DigitalOcean forecast beats Wall Street estimates on AI boom strength
DigitalOcean forecast beats Wall Street estimates on AI boom strength By Stephen Nellis
SAN FRANCISCO, Aug 4 (Reuters) - DigitalOcean Holdings DOCN.N shares closed higher on Tuesday after the company lifted its full-year 2026 sales and profit forecast above Wall Street estimates, as AI software companies increasingly use its cloud computing services.
DigitalOcean said it expects sales between $1.17 billion and $1.18 billion for 2026, above analyst estimates of $1.16 billion, according to LSEG data. The Broomfield, Colorado-based company expects full-year adjusted profits of between $1.35 and $1.40 per share, above LSEG average estimates of $1.25 per share.
DigitalOcean, a so-called "neocloud" that sells cloud infrastructure specifically to software companies building AI products, also reported second-quarter sales and adjusted profits of $281 million and 45 cents per share, both above estimates of $279.19 million and 26 cents per share, according to LSEG data.
Shares closed 1.35% higher at $128.89 on Tuesday. The company had given a preview of the second-quarter results on July 7, and had said it expected to boost its 2026 sales forecast.
DigitalOcean also repurchased $472 million in debt during the quarter. In an interview with Reuters, DigitalOcean CEO Paddy Srinivasan said the company projects 50% year-on-year revenue growth in 2027 while remaining cash-flow positive.
"Many of our competitors are levering the hell up, and maybe there is a touch of madness to it," Srinivasan said. "But we are zagging when everyone else is zigging."
(Reporting by Stephen Nellis in San Francisco; Editing by Jamie Freed)