DigitalOcean Holdings, Inc.

Q2 revenue was $281 million, up 29% year over year. Non-GAAP diluted EPS was $0.45, adjusted EBITDA was $114 million, adjusted EBITDA margin was 40%, GAAP operating income was $29 million (10% margin), adjusted operating income was $67 million (24% margin), and adjusted free cash flow was $61 million; trailing 12-month adjusted free cash flow was $175 million, or 17% of revenue. AI customer ARR reached $234 million, up 212% year over year, and remaining performance obligations rose to $894 million, up more than 12x year over year. For Q3 2026, guidance is revenue of $304 million to $307 million, adjusted EBITDA margin of 38% to 39%, and non-GAAP diluted EPS of $0.28 to $0.30. For full-year 2026, guidance is revenue of $1.17 billion to $1.18 billion, about 30.5% year-over-year growth, adjusted EBITDA margin of about 39%, non-GAAP diluted EPS of $1.35 to $1.40, and adjusted free cash flow margin of 11% to 13%. Management said the company expects an exit growth rate of 35% or more in Q4 2026.

Paddy Srinivasan framed the quarter as evidence that DigitalOcean is becoming a differentiated AI-native cloud platform rather than just a capacity provider. He emphasized the emerging flywheel across inference, agents, data, and core compute, saying more than half of new AI customers added year to date have core cloud attached and that the platform is already pulling customers deeper over time. His tone was confident and expansive, but he repeatedly stressed disciplined execution, responsible investment, and building durable growth rather than chasing growth at any cost.

Matt Steinfort focused on the financial acceleration and the balance-sheet actions supporting it. He highlighted Q2 revenue of $281 million, 40% adjusted EBITDA margin, $61 million of adjusted free cash flow, and the increase in RPO to $894 million with a 3.7-year average life. He also discussed the July retirement of approximately $472 million of 2030 convertible notes, saying pro forma net leverage is 0.7x and that the company remains comfortably below its 4x leverage guideline while preserving capacity to fund growth. On guidance, he detailed Q3 revenue of $304 million to $307 million and full-year 2026 revenue of $1.17 billion to $1.18 billion with 11% to 13% adjusted free cash flow margin.

Analysts focused on whether DigitalOcean can scale to larger AI-native customers and the operational demands of adding more megawatts. Management said the company’s long operating history, forward-deployed engineering, improved go-to-market leadership, and partnerships with data center operators and chip suppliers position it well to handle larger, more technical customers. Questions also centered on pricing, leverage, free cash flow, and how much of the stronger 2026 and 2027 outlook is already baked in; management said pricing contributed only modestly to Q2 results, leverage is around 0.7x pro forma, free cash flow should remain positive in 2026, and there is likely upside to 2027, though it is too early for formal guidance.