DigitalOcean Holdings, Inc. Q4 FY2025 Earnings Call

· Earnings call transcript and AI-powered summary

DigitalOcean Holdings, Inc. Q4 & Full Year 2025 Earnings Summary

Financial Highlights (Q4 2025 vs. Q4 2024; Full Year 2025 vs. 2024)
  • Revenue: Q4 $242M (+18% YoY); Full year $901M (growth reaccelerated 500 bps from prior year period).
  • Gross Profit: Q4 $102M (+13% YoY, 59% margin); Full year $540M (+16% YoY, 60% margin).
  • Adjusted EBITDA: Q4 $99M (41% margin); Full year $375M (42% margin).
  • Trailing twelve-month Adjusted Free Cash Flow: $168M (19% of revenue).
  • GAAP Diluted EPS: Full year $2.52 (+183% YoY); Non-GAAP Diluted EPS: Full year $2.12 (+10% YoY). Excluding 2025 financing impacts: $2.29 full year / $0.53 Q4.
  • Stock-based Compensation: 9% of revenue (down from 12% prior year); Adjusted EBITDA less SBC margin at 33%.
  • Share Repurchases: 2.4M shares for $82M (~$35 avg price); $100M authorization remains through 07/31/2027.
Key Growth & Customer Metrics (Comparisons to Prior Periods)
  • Record organic incremental ARR: $51M in Q4; TTM $150M (highest in company history, surpassing peak COVID quarters).
  • Million-dollar customers: $133M ARR (+123% YoY); NDR 115%; 0% churn over last 12 months.
  • $100K customers: +58% YoY growth, 102% NDR; $500K customers: +97% YoY, 106% NDR.
  • Digital-native enterprises (DNEs): $640M ARR (62% of total, +30% YoY); DNE NDR 102% (outperforming developer NDR).
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Operator: Good morning, and thank you for standing by. My name is John, and I will be your conference operator today. At this time, I would like to welcome everyone to the DigitalOcean Holdings, Inc. Fourth Quarter Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. To withdraw your questions, simply press star one again. I would now like to turn the conference over to Melanie Strate, Head of Investor Relations. Please go ahead. Thank you, and good morning. Thank you all for joining us today to review DigitalOcean Holdings, Inc.'s fourth quarter and full year 2025 financial results and an investor update. Joining me on the call today are Padmanabhan Srinivasan, our Chief Executive Officer, and W. Matthew 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 websi
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