• The repurchases will be funded by the Registered Direct Offering of DigitalOcean’s common stock.
  • The transaction is expected to reduce net leverage with minimal change in cash or shares outstanding.
  • Repurchased notes will be retired, and shares issued in the Registered Direct Offering are expected to be largely offset by shares underlying the repurchased notes.
  • The Company intends to use its existing share repurchase authorization to repurchase any incremental shares issued as part of this transaction to eliminate any dilution.
  • The transaction creates capacity to support expansion of DigitalOcean’s AI-Native Cloud.

Repurchase of 2030 Convertible Notes

DigitalOcean intends to use the net proceeds from the Registered Direct Offering to enter into one or more separate, privately negotiated transactions with a limited number of holders of the 2030 Convertible Notes to repurchase up to $500.0 million principal amount of the 2030 Convertible Notes for cash. The Company will use cash on hand to pay expenses related to the transactions. The repurchase price will be determined based on a volume-weighted average price of DigitalOcean’s common stock following the signing of the applicable note purchase agreement with each participating noteholder measured over the next trading day, which is expected to be July 15, 2026. The Repurchase will be subject to closing conditions that may not be satisfied. No assurance can be given as to how many, if any, of the 2030 Convertible Notes will be repurchased or the terms on which they will be repurchased. The transactions are expected to close on July 23, 2026, subject to customary closing conditions.

In connection with the Repurchase, certain holders of the 2030 Convertible Notes that participate in the Repurchase may purchase or sell shares of DigitalOcean’s common stock in the open market or enter into or unwind various derivative transactions with respect to DigitalOcean’s common stock to unwind any hedge positions they may have with respect to the 2030 Convertible Notes or to hedge or unwind their exposure in connection with the Repurchase.

The amount of DigitalOcean’s common stock to be sold or purchased by such holders or the notional number of shares of DigitalOcean’s common stock underlying such derivative transactions may be substantial in relation to the historical average daily trading volume of DigitalOcean’s common stock. These activities may adversely affect the trading price of DigitalOcean’s common stock. DigitalOcean cannot predict the magnitude of such market activities or the overall effect they will have on the price of its common stock.

Registered Direct Offering

DigitalOcean intends to offer, subject to market and other conditions, shares of its common stock in the Registered Direct Offering. The number of shares to be sold, and the price per share, will be determined at the pricing of the Registered Direct Offering. DigitalOcean intends to use the net proceeds, together with cash on hand, from the Registered Direct Offering to repurchase up to $500.0 million principal amount of the 2030 Convertible Notes for cash in the Repurchase described above.