DigitalOcean (DOCN) Q1 2026 earnings summary

Executive summary

• Q1 2026 revenue reached $258 million, up 22% year-over-year, with strong growth in AI and large customer segments.

• AI Customer ARR surged 221% to $170 million, with over 80% from non-bare metal services.

• Launched the AI-Native Cloud platform with 15+ new products and acquired Katanemo to enhance agentic AI infrastructure.

• Raised $888 million in equity, strengthening the balance sheet, repaying debt, and enabling 60 MW of new data center capacity, bringing total committed capacity to 135 MW.

• Raised full-year 2026 revenue growth guidance to 25%-27% and 2027 growth to 50%+, driven by strong demand and new capacity.

Financial highlights

• Q1 2026 revenue was $258 million, up 22% year-over-year, exceeding guidance; ARR ended at $1.032 billion.

• Adjusted EBITDA was $105 million (41% margin); adjusted operating income was $64 million (25% margin); GAAP operating income was $37 million (14% margin).

• Non-GAAP diluted EPS for Q1 2026 was $0.44.

• Trailing twelve-month adjusted free cash flow was $171 million (18% of revenue); Q1 adjusted free cash flow margin was 1%.

• Net dollar retention rate was 101% for Q1 2026.

Outlook and guidance

• Q2 2026 revenue expected at $272–$274 million (24–25% growth), with adjusted EBITDA margin of 37–38%.

• Full-year 2026 revenue guidance raised to $1.13–$1.145 billion (25–27% growth), with adjusted EBITDA margin of 37–39%.

• 2027 revenue projected to exceed $1.7 billion (50%+ growth), with ~40% adjusted EBITDA margin and high teens free cash flow margin.

• Non-GAAP diluted EPS for 2026 expected at $1.10–$1.20.

• Adjusted free cash flow margin for FY 2026 expected at 9–12%.