DigitalOcean Q2 profit beats estimates, lifts 2026 revenue outlook
DigitalOcean Q2 profit beats estimates, lifts 2026 revenue outlook
Overview
US cloud infrastructure provider's Q2 revenue grew 29% yr/yr, slightly beating analyst expectations
Adjusted EPS for Q2 beat analyst expectations
Company raised 2026 revenue outlook, citing accelerating growth from large and AI customers
Outlook
DigitalOcean raises 2026 revenue outlook to $1.170-$1.180 bln, up 30%-31% yr/yr
Company sees Q3 2026 revenue of $304-$307 mln, up 32%-34% yr/yr
DigitalOcean expects to exceed 50% revenue growth in 2027
Result Drivers
LARGE CUSTOMER GROWTH - Revenue acceleration attributed to highest spending customers and AI-focused clients, with $1M+ customer ARR up 214% yr/yr
AI PRODUCT DEMAND - AI customer ARR grew 212% yr/yr to $234 mln, with 85% now from inference and core cloud, driven by increased token consumption in new Inference Engine
LONGER-TERM CONTRACTS - Signed first nine-figure annual customer commitments, extending weighted average contract life from 1.6 years to over 3 years
Company press release: ID:nBw3VXXvba
Key Details
Metric | Beat/Miss | Actual | Consensus Estimate |
Q2 Revenue | Slight Beat* | $281.18 mln | $279.19 mln (15 Analysts) |
Q2 Adjusted EPS | Beat | $0.45 | $0.26 (16 Analysts) |
Q2 Net Income |
| $35.44 mln |
|
Q2 Gross Profit |
| $154.66 mln |
|
Q2 Pretax Profit |
| $27.14 mln |
|
*Applies to a deviation of less than 1%; not applicable for per-share numbers.
Analyst Coverage
The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 14 "strong buy" or "buy", 3 "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 $175.00, about 37.6% above its August 3 closing price of $127.17
The stock recently traded at 82 times the next 12-month earnings vs. a P/E of 77 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.)