DigitalOcean Boasts 13% Revenue Growth In Q4, Raises Full-Year Guidance Due To AI Momentum (CORRECTED)

Editor’s Note: The story has been updated to correct the company’s name to DigitalOcean Holdings Inc

Cloud computing platform DigitalOcean Holdings, Inc. DOCN reported financial results for the fourth quarter Tuesday. Here’s a rundown of the report.

Q4 Earnings: DigitalOcean reported revenue of $204.93 million, beating the consensus estimate of $200.51 million. The company reported adjusted earnings of 49 cents per share, beating analyst estimates of 34 cents per share.

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• Total revenue increased 13% year-over-year.
• Annual Run-Rate Revenue (ARR) was $820 million, up by 13%.
• Net cash from operating activities totaled $71 million, down from $81 million a year ago.
• Adjusted free cash flow reached $37 million versus $29 million a year ago.
• Quarter ended with $428 million in cash, cash equivalents, restricted cash, and investments.

In the fourth quarter, DigitalOcean released over four times as many products and features as it did a year ago. The company also:

• Increased net dollar retention to 99%
• Grew revenue by 13% year-over-year
• Delivered 18% adjusted free cash flow margin

DigitalOcean CEO Paddy Srinivasan said the company’s “continued traction in AI” drove quarterly revenue for its top 500 customers, representing 22% of total revenue, grew at 37% year-over-year.

Outlook: DigitalOcean expects first-quarter revenue of $207 million-$209 million versus estimates of $207.71 million and adjusted EPS of $0.41-$0.46 versus $0.42 estimate.

DigitalOcean expects fiscal year 2025 revenue of $870 million-$890 million versus estimates of $877.56 million and adjusted EPS of $1.85-$1.95 against analyst consensus of $1.84.

Price Action: DOCN stock is up 12.30% at $41.73 at the last check Tuesday (updated).

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