DigitalOcean Holdings, Inc. Q1 FY2026 Earnings Call

· Earnings call transcript and AI-powered summary

Overview: DigitalOcean reported strong Q1 2026 results with accelerating momentum driven by AI-native and large cloud customers. The company launched its AI Native Cloud platform and raised $888 million in equity to expand capacity. All prior financial targets were exceeded, leading to raised guidance for 2026 and 2027.

Financial Highlights (Q1 2026 vs. Prior Periods)

  • Revenue: $258 million, +22% year-over-year (improved from 18% exit growth rate in Q4 2025).
  • Adjusted EBITDA: $105 million (+21% YoY), margin 41%.
  • GAAP Operating Income: $37 million (14% margin).
  • Adjusted Operating Income: $64 million (25% margin).
  • Trailing 12-Month Adjusted Free Cash Flow: $171 million (18% of revenue); less lease payments: $154 million (16% of revenue).
  • Richmond Data Center Contribution: Less than $500k revenue and <20 bps of YoY growth in Q1.

Growth Metrics (Q1 2026 vs. Prior Periods)

  • $1M+ ARR Customers: $183 million (+179% YoY; accelerated from +123% last quarter).
  • AI Customer ARR: $170 million (+221% YoY); over 80% from inference and core cloud services (up from 70% in Q4 2025).
  • $100k+ ARR Customers: +73% YoY.
  • $500k+ ARR Customers: +132% YoY.
Professional feature The full AI summary covers key highlights, financial performance and analyst Q&A.
Operator: Thank you for standing by. My name is Jill, and I will be your conference operator today. At this time, I would like to welcome everyone to the DigitalOcean's First Quarter 2026 Earnings Conference Call. [Operator Instructions] I would now like to turn the conference over to [ Raju Patrike ], Head of Investor Relations. You may begin. Unknown Executive: Great. Thank you, Jill, and good morning, everyone. Thank you all for joining us today to review DigitalOcean's First Quarter 2026 results. Joining me on the call today are Paddy Srinivasan, our Chief Executive Officer; and Matt Steinfort, our Chief Financial Officer. For those of you following along, an accompanying slide presentation is available on the webcast. Before we begin, let me remind you that certain statements made on the call today may be considered forward-looking statements, which reflects 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 earnings -- in our filings with the SEC as well as those referenced in today's press release that is posted on our website. DigitalOcean 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
Professional feature The full transcript includes every speaker turn.