DigitalOcean Holdings earnings date
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DigitalOcean Holdings (DOCN) Q3 2026 Earnings Report
DOCN Q3 2026 EPS Results
- Actual EPS
- $0.45
- Consensus EPS
- $0.32
- Beat/Miss
- Beat by +$0.13
- One Year Ago EPS
- $0.54
DOCN Q3 2026 Revenue Results
- Actual Revenue
- $321.19M
- Expected Revenue
- $306.74M
- Beat/Miss
- Beat by +$14.46M
- YoY Revenue Growth
- +39.87%
Earnings Announcement Details
- Quarter
- Q3 2026
- Date
- 11/03/2026
- Time
- Before Open
- Conference Call
- Tuesday, November 3, 2026
DigitalOcean Holdings's next earnings date is estimated for February 25, 2027, based on past reporting schedules.
Q3 2026 Earnings Call Audio
Q3 2026 Earnings Slide Deck
Q3 2026 Earnings Call Summary
The call was strongly positive, characterized by accelerating revenue and ARR growth, substantial AI and agent adoption, strong profitability, ahead-of-plan data center execution, increased liquidity and materially higher 2026 and 2027 guidance. The main negatives were the GAAP loss caused by a one-time conversion expense, lower gross and free cash flow margins, ongoing capacity and pricing normalization risks, and upcoming financing actions. Highlights significantly outweighed lowlights.
For the fourth quarter of 2026, DigitalOcean expects revenue of $348 million to $351 million, representing 44% to 45% year-over-year growth, adjusted EBITDA margin of 42% to 43%, and non-GAAP diluted net income per share of $0.30 to $0.32 on approximately 128 million to 129 million weighted average fully diluted shares; for the full year 2026, it expects revenue of $1.208 billion to $1.211 billion, representing approximately 34% year-over-year growth, adjusted EBITDA margin of 41% to 42%, adjusted free cash flow margin of 20% to 22%, and non-GAAP diluted net income per share of $1.60 to $1.62 on approximately 122 million to 123 million weighted average fully diluted shares; for the full year 2027, it expects revenue growth of 60% or more, with approximately 75 or so megawatts of capacity expected to come on over the course of the year, growth expected to accelerate during the year, and the second half expected to grow faster than the first half, while more detailed '27 guidance, including projected margins and cash flow, will be provided on the fourth quarter call in February.
- Revenue Growth Accelerated to 40%Q3 revenue was $321 million, up 40% year-over-year, the highest growth rate in a decade and the fifth consecutive quarter of acceleration. Revenue was more than $14 million above the high end of guidance, compared with 16% growth a year ago.
- Record ARR Addition and Higher Total ARRDigitalOcean added a record $160 million of ARR in Q3, up 266% year-over-year, bringing total ARR to approximately $1.28 billion, up 40% year-over-year.
- AI Customer ARR SurgedAI customer ARR reached $376 million, growing 288% year-over-year. ARR from customers spending more than $100,000 grew 133% year-over-year to represent 41% of total ARR, while ARR from customers spending more than $1 million grew 273% and represented 30% of ARR.
- Strong Profitability and Cash GenerationAdjusted EBITDA was $144 million, up 45% year-over-year, with a 45% margin versus guidance of 38% to 39%. Adjusted operating income was $74 million, or a 23% margin, and non-GAAP diluted EPS was $0.45 versus guidance of $0.28 to $0.30. Trailing 12-month adjusted free cash flow was $220 million, representing a 20% margin.
- Inference and Token Volume ExpansionToken volume grew roughly 10x quarter-over-quarter. The model catalog added 37 models since April, more than 4,000 customers used the inference router, and OpenRouter averaged well over 0.5 trillion tokens per day while routinely ranking as a top inference provider for leading open-weight models.
- Expansion of the Agentic Cloud PlatformDigitalOcean launched managed agents, agent learning services and agent data services, including secure CPU-based sandboxes, Harness Runtime, context and memory capabilities, high-performance storage and advanced databases. The platform had more than 70 releases in 65 days and was described as enabling agents to recursively self-improve with every run.
- Broad Multi-Product Customer AdoptionIn Q3, 90% of AI customer revenue came from customers also consuming core cloud primitives, and customers using four or more products generated roughly 60% of total revenue. More than 90% of AI customer ARR came from inference services and Core Cloud, with inference services up nearly 600% year-over-year.
- Core Cloud Business Continued to AccelerateThe approximately $900 million ARR core cloud business was described as growing, highly profitable and cash-generative. Management said traditional core products and basic droplets were expanding, core cloud attach to AI customers was increasing, and it was becoming harder to distinguish AI customers from non-AI customers.
- Agent Adoption and Distribution GrowthApproximately half of unique visitors to digitalocean.com were agents, and more than 37,000 unique customers had deployed on DigitalOcean through an agent during the year. DigitalOcean also launched Agent Droplets to make it easier for non-AI customers to consume agent-related primitives.
- Customer Platform Example and Lower CostAmplitude is building Amplitude Wave on DigitalOcean's AI-native cloud using Agent Runtime, dynamic tool access and inference. For one core workload, the open model on DigitalOcean runs approximately 67% cheaper than a frontier model.
- High ARR Yield per MegawattDigitalOcean generated $18 million of ARR per average active megawatt across its entire fleet. Management cited higher prices on short-term capacity, Elastic Compute utilization, newer token-efficient technologies and increased adoption of higher-margin compute, data and platform products as levers to increase ARR per megawatt.
- Data Center Execution Ahead of PlanRichmond launched in Q1, Kansas City in Q2 and Memphis in Q3, with all three planned 2026 data centers live and ramping ahead of schedule. Memphis came online a few weeks early.
- Additional Capacity SecuredDigitalOcean secured an incremental 20 megawatts of committed capacity from Tier 1 data center partners for 2028, bringing total committed capacity to approximately 180 megawatts. Management also said roughly 75 megawatts would come online in 2027 and another 30 megawatts in 2028.
- Diversified Customer BaseThe top 25 customers represented only 27% of revenue, and no single customer accounted for a high-single-digit percentage of revenue. Management also said most customers use multiple products and that the company has very few GPU-only customers.
- Strong Liquidity and Funding FlexibilityDigitalOcean ended Q3 with approximately $1.2 billion of total liquidity, including $845 million in cash, cash equivalents and marketable securities and roughly $400 million available under its revolving facility. Net leverage was 1.2x, and the company secured a $785 million equipment lease facility at attractive rates.
- Raised 2026 and 2027 OutlookQ4 2026 revenue guidance is $348 million to $351 million, representing 44% to 45% year-over-year growth. Full-year 2026 revenue guidance is $1.208 billion to $1.211 billion, representing approximately 34% growth, with adjusted EBITDA margin of 41% to 42%, adjusted free cash flow margin of 20% to 22% and non-GAAP diluted EPS of $1.60 to $1.62. The company now expects revenue growth of 60% or more in 2027, up from the prior 50%-plus outlook.
- 2027 Capacity and Technology RoadmapManagement expects approximately 75 megawatts of additional capacity to come online during 2027 and said the second half of 2027 should grow faster than the first half. Newer GPU generations, including GB300 and potentially Vera Rubin, are expected to improve token efficiency and increase ARR per megawatt.
- Competitive Differentiation in Model RoutingManagement said DigitalOcean's inference router is a true model router rather than a simple load balancer or traffic multiplexer. It uses a diverse model catalog, can route workloads to tools when a model is unnecessary, and is being customized for workloads such as coding and media generation.
DOCN Earnings History
| Report Date | Fiscal Quarter | Forecast / EPS | Last Year's EPS | EPS YoY Change | Press Release |
|---|---|---|---|---|---|
| Feb 25, 2027 | 2026 (Q4) | 0.32- | 0.44 | ― | ― |
| Nov 03, 2026 | 2026 (Q3) | 0.320.45 | 0.54 | -16.67% (-0.09) | |
| Aug 04, 2026 | 2026 (Q2) | 0.260.45 | 0.59 | -23.73% (-0.14) | |
| May 05, 2026 | 2026 (Q1) | 0.270.44 | 0.56 | -21.43% (-0.12) | |
| Feb 24, 2026 | 2025 (Q4) | 0.380.44 | 0.49 | -10.20% (-0.05) | |
| Nov 05, 2025 | 2025 (Q3) | 0.490.54 | 0.52 | 3.85% (+0.02) | |
| Aug 05, 2025 | 2025 (Q2) | 0.470.59 | 0.48 | 22.92% (+0.11) | |
| May 06, 2025 | 2025 (Q1) | 0.440.56 | 0.43 | 30.23% (+0.13) | |
| Feb 25, 2025 | 2024 (Q4) | 0.340.49 | 0.44 | 11.36% (+0.05) | |
| Nov 04, 2024 | 2024 (Q3) | 0.400.52 | 0.44 | 18.18% (+0.08) |
The table shows recent earnings report dates and whether the forecast was beat or missed. See the change in forecast and EPS from the previous year.
