DigitalOcean’s second quarter results were well received by the market, reflecting strong demand for its AI-native cloud platform and continued success in landing larger, high-value customers. Management credited the acceleration in revenue growth to traction with inference services, which grew nearly 800% year-over-year, and increasing adoption of the company’s full stack platform by sophisticated AI-native businesses. CEO Padmanabhan Srinivasan emphasized that the company’s differentiated software and integrated infrastructure enabled it to deliver value to customers beyond raw computing capacity, resulting in a broader and more durable revenue base.
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DigitalOcean (DOCN) Q2 CY2026 Highlights:
- Revenue: $281.2 million vs analyst estimates of $278.8 million (28.6% year-on-year growth, 0.9% beat)
- Adjusted EPS: $0.45 vs analyst estimates of $0.26 (72.9% beat)
- Adjusted EBITDA: $113.6 million vs analyst estimates of $105.7 million (40.4% margin, 7.4% beat)
- The company lifted its revenue guidance for the full year to $1.18 billion at the midpoint from $1.14 billion, a 3.3% increase
- Management raised its full-year Adjusted EPS guidance to $1.38 at the midpoint, a 19.6% increase
- Operating Margin: 10.4%, down from 16.3% in the same quarter last year
- Annual Recurring Revenue: $1.13 billion (28.6% year-on-year growth, beat)
- Billings: $327.9 million at quarter end, up 46.2% year on year
- Market Capitalization: $15.25 billion
While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From DigitalOcean’s Q2 Earnings Call
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Gabriela Borges (Goldman Sachs) asked about scaling for larger customers, with CEO Padmanabhan Srinivasan emphasizing DigitalOcean’s history of global scale and new hires in sales and marketing to address sophisticated AI workloads.
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Jason Ader (William Blair) inquired about the impact of recent price increases on revenue growth, with CFO Matt Steinfort describing the effect as modest for Q2 and noting that new pricing is already reflected in forward guidance.
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Mark Zhang (Citi) questioned the adoption of additional platform layers by large customers, to which Srinivasan highlighted that most major AI customers are already integrating core cloud services beyond inference and that the company is focused on deepening these relationships.
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Wamsi Mohan (Bank of America) pressed for more color on 2027 growth outlook, with Steinfort stating it is too early for specifics but affirming that the current momentum and backlog suggest possible upside to their previous projections.
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Sanjit Singh (Morgan Stanley) explored drivers of revenue per megawatt, with Steinfort explaining that software integration, higher attach rates, and next-generation hardware will help maintain a premium over competitors despite industry mix shifts.
Catalysts in Upcoming Quarters
In future quarters, the StockStory team will be watching (1) the pace of adoption and monetization for new AI-native services, especially inference and agentic workflows, (2) execution and fill rates on additional data center capacity coming online, and (3) the continued growth and diversification of large customer cohorts. Progress on integrating new platform features and maintaining strong margins will also be key signposts for sustained performance.
DigitalOcean currently trades at $131, up from $127.17 just before the earnings. Is there an opportunity in the stock? See for yourself in our full research report (it’s free).
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