DigitalOcean (DOCN) investor relations material

Executive summary

• Revenue grew 29% year-over-year in Q2 2026 to $281.2 million, with ARR reaching $1.125 billion and AI Customer ARR up 212% to $234 million; strong profitability and record incremental ARR of $93 million were achieved.

• Inference services revenue surged nearly 800% year-over-year, with over 6,000 customers adopting the Inference Engine since its April launch.

• Adjusted EBITDA margin was 40%, with disciplined execution in capacity deployment and leverage reduction.

• Net income for Q2 2026 was $35.4 million, down slightly from $37.0 million in Q2 2025, with diluted EPS of $0.29.

• Raised full-year 2026 revenue outlook to approximately 30–31% growth, targeting a 35%+ exit rate and reaffirmed confidence in 50%+ growth for 2027.

Financial highlights

• Q2 2026 revenue: $281.2 million, up 29% year-over-year; ARR reached $1.125 billion; incremental ARR in Q2 was $93 million, up 191% year-over-year.

• Adjusted EBITDA: $113.6 million (40% margin); adjusted operating income: $67 million (24% margin); adjusted free cash flow for the quarter was $61 million.

• Net income margin was 13% for Q2 2026; diluted net income per share was $0.29; non-GAAP diluted net income per share was $0.45.

• Cash and cash equivalents at June 30, 2026: $767 million.

• RPO increased to $894 million, up more than 12x year-over-year, with a 3.7-year average life.

Outlook and guidance

• Q3 2026 revenue expected at $304–$307 million, representing 32–34% year-over-year growth; adjusted EBITDA margin 38–39%.

• Full-year 2026 revenue guidance raised to $1.170–$1.180 billion, ~30–31% year-over-year growth, with 35%+ exit growth rate.

• Adjusted EBITDA margin for 2026 projected at 38.5–39.5%; non-GAAP diluted EPS of $1.35–$1.40; adjusted free cash flow margin of 11–13%.

• Management expresses increased confidence in achieving 50%+ revenue growth for 2027.

• Investments in data center capacity and AI/ML offerings are expected to support future growth.