DigitalOcean Holdings Reports Q2 2026 Results: Full Earnings Call Transcript

On Tuesday, DigitalOcean Holdings (NYSE: DOCN ) discussed second-quarter financial results during its earnings call.

The full transcript is provided below.

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Access the full call at Summary DigitalOcean Holdings reported a strong Q2 with a 29% year-over-year revenue growth, surpassing guidance on all key metrics.

The company's Inference Services saw significant traction, growing 800% year-over-year and now representing over 70% of AI customer ARR.

DigitalOcean Holdings raised its 2026 revenue growth outlook to approximately 30% and projects a 35% growth rate by Q4 2026, with confidence in 50% plus growth for 2027.

The company launched its inference engine in late April, which has already acquired over 6,000 customers and is driving a flywheel effect, leading to increased adoption of its AI-native cloud platform.

Operationally, DigitalOcean Holdings is ahead of schedule with its 2026 capacity expansions, having secured an additional 20 megawatts, and has strengthened its balance sheet by reducing leverage.

Management emphasized disciplined execution and durable growth, with improvements in adjusted EBITDA and operating income margins.

The company's AI-native cloud is becoming increasingly attractive to high-spending customers, with ARR from $100K-plus customers growing 98% year-over-year.

DigitalOcean Holdings' strategy focuses on integrating high-quality AI-native customers into its platform, enhancing its software capabilities to drive higher ARR per megawatt.

Full Transcript OPERATOR Let me remind you that certain statements made on today's call may be considered forward-looking, which reflect management's best judgment based on currently available information.

Our actual results may differ materially from those projected in these forward-looking statements, including our financial outlook.

I direct your attention to the risk factors contained in our SEC filings as well as those referenced in today's press release that is posted on our website.

DigitalOcean Holdings expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements made today.

Additionally, non-GAAP financial measures will be discussed on this conference call.

Reconciliations to the most comparable GAAP financial measures can be found in today's earnings press release as well as in our investor presentation that outlines the discussion on today's call.

A webcast of today's call is available in the IR section of our website and with that I turn the call Paddy Srinivasan, Chief Executive Officer Thank you, Radu.

Good morning, everyone, and thank you for joining us today.

We had an exceptional Q2 as we continue to accelerate growth in a disciplined way, and I'm excited to share the highlights with all of you.

Let me start with four key takeaways from the quarter.

First, our growth rate continues to accelerate.

As we previewed several weeks ago, Q2 was another strong quarter for DigitalOcean Holdings.

We were above guidance on every key metric.

We delivered 29% year-over-year revenue growth while continuing to have strong profitability.

Second, our Inference Services, the collection of all non—bare metal inferencing capabilities on our AI-native cloud, is getting tremendous traction and grew almost 800% year over year.

Launched in late April this year, our inference engine, which is a managed offering that includes serverless inference and related technologies, is off to a flying start with over 6,000 customers, including material inference workloads from some of the most sophisticated AI-native companies.

Third, an AI-native flywheel is emerging, driving adoption across our full AI-native cloud with a new entry point through our inference engine.

We're already seeing early signs of this flywheel.

More than half of new AI customers added year to date had Core Cloud attached.

We believe this flywheel will drive higher-margin and stickier services, further increasing our ARR per megawatt and differentiating us from bare metal NEO clouds.

And finally, we continue to focus on disciplined execution and durable growth while we continue to manage the same supply chain challenges that face the entire industry.

We are delivering our new 2026 capacity on time and, in some cases, ahead of schedule.

We secured an incremental 20 megawatts.

We strengthened our balance sheet.