DigitalOcean Reports Strong Q3 2026 Growth Driven by AI Demand and Raises Full Year Outlook
DigitalOcean (DOCN) reported robust third-quarter results for 2026, with revenue reaching $321 million, a 40% increase year-over-year. The growth was primarily fueled by surging demand for AI inference services and agentic workloads, which saw AI customer Annual Recurring Revenue (ARR) skyrocket by 288% to $376 million. The company also noted a significant shift toward enterprise clients, with million-dollar customer ARR increasing by 273%. Reflecting this momentum, management raised its full-year 2027 revenue growth outlook to 60% or more, up from previous estimates of 50%. While GAAP gross margins declined to 50% due to the upfront costs of bringing new data center capacity and GPU infrastructure online, adjusted EBITDA margins exceeded guidance at 45%. The company maintains a strong liquidity position with $1.2 billion available to fund ongoing infrastructure expansion.
Tickers: $DOCN
Topics: AI inference ARR cloud services financial guidance revenue growth