DigitalOcean Holdings, Inc. Q3 FY2025 Earnings Call

· Earnings call transcript and AI-powered summary

Overview

DigitalOcean reported strong Q3 2025 results, exceeding guidance on revenue and profitability. Revenue grew 16% YoY to $230M (highest growth since Q3 2023), with record organic incremental ARR of $44M and total ARR reaching $919M. The company highlighted accelerating traction with its unified "agentic cloud" platform, particularly among AI-native and large digital native enterprise customers. Demand for AI infrastructure exceeded supply, prompting raised 2025/2026 guidance and increased investments in data centers and GPUs. Management raised full-year 2025 revenue outlook and now expects to achieve its original 2027 growth target (18-20%) in 2026.

Key Financial Highlights (Q3 2025 vs Prior Periods)

  • Revenue: $230M, +16% YoY (vs. prior year; highest since Q3 2023). Q4 2025 guidance: $237-238M (+16% YoY). Full-year 2025 guidance raised to $896-897M (~15% YoY growth, +100 bps vs. prior guidance).
  • ARR & Incremental ARR: ARR $919M; record organic incremental ARR $44M.
  • Large Customer Growth: Customers >$1M ARR contributed $110M ARR (+72% YoY); >$500k ARR grew 55% YoY; >$100k ARR cohort now 26% of revenue (+41% YoY, +200 bps vs. prior year).
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Operator: Thank you for standing by. My name is Rebecca, and I will be your conference operator today. At this time, I would like to welcome everyone to the DigitalOcean Third Quarter 2025 Earnings Conference Call. [Operator Instructions] I would like to turn the call over to Melanie Strate, Head of Investor Relations. Please go ahead. Melanie Strate: Thank you, Rebecca, and good morning. Thank you all for joining us today to review DigitalOcean's Third Quarter 2025 Financial Results. Joining me on the call today are Paddy Srinivasan, our Chief Executive Officer; and Matt Steinfort, our Chief Financial Officer. Before we begin, let me remind you that certain statements made on the call today may be considered forward-looking statements, 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 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 and reconciliations to the most directly comparable GAAP financial measures can be found in today's earnings press release as well as
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