Shares of DigitalOcean Holdings, Inc. (DOCN) plummeted 5.65% in pre-market trading on Tuesday following the release of its first-quarter 2025 financial results and subsequent guidance. The cloud infrastructure provider's earnings report revealed a mixed performance, with revenue slightly exceeding expectations but profits falling short of estimates.

DigitalOcean reported Q1 revenue of $210.703 million, marginally surpassing the IBES estimate of $208.6 million. However, the company's pretax profit of $41.38 million significantly missed the mark, coming in well below the expected $54.8 million. This profit shortfall appears to be the primary driver behind the stock's pre-market decline.

Adding to investor concerns, DigitalOcean's outlook for the second quarter of 2025 failed to impress. The company forecasted Q2 adjusted earnings per share between $0.42 and $0.47, with total revenue projected to be in the range of $215.5 million to $217.5 million. These figures fell short of analyst expectations, with IBES data showing a consensus estimate of $0.47 per share and revenue of $217.0 million for Q2.

In a separate announcement, DigitalOcean disclosed entering into a new credit agreement on May 5, 2025. The agreement includes a $300 million revolving credit facility and a $500 million delayed draw term loan facility. While this additional financial flexibility could be viewed positively, it did not offset the negative sentiment surrounding the earnings miss and cautious guidance.