DigitalOcean (NYSE:DOCN) Releases FY 2026 Earnings Guidance

DigitalOcean (NYSE:DOCN) updated its FY 2026 earnings guidance on Tuesday. The company provided earnings per share guidance of 1.350-1.400 for the period, compared to the consensus earnings per share estimate of 1.060. The company issued revenue guidance of $1.2 billion-$1.2 billion, compared to the consensus revenue estimate of $1.1 billion. DigitalOcean also updated its Q3 2026 guidance to 0.280-0.300 EPS.

DigitalOcean Price Performance

Shares of DOCN traded down $7.22 during mid-day trading on Wednesday, reaching $121.67. The company had a trading volume of 577,805 shares, compared to its average volume of 3,876,759. The company has a debt-to-equity ratio of 0.92, a current ratio of 1.46 and a quick ratio of 1.46. The company has a market capitalization of $12.70 billion, a P/E ratio of 53.13 and a beta of 1.61. DigitalOcean has a twelve month low of $28.79 and a twelve month high of $187.50. The company’s 50-day moving average is $145.98 and its 200-day moving average is $107.48.

DigitalOcean (NYSE:DOCN) last issued its quarterly earnings data on Tuesday, August 4th. The company reported $0.45 earnings per share for the quarter, topping the consensus estimate of $0.26 by $0.19. The firm had revenue of $281.18 million for the quarter, compared to analysts’ expectations of $279.03 million. DigitalOcean had a net margin of 24.97% and a return on equity of 88.86%. The company’s quarterly revenue was up 28.6% compared to the same quarter last year. During the same period in the prior year, the firm earned $0.39 earnings per share. DigitalOcean has set its FY 2026 guidance at 1.350-1.400 EPS and its Q3 2026 guidance at 0.280-0.300 EPS. On average, equities analysts anticipate that DigitalOcean will post 0.57 EPS for the current year.

Analysts Set New Price Targets

Several research firms have recently issued reports on DOCN. Stifel Nicolaus upgraded DigitalOcean from a “hold” rating to a “buy” rating and raised their price target for the stock from $135.00 to $160.00 in a research report on Tuesday, July 21st. Oppenheimer set a $190.00 price target on shares of DigitalOcean in a research report on Wednesday, May 6th. Robert W. Baird assumed coverage on shares of DigitalOcean in a report on Tuesday, July 21st. They set an “outperform” rating and a $165.00 price objective for the company. Bank of America increased their target price on shares of DigitalOcean from $103.00 to $107.00 and gave the stock a “buy” rating in a report on Thursday, April 9th. Finally, Barclays raised their price objective on DigitalOcean from $160.00 to $161.00 and gave the stock an “overweight” rating in a research note on Wednesday. Two equities research analysts have rated the stock with a Strong Buy rating, eleven have given a Buy rating and three have given a Hold rating to the company’s stock. According to data from MarketBeat, DigitalOcean has a consensus rating of “Moderate Buy” and a consensus price target of $152.00.

Insider Buying and Selling at DigitalOcean

In related news, CFO Matt Steinfort sold 25,000 shares of the firm’s stock in a transaction on Friday, May 15th. The shares were sold at an average price of $152.50, for a total value of $3,812,500.00. Following the completion of the transaction, the chief financial officer owned 573,272 shares of the company’s stock, valued at approximately $87,423,980. This trade represents a 4.18% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this hyperlink. Also, Director Hilary Schneider sold 4,338 shares of the firm’s stock in a transaction dated Friday, May 15th. The shares were sold at an average price of $156.38, for a total value of $678,376.44. Following the completion of the transaction, the director owned 24,323 shares of the company’s stock, valued at $3,803,630.74. The trade was a 15.14% decrease in their position. The disclosure for this sale is available in the SEC filing. Insiders have sold 39,338 shares of company stock valued at $6,191,576 in the last 90 days. 0.96% of the stock is currently owned by corporate insiders.

DigitalOcean News Summary

Here are the key news stories impacting DigitalOcean this week:

• Positive Sentiment: DigitalOcean reported second-quarter adjusted earnings of $0.45 per share, well above the $0.26 analyst consensus, while revenue of $281.2 million exceeded expectations of $279.0 million and rose 28.6% year over year. DigitalOcean Beats Q2 Earnings and Revenue Estimates
• Positive Sentiment: The company raised its full-year 2026 outlook to approximately $1.2 billion in revenue and $1.35-$1.40 in EPS, above consensus expectations of roughly $1.1 billion in revenue and $1.06 in EPS. Third-quarter guidance also topped estimates, with revenue of $304-$307 million and EPS of $0.28-$0.30. DigitalOcean Forecasts 2026 Revenue Growth
• Positive Sentiment: Management’s outlook reflects stronger AI-native enterprise demand, including expanding inference services and a projected 35% or higher fourth-quarter exit growth rate. Analysts highlighted DigitalOcean’s approximately $1.1 billion annual recurring revenue and potential for 50% or greater growth acceleration in fiscal 2027. DigitalOcean Affirms Growth Acceleration
• Positive Sentiment: A Seeking Alpha analyst upgraded the stock, arguing that DigitalOcean is well positioned to benefit from the AI cloud expansion and offers recurring-revenue exposure rather than relying primarily on one-time hardware sales. DigitalOcean AI Boom Upgrade
• Neutral Sentiment: The initial market reaction was volatile despite the beat and raised outlook, suggesting investors were weighing the improved growth profile against elevated expectations and the stock’s premium valuation.

Hedge Funds Weigh In On DigitalOcean

Hedge funds and other institutional investors have recently made changes to their positions in the company. Alyeska Investment Group L.P. bought a new stake in DigitalOcean during the third quarter worth $21,808,000. Arrowstreet Capital Limited Partnership grew its position in shares of DigitalOcean by 90.9% in the 4th quarter. Arrowstreet Capital Limited Partnership now owns 1,194,845 shares of the company’s stock valued at $57,496,000 after acquiring an additional 568,823 shares during the period. Franklin Resources Inc. increased its stake in shares of DigitalOcean by 784.2% during the 4th quarter. Franklin Resources Inc. now owns 494,314 shares of the company’s stock worth $23,786,000 after purchasing an additional 438,411 shares during the last quarter. Danske Bank A S bought a new stake in shares of DigitalOcean in the 3rd quarter valued at about $14,582,000. Finally, Lazard Asset Management LLC raised its holdings in shares of DigitalOcean by 34.5% in the 2nd quarter. Lazard Asset Management LLC now owns 1,660,731 shares of the company’s stock valued at $47,430,000 after purchasing an additional 426,264 shares during the period. 49.77% of the stock is owned by institutional investors.

DigitalOcean Company Profile

DigitalOcean Holdings, Inc is a cloud infrastructure provider that focuses on simplicity, performance and developer experience. The company offers a range of cloud services designed to help software developers, startups and small- to medium-sized businesses deploy, manage and scale applications. Its flagship offering, Droplets, provides virtual private servers that can be configured with various CPU, memory and storage options. In addition to compute instances, DigitalOcean’s platform includes managed Kubernetes, scalable object and block storage, managed databases, load balancers and networking capabilities such as Virtual Private Cloud (VPC) and Floating IPs.

Founded in 2011 and headquartered in New York City, DigitalOcean was created with the goal of making cloud computing more accessible to individual developers and smaller teams.