168 million (19% margin); year-end cash and equivalents were $254 million.

Outlook and guidance

• 2026 revenue guidance raised to $1.075–$1.105 billion, representing 19.3%–22.6% growth, with an exit growth rate of 25%+ in Q4 2026 and 30% in 2027.

• Q1 2026 revenue expected at $249–$250 million (18–19% growth); adjusted EBITDA margin 36–37%.

• Full-year 2026 adjusted EBITDA margin projected at 36–38%; adjusted free cash flow margin at 15–17%; unlevered adjusted free cash flow margin at 18–20%.

• Guidance based on committed 31 MW incremental data center capacity coming online in 2026.

• Near-term margin pressure expected due to timing of new capacity ramp, but margins projected to recover as utilization increases.