# DigitalOcean Holdings, Inc. (DOCN) Informational only - not investment advice. CIK: 0001582961 SIC: 7370 Services-Computer Programming, Data Processing, Etc. SIC breadcrumb: [Services](/division/I/) > [Business Services](/major-group/73/) > [SIC 7370 Services-Computer Programming, Data Processing, Etc.](/industry/7370/) Latest 10-K filed: 2026-02-24 SEC page: https://www.sec.gov/edgar/browse/?CIK=1582961 Filing source: https://www.sec.gov/Archives/edgar/data/1582961/000158296126000019/docn-20251231.htm ## Selected Fundamentals | Metric | Value | Unit | FY | Filed | | --- | ---: | --- | ---: | --- | | Revenue | 901427000 | USD | 2025 | 2026-02-24 | | Net income | 259262000 | USD | 2025 | 2026-02-24 | | Assets | 1837705000 | USD | 2025 | 2026-02-24 | ## Financials Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-24. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001582961.json. Derived margins are computed from the extracted annual SEC facts. | Metric | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | | --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | | Revenue | | 254,823,000 | 318,380,000 | 428,561,000 | 576,322,000 | 692,884,000 | 780,615,000 | 901,427,000 | | Net income | | -40,390,000 | -43,568,000 | -19,503,000 | -27,804,000 | 19,409,000 | 84,492,000 | 259,262,000 | | Operating income | | -29,905,000 | -15,791,000 | -11,186,000 | -25,697,000 | 11,896,000 | 91,007,000 | 156,989,000 | | Gross profit | | 132,564,000 | 172,848,000 | 257,966,000 | 364,395,000 | 397,497,000 | 465,943,000 | 539,592,000 | | Diluted EPS | | -1.06 | -1.05 | -0.21 | -0.28 | 0.20 | 0.89 | 2.52 | | Assets | | | 430,252,000 | 2,100,995,000 | 1,815,631,000 | 1,460,967,000 | 1,639,015,000 | 1,837,705,000 | | Liabilities | | | 329,272,000 | 1,522,798,000 | 1,768,062,000 | 1,774,665,000 | 1,841,970,000 | 1,866,395,000 | | Stockholders' equity | -56,864,000 | -72,280,000 | -72,094,000 | 578,197,000 | 47,569,000 | -313,698,000 | -202,955,000 | -28,690,000 | | Cash and cash equivalents | | | 100,311,000 | 1,713,387,000 | 140,772,000 | 317,236,000 | 428,446,000 | 254,475,000 | | Net margin | | -15.85% | -13.68% | -4.55% | -4.82% | 2.80% | 10.82% | 28.76% | | Operating margin | | -11.74% | -4.96% | -2.61% | -4.46% | 1.72% | 11.66% | 17.42% | ## Quarterly Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-05. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001582961.json. Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived. | Quarter | End date | Revenue | Net income | Diluted EPS | Method | | --- | --- | ---: | ---: | ---: | --- | | 2022-Q2 | 2022-06-30 | | | -0.06 | reported discrete quarter | | 2022-Q3 | 2022-09-30 | | | 0.10 | reported discrete quarter | | 2023-Q1 | 2023-03-31 | | | -0.17 | reported discrete quarter | | 2023-Q2 | 2023-06-30 | 169,814,000 | 665,000 | 0.01 | reported discrete quarter | | 2023-Q3 | 2023-09-30 | 177,062,000 | 19,175,000 | 0.20 | reported discrete quarter | | 2023-Q4 | 2023-12-31 | 180,874,000 | 15,939,000 | | derived Q4 = FY annual - nine-month YTD | | 2024-Q1 | 2024-03-31 | 184,730,000 | 14,139,000 | 0.15 | reported discrete quarter | | 2024-Q2 | 2024-06-30 | 192,476,000 | 19,138,000 | 0.20 | reported discrete quarter | | 2024-Q3 | 2024-09-30 | 198,484,000 | 32,949,000 | 0.33 | reported discrete quarter | | 2024-Q4 | 2024-12-31 | 204,925,000 | 18,266,000 | | derived Q4 = FY annual - nine-month YTD | | 2025-Q1 | 2025-03-31 | 210,703,000 | 38,204,000 | 0.39 | reported discrete quarter | | 2025-Q2 | 2025-06-30 | 218,700,000 | 37,027,000 | 0.39 | reported discrete quarter | | 2025-Q3 | 2025-09-30 | 229,634,000 | 158,371,000 | 1.51 | reported discrete quarter | | 2025-Q4 | 2025-12-31 | 242,390,000 | 25,660,000 | | derived Q4 = FY annual - nine-month YTD | | 2026-Q1 | 2026-03-31 | 257,905,000 | 15,771,000 | 0.15 | reported discrete quarter | ## Macro Cross-References - [CPIAUCSL](/indicator/CPIAUCSL/): Consumer Price Index for All Urban Consumers: All Items in U.S. City Average - [UNRATE](/indicator/UNRATE/): Unemployment Rate - [FEDFUNDS](/indicator/FEDFUNDS/): Federal Funds Effective Rate - [CES0500000003](/indicator/CES0500000003/): Average Hourly Earnings of All Employees, Total Private - [DFEDTARU](/indicator/DFEDTARU/): Federal Funds Target Range - Upper Limit - [DFEDTARL](/indicator/DFEDTARL/): Federal Funds Target Range - Lower Limit - [DGS3MO](/indicator/DGS3MO/): Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity - [DGS2](/indicator/DGS2/): Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity - [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity - [DGS30](/indicator/DGS30/): Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity - [T10Y2Y](/indicator/T10Y2Y/): 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity - [CPILFESL](/indicator/CPILFESL/): Consumer Price Index for All Urban Consumers: All Items Less Food and Energy - [CPIUFDSL](/indicator/CPIUFDSL/): Consumer Price Index for All Urban Consumers: Food - [CPIENGSL](/indicator/CPIENGSL/): Consumer Price Index for All Urban Consumers: Energy - [CUSR0000SAH1](/indicator/CUSR0000SAH1/): Consumer Price Index for All Urban Consumers: Shelter - [PCEPI](/indicator/PCEPI/): Personal Consumption Expenditures: Chain-type Price Index - [PCEPILFE](/indicator/PCEPILFE/): Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index - [PPIACO](/indicator/PPIACO/): Producer Price Index by Commodity: All Commodities - [T10YIE](/indicator/T10YIE/): 10-Year Breakeven Inflation Rate - [U6RATE](/indicator/U6RATE/): Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons - [PAYEMS](/indicator/PAYEMS/): All Employees, Total Nonfarm - [CIVPART](/indicator/CIVPART/): Labor Force Participation Rate - [EMRATIO](/indicator/EMRATIO/): Employment-Population Ratio - [UNEMPLOY](/indicator/UNEMPLOY/): Unemployed - [CE16OV](/indicator/CE16OV/): Employment Level - [ICSA](/indicator/ICSA/): Initial Claims - [JTSJOL](/indicator/JTSJOL/): Job Openings: Total Nonfarm - [JTSQUR](/indicator/JTSQUR/): Quits: Total Nonfarm - [GDPC1](/indicator/GDPC1/): Real Gross Domestic Product - [A191RL1Q225SBEA](/indicator/A191RL1Q225SBEA/): Real Gross Domestic Product: Percent Change from Preceding Period - [INDPRO](/indicator/INDPRO/): Industrial Production: Total Index - [TCU](/indicator/TCU/): Capacity Utilization: Total Index - [HOUST](/indicator/HOUST/): New Privately-Owned Housing Units Started: Total Units - [PERMIT](/indicator/PERMIT/): New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units - [RSAFS](/indicator/RSAFS/): Advance Retail Sales: Retail Trade - [PCE](/indicator/PCE/): Personal Consumption Expenditures - [DSPIC96](/indicator/DSPIC96/): Real Disposable Personal Income - [PSAVERT](/indicator/PSAVERT/): Personal Saving Rate - [M2SL](/indicator/M2SL/): M2 - [BOPGSTB](/indicator/BOPGSTB/): U.S. International Trade in Goods and Services: Balance - [MSPUS](/indicator/MSPUS/): Median Sales Price of Houses Sold for the United States - [HSN1F](/indicator/HSN1F/): New One Family Houses Sold: United States - [RHORUSQ156N](/indicator/RHORUSQ156N/): Homeownership Rate in the United States - [TTLCONS](/indicator/TTLCONS/): Total Construction Spending: Total Construction in the United States - [RRVRUSQ156N](/indicator/RRVRUSQ156N/): Rental Vacancy Rate in the United States - [TOTALSL](/indicator/TOTALSL/): Total Consumer Credit Owned and Securitized - [REVOLSL](/indicator/REVOLSL/): Revolving Consumer Credit Owned and Securitized - [DRCCLACBS](/indicator/DRCCLACBS/): Delinquency Rate on Credit Card Loans, All Commercial Banks - [GDP](/indicator/GDP/): Gross Domestic Product - [GPDI](/indicator/GPDI/): Gross Private Domestic Investment - [GCE](/indicator/GCE/): Government Consumption Expenditures and Gross Investment - [PCEC](/indicator/PCEC/): Personal Consumption Expenditures - [NETEXP](/indicator/NETEXP/): Net Exports of Goods and Services - [GFDEBTN](/indicator/GFDEBTN/): Federal Debt: Total Public Debt - [GFDEGDQ188S](/indicator/GFDEGDQ188S/): Federal Debt: Total Public Debt as Percent of Gross Domestic Product - [FYFSD](/indicator/FYFSD/): Federal Surplus or Deficit - [FGRECPT](/indicator/FGRECPT/): Federal Government Current Receipts - [FGEXPND](/indicator/FGEXPND/): Federal Government: Current Expenditures - [MANEMP](/indicator/MANEMP/): All Employees, Manufacturing - [USCONS](/indicator/USCONS/): All Employees, Construction - [USTRADE](/indicator/USTRADE/): All Employees, Retail Trade - [USFIRE](/indicator/USFIRE/): All Employees, Financial Activities - [USGOVT](/indicator/USGOVT/): All Employees, Government - [AWHAETP](/indicator/AWHAETP/): Average Weekly Hours of All Employees, Total Private - [DGORDER](/indicator/DGORDER/): Manufacturers' New Orders: Durable Goods - [NEWORDER](/indicator/NEWORDER/): Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft - [BUSINV](/indicator/BUSINV/): Total Business Inventories - [EXPGS](/indicator/EXPGS/): Exports of Goods and Services - [IMPGS](/indicator/IMPGS/): Imports of Goods and Services - [IR](/indicator/IR/): Import Price Index (End Use): All Commodities - [PPIFIS](/indicator/PPIFIS/): Producer Price Index by Commodity: Final Demand ## Latest quarter (10-Q) Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/1582961/000158296126000049/docn-20260331.htm Extracted between Part I Item 2 and the next Item 3/4 or Part II heading after HTML sanitization. Confidence: high Filing date: 2026-05-05 Report date: 2026-03-31 ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of our financial condition and results of operations should be considered together with our unaudited condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q our audited consolidated financial statements and the related notes and the discussion under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2025. This discussion, particularly information with respect to our outlook, key trends and uncertainties, our plans and strategy for our business, and our performance and future success, includes forward-looking statements that involve risks and uncertainties as described under the heading “Special Note Regarding Forward-Looking Statements” in this Quarterly Report on Form 10-Q. Actual results could differ materially from those discussed below. Overview DigitalOcean is an AI-Native Cloud, purpose-built for inference and agentic workloads that brings infrastructure, core cloud services, inference, data, and agents together in one integrated stack that is open throughout, giving builders the best of the AI ecosystem in one place. The platform combines production-ready GPU infrastructure, a full-stack cloud, model-first inference workflows, and an agentic experience layer to reduce operational complexity and accelerate time to production. Our customers include growing technology companies across numerous industry verticals ranging from online gaming to fintech to cybersecurity, among many others, and leverage our platform for a wide variety of use cases, such as building and hosting websites, developing new web and mobile applications, integrating AI into their businesses, and building AI products and applications, among many others. We believe that being simple, scalable and approachable, while offering a comprehensive range of integrated cloud and AI products, are our key differentiators, driving a broad range of customers around the world whose needs are not being fully met by larger cloud providers to build and grow their businesses on our platform. We offer a comprehensive set of cloud platform capabilities which span across Infrastructure-as-a-Service (“IaaS”), including Droplet virtual machines, storage and networking offerings; Platform-as-a-Service (“PaaS”) and Software-as-a-Service (“SaaS”), including Managed Hosting, Managed Database, Managed Kubernetes and Marketplace offerings. We also offer a comprehensive artificial intelligence and machine learning (“AI/ML”) platform - DigitalOcean Gradient® AI Agentic Cloud which includes Gradient AI Infrastructure with offerings such as GPU Droplets and Bare Metal GPUs; the Gradient AI Platform which offers various building block services including Large Language Models (“LLMs”); and Gradient AI Agents. We continue to invest in our platform to further penetrate the growing markets in which we operate. We generate revenue primarily from the usage of our agentic inference cloud platform by our customers. We recognize revenue largely based on the customer utilization of our offerings. While our pricing is primarily consumption-based and the majority of our customers use our platform on a month-to-month basis, a growing number of customers are using our platform for larger workloads and some of these customers are opting to enter into committed contracts, committing to a minimum spend on our platform. 21 We serve a large number of customers that range in size from growing or scaled businesses that generate millions of dollars in revenue and serve millions of their own customers to individual developers testing or learning new technology for their own development. Thousands of new users come to DigitalOcean every month with some users intending only to utilize our platform for a discrete task, and other users are part of new or existing businesses that intend to operate their production and test workloads on our platform to support their business. Given the wide range of users and their associated spend, we classify customers based on their spend in a given month, which we have found to be a good proxy that distinguishes between casual users and substantial enterprise customers. Our total customer count is represented by the number of Digital Native Enterprise (“DNE”) Customers, which are users that spend more than $500 in a month. We further disaggregate our DNE customers into the following categories - $100K+ Customers, $500K+ Customers and $1M+ Customers. See further discussion in “Digital Native Enterprise Customers” below. Growing our DNE Customers is a critical focus for us, and we have successfully increased the number of these customers and their percentage of our total revenue. Revenue from our DNE Customers as a percentage of total revenue was 64% in the three months ended March 31, 2026, up from approximately 57% in the three months ended March 31, 2025. As of March 31, 2026, we had approximately 22,000 DNE Customers using our platform to build, deploy and scale applications. The number of DNE Customers increased from approximately 20,000 as of March 31, 2025 to 22,000 as of March 31, 2026. We had no material customer concentration as our top 25 customers made up approximately 16% and 9% of our revenue in the three months ended March 31, 2026 and 2025, respectively. Our annual run-rate revenue (“ARR”) as of March 31, 2026 was $1,032 million, up from $843 million as of March 31, 2025. Our AI Customer ARR as of March 31, 2026 was $170 million, up from $53 million as of March 31, 2025. See further discussion in “ARR and AI Customer ARR” below. We have a highly efficient self-service customer acquisition model, which we complement with a sales force focused on inside sales, targeted outside sales and partnership opportunities to drive revenue growth. The efficiency of our go-to-market model and our focus on the needs of growing technology enterprises have enabled us to drive organic growth and establish a truly global customer base across a broad range of industries. For the three months ended March 31, 2026 and 2025, our sales and marketing expense was approximately 8% of our revenue. Our customers are spread across approximately 190 countries and around two-thirds of our revenue has historically come from customers located outside the United States. For the three months ended March 31, 2026, 44% of our revenue was generated from North America, 24% from Europe, 22% from Asia and 10% from the rest of the world. Key Factors Affecting Our Performance Increasing Usage by Our Existing Customers Our existing customer base represents a significant opportunity for further sales expansion through increased usage of our platform and adoption of additional product offerings. We are highly focused on gaining a better understanding of the needs and growth plans of our existing customers, increasing our feature velocity and shaping our product roadmap around the needs of DNE Customers, and leveraging our account management function to provide more direct coverage of our top spending accounts. This deeper relationship with our customers is helping us to identify opportunities to educate our customer base on ways to utilize the platform more effectively for their individual use cases, as well as provide a feedback loop to inform our product roadmap, in order to build trust with customers and encourage them to run more of their critical cloud workloads on our platform. We closely monitor our net dollar retention (“NDR”), which reflects our ability to retain and grow revenue from our existing customers. NDR increased from 100% during the three months ended March 31, 2025 to 101% during the three months ended March 31, 2026 driven by improved net expansion. We expect to increase our revenue in the future from existing customers through the introduction of new products and features tailored to our DNE Customers through expanded customer outreach, and targeted services to support our customers in migrating additional workloads from other cloud providers to DigitalOcean. Growing Our Base of AI-Native and Cloud-Native DNE Customers We believe there is a substantial opportunity to further expand our customer base. We are investing in strategies that we believe will drive adoption by new AI-Native and Cloud-Native DNE Customers, a dedicated AI sales team with deep AI expertise to help prospective customers understand our offerings and the process to onboard onto our platform, marketing initiatives that further optimize our self-service revenue funnel to identify potential DNE Customers, enhanced 22 research and development to build our product roadmap around the needs of DNE Customers, and the expansion of our migration services team to support additional migrations to our platform from other cloud providers. Investing in Our Platform and Product Offerings We have a history of, and will continue to invest significantly in, delivering innovative products, features and functionality for our DNE Customers. Our product strategy is anchored in addressing the needs of our DNE Customers and other digital native enterprises and on continuously innovating to meet those needs in a simple, scalable and approachable way. We have accelerated the pace of product innovation and made disciplined investments to expand our offerings for our IaaS and PaaS offerings, as well as our newer AI/ML offerings. The market opportunity for our services continues to expand and we expect to make additional investments to offer an enhanced and tailored suite of IaaS, PaaS/SaaS and AI/ML offerings that address the changing needs of our customers. Driving Increased Adoption Through Our Community Ecosystem We attract a large number of developers to our website and platform, and we are committed to supporting and expanding this community of innovators and technologists by continuing to produce high-quality educational content and hosting developer-focused programs and events around the world. Supporting and educating the developer community is not only one of our values, but it also fosters brand loyalty, expands our customer base and drives increased adoption of our products. Augmenting our Platform through Strategic Partnerships and Acquisitions In addition to organic growth, we believe that strategic partnerships and acquisitions will allow us to accelerate our key platform, product and marketing initiatives. In recent years, we completed acquisitions of Paperspace, which launched our AI/ML offerings, and Cloudways, which added our Managed Hosting offering to our platform. In addition, we have entered into partnerships to augment our product offerings. We intend to actively pursue both strategic partnerships and acquisitions that we believe will be complementary to our business, accelerate customer acquisition, increase usage of our platform and/or expand our product offerings in our core markets. Macroeconomic Conditions Unfavorable conditions in the economy both in the United States and abroad, including conditions resulting from trade tension and/or the imposition and enforceability of trade restrictions or other changes in trade policies and related uncertainties (including recent U.S. tariffs imposed and/or threatened to be imposed, any retaliatory actions taken by other countries, and uncertainties regarding the ability to obtain refunds for previously paid tariffs that have subsequently been invalidated), changes in gross domestic product growth, supply chain disruptions, inflationary pressures, high interest rates, financial and credit market fluctuations, volatility in the capital markets, liquidity concerns at, and failures of, banks and other financial institutions, geopolitical tensions, political turmoil, political instability and t [Excerpt truncated for page length; source filing is linked above.] ## Latest 10-K MD&A Extracted between Item 7 and the next Item 7A/8 heading after HTML sanitization. Confidence: high ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of our financial condition and results of operations should be considered together with our consolidated financial statements and related notes and other financial information included in Part II, Item 8. “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K. This discussion, particularly information with respect to our outlook, key trends and uncertainties, our plans and strategy for our business, and our performance and future success, includes forward-looking statements that involve risks and uncertainties. Actual results could differ materially from those discussed below. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Annual Report, particularly in Part I, Item 1A. “Risk Factors.” In addition, for more information regarding key factors affecting our performance, see “Key Factors Affecting Our Performance” below. Overview DigitalOcean is an agentic inference cloud platform that helps AI and Digital Native Enterprises build, run, and scale intelligent applications with speed, simplicity, and predictable economics. The platform combines production-ready 49 GPU infrastructure, a full-stack cloud, model-first inference workflows, and an agentic experience layer to reduce operational complexity and accelerate time to production. Our customers include growing technology companies across numerous industry verticals ranging from online gaming to fintech to cybersecurity, among many others, and leverage our platform for a wide variety of use cases, such as building and hosting websites, developing new web and mobile applications, integrating AI into their businesses, and building AI products and applications, among many others. We believe that being simple, scalable and approachable, while offering a comprehensive range of integrated cloud and AI products, are our key differentiators, driving a broad range of customers around the world whose needs are not being fully met by larger cloud providers to build and grow their businesses on our platform. We offer a comprehensive set of cloud platform capabilities which span across Infrastructure-as-a-Service (“IaaS”), including Droplet virtual machines, storage and networking offerings; Platform-as-a-Service (“PaaS”) and Software-as-a-Service (“SaaS”), including Managed Hosting, Managed Database, Managed Kubernetes and Marketplace offerings. We also offer a comprehensive artificial intelligence and machine learning (“AI/ML”) platform - DigitalOcean Gradient® AI Agentic Cloud which includes Gradient AI Infrastructure with offerings such as GPU Droplets and Bare Metal GPUs; the Gradient AI Platform which offers various building block services including Large Language Models (“LLMs”); and Gradient AI Agents. We continue to invest in our platform to further penetrate the growing markets in which we operate. We generate revenue primarily from the usage of our agentic inference cloud platform by our customers. We recognize revenue largely based on the customer utilization of our offerings. While our pricing is primarily consumption-based and the majority of our customers use our platform on a month-to-month basis, a growing number of customers are using our platform for larger workloads and some of these customers are opting to enter into committed contracts, committing to a minimum spend on our platform. We serve a large number of customers that range in size from growing or scaled businesses that generate millions of dollars in revenue and serve millions of their own customers to individual developers testing or learning new technology for their own development. Thousands of new users come to DigitalOcean every month with some users intending only to utilize our platform for a discrete task, and other users are part of new or existing businesses that intend to operate their production and test workloads on our platform to support their business. Given the wide range of users and their associated spend, we classify customers based on their spend in a given month, which we have found to be a good proxy that distinguishes between casual users and substantial enterprise customers. Our total customer count is represented by the number of Digital Native Enterprise (“DNE”) Customers, which are users that spend more than $500 in a month. Beginning in the fourth quarter of 2025, we redefined our total customer count and excluded the number of users that spend more than $50 and less than or equal to $500 in a month, formerly referred to as Builders, and the number of customers using certain legacy Bare Metal CPU offerings. Beginning in the fourth quarter of 2025, we further refined our customer category naming and disaggregation to provide more insight into our DNE Customers and $100K+ Customers, formerly referred to as Scalers+, to now disclose the number of our $500K+ Customers and $1M+ Customers. We believe these annual run-rate revenue (“ARR”) based tiers provide a better representation of the growth of customers on our platform during each reporting period as our research and development, sales and marketing and customer support investments are primarily focused on these DNE Customers. See “Digital Native Enterprise Customers” below for a description of how we previously defined our customer count and categories, our reasons for such changes, and our customer count under our prior definitions for each period presented. Growing our DNE Customers is a critical focus for us, and we have successfully increased the number of these customers and their percentage of our total revenue. Revenue from our DNE Customers as a percentage of total revenue was 60% in 2025, 55% in 2024, and 53% in 2023. As of December 31, 2025, we had approximately 21,000 DNE Customers using our platform to build, deploy and scale applications. The number of DNE Customers increased from approximately 18,000 as of December 31, 2024 and 17,000 as of December 31, 2023. We had no material customer concentration as our top 25 customers made up approximately 10%, 8% and 7% of our revenue in the years ended December 31, 2025, 2024 and 2023, respectively. 50 Our ARR, as further described in “ARR” below, as of December 31, 2025 was $970 million, up from $820 million as of December 31, 2024, and $723 million as of December 31, 2023. We have a highly efficient self-service customer acquisition model, which we complement with a sales force focused on inside sales, targeted outside sales and partnership opportunities to drive revenue growth. The efficiency of our go-to-market model and our focus on the needs of growing technology enterprises have enabled us to drive organic growth and establish a truly global customer base across a broad range of industries. For the years ended December 31, 2025, 2024 and 2023, our sales and marketing expense was approximately 9% of our revenue. Our customers are spread across approximately 190 countries and around two-thirds of our revenue has historically come from customers located outside the United States. For the year ended December 31, 2025, 38% of our revenue was generated from North America, 28% from Europe, 23% from Asia and 11% from the rest of the world. Key Factors Affecting Our Performance Increasing Usage by Our Existing Customers Our existing customer base represents a significant opportunity for further sales expansion through increased usage of our platform and adoption of additional product offerings. We are highly focused on gaining a better understanding of the needs and growth plans of our existing customers, increasing our feature velocity and shaping our product roadmap around the needs of DNE Customers, and leveraging our account management function to provide more direct coverage of our top spending accounts. This deeper relationship with our customers is helping us to identify opportunities to educate our customer base on ways to utilize the platform more effectively for their individual use cases, as well as provide a feedback loop to inform our product roadmap, in order to build trust with customers and encourage them to run more of their critical cloud workloads on our platform. We closely monitor our net dollar retention (“NDR”), which reflects our ability to retain and grow revenue from our existing customers. NDR increased from 98% during the year ended December 31, 2024 to 100% during the year ended December 31, 2025 driven by improved net expansion. We expect to increase our revenue in the future from existing customers through the introduction of new products and features tailored to our DNE Customers through expanded customer outreach, and targeted services to support our customers in migrating additional workloads from other cloud providers to DigitalOcean. 51 Growing Our Base of AI Native and Cloud Native DNE Customers We believe there is a substantial opportunity to further expand our customer base. We are investing in strategies that we believe will drive adoption by new AI native and Cloud Native DNE Customers, a dedicated AI sales team with deep AI expertise to help prospective customers understand our offerings and the process to onboard onto our platform, marketing initiatives that further optimize our self-service revenue funnel to identify potential DNE Customers, enhanced research and development to build our product roadmap around the needs of DNE Customers, and the expansion of our migration services team to support additional migrations to our platform from other cloud providers. Investing in Our Platform and Product Offerings We have a history of, and will continue to invest significantly in, delivering innovative products, features and functionality for our DNE Customers. Our product strategy is anchored in addressing the needs of our DNE Customers and other digital native enterprises and on continuously innovating to meet those needs in a simple, scalable and approachable way. We have accelerated the pace of product innovation and made disciplined investments to expand our offerings for our IaaS and PaaS offerings, as well as our newer AI/ML offerings. The market opportunity for our services continues to expand and we expect to make additional investments to offer an enhanced and tailored suite of IaaS, PaaS/SaaS and AI/ML offerings that address the changing needs of our customers. Driving Increased Adoption Through Our Community Ecosystem We attract a large number of developers to our website and platform and we are committed to supporting and expanding this community of innovators and technologists by continuing to produce high-quality educational content and hosting developer-focused programs and events around the world. Supporting and educating the developer community is not only one of our values, but it also fosters brand loyalty, expands our customer base and drives increased adoption of our products. Augmenting our Platform through Strategic Partnerships and Acquisitions In addition to organic growth, we believe that strategic partnerships and acquisitions will allow us to accelerate our key platform, product and marketing initiatives. In recent years, we completed acquisitions of Paperspace, which launched our AI/ML offerings, and Cloudways, which added our Managed Hosting offering to our platform. In addition, we have entered into partnerships to augment our product offerings. We intend to actively pursue both strategic partnerships and acquisitions that we believe will be complementary to our business, accelerate customer acquisition, increase usage of our platform and/or expand our product offerings in our core markets. Macroeconomic Conditions Unfavorable conditions in the economy both in the United States and abroad, including conditions resulting from trade tension and/or the imposition and enforceability of trade restrictions or other changes in trade policies and related uncertainties (including recent U.S. tariffs imposed and/or threatened to be imposed, any retaliatory actions taken by other countries, and uncertainties regarding the ability to obtain refunds for previously paid tariffs that have subsequently been invalidated), changes in gross domestic product growth, supply chain disruptions, inflationary pressures, high interest rates, financial and credit market fluctuations, volatility in the capital markets, liquidity concerns at, and failures of, banks and other financial institutions, geopolitical tensions, political turmoil, political instability and transitions of power in regions where we operate, natural catastrophes, outbreaks of contagious diseases, warfare and terrorist attacks on the United States, Europe or elsewhere, including military actions affecting Russia, Ukraine, the Middle East or elsewhere, could cause a decrease in business investments in information technology and negatively affect the growth of our business and our results of operations. We will continue to monitor the direct and indirect impacts of these or similar circumstances on our business and our results of operations. The implications of macroeconomic conditions on our business, results of operations, and overall financial position remain uncertain. 52 Key Business Metrics We utilize the key metrics set forth below to help us evaluate our business and growth, identify trends, formulate financial projections and make strategic decisions. We are not aware of any uniform standards for calculating these key metrics, and other companies may not calculate similarly titled metrics in a consistent manner, which may hinder comparability. Year Ended December 31, 2025 2024 2023 Digital Native Enterprise Customers(1) 21,361 18,468 16,771 $100K+ Customers(1) 628 499 426 $500K+ Customers(1) 95 63 46 $1M+ Customers(1) 41 24 13 ARR (in millions)(2) $ 970 $ 820 $ 723 Net dollar retention rate 100  % 98  % 101  % ______________ (1)Customer count. As discussed above, beginning in the fourth quarter of 2025, we redefined our total customer count, customer categories naming and disaggregation, and excluded the number of customers using certain legacy Bare Metal CPU offerings. See further discussion in “Digital Native Enterprise Customers” below. Prior periods have been recast to reflect the effects of such changes. (2)Beginning in the fourth quarter of 2024, we changed our methodology for calculating ARR. Prior periods have been recast to reflect the effects of the change. Digital Native Enterprise Customers We refer to customers spending more than $500 in a given month collectively as our Digital Native Enterprise (“DNE”) Customers. We believe the total number of our DNE Customers is an important indicator of the growth of our business and future revenue opportunity, and the trends relating to our $100K+ Customers, $500K+ Customers and $1M+ Customers are of particular importance to us as these customers comprise a significant majority of our revenue and revenue growth, and are representative of the Cloud native and AI native DNEs that have scaled on our platform. Beginning in the fourth quarter of 2025, we redefined our total customer count and excluded the number of users that spend more than $50 and less than or equal to $500 in a month, formerly referred to as Builders, from our total customer count because we do not believe these customers are a good predictor of our future growth. In addition, we excluded customers using certain legacy Bare Metal CPU offerings from our customer count because the related offerings are not representative of our core cloud platform and relate to workloads migrating off of our infrastructure. Beginning in the fourth quarter of 2025, we further refined our customer category naming and disaggregation to provide more insight into our DNE Customers, formerly referred to as Scalers and Scalers+, to now disclose the number of our $100K+ Customers, $500K+ Customers and $1M+ Customers. We believe this new classification enhances the quality and interpretability of our customer categories by measuring our ability to attract, retain and scale more complex, multi-product and multi-entity relationships as they are a key predictor of our long-term enterprise growth and customer retention. We calculate customer count as the average number of customers as of the last day of the month for each month in the most recent quarter. 53 The following table provides a mapping of our current definitions and categories of customers to our prior definitions and categories of customers. Customers are classified in the following categories based on the amount of their spend in a given month and individual customers may fall within different categories within a reporting period (customer spend in a month in whole dollars): Current Prior Customer Grouping Customer Category Description Customer Category Customer Grouping Digital Native Enterprise Customers Above $6K and under $100K Customers Users that spend more than $500 and less than or equal to $8,333 in a month Scalers Higher Spend Customers Above $100K and under $500K Customers Users that spend more than $8,333 and less than or equal to $41,667 in a month Scalers+ Above $500K and under $1M Customers Users that spend more than $41,667 and less than or equal to $83,333 in a month Above $1M Customers Users that spend more than $83,333 in a month Developers Users that spend more than $50 and less than or equal to $500 in a month Builders Users that spend less than or equal to $50 in a month and have been on our platform for more than three months Learners Refer to the table above for customer count by category under our new customer classification and definitions. Customer count by category based on our prior customer classification and definitions is as follows: Year Ended December 31, 2025 2024 2023 Builders(1) 155,570 146,922 139,125 Scalers(1) 20,738 17,975 16,351 Scalers+(1) 632 504 431     Higher Spend Customers 176,940 165,401 155,907 ______________ (1)Beginning in the fourth quarter of 2024, we changed our methodology for calculating customer count and customer classification. Prior periods have been recast to reflect the effects of the changes. ARR Given the recurring nature of our business, we view annual run-rate revenue as an important indicator of our current progress towards meeting our revenue targets and projected growth rate going forward. We calculate ARR by multiplying total revenue for the most recent quarter by four. Net Dollar Retention Rate Our ability to maintain long-term revenue growth and achieve profitability is dependent on our ability to retain and grow revenue from our existing customers. We have a history of retaining customers for multiple years and in many cases increasing their spend with us over time. To help us measure our performance in this area, we monitor our net dollar retention rate. We calculate net dollar retention rate monthly by starting with total revenue for our IaaS and PaaS/SaaS offerings during the corresponding month 12 months prior, or the Prior Period Revenue. We then calculate the revenue from these same customers as of the current month, or the Current Period Revenue, including any expansion and net of any contraction or attrition from these customers over the last 12 months. The calculation also includes revenue from customers that generated revenue before, but not in, the corresponding month 12 months prior, but subsequently generated revenue in the current month and are therefore reflected in the Current Period Revenue. We include this group of re-engaged customers in this calculation because some of our customers use our platform for projects that stop and start over time. We then divide the total Current Period Revenue by the total Prior Period Revenue to arrive at the net dollar retention rate for the relevant month. For a quarterly or annual period, the net dollar retention rate is determined as the average monthly net dollar retention rates over such three or 12-month period. 54 Components of Results of Operations Revenue We offer a comprehensive set of cloud platform capabilities which span across IaaS, including Droplet virtual machines, storage and networking offerings; PaaS and SaaS, including Managed Hosting, Managed Database, Managed Kubernetes and Marketplace offerings. We also offer a comprehensive AI/ML platform - DigitalOcean Gradient® AI Agentic Cloud, which includes Gradient AI Infrastructure with offerings such as GPU Droplets and Bare Metal GPUs; the Gradient AI Platform which offers various building block services including LLMs; and Gradient AI Agents. We continue to invest in our platform to further penetrate the growing markets in which we operate. We may offer sales incentives in the form of promotional and referral credits and grant credits to encourage customers to use our services. These types of promotional and referral credits typically expire in two months or less if not used. For credits earned with a purchase, they are recorded as contract liabilities when earned and recognized at the earlier of redemption or expiration. The majority of credits are redeemed in the month they are earned. Cost of Revenue Cost of revenue consists primarily of fees related to operating our data center facilities, personnel costs of our employees providing customer support or operating our facilities, and partnership expenses. Cost of revenue includes depreciation of our data center equipment and amortization of acquired technology and capitalized internal-use software development costs. Data center facility fees include data center rental fees, power costs, maintenance fees, network, bandwidth and ancillary equipment. Personnel costs include salaries, bonuses, benefits, and stock-based compensation. We intend to continue to invest additional resources in our infrastructure to support our product portfolio and the scalability of our customer base. The level, timing and relative investment in our infrastructure could affect our cost of revenue in the future. Operating Expenses Research and Development Expenses Research and development expenses consist primarily of personnel costs including salaries, bonuses, benefits and stock-based compensation. Research and development expenses also include amortization of capitalized internal-use software development costs, which are amortized over three years, professional services, software, as well as costs related to our efforts to add new features to our existing offerings, develop new offerings, and ensure the security, performance, and reliability of our global cloud platform. We expect research and development expenses to increase in absolute dollars as we continue to invest in our platform and product offerings. Sales and Marketing Expenses Sales and marketing expenses consist primarily of personnel costs of our sales and marketing and customer success employees, including salaries, bonuses, benefits, commissions and stock-based compensation. Sales and marketing expenses also include costs for marketing programs, advertising, amortization of acquired customer relationships and purchased software used for sales and marketing purposes, professional services and software. We expect sales and marketing expenses to increase in absolute dollars as we enhance our product offerings and implement new marketing and sales strategies. General and Administrative Expenses General and administrative expenses consist primarily of personnel costs of our human resources, legal, finance and other administrative functions, including salaries, bonuses, benefits, and stock-based compensation. General and administrative expenses also include payment processing fees, provision for expected credit losses, professional services, software, business insurance, depreciation and amortization, rent and facilities costs, acquisition-related compensation, and other administrative costs. General and administrative expenses may increase in absolute dollars as we continue to grow our business. 55 Restructuring and other charges Restructuring and other charges consist primarily of personnel costs, such as notice period, employee severance payments and termination benefits, as well as stock-based compensation related to vesting of certain equity awards. Other Income, net Other income, net consists primarily of gain on partial extinguishment of our 2026 Convertible Notes, interest income on our money market funds, amortization of debt issuance costs, cash interest expense on our Term Loan A, credit facilities and equipment financing obligations, and gains or losses on foreign currency exchange. Income Tax Expense Our income tax benefit consists primarily of the release of valuation allowance related to our U.S. deferred tax assets of $69.9 million. We regularly assess the need for a valuation allowance on our deferred tax assets. In making this assessment, we consider both positive and negative evidence related to the likelihood of realization of the deferred tax assets to determine, based on the weight of available evidence, whether it is more likely than not that some or all the deferred tax assets will not be realized. As of December 31, 2025, based on all available positive and negative evidence, having demonstrated sustained U.S. profitability, which is objective and verifiable, and taking into account anticipated future earnings, we have concluded it is more likely than not that we will realize our U.S. federal and U.S. states deferred tax assets. Prior Period Reclassification As indicated in Note 2 in our consolidated financial statements, beginning in the fourth quarter of 2024, we reclassified personnel costs including salaries, bonuses, benefits, and stock-based compensation related to our customer support employees, and certain other costs from sales and marketing and research and development to cost of revenue in order to better reflect the cost of supporting our growing customer base, and to improve comparability with peers. We have reclassified $8.0 million and $3.4 million from sales and marketing and research and development, respectively, to cost of revenue for the year ended December 31, 2023. We believe this refined methodology better reflects the nature of the costs and financial performance of the Company as it operates. As a result, the consolidated statements of operations for the year ended December 31, 2023 have been recast for prior periods presented to reflect the effects of the changes in cost of revenue, gross profit, sales and marketing, research and development and total operating expenses. There was no change in income from operations, net income attributable to common stockholders or net income per share attributable to common stockholders for the year ended December 31, 2023 as a result of these reclassifications. The consolidated balance sheets, consolidated statements of comprehensive income, consolidated statements of changes in stockholders’ equity, and the consolidated statements of cash flows were not affected by changes in the presentation of these costs. 56 Results of Operations The following table sets forth our results of operations for the periods presented: Year Ended December 31, 2025 2024 2023 (in thousands) Revenue $ 901,427  $ 780,615  $ 692,884  Cost of revenue(1)(2) 361,835  314,672  295,387  Gross profit 539,592  465,943  397,497  Operating expenses: Research and development(1)(2) 161,621  142,499  136,917  Sales and marketing(1)(2) 82,433  71,570  65,055  General and administrative(2) 138,549  160,867  162,742  Restructuring and other charges(2) —  —  20,887  Total operating expenses 382,603  374,936  385,601  Income from operations 156,989  91,007  11,896  Other income, net 49,673  6,692  14,880  Income before taxes 206,662  97,699  26,776  Income tax benefit (expense) 52,600  (13,207) (7,367) Net income attributable to common stockholders $ 259,262  $ 84,492  $ 19,409  ___________________ (1)Amounts for the year ended December 31, 2023 have been recast to conform with current period presentation. Refer to Note 2. Summary of Significant Accounting Policies, Prior Period Reclassification, in Item 8. in the consolidated financial statements for further details. (2)Includes stock-based compensation as follows: Year Ended December 31, 2025 2024 2023 (in thousands) Cost of revenue(1) $ 5,435  $ 5,889  $ 5,685  Research and development(1) 34,939  38,285  42,040  Sales and marketing(1) 11,646  10,093  13,177  General and administrative(2) 28,295  36,278  23,508  Restructuring and other charges —  —  3,937  Total $ 80,315  $ 90,545  $ 88,347  ___________________ (1)Amounts for the year ended December 31, 2023 have been recast to conform with current period presentation. Refer to Note 2. Summary of Significant Accounting Policies, Prior Period Reclassification, in Item 8. in the consolidated financial statements for further details. (2)Amount includes $31.3 million of recognized stock-based compensation related to our former CEO’s MRSUs that was estimated to be forfeited and therefore reversed for the year ended December 31, 2023. 57 The following table sets forth our results of operations as a percentage of revenue for the periods presented: Year Ended December 31, 2025 2024 2023 Revenue 100  % 100  % 100  % Cost of revenue(1) 40  40  43  Gross profit 60  60  57  Operating expenses: Research and development(1) 18  18  20  Sales and marketing(1) 9  9  9  General and administrative 15  21  23  Restructuring and other charges —  —  3  Total operating expenses(2) 42  48  56  Income from operations(2) 17  12  2  Other income, net 6  1  2  Income before income taxes(2) 23  13  4  Income tax benefit (expense) 6  (2) (1) Net income attributable to common stockholders(2) 29  % 11  % 3  % ___________________ (1)Amounts for the year ended December 31, 2023 have been recast to conform with current period presentation. Refer to Note 2. Summary of Significant Accounting Policies, Prior Period Reclassification, in Item 8. in the consolidated financial statements for further details. (2)May not foot due to rounding. A discussion regarding our financial condition and results of operations for the year ended December 31, 2025 compared to the year ended December 31, 2024 is presented below. A discussion regarding our financial condition and results of operations for the year ended December 31, 2024 compared to the year ended December 31, 2023 can be found under Part II, Item 7. “Management's Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on February 25, 2025, which is available on the SEC’s website at www.sec.gov. Comparison of the Years Ended December 31, 2025 and 2024 Revenue Year Ended December 31, 2025 2024 $ Change % Change (in thousands) Revenue $ 901,427  $ 780,615  $ 120,812  15 % Revenue increased for the year ended December 31, 2025 compared to 2024 due to an increase of 24% in revenue from DNE Customers driven by continued adoption of our products from our existing customers leading to higher average usage of our platform. 58 Cost of Revenue Year Ended December 31, 2025 2024 $ Change % Change (in thousands) Cost of revenue $ 361,835  $ 314,672  $ 47,163  15 % Cost of revenue increased for the year ended December 31, 2025 compared to 2024 due to increases of $28.6 million in co-location costs as a result of data center expansions, $7.8 million in depreciation and amortization, $4.6 million in costs related to our revenue share programs, $3.0 million in third-party license fees and $3.0 million in other costs, net. Depreciation and amortization increased primarily due to depreciation of equipment placed in service in the past year, partially offset by our change in useful life of servers and related equipment from five to six years effective October 1, 2024. Gross profit remained consistent at 60% for the years ended December 31, 2025 and 2024 primarily due to higher revenue, offset by an increase in co-location costs and depreciation of servers and equipment placed in service as a result of data center expansions. Operating Expenses Year Ended December 31, 2025 2024 $ Change % Change (in thousands) Research and development $ 161,621  $ 142,499  $ 19,122  13 % Sales and marketing 82,433  71,570  10,863  15 % General and administrative 138,549  160,867  (22,318) (14 %) Total operating expenses $ 382,603  $ 374,936  $ 7,667  2 % Research and development expenses increased for the year ended December 31, 2025 compared to 2024 due to increases of $14.7 million in personnel costs driven by higher headcount, $3.0 million in software costs, and $1.5 million in other costs. Sales and marketing expenses increased for the year ended December 31, 2025 compared to 2024 due to increases of $7.8 million in personnel costs driven by higher headcount, $2.2 million in expenses associated with events and advertising, and $0.9 million in other costs, net. General and administrative expenses decreased for the year ended December 31, 2025 compared to 2024 due to decreases of $28.8 million in personnel costs, primarily due to costs incurred in the first half of 2024 related to acquisition-related deferred compensation and executive reorganization, including the reversal of stock-based compensation from forfeited RSUs and other related costs, and $0.3 million in other costs, net, partially offset by increases of $3.7 million in payment processing costs and provision for expected credit losses due to higher revenue and $3.0 million in professional services costs. Other Income, net Year Ended December 31, 2025 2024 $ Change % Change (in thousands) Other income, net $ 49,673  $ 6,692  $ 42,981  642 % Other income, net increased for the year ended December 31, 2025 compared to 2024 due to a $48.1 million net gain on partial extinguishment of our 2026 Convertible Notes and termination of our 2022 Credit Facility and an increase of $12.3 million in unrealized gains from foreign currency fluctuations from our operations and other income. The change was offset by $8.8 million higher interest expense mostly due to interest on our Term Loan A and issuance cost amortization of our convertible notes and $8.6 million of lower interest income resulting from a reduction in our balance of cash and cash equivalents. The gain on partial extinguishment of our 2026 Convertible Notes increased basic net income per share attributable to common stockholders by $0.43 and diluted net income per share attributable to common stockholders by $0.30 during the year ended December 31, 2025. 59 Income Tax Benefit (Expense) Year Ended December 31, 2025 2024 $ Change % Change (in thousands) Income tax benefit (expense) $ 52,600  $ (13,207) $ 65,807  498 % Income tax benefit (expense) increased for the year ended December 31, 2025 compared to 2024 due to the release of our valuation allowance related to our U.S. deferred tax assets of $69.9 million during the year ended December 31, 2025, partially offset by the increase of current tax expense from higher taxable income. The tax benefit related to the release of the valuation allowance increased basic net income per share attributable to common stockholders by $0.76 and diluted net income per share attributable to common stockholders by $0.66 during the year ended December 31, 2025. Liquidity and Capital Resources We have funded our operations since inception primarily with cash flow generated by operations, offerings of our equity and debt securities, borrowings under our credit facilities, and equipment financing arrangements. Cash provided from these sources is used primarily for operating expenses, such as personnel and co-location costs, and capital expenditures, including our investments in AI/ML and other core product offerings. From time to time, we may also use excess cash and/or debt for share repurchases and investments in marketable securities and cash equivalents. In August 2025, we completed a private offering of our 2030 Convertible Notes with an aggregate principal amount of $625.0 million. The total net proceeds from the offering, after deducting issuance costs, were $606.1 million. The 2030 Convertible Notes mature on August 15, 2030, unless earlier converted, redeemed or repurchased by us. In connection with the 2030 Convertible Notes, we entered into capped call transactions, which are expected to reduce the potential dilution of our common stock upon any conversion of the 2030 Convertible Notes and/or offset any cash payments we could be required to make in excess of the principal amount of the converted notes, with such reduction and/or offset subject to a cap based on a cap price initially equal to $66.51 per share, which is subject to certain adjustments under the terms of the capped call transactions. In August 2025, we drew down $380.0 million on Term Loan A under our 2025 Credit Facility, which we entered into on May 5, 2025. We used the proceeds from our 2030 Convertible Notes and Term Loan A along with cash on hand to repurchase $1,187.7 million of principal outstanding of our 2026 Convertible Notes for an aggregate amount of $1,131.5 million, and to purchase the 2030 Capped Calls for an aggregate purchase price of $83.9 million. For further information refer to Note 7. Debt in our consolidated financial statements. As of December 31, 2025, we had $1,317.3 million aggregate principal amount outstanding under our 2030 Convertible Notes, 2026 Convertible Notes and our Term Loan A, with $420.0 million of borrowing capacity available under our 2025 Credit Facility. Subsequent to December 31, 2025, we borrowed an additional $120 million under our 2025 Credit Facility as a term loan and received the proceeds in February 2026. As of February 24, 2026, no further borrowing capacity remains under our Term Loan Facility. As of December 31, 2025, we had $326.6 million of debt maturing within the next 12 months, consisting of $312.3 million of our 2026 Convertible Notes and $14.3 million of principal payments of our Term Loan A. We plan to repurchase, repay, acquire or otherwise settle the remaining outstanding principal of our 2026 Convertible Notes by drawing on the remaining capacity under our 2025 Credit Facility, in whole or in part, and using cash on hand or generated from our operations. We believe our existing cash and cash equivalents, cash flow from operations and availability under our 2025 Credit Facility will be sufficient to support our requirements for working capital and capital expenditures, outstanding contractual commitments, debt and finance lease liabilities and equipment financing obligations for at least the next 12 months and in the long term. We have historically repurchased our common stock pursuant to repurchase programs approved by our Board of Directors. In February 2024, our Board of Directors approved additional repurchase program of up to an aggregate of $140 million of our common stock, which we completed in July 2025. In August 2025, we adopted the 2025 Share Buyback Program which authorizes the repurchase of up to $100 million of our common stock. The 2025 Share Buyback Program 60 will expire on July 31, 2027. For the year ended December 31, 2025, we repurchased and retired 2.4 million shares of common stock for an aggregate purchase price of $82.1 million. As of December 31, 2025, we had $599.4 million of estimated undiscounted fixed payment obligations for leases of co-location space at data center facilities that have not yet commenced and were not included on the consolidated balance sheets. These leases are scheduled to commence between January 2026 and April 2026, and have a weighted-average lease term of 9.6 years. As of December 31, 2025, we had $254.5 million in cash and cash equivalents. Our cash and cash equivalents primarily consist of cash and money market funds. From time to time, we may seek to retire or purchase our outstanding equity or debt, including the repurchase of our common stock or outstanding convertible notes, through cash purchases and/or exchanges for equity securities, in open market purchases, privately negotiated transactions or otherwise. Such repurchases or exchanges, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions, and other factors. The amounts involved in any such transactions, individually or in the aggregate, may be material. Further, any such purchases or exchanges may result in us acquiring and retiring a substantial amount of such indebtedness, which could impact the trading liquidity of such indebtedness. The following table summarizes our cash flows for the periods presented: Year Ended December 31, (In thousands) 2025 2024 2023 Net cash provided by operating activities $ 309,604  $ 282,725  $ 234,942  Net cash (used in) provided by investing activities (268,285) (94,805) 401,152  Net cash used in financing activities (216,909) (76,446) (468,903) (Decrease) increase in cash, cash equivalents and restricted cash (175,560) 111,210  167,176  Operating Activities Our largest source of operating cash is cash collections from sales to our customers. Our primary uses of cash from operating activities are for personnel costs, data center co-location costs, payment processing fees, bandwidth and connectivity, server maintenance, software licensing fees, and taxes. Net cash provided by operating activities was $309.6 million and $282.7 million for the years ended December 31, 2025 and 2024, respectively. The change was primarily driven by an increase in cash collections from higher revenues, partially offset by higher co-location costs as a result of data center expansions and higher personnel costs due to increased headcount, as well as annual merit-based salary increases. Investing Activities Net cash used in investing activities was $268.3 million and $94.8 million for the years ended December 31, 2025 and 2024, respectively. The change in cash used in investing activities was primarily driven by $126.8 million in cash payments for the acquisition of equipment under financing arrangements (for which we received an equivalent amount of proceeds discussed below in “Financing Activities”) and a $91.7 million reallocation of our marketable securities portfolio to cash equivalents, partially offset by a decrease of $46.7 million in cash payments for capital expenditures. Financing Activities Net cash used in financing activities was $216.9 million and $76.4 million for the years ended December 31, 2025 and 2024, respectively. The change was primarily due to cash used for $1,131.5 million for the partial repurchase of our 2026 Convertible Notes, $83.9 million for the purchases of capped calls related to our 2030 Convertible Notes, $22.3 million for repurchase and retirement of our common stock and $9.2 million decrease in net cash received from issuance of common stock under our 2021 Plan and ESPP, partially offset by proceeds of $606.1 million from the issuance of our 2030 Convertible Notes, $376.3 million from the drawdown of our 2025 Credit Facility, and $126.8 million from our equipment financing arrangements. Contractual Obligations and Commitments We have various contractual obligations and commitments, such as long-term leases, purchase commitments, financing arrangements, long-term debt, and short-term debt that are disclosed in the footnotes to the consolidated financial 61 statements. See Note 7. Debt; Note 8. Operating Leases; Note 9. Finance Leases and Equipment Financing Obligations; and Note 10. Commitments and Contingencies to our consolidated financial statements included in Part II, Item 8. “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K for further information regarding these commitments. Critical Accounting Policies and Estimates Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses, and related disclosures. On an ongoing basis, we evaluate our estimates and assumptions. Our actual results may differ from these estimates under different assumptions or conditions. We believe that the following accounting policies involve a greater degree of judgment and complexity in the preparation of our consolidated financial statements. We have other significant accounting policies that are more fully described in Note 2. Summary of Significant Accounting Policies, to the consolidated financial statements in Part II, Item 8. “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K. Both our critical and significant accounting policies are important to an understanding of the consolidated financial statements. Revenue Recognition We recognize revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”). We account for revenue using the following steps: 1. Identify the contract with a customer We consider the terms and conditions of the contract and our customary business practices in identifying our contracts under ASC 606. We determine we have a contract with a customer when the customer agrees to the terms of service, we can identify each party’s rights regarding the services to be transferred, we can identify the payment terms for the services, we have determined the customer has the ability and intent to pay and the contract has commercial substance. We apply judgment in determining the customer’s ability and intent to pay, which is based on a variety of factors, including the customer’s historical payment experience or, in the case of a new customer, we apply security checks and validate their payment method. 2. Identify the performance obligations in the contract Our performance obligation is to provide our cloud-based infrastructure for customers to use at the customers’ election. The availability of services is free of charge, and therefore we have no performance obligation until the customer elects to use the services. 3. Determine the transaction price The transaction price is calculated based on the customer’s usage for the month at the applicable unit of measure (e.g. hourly) that is published on the Company’s website. None of our contracts contain a significant financing component. 4. Allocate the transaction price to performance obligations in the contract The transaction price is calculated based on actual monthly usage and pricing that is published on the Company’s website. This is considered a single performance obligation, and thus the entire transaction price is allocated to the single performance obligation. 5. Recognize revenue when or as we satisfy a performance obligation We offer a comprehensive set of cloud platform capabilities which span across IaaS, including Droplet virtual machines, storage and networking offerings; PaaS and SaaS, including Managed Hosting, Managed Database, Managed Kubernetes and Marketplace offerings. We also offer a comprehensive AI/ML platform - DigitalOcean Gradient® AI Agentic Cloud, which includes Gradient AI Infrastructure with offerings such as GPU Droplets and Bare Metal GPUs; the Gradient AI Platform which offers various building block services including LLMs; and Gradient AI Agents. We recognize revenue largely based on the customer utilization of these resources. Fees are billed monthly, and payment is typically due upon invoicing. Revenue is recognized net of allowances for credits and any taxes collected from customers, which are subsequently remitted to governmental authorities. 62 Our global cloud platform is supported by various third parties. We considered the principal versus agent guidance in ASC 606 and concluded that we are the principal for all services provided to our customers. We may offer sales incentives in the form of promotional and referral credits and grant credits to encourage customers to use our services. These types of promotional and referral credits typically expire in two months or less if not used. For credits earned with a purchase, they are recorded as contract liabilities when earned and recognized at the earlier of redemption or expiration. The majority of credits are redeemed in the month they are earned. Timing of revenue recognition may differ from the timing of invoicing to customers. We record a receivable when revenue is recognized prior to invoicing. Any payments received in advance of billing are a contract liability, which is recorded as deferred revenue within total current liabilities on the consolidated balance sheets. Recently Adopted Accounting Pronouncements See Note 2. Summary of Significant Accounting Policies, to the consolidated financial statements in Part II, Item 8. “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K for information about recent accounting pronouncements. Non‑GAAP Financial Measures To supplement our consolidated financial statements, which are prepared and presented in accordance with generally accepted accounting principles in the United States, or GAAP, we provide investors with non-GAAP financial measures including: (i) adjusted EBITDA and adjusted EBITDA margin and (ii) non-GAAP net income and non-GAAP diluted net income per share. These measures are presented for supplemental informational purposes only, have limitations as analytical tools and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP. Our calculations of each of these measures may differ from the calculations of measures with the same or similar titles by other companies and therefore comparability may be limited. Because of these limitations, when evaluating our performance, you should consider each of these non-GAAP financial measures alongside other financial performance measures, including the most directly comparable financial measure calculated in accordance with GAAP and our other GAAP results. A reconciliation of each of our non-GAAP financial measures to the most directly comparable financial measure calculated in accordance with GAAP is set forth below. Adjusted EBITDA and Adjusted EBITDA Margin We define adjusted EBITDA as net income attributable to common stockholders, adjusted to exclude depreciation and amortization, stock-based compensation, interest expense, acquisition related compensation, acquisition and integration related costs, income tax expense (benefit), restructuring and other charges, restructuring related charges, impairment of certain long-lived assets, interest income and other income, net, revaluation of warrants, (gain) loss on extinguishment of debt, net, release of a VAT reserve, and other charges. We define adjusted EBITDA margin as adjusted EBITDA as a percentage of revenue. We believe that adjusted EBITDA, when taken together with our GAAP financial results, provides meaningful supplemental information regarding our operating performance and facilitates internal comparisons of our historical operating performance on a more consistent basis by excluding certain items that may not be indicative of our business, results of operations or outlook. In particular, we believe that the use of adjusted EBITDA is helpful to our investors as it is a measure used by management in assessing the health of our business, evaluating our operating performance, and for internal planning and forecasting purposes. Our calculation of adjusted EBITDA and adjusted EBITDA margin may differ from the calculations of adjusted EBITDA and adjusted EBITDA margin by other companies and therefore comparability may be limited. Because of these limitations, when evaluating our performance, you should consider adjusted EBITDA and adjusted EBITDA margin alongside other financial performance measures, including our net income attributable to common stockholders and other GAAP results. The following table presents a reconciliation of Net income attributable to common stockholders, the most directly comparable financial measure stated in accordance with GAAP, to adjusted EBITDA for each of the periods presented: 63 Year Ended December 31, (In thousands) 2025 2024 2023 GAAP Net income attributable to common stockholders $ 259,262  $ 84,492  $ 19,409  Adjustments: Depreciation and amortization 137,449  130,052  117,866  Stock-based compensation(1) 80,315  90,398  115,019  Interest expense 17,940  9,113  8,945  Acquisition related compensation —  12,661  27,763  Acquisition and integration related costs —  —  6,145  Income tax (benefit) expense (52,600) 13,207  7,367  Gain on extinguishment of debt, net (48,104) —  —  Restructuring and other charges(1) —  —  20,887  Restructuring related charges(1)(2) —  4,025  (23,535) Impairment of certain long-lived assets 52  356  1,140  Interest income and other income, net(3) (19,509) (15,805) (23,825) Adjusted EBITDA $ 374,805  $ 328,499  $ 277,181  As a percentage of revenue: Net income margin 29 % 11 % 3 % Adjusted EBITDA margin 42 % 42 % 40 % ___________________ (1)For the year ended December 31, 2024, non-GAAP stock-based compensation excludes $0.1 million as it is presented in restructuring related charges. For the year ended December 31, 2023, non-GAAP stock-based compensation excludes the $31.3 million reversal related to the former CEO’s forfeited MRSU award that is reported in restructuring related charges, as well as $3.9 million that is reported in restructuring and other charges, in the table above. (2)For the year ended December 31, 2024, primarily consists of executive reorganization charges. For the year ended December 31, 2023, primarily consists of the $31.3 million reversal of stock-based compensation related to the former CEO’s forfeited MRSU award, partially offset by salary continuation charges, executive reorganization charges including severance, CEO search firm fees, and other legal and professional service costs. (3) For the years ended December 31, 2025, primarily consists of interest income from our cash and cash equivalents. For the years ended December 31, 2024 and 2023, primarily consists of interest and accretion income from our cash and cash equivalents and marketable securities. Non-GAAP Net Income and Non-GAAP Diluted Net Income Per Share We define non-GAAP net income as net income attributable to common stockholders, excluding stock-based compensation, acquisition related compensation, amortization of acquired intangibles, acquisition and integration related costs, restructuring and other charges, restructuring related charges, impairment of certain long-lived assets, (gain) loss on extinguishment of debt, net, revaluation of warrants, release of a VAT reserve, and other charges. In addition to these exclusions, we subtract an assumed non-GAAP provision for income taxes to calculate non-GAAP net income that excludes the current period income tax benefit (expense). We utilize a fixed long-term projected tax rate in our computation of the non-GAAP income tax provision in order to provide better consistency across reporting periods. We define non-GAAP diluted net income per share as non-GAAP net income divided by the weighted-average diluted shares outstanding, which includes the potentially dilutive effect of our stock options, RSUs, PRSUs, and Convertible Notes. We believe non-GAAP diluted net income per share provides our management and investors consistency and comparability with our past financial performance and facilitates period-to-period comparisons of operations, as this metric generally eliminates the effects of unusual or non-recurring items from period to period for reasons unrelated to overall operating performance. 64 The following table presents a reconciliation of Net income attributable to common stockholders, the most directly comparable financial measure stated in accordance with GAAP, to Non-GAAP Net income for each of the periods presented: Year Ended December 31, (In thousands, except per share amounts) 2025 2024 2023 GAAP Net income attributable to common stockholders $ 259,262  $ 84,492  $ 19,409  Stock-based compensation(1) 80,315  90,398  115,019  Acquisition related compensation —  12,661  27,763  Amortization of acquired intangible assets 20,057  22,426  18,967  Acquisition and integration related costs —  —  6,145  Gain on extinguishment of debt, net (48,104) —  —  Restructuring and other charges(1) —  —  20,887  Restructuring related charges(1)(2) —  4,025  (23,535) Impairment of certain long-lived assets 52  356  1,140  Non-GAAP income tax adjustment(3) (94,038) (23,202) (25,469) Non-GAAP Net income $ 217,544  $ 191,156  $ 160,326  Non-cash charges related to convertible notes(4) $ 5,697  $ 6,357  $ 6,249  Non-GAAP Net income used to compute net income per share, diluted $ 223,241  $ 197,513  $ 166,575  GAAP Net income per share attributable to common stockholders, diluted $ 2.52  $ 0.89  $ 0.20  Stock-based compensation(1) 0.76  0.88  1.10  Acquisition related compensation —  0.12  0.26  Amortization of acquired intangible assets 0.19  0.22  0.18  Acquisition and integration related costs —  —  0.06  Gain on extinguishment of debt, net(5) (0.46) —  —  Restructuring and other charges(1) —  —  0.20  Restructuring related charges(1)(2) —  0.04  (0.23) Impairment of certain long-lived assets —  —  0.01  Non-cash charges related to convertible notes(4) 0.05  0.06  0.06  Non-GAAP income tax adjustment(3) (0.94) (0.30) (0.25) Non-GAAP Net income per share, diluted(6) $ 2.12  $ 1.92  $ 1.59  GAAP Weighted-average shares used to compute net income per share, diluted 105,343 94,503 96,415 Weighted-average dilutive effect of potentially dilutive securities —  8,403 8,403 Non-GAAP Weighted-average shares used to compute net income per share, diluted 105,343 102,906 104,818 ______________ (1)For the year ended December 31, 2024, non-GAAP stock-based compensation excludes $0.1 million as it is presented in restructuring related charges. For the year ended December 31, 2023, non-GAAP stock-based compensation excludes the $31.3 million reversal related to the former CEO’s forfeited MRSU award that is reported in restructuring related charges, as well as $3.9 million that is reported in restructuring and other charges, in the table above. (2)For the year ended December 31, 2024, primarily consists of executive reorganization charges. For the year ended December 31, 2023, primarily consists of the $31.3 million reversal of stock-based compensation related to the 65 former CEO’s forfeited MRSU award, partially offset by salary continuation charges, executive reorganization charges including severance, CEO search firm fees, and other legal and professional service costs. (3) For the years ended December 31, 2025 and 2024, we used a tax rate of 16%, which we believe is a reasonable estimate of our long-term effective tax rate applicable to non-GAAP pre-tax income for each respective year. For the year ended December 31, 2023, we used a tax rate of 17% which we believe is a reasonable estimate of our long-term effective tax rate applicable to non-GAAP pre-tax income for 2023. (4) Consists of non-cash interest expense for amortization of debt issuance costs related to the 2026 and 2030 Convertible Notes. (5) For the year ended December 31, 2025, excludes tax impact which is presented in Non-GAAP income tax adjustment.     (6) May not foot due to rounding.