The earnings call reflects a positive overall sentiment driven by strong revenue growth, particularly in the AI/ML segment, increased ARR, and improved profitability. While there are some challenges with net dollar retention and share repurchase constraints due to debt priorities, the company's performance and future outlook remain robust.

Company Guidance -

Q3 2025

During DigitalOcean's Second Quarter 2025 earnings call, the company reported strong financial results and announced an increase in their full-year guidance for both revenue and profitability metrics. The second quarter revenue was $219 million, reflecting a 14% year-over-year growth, and revenue from their AI/ML business grew over 100% year-over-year. The company's Scalers+ customers, who contribute 24% of total revenue, experienced a 35% growth. DigitalOcean also achieved an incremental ARR of $32 million, marking the highest organic increment in over three years. In response to this positive performance, the full-year revenue guidance range has been raised to $888 million to $892 million. Additionally, the company increased its adjusted free cash flow guidance to 17% to 19% of revenue, with a second-quarter adjusted free cash flow of $57 million, or 26% of revenue. The company is capitalizing on the momentum in its AI/ML platform and core cloud services, with significant progress in product innovation and customer acquisition strategies.

Strong Revenue Growth

DigitalOcean reported Q2 2025 revenue of $219 million, representing a 14% year-over-year increase. The company raised its full-year revenue guidance to $888 million to $892 million.

AI/ML Business Expansion

Revenue from the AI/ML segment grew over 100% year-over-year. The company is seeing strong demand for AI infrastructure, particularly in inferencing workloads.

High Incremental ARR

The company achieved incremental annual recurring revenue (ARR) of $32 million, the highest since Q4 2022 and the highest organic incremental ARR in over three years.

Profitability and Cash Flow

Adjusted EBITDA for Q2 was $89 million with a margin of 41%. Adjusted free cash flow was $57 million, or 26% of revenue, leading to an increase in full-year free cash flow guidance to 17% to 19% of revenue.

Product Innovation

DigitalOcean released over 60 new products and features, including a new AI platform and advanced networking features, which have been adopted by many top customers.

DigitalOcean Holdings (DOCN) Earnings, Revenues Date & History

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DOCN Earnings History

Report Date	Fiscal Quarter	Forecast / EPS	Last Year's EPS	EPS YoY Change	Slides	Play Transcript
Oct 30, 2025	2025 (Q3)	0.49 / -	0.52	―	―	―
Aug 05, 2025	2025 (Q2)	0.47 / 0.59	0.48	22.92% (+0.11)
May 06, 2025	2025 (Q1)	0.44 / 0.56	0.43	30.23% (+0.13)
Feb 25, 2025	2024 (Q4)	0.34 / 0.49	0.44	11.36% (+0.05)
Nov 04, 2024	2024 (Q3)	0.40 / 0.52	0.44	18.18% (+0.08)
Aug 08, 2024	2024 (Q2)	0.39 / 0.48	0.434	10.60% (+0.05)
May 10, 2024	2024 (Q1)	0.38 / 0.43	0.28	53.57% (+0.15)
Feb 21, 2024	2023 (Q4)	0.36 / 0.44	0.28	57.14% (+0.16)
Nov 02, 2023	2023 (Q3)	0.36 / 0.44	0.38	15.79% (+0.06)
Aug 03, 2023	2023 (Q2)	0.41 / 0.43	0.2	117.00% (+0.23)

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.

Beat

Missed

DOCN Earnings-Related Price Changes

Report Date	Price 1 Day Before	Price 1 Day After	Percentage Change
Aug 05, 2025	$27.01	$34.81	+28.88%
May 06, 2025	$32.76	$28.25	-13.77%
Feb 25, 2025	$37.17	$40.83	+9.85%
Nov 04, 2024	$40.83	$35.33	-13.47%

Earnings announcements can affect a stock’s price. This table shows the stock's price the day before and the day after recent earnings reports, including the percentage change.