--  Company raises 2026 and 2027 revenue outlook after strong Q4 2025 on 
      back of top customer growth and growing AI traction 
 
   --  Q4 2025 revenue of $242 million, up 18% year-over-year; Reached $1B 
      annualized monthly revenue in Dec 2025; Raised 2026 guidance to 21% 
      growth 
 
   --  2025 net income was $259 million, up 207% year-over-year, at 29% margin 
      and Adjusted EBITDA was $375 million, up 14% year-over-year, at 42% 
      margin 
 
   --  Delivered record $51 million incremental organic ARR; Million+ dollar 
      customers driving $133 million ARR, up 123% year-over-year 
BROOMFIELD, Colo.--(BUSINESS WIRE)--February 24, 2026-- 

DigitalOcean Holdings, Inc. (NYSE: DOCN), the agentic inference cloud, today announced results for its fourth quarter and fiscal year ended December 31, 2025.

"AI is reshaping entire industries, and we are built for this shift. DigitalOcean's Agentic Inference Cloud is gaining further traction with large Cloud and AI Native customers that are driving the shift, which is evident in our strong Q4 performance and our increased outlook for 2026 and 2027," said Paddy Srinivasan, CEO of DigitalOcean. "There is a lot of momentum across the business. We delivered 18% top-line growth in Q4 and reached $1 billion in annualized monthly run-rate revenue in December. We added a record $51 million in organic incremental ARR. Our million+ dollar customer ARR was $133 million, growing 123% year-over-year. We reached $120 million in AI customer ARR, growing 150% year-over-year. We continued to distinguish ourselves from the growing number of bare metal GPU providers, as more than 70% of our AI customer ARR comes from inference services and core cloud products, rather than from bare metal. With this growing momentum, we are raising our growth outlook again after raising it just last quarter. We now expect to deliver 21% growth in 2026, to exit 2026 at 25%+ growth and to reach 30% growth in 2027 - and we expect to do so profitably, as we are on track to being a weighted Rule of 50 company in 2027."

Fourth Quarter 2025 Financial Highlights:

   --  Revenue was $242 million, an increase of 18% year-over-year. 
 
   --  Annual Run-Rate Revenue ("ARR") ended the quarter at $970 million, an 
      increase of 18% year-over-year. 
 
   --  Gross profit was $142 million, an increase of 13% year-over-year, and 
      gross profit margin was 59%. 
 
   --  Net income attributable to common stockholders was $26 million, an 
      increase of 40% year-over-year, and net income margin was 11%. 
 
   --  Adjusted EBITDA was $99 million, an increase of 16% year-over-year, and 
      adjusted EBITDA margin was 41%. 
 
   --  Diluted net income per share was $0.24 and non-GAAP diluted net income 
      per share was $0.44. 
 
   --  Net cash from operating activities was $57 million at 24% margin, 
      compared to $71 million at 35% margin in the fourth quarter of 2024. 
 
   --  Adjusted free cash flow was $27 million at 11% margin, compared to $37 
      million at 18% margin in the fourth quarter of 2024. 
 
   --  Unlevered adjusted free cash flow, was $32 million at 13% margin, 
      compared to $32 million at 16% margin in the fourth quarter of 2024. 
 
   --  Cash and cash equivalents was $254 million as of December 31, 2025. 
 
   --  Remaining Performance Obligation ("RPO")(1) was $134 million, of which, 
      $73 million is expected to be recognized over the next 12 months. RPO was 
      $22 million in the fourth quarter of 2024. 

Fourth Quarter 2025 Operational Highlights:

   --  The number of $100K+ Customers(2) grew 26%, while the revenue from 
      these customers, which now represents 28% of total revenue, grew 58% 
      year-over-year. 
 
   --  The number of $500K+ and $1M+ Customers grew 51% and 71%, while the 
      revenue from these customers, which now represents 17% and 14% of total 
      revenue, grew 97% and 123% year-over-year, respectively. 
 
   --  Net Dollar Retention Rate ("NDR") increased to 101% from 99% in the 
      fourth quarter of 2024. 
 
   --  Launched new core cloud and AI-native capabilities, including Remote 
      MCP support to securely manage infrastructure through AI-enabled tools, 
      further embedding AI-driven workflows directly into the core cloud 
      experience. 
 
   --  Expanded our AI platform with the public preview of our Agent 
      Development Kit and the general availability of key inference 
      infrastructure capabilities, including enhanced GPU observability, 
      managed NFS for GPU workloads, and multi-node AMD GPU support. 

Fiscal Year 2025 Financial Highlights:

   --  Revenue was $901 million, an increase of 15% year-over-year. 
 
   --  Gross profit was $540 million, an increase of 16% year-over-year, and 
      gross profit margin was 60% of revenue. 
 
   --  Net income attributable to common stockholders was $259 million, an 
      increase of 207% year-over-year, and net income margin was 29%. 
 
   --  Adjusted EBITDA was $375 million, an increase of 14% year-over-year, 
      and adjusted EBITDA margin was 42%. 
 
   --  Diluted net income per share was $2.52 and non-GAAP diluted net income 
      per share was $2.12. Diluted net income per share increased by $0.66 from 
      the one-time benefit of VA release, and by $0.30 from the one-time gain 
      on the partial extinguishment of 2026 Convertible Notes in the fiscal 
      year 2025. 
 
   --  Net cash from operating activities was $310 million as compared to $283 
      million in the prior year. 
 
   --  Adjusted free cash flow was $168 million at 19% margin, as compared to 
      $135 million at 17% margin in the prior year. 
 
   --  Unlevered adjusted free cash flow, was $166 million at 18% margin, 
      compared to $116 million at 15% margin in the prior year. 
 
   --  Repurchased approximately $1,188 million in aggregate principal of our 
      2026 Convertible Notes at a $56 million discount to par. 

Fiscal Year 2025 Operational Highlights:

   --  Repurchased 2,356,547 shares during the year; our cumulative share 
      repurchases since IPO are $1.6 billion and 34.9 million shares through 
      December 31, 2025. 
 
   --  Revenue from $100K+ Customers(2) grew 46% and now represents 24% of 
      total revenue. 
 
   --  Revenue from $500K+ and $1M+ Customers grew 76% and 106%, and now 
      represents 14% and 11% of total revenue, respectively. 
 
______________ 
(1)  Beginning in the fourth quarter of 2025, the Remaining Performance 
     Obligation amount represents all contracts regardless of the duration of 
     their original expected term. Previously, our Remaining Performance 
     Obligation amount included only contracts with an original expected term 
     of greater than one year. Prior periods have been recast to conform to 
     the current period presentation. 
(2)  Beginning in the fourth quarter of 2025, we redefined our total customer 
     count and excluded the number of users that spend less than or equal to 
     $500 in a month, formerly known as Builders, and the number of customers 
     using certain legacy Bare Metal CPU offerings. We also further refined 
     our customer category naming and disaggregation. See the discussion below 
     under the heading "Key Business Metrics" and refer to our Annual Report 
     on Form 10-K for the year ended December 31, 2025 for further details. 
 

Financial Outlook:

DigitalOcean is initiating guidance for the first quarter ending March 31, 2026 as follows:

   --  Total revenue of $249 to $250 million. 
 
   --  Adjusted EBITDA margin of 36% to 37%. 
 
   --  Non-GAAP diluted net income per share of $0.22 to $0.27. 
 
   --  Fully diluted weighted average shares outstanding of approximately 111 
      to 112 million shares. 

For the full year 2026, we expect:

   --  Total revenue of $1.075 to $1.105 billion. 
 
   --  Adjusted EBITDA margin of 36% to 38%. 
 
   --  Adjusted free cash flow margin in the range of 15% to 17% of revenue. 
 
 
   --  Unlevered adjusted free cash flow margin in the range of 18% to 20% of 
      revenue. 
 
   --  Non-GAAP diluted net income per share of $0.75 to $1.00. 
 
   --  Fully diluted weighted average shares outstanding of approximately 111 
      to 112 million shares. 

A reconciliation of non-GAAP outlook measures to corresponding GAAP measures is not available on a forward-looking basis without unreasonable effort due to the uncertainty regarding, and the potential variability of, expenses that may be incurred in the future. For example, stock-based compensation expense-related charges are impacted by the timing of employee stock transactions, the future fair market value of our common stock, and our future hiring and retention needs, all of which are difficult to predict and subject to constant change. Accordingly, a reconciliation is not available without unreasonable effort and we are unable to assess the probable significance of the unavailable information, although it is important to note that these factors could be material to our results computed in accordance with GAAP.

The financial guidance presented in this release are estimates based on information available to management as of the date of this release. There can be no assurance that our actual results will not differ from the financial guidance presented in this release.

Conference Call Information:

DigitalOcean will host a conference call today, February 24, 2026, at 8:00 a.m. ET to review its results. The conference call and presentation can be accessed by registering for the webcast at https://events.q4inc.com/attendee/812774949. A live webcast and replay of the conference call in addition to the presentation can be accessed from the DigitalOcean investor relations website at http://investors.digitalocean.com.

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