DigitalOcean (DOCN) Q2 2026 earnings summary

Executive summary

• Revenue grew 29% year-over-year in Q2 2026 to $281.2 million, with ARR reaching $1.125 billion and record incremental ARR of $93 million; AI Customer ARR surged 212% to $234 million, and Million+ Dollar Customer ARR rose 214% to $259 million.

• Inference services revenue grew nearly 800% year-over-year, now representing over 70% of AI customer ARR, with the Inference Engine gaining over 6,000 customers since launch in late April and driving platform adoption.

• Adjusted EBITDA margin was 40% for Q2 2026, with adjusted EBITDA of $113.6 million and adjusted operating income margin of 24%.

• Net income attributable to common stockholders was $35 million, down 4% year-over-year, with diluted EPS of $0.29 and non-GAAP diluted EPS of $0.45.

• Secured first nine-figure annual revenue commitments, increasing remaining performance obligations to $894 million, up 12x year-over-year, and extended average contract life to over 3 years.

Financial highlights

• Q2 2026 revenue: $281.2 million, up 29% year-over-year, with ARR at $1.125 billion and incremental ARR of $93 million.

• Adjusted EBITDA: $113.6 million (40% margin); adjusted operating income: $67 million (24% margin); adjusted free cash flow: $61 million (22% margin).

• Net income: $35.4 million; diluted EPS: $0.29; non-GAAP diluted EPS: $0.45.

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

• Top 25 customers represented only 20% of ARR, indicating broad customer diversification.

Outlook and guidance

• Q3 2026 revenue guidance: $304–$307 million, up 32–34% year-over-year; adjusted EBITDA margin 38–39%.

• Full-year 2026 revenue expected at $1.170–$1.180 billion (30–31% growth), with adjusted EBITDA margin 38.5–39.5% and non-GAAP diluted EPS of $1.35–$1.40.

• Adjusted free cash flow margin for 2026 guided at 11–13%, higher than prior guidance.

• Exit growth rate for 2026 expected at 35%+; strong conviction in 50%+ revenue growth for 2027.

• Management expects continued revenue growth driven by DNE and AI customer expansion.