Cloud platform DigitalOcean beats Q2 revenue beats estimates, raises FY guidance
Overview
DigitalOcean Q2 2025 revenue rises 14% yr/yr, beating analyst expectations
Net income for Q2 2025 increases 93% yr/yr to $37 mln
Company raises full-year revenue guidance to $888-$892 mln
Outlook
DigitalOcean sees Q3 revenue of $226 mln to $227 mln
Company expects full-year revenue of $888 mln to $892 mln
DigitalOcean forecasts Q3 adjusted EBITDA margin of 39% to 40%
Company anticipates full-year adjusted EBITDA margin of 39% to 40%
Result Drivers
INCREMENTAL ARR - Achieved highest incremental ARR since Q4 2022, with $32 mln added in Q2 2025
AI/ML REVENUE GROWTH - More than doubled its AI/ML revenue year-over-year, per CEO Paddy Srinivasan
SCALERS+ REVENUE - Revenue from higher spending digital native enterprises grew 35% year-over-year, now representing 24% of total revenue
Key Details
Metric | Beat/Miss | Actual | Consensus Estimate |
Q2 Revenue | Beat | $218.70 mln | $216.60 mln (12 Analysts) |
Q2 Net Income | $37.03 mln | ||
Q2 Gross Profit | $130.94 mln | ||
Q2 Pretax Profit | $42.45 mln |
Analyst Coverage
The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 8 "strong buy" or "buy", 5 "hold" and 1 "sell" or "strong sell"
The average consensus recommendation for the it services & consulting peer group is "buy"
Wall Street's median 12-month price target for DigitalOcean Holdings Inc is $37.50, about 28% above its August 4 closing price of $27.01
The stock recently traded at 13 times the next 12-month earnings vs. a P/E of 15 three months ago
Press Release:
