DigitalOcean Q1 revenue rises 22%, beats estimates; lifts outlook

DigitalOcean Holdings

05/05/2026 12:32

Overview

US AI-Native Cloud provider's Q1 revenue grew 22% yr/yr, beating analyst expectations

Adjusted EPS for Q1 beat consensus, driven by strong customer demand

Company raised 2026 and 2027 revenue outlook on increased customer demand and capacity

Outlook

DigitalOcean raises 2026 revenue outlook to $1.130-$1.145 bln, up 25%-27% yr-over-yr

Company expects 2027 revenue growth to exceed 50%

DigitalOcean sees Q2 2026 revenue of $272-$274 mln, up 24%-25% yr-over-yr

Result Drivers

LARGE CUSTOMER GROWTH - Revenue gains driven by 179% yr/yr increase in Million+ Dollar Customer ARR and 221% yr/yr increase in AI Customer ARR

AI-NATIVE CLOUD LAUNCH - Launch of DigitalOcean AI-Native Cloud and 15+ new products contributed to platform differentiation and customer demand

CAPACITY EXPANSION - Added ~60 MW of incremental committed data center capacity to support growing demand

Company press release: ID:nBw8QmqbNa

Key Details

Metric
Beat/Miss
Actual
Consensus Estimate
Q1 Revenue
Beat
$257.91 mln
$249.74 mln (13 Analysts)
Q1 Net Income
$15.77 mln
Q1 Gross Profit
$144.71 mln
Q1 Pretax Profit
$24.50 mln


Analyst Coverage

The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 11 "strong buy" or "buy", 4 "hold" and no "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 $105.00, about 3.5% below its May 4 closing price of $108.81

The stock recently traded at 86 times the next 12-month earnings vs. a P/E of 28 three months ago

For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.

(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.)