DigitalOcean Holdings, Inc. (NYSE:DOCN) shares are trading higher Tuesday after the company reported better-than-expected first-quarter financial results and raised its fiscal-year 2026 guidance above estimates on Monday after the market closed. Also, the company issued second-quarter revenue guidance above estimates.
- DigitalOcean stock is challenging resistance. Why did DOCN hit a new high?
Q1 Highlights
DigitalOcean reported adjusted earnings per share of 44 cents, beating the consensus estimate of 27 cents. In addition, it reported revenue of $257.90 million, beating the consensus estimate of $249.74 million.
Million+ Dollar Customer annual recurring revenue (ARR) rose 179% year-over-year to $183 million. AI Customer ARR increased 221% year-over-year to $170 million, while the company delivered a record $62 million in incremental organic ARR.
CEO Paddy Srinivasan said the company's performance reflects strong demand for its platform, highlighting the launch of its AI-Native Cloud and more than 15 new product releases across five integrated layers.
DigitalOcean said it is continuing to invest in infrastructure, adding approximately 60 megawatts of incremental committed data center capacity expected to come online through 2027 to support growing customer demand.
Guidance
DigitalOcean raised its fiscal-year 2026 adjusted earnings per share guidance from between 75 cents and $1.00 to between $1.10 and $1.20, versus the consensus estimate of $1.02. Furthermore, it raised its fiscal-year 2026 revenue guidance from between $1.07 billion and $1.10 billion to between $1.13 billion and $1.14 billion, versus the consensus estimate of $1.09 billion.
The company anticipates second-quarter adjusted earnings per share between 20 cents and 23 cents, versus the consensus estimate of 24 cents. It sees revenue of between $272 million and $274 million, versus the consensus estimate of $260.75 million.
DigitalOcean Shares Soar
DOCN Price Action: At the time of publication, DigitalOcean shares are trading 18.96% higher at $129.45, according to data from Benzinga Pro.
This illustration was generated using artificial intelligence via Midjourney.
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