The cloud provider beat estimates, raised its outlook, and reported AI customer ARR of $376 million
DigitalOcean reported third-quarter revenue of $321 million, a 40% jump from a year earlier. The company beat consensus estimates on both revenue and earnings.
According to the company’s results, it is DigitalOcean’s fastest expansion in a decade. It also marks the fifth straight quarter of accelerating growth.
The numbers behind the beat
DigitalOcean added a record $160 million in incremental ARR during the third quarter. That is up 266% year over year.
AI was the standout driver. ARR from AI customers reached $376 million, up 288% from a year earlier.
Large customers also grew quickly. ARR from customers spending more than $1 million annually hit $386 million, a 273% increase.
Through the first nine months of the year, DigitalOcean has booked $860 million in revenue.
Profitable growth, which is rarer than it sounds
The company reported an adjusted EBITDA margin of 45%.
Customer stickiness is also improving. About 60% of revenue now comes from customers using four or more DigitalOcean products.
The AI-native pivot is showing up in usage
Token volume tied to inference grew roughly 10-fold quarter over quarter.
Guidance goes up, again
Management raised both its fourth-quarter and full-year 2026 outlooks after the results.
The company now projects fourth-quarter revenue growth of 44-45%.
DigitalOcean also expects revenue growth of more than 60% for fiscal 2027.
Following the report, DOCN shares were trading around $89-$91, giving the company a market capitalization of approximately $10.5 billion.
