DigitalOcean (DOCN) Q1 2026 earnings summary

Executive summary

• Q1 2026 revenue reached $258 million, up 22% year-over-year, driven by strong AI adoption and Digital Native Enterprise (DNE) customer growth.

• AI Customer ARR surged 221% to $170 million, with $1M+ customer ARR rising 179% to $183 million; over 80% of AI ARR came from non-bare metal services.

• Launched the AI-Native Cloud platform with 15+ new products and acquired Katanemo Labs to enhance agentic AI infrastructure.

• Raised $888 million in equity, repaid $500 million in debt, and expanded data center capacity by 60 MW, bringing total committed to 135 MW.

• Raised 2026 revenue growth guidance to 25%-27% and 2027 to 50%+ year-over-year, supported by robust demand and new capacity.

Financial highlights

• Q1 2026 revenue: $258 million (+22% YoY); adjusted EBITDA: $105 million (41% margin); adjusted operating income: $64 million (25% margin); GAAP operating income: $37 million (14% margin).

• Net income attributable to common stockholders was $16 million, down 59% year-over-year; diluted EPS was $0.15; non-GAAP diluted EPS was $0.44.

• Trailing twelve-month adjusted free cash flow: $171 million (18% of revenue); Q1 adjusted free cash flow margin was 1%.

• Q2 2026 revenue guidance: $272-$274 million (+24%-25% YoY); adjusted EBITDA margin: 37%-38%.

• Full-year 2026 revenue guidance: $1.13-$1.145 billion (+25%-27% YoY); adjusted EBITDA margin: 37%-39%.

Outlook and guidance

• 2026 revenue growth guidance raised to 25%-27% YoY, with Q4 exit rate near 30%.

• 2027 revenue growth projected at 50%+ YoY, driven by new 60 MW capacity ramping.

• Adjusted free cash flow margin for 2026: 9%-12% (including $100M start-up costs); would be 18%-21% excluding these costs.

• 2027 adjusted free cash flow margin expected in high teens.

• Non-GAAP diluted EPS for 2026 expected at $1.10–$1.20.