Want to see DOCN full AI Analyst Report?
Top Page
DigitalOcean Holdings
(NYSE:DOCN)
Select Model
Select Model
Rating:69Neutral
Price Target:
$139.00
▲(12.51% Upside)
Action:Reiterated
Date:08/04/26
The score is led by a very strong earnings update (raised guidance, accelerating AI traction, and high profitability/FCF outlook) and solid underlying operating performance. Offsetting factors are a still-risky/volatile balance-sheet history with meaningful debt, mixed technical momentum signals, and a high valuation multiple with no dividend cushion.
Positive Factors
Accelerating Revenue & ARR
Sustained ARR additions and 29% YoY revenue growth reflect deeper penetration of larger, higher‑spend customers. Recurring ARR growth increases revenue predictability and upsell potential, supporting durable top‑line expansion and repeatable cash generation over the next several quarters.
Negative Factors
Capacity Constraints
Customer demand outstrips available data center capacity, which can cap near‑term revenue despite strong demand. Scaling capacity requires multi‑quarter capital, lead time and supply‑chain coordination; delays could blunt AI momentum and defer revenue realization for many months.
Read all positive and negative factors
Positive Factors
Negative Factors
Accelerating Revenue & ARR
Sustained ARR additions and 29% YoY revenue growth reflect deeper penetration of larger, higher‑spend customers. Recurring ARR growth increases revenue predictability and upsell potential, supporting durable top‑line expansion and repeatable cash generation over the next several quarters.
Read all positive factors
DigitalOcean Holdings Key Performance Indicators (KPIs)
Any
Dollar-Based Net Retention Rate
Indicates how much revenue is retained from existing customers, reflecting customer satisfaction and the potential for upselling.
Indicates how much revenue is retained from existing customers, reflecting customer satisfaction and the potential for upselling.
Data provided by:
The Fly
The FlyDigitalOcean Holdings (DOCN) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$13.74B
Dividend YieldN/A
Average Volume (3M)3.60M
Price to Earnings (P/E)45.4
Beta (1Y)1.55
Revenue Growth17.61%
EPS Growth119.62%
CountryUS
Employees1,462
SectorTechnology
Sector Strength88
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)2.52
Shares Outstanding116,908,100
10 Day Avg. Volume3,374,745
30 Day Avg. Volume3,597,986
Financial Highlights & Ratios
PEG Ratio0.08
Price to Book (P/B)-153.44
Price to Sales (P/S)4.88
P/FCF Ratio107.13
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$178.00Price Target Upside44.08% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering14
EPS Forecast (FY)1.24
Revenue Forecast (FY)$1.16B
DigitalOcean Holdings Business Overview & Revenue Model
Company Description
DigitalOcean Holdings, Inc., through its various operating entities, provides a global cloud computing environment with reach across North America, Europe, Asia, and beyond. This adaptable platform delivers on-demand infrastructure and essential d...
How the Company Makes Money
DigitalOcean primarily makes money by charging customers for access to its cloud platform through recurring, usage-based and subscription-like billing for infrastructure and managed services. Key revenue streams include: (1) Compute: charges for v...
DigitalOcean Holdings Earnings Call Summary
Earnings Call Date:Aug 04, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 09, 2026
Earnings Call Sentiment Positive
The call presented a strong set of operational and financial positives: accelerating revenue growth, record incremental ARR, very rapid adoption of the inference engine and AI workloads, robust margins, a significantly larger RPO, and balance sheet improvements. The primary negatives are capacity and timing constraints tied to data center buildouts and industry supply chain realities, RPO lumpiness, and potential effects of recent GPU price increases. On balance, the positive developments (strong growth, profitability, AI traction, and financial flexibility) substantially outweigh the challenges, though execution of capacity plans will be critical to sustain the momentum into 2027.Positive Updates
Strong Top-Line Growth and Record ARR Addition
Q2 revenue of $281M, up ~29% year-over-year; record $93M incremental ARR in Q2 (largest quarterly ARR addition in company history).
Negative Updates
Capacity Constraints and Demand > Supply
Management stated demand is well in excess of capacity; token demand and customer growth outpacing supply, with some new capacity not expected online until late 2027 and into 2028, which could limit near-term revenue upside.
Read all updates
Q2-2026 Updates
Positive
Negative
Strong Top-Line Growth and Record ARR Addition
Q2 revenue of $281M, up ~29% year-over-year; record $93M incremental ARR in Q2 (largest quarterly ARR addition in company history).
Read all positive updates
Company Guidance
DigitalOcean raised its 2026 outlook, guiding Q3 revenue of $304–$307 million (32–34% YoY) with adjusted EBITDA margins of 38–39% and non‑GAAP diluted EPS of $0.28–$0.30 on ~126.5 million diluted shares; for full‑year 2026 it now expects $1.17–$1.18 billion of revenue (~30.5% YoY) with a Q4 exit growth rate of ≥35%, ~39% adjusted EBITDA margin, non‑GAAP diluted EPS of $1.35–$1.40 and adjusted free cash flow margin of 11–13%; management also reiterated confidence in 50%+ revenue growth for 2027 and highlighted a strengthened balance sheet after equitizing ~$472 million of convertible notes (pro‑forma net leverage ~0.7x).DigitalOcean Holdings Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
56
Neutral
Cash Flow
62
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.01B | 901.43M | 780.62M | 692.88M | 576.32M | 428.56M |
| Gross Profit | 578.58M | 539.59M | 465.94M | 408.92M | 364.39M | 257.97M |
| EBITDA | 374.11M | 362.05M | 236.86M | 153.59M | 86.74M | 73.92M |
| Net Income | 235.24M | 259.26M | 84.49M | 19.41M | -27.80M | -19.50M |
Balance Sheet | ||||||
| Total Assets | 3.12B | 1.84B | 1.64B | 1.46B | 1.82B | 2.10B |
| Cash, Cash Equivalents and Short-Term Investments | 767.03M | 254.47M | 428.45M | 411.77M | 864.23M | 1.71B |
| Total Debt | 1.50B | 730.55M | 1.70B | 1.66B | 1.64B | 1.46B |
| Total Liabilities | 2.19B | 1.87B | 1.84B | 1.77B | 1.77B | 1.52B |
| Stockholders Equity | 930.73M | -28.69M | -202.96M | -313.70M | 47.57M | 578.20M |
Cash Flow | ||||||
| Free Cash Flow | 14.88M | 41.09M | 96.20M | 110.13M | 74.94M | 24.02M |
| Operating Cash Flow | 356.88M | 309.60M | 282.73M | 234.94M | 195.15M | 133.11M |
| Investing Cash Flow | -378.16M | -268.29M | -94.81M | 401.15M | -1.15B | -113.61M |
| Financing Cash Flow | 886.01M | -216.91M | -76.45M | -468.90M | -610.36M | 1.59B |
DigitalOcean Holdings Technical Analysis
Negative
123.54
Price Trends
144.92
Negative
126.67
Negative
89.15
Positive
Market Momentum
-5.25
Negative
45.54
Neutral
56.68
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DOCN, the sentiment is Negative. The current price of 123.54 is above the 20-day moving average (MA) of 123.43, below the 50-day MA of 144.92, and above the 200-day MA of 89.15, indicating a neutral trend. The MACD of -5.25 indicates Negative momentum. The RSI at 45.54 is Neutral, neither overbought nor oversold. The STOCH value of 56.68 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DOCN.
DigitalOcean Holdings Risk Analysis
DigitalOcean Holdings disclosed 58 risk factors in its most recent earnings report. DigitalOcean Holdings reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
DigitalOcean Holdings Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $4.45B | 22.85 | 37.04% | 1.36% | 46.60% | 66.04% | |
70 Outperform | $2.76B | 59.96 | 15.70% | ― | 27.12% | ― | |
69 Neutral | $13.74B | 45.37 | 54.71% | ― | 17.61% | 119.62% | |
67 Neutral | $2.13B | 46.94 | 19.61% | 0.70% | 12.08% | -8.14% | |
62 Neutral | $3.60B | 521.41 | 2.41% | ― | 9.93% | ― | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
DOCN
DigitalOcean Holdings
124.15
91.10
275.64%
ATEN
A10 Networks
26.84
9.64
56.03%
TENB
Tenable Holdings
36.38
7.39
25.49%
AVPT
AvePoint
12.79
-1.54
-10.75%
DLO
DLocal
14.41
3.62
33.53%
DigitalOcean Holdings Corporate Events
Business Operations and StrategyPrivate Placements and Financing
DigitalOcean restructures capital via major debt repurchase
Neutral
Jul 24, 2026
On July 23, 2026, DigitalOcean Holdings, Inc. completed the repurchase of approximately $471.8 million in principal amount of its 0.00% Convertible Senior Notes due 2030 from a limited number of noteholders in privately negotiated transactions, pa...
Private Placements and FinancingRegulatory Filings and Compliance
DigitalOcean advances legal approval for new stock offering
Positive
Jul 23, 2026
DigitalOcean Holdings, Inc. disclosed that Freshfields US LLP has issued a legal opinion affirming the legality of the issuance and sale of its common stock. The shares are being offered under a prospectus supplement dated July 15, 2026, indicatin...
Executive/Board ChangesShareholder Meetings
DigitalOcean Shareholders Approve Directors, Auditor and Executive Pay
Positive
Jun 17, 2026
At its June 15, 2026 annual meeting, DigitalOcean stockholders elected Warren Adelman and Pueo Keffer as Class II directors to serve on the board until the 2029 annual meeting, reinforcing the company’s longer-term governance structure. Stoc...
Business Operations and StrategyFinancial DisclosuresM&A TransactionsPrivate Placements and FinancingProduct-Related Announcements
DigitalOcean Posts Strong Q1 Growth, Expands AI Cloud
Positive
May 5, 2026
DigitalOcean reported first-quarter 2026 results on May 5, posting revenue of $258 million, up 22% year over year, and annual run-rate revenue of $1.03 billion, while AI customer ARR surged 221% to $170 million and million-dollar customer ARR jump...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.