DigitalOcean beats Q3 revenue estimates, raises outlook

DigitalOcean Holdings

05/11/2025 12:14

Overview

DigitalOcean Q3 rev rises 16% yr/yr to $230 mln, beating analyst expectations

Net income for Q3 surged 381% yr/yr due to one-time tax benefit and debt gain

Company raises full-year 2025 revenue and profitability outlook

Outlook

DigitalOcean expects Q4 revenue of $237 to $238 mln

Company raises 2025 revenue guidance to $896 to $897 mln

DigitalOcean forecasts 2025 adjusted EBITDA margin of 40.7% to 41%

Result Drivers

AI DEMAND - Direct AI revenue more than doubled year-over-year for the fifth consecutive quarter, driving growth

LARGER CLIENTS - Customers with annual run-rate over $1 mln grew 72% yr/yr, driving $110 mln total ARR

AGENTIC CLOUD PLATFORM - Unified agentic cloud platform gaining momentum among AI and digital native enterprises

Key Details

Metric
Beat/Miss
Actual
Consensus Estimate
Q3 Revenue
Beat
$229.63 mln
$226.50 mln (11 Analysts)
Q3 Net Income
$158.37 mln
Q3 Gross Profit
$136.93 mln
Q3 Pretax Profit
$90.31 mln


Analyst Coverage

The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 7 "strong buy" or "buy", 5 "hold" and 1 "sell" or "strong sell"

The average consensus recommendation for the it services & consulting peer group is "buy"

Wall Street's median 12-month price target for DigitalOcean Holdings Inc is $40.00, about 2.9% above its November 4 closing price of $38.82

The stock recently traded at 18 times the next 12-month earnings vs. a P/E of 14 three months ago

Press Release: ID:nBw1D0k2Da

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)