Latest quarter
DigitalOcean reported Q2 FY2026 revenue of $281.2 million, above the consensus of $277.8 million and up from $218.7 million a year earlier. The company’s filing attributed the increase to revenue growth from its DNE customers, including new AI customers and greater usage by existing customers.
Gross margin fell to 55.0% from 59.9%. The filing attributed the decline to data center expansion costs incurred ahead of revenue from the new facilities. It also said research and development and administrative expenses rose in part because of higher personnel costs.
DigitalOcean reported an operating margin of 10.4%, down from 16.3% a year earlier, and diluted earnings per share of $0.29, compared with $0.39. The filing said an increase in excess tax benefits on stock-based compensation contributed to an income tax benefit for the quarter. Free cash flow was $20.8 million, compared with $57.0 million a year earlier.
| Q2 FY2026 | Q2 FY2025 | Change | |
|---|---|---|---|
| Revenue | $281.2 million | $218.7 million | 28.6% |
| Diluted EPS | $0.29 | $0.39 | −25.6% |
| Gross margin | 55.0% | 59.9% | −4.9 percentage points |
| Operating margin | 10.4% | 16.3% | −5.8 percentage points |
| Free cash flow | $20.8 million | $57.0 million | −63.4% |
| Against the consensus | Reported | Consensus | Result |
|---|---|---|---|
| Revenue | $281.2 million | $277.8 million | Beat by 1.23% |
Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.
What management said on the call
An earnings call was not available for the quarter, so there is no call commentary to report.
Guidance
DigitalOcean said it raised its FY2026 revenue outlook, citing customer momentum and early product traction. The company expects revenue growth to reach 35.0% or more by Q4 FY2026.
| Metric | For | Guide | Previous guide | Change |
|---|---|---|---|---|
| Revenue growth, Growth | FY2027 | 50.0% | — | New |
| Revenue growth, Growth | Q4 FY2026 | 35.0% | — | New |
| EPS, non-GAAP | FY2026 | $1.35–$1.40 | — | New |
| Free cash flow growth, Non Gaap Margin | FY2026 | 11.0%–13.0% | — | New |
| EBITDA growth, Non Gaap Margin | FY2026 | 38.5%–39.5% | — | New |
| Revenue | FY2026 | $1.2 billion–$1.2 billion | — | New |
| EPS, non-GAAP | Q3 FY2026 | $0.28–$0.30 | — | New |
| EBITDA growth, Non Gaap Margin | Q3 FY2026 | 38.0%–39.0% | — | New |
| Revenue | Q3 FY2026 | $304.0 million–$307.0 million | — | New |