DigitalOcean (NYSE:DOCN) Q4 2025 Earnings call February 24, 2026 08:00 AM ET Company ParticipantsKingsley Crane - Managing DirectorMark Zhang - AVP of Equity ResearchMatt Steinfort - CFOMelanie Strate - Head of Investor RelationsPaddy Srinivasan - CEOPatrick Walravens - Managing Director and Director of Technology ResearchRadi Sultan - DirectorRaimo Lenschow - Managing DirectorThomas Blakey - Managing DirectorConference Call ParticipantsGabriela Borges - Managing Director and Senior Software Equity Research ...

Financial Data and Key Metrics Changes - The company achieved 18% revenue growth in Q4 2025, reaching $901 million for the full year [4] - Incremental organic ARR was $51 million, the highest in the company's history [4] - Adjusted EBITDA margins were 42% and adjusted free cash flow margins were 19% for the year [4][34] - Q4 revenue was $242 million, up 18% year-over-year, with a gross profit of $142 million and a gross margin of 59% [34] Business Line Data and Key Metrics Changes - ARR from Digital Native Enterprises (DNEs) reached $604 million in Q4, growing 30% year-over-year [10] - The million-dollar customers cohort reached $133 million in ARR, growing at 123% year-over-year [10] - The company delivered a record organic incremental ARR of $51 million in Q4, surpassing previous peak quarters [9] Market Data and Key Metrics Changes - AI customer ARR reached $120 million in Q4 2025, growing 150% year-over-year, now making up 12% of total ARR [28] - The company is positioned to capture a significant share of the AI and cloud-native market, with a focus on serving these disruptors [5][12] Company Strategy and Development Direction - The company is focusing on scaling its top customers and expanding its base of AI-native customers [45] - It aims to deliver 21% revenue growth in 2026, with an exit growth rate of 25%+ in Q4 2026, and 30% growth in 2027 [7][30] - The strategy includes building a vertically integrated inference cloud to support AI-native companies [16][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to capitalize on the AI-driven disruption in the software industry [5][48] - The company anticipates near-term pressure on gross margin and adjusted EBITDA due to new capacity investments but remains committed to maintaining financial discipline [31][41] - Management highlighted the importance of balancing growth with disciplined capital allocation [31][45] Other Important Information - The company introduced a new metric, AI customer revenue, to provide clearer visibility into its momentum [27] - The company has strengthened its executive team by adding a Chief Product and Technology Officer to enhance its capabilities [25] Q&A Session Summary Question: Insights on the inference market and customer evolution - Management noted that while major players like OpenAI and Anthropic dominate headlines, there is a growing importance of open-source models for managing unit economics [52][53] - The company is seeing a healthy adoption of open-source models among its AI-native customers, which is expected to grow [55][56] Question: Clarification on the weighted rule of fifty and free cash flow margins - Management explained that the weighted rule of fifty considers revenue growth as three times more valuable than free cash flow margin, indicating strong growth potential alongside disciplined financial management [57][58] Question: Operational support for open-source models - Management confirmed that they are extending day zero support for open-source models, with automation expected to increase in the future [63] - The company is working on intelligent routing algorithms to optimize the use of both open-source and closed-source models [65][66] Question: Revenue efficiency for fully utilized megawatts - Management indicated that they expect to deliver materially higher ARR per megawatt compared to competitors, with a focus on integrating AI and core cloud capabilities [68][70] Question: Incremental capacity and revenue growth projections - Management confirmed that the incremental 31 megawatts of capacity will come online by the end of 2026, supporting a projected exit growth rate of 25%+ in Q4 2026 and 30% growth in 2027 [73]

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Q4 2025 Earnings and Investor Update Presentation February 24, 2026 2026 DigitalOcean. All rights reserved 1 Safe Harbor This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding our financial outlook. These statements are subject to known and unknown risks, uncertainties, assumptions, and other factors that may cause actual results or ou ...

Group 1: AMD and Meta Deal - Advanced Micro Devices (AMD) has agreed to sell up to $60 billion worth of artificial intelligence chips to Meta Platforms over five years, allowing Meta to purchase as much as 10% of AMD [1][9] - AMD will supply six gigawatts' worth of chips to Meta, starting with one gigawatt of the forthcoming MI450 flagship hardware in the second half of this year [10] Group 2: OpenAI Partnerships - Amazon is considering an investment of around $10 billion in OpenAI, with discussions remaining fluid [1] - Walt Disney plans to invest $1 billion in OpenAI, allowing the use of its characters from franchises like Star Wars and Marvel in the Sora AI video generator [2] - OpenAI has partnered with Broadcom to produce its first in-house artificial intelligence processors [3] - AMD has also agreed to supply AI chips to OpenAI in a multi-year deal, which includes an option for OpenAI to buy up to roughly 10% of AMD [4] - Nvidia is set to invest up to $100 billion in OpenAI and supply data center chips, establishing a financial stake in the company [5] - Oracle has signed a significant cloud deal with OpenAI, expected to involve $300 billion in computing power over about five years [6] - CoreWeave signed a five-year contract worth $11.9 billion with OpenAI [7] Group 3: Stargate Datacenter Project - The Stargate project is a joint venture between SoftBank, OpenAI, and Oracle to build data centers, with an investment of up to $500 billion for AI infrastructure [8]

Core Viewpoint - A class action lawsuit has been filed against CoreWeave, Inc. and its senior executives for securities fraud following significant stock drops attributed to potential violations of federal securities laws [1]. Company Overview - CoreWeave is an AI-focused cloud computing company that operates data centers providing high-performance GPU infrastructure. The company relies on partnerships, including a merger agreement with Core Scientific announced on July 7, 2025 [4]. Allegations of Securities Fraud - The lawsuit claims that CoreWeave misled investors about its ability to meet customer demand and concealed significant construction delays at its data centers, despite assurances of robust demand and competitive strengths [5]. Stock Performance and Impact of Events - On October 30, 2025, Core Scientific's announcement of insufficient shareholder votes to approve the merger led to a stock price drop of $8.87 per share, over 6%, from $139.93 to $131.06 [6]. - Following a revenue guidance reduction on November 10, 2025, due to delays from a third-party developer, CoreWeave's stock fell by $17.22 per share, over 16%, from $105.61 to $88.39 [7]. - A report on December 15, 2025, regarding delays in a major data center project caused the stock to drop by $2.85 per share, over 3%, from $72.35 to $69.50 [8].

As it always does following each quarter, Berkshire Hathaway recently disclosed the stocks it held in its massive equities portfolio at the end of the fourth quarter of 2025. This is a particularly special filing for followers of Berkshire because it will ultimately be the last quarter that Warren Buffett was CEO of the company he led for over six decades and built into one of the greatest wealth-generating machines in history. While Buffett will remain chairman of the board of directors, the 95-year-old ...

Would you be shocked to learn that Amazon (NASDAQ: AMZN) stock has underperformed the broad market indices over the past five years? That's right: Even though the mega-technology company keeps posting impressive growth figures, it is only up 23% cumulatively from five years ago. The S&P 500 (SNPINDEX: ^GSPC) has produced a total return of 88% over that same time frame. Amazon's stock has underperformed the index due to investor concerns about losing the race in artificial intelligence (AI), large capital ...

Amazon.com Inc. (NASDAQ:AMZN) announced a $12 billion investment in northwest Louisiana on Monday. The investment is earmarked for the development of data centers, which are projected to generate 540 full-time positions and support an additional 1,710 full-time equivalent roles in the community.The investment will be spread across Caddo and Bossier Parishes, stimulating regional economic activity. The data centers will cater to cloud computing technologies, offering job opportunities for electricians, HVAC ...

After being essentially flat over the past year, Amazon is poised for a breakout.There are currently an even dozen companies with a market cap of $1 trillion or more, but only three are members of the prestigious $3 trillion club: Nvidia at $4.6 trillion, Apple at $3.9 trillion, and Alphabet at $3.7 trillion (as of this writing). With a market cap of nearly $2.2 trillion, it seems like it's just a matter of time before Amazon (AMZN 2.39%) joins that elite group. Yet recent events have sent some investors he ...