Core Insights - DigitalOcean Holdings Inc. has launched new artificial intelligence initiatives, including the DigitalOcean AI Ecosystem and the DigitalOcean AI Partner Program, aimed at supporting AI-native startups and technology partners [1][6] - The company is integrating hardware, advanced models, and developer tools into a unified platform to enhance its offerings [2][3] - The AI Partner Program provides resources such as credits and joint development opportunities to startups and technology providers, with companies like Fal.ai and Traversal already participating [5] Financial Performance - Following a strong second-quarter earnings report, DigitalOcean's shares increased by nearly 30%, boosting the company's confidence in its growth strategy [6] Product and Service Enhancements - Planned enhancements include generative media features through Fal.ai and MongoDB's Vector Search, aimed at enabling faster and more efficient AI-driven product delivery [4] - The Gradient AI Agentic Cloud will provide access to high-performance GPUs from AMD and NVIDIA, along with models from OpenAI and other tech leaders [3][5] Strategic Positioning - The initiatives position DigitalOcean to play a significant role in the future of AI-native innovation, showcasing new products and platform enhancements at the Deploy event [7]

Core Insights - DigitalOcean has announced a significant expansion of its AI offerings and the introduction of the DigitalOcean AI Partner Program to foster innovation and support startups and builders [1][5] Group 1: DigitalOcean AI Ecosystem - The DigitalOcean AI Ecosystem enables customers to create and deploy AI applications effectively, providing a suite of tools including AMD and NVIDIA GPUs and access to advanced models from companies like OpenAI and Meta [2][4] - Planned integrations within the Gradient AI Agentic Cloud include media models from Fal.ai for generating voice, image, and video, and leveraging Vector Search from MongoDB for intelligent applications [3][4] Group 2: Developer Support and Community - The Gradient AI Ecosystem serves as a powerful resource for developers, emphasizing the importance of software and community collaboration in AI development [4] - DigitalOcean aims to provide developers and enterprises with resources, tools, and community support to scale their AI applications, including practical use cases and tutorials [5][10] Group 3: AI Partner Program - The DigitalOcean AI Partner Program is designed to accelerate growth for partners and customers, offering unique advantages tailored for AI development [5][6] - The program includes extensive developer marketing support, community engagement opportunities, and access to DigitalOcean's customer base of over 640,000 [9][10]

Financial Data and Key Metrics Changes - Revenue for Q2 2025 was $219 million, representing a 14% year-over-year growth [6][23] - Adjusted free cash flow was $57 million, or 26% of revenue, marking a significant increase from Q1 [7][28] - Non-GAAP diluted net income per share was $0.59, a 23% increase year-over-year, while GAAP diluted net income per share was $0.39, a 95% increase year-over-year [28] Business Line Data and Key Metrics Changes - AIML business revenue grew over 100% year-over-year, indicating strong demand [6][26] - Revenue from Scalar Plus customers, those with an annual run rate of over $100,000, grew 35% year-over-year and accounted for 24% of total revenue [6][25] - Incremental ARR for the quarter was $32 million, the highest since 2022 [6][24] Market Data and Key Metrics Changes - The company raised its full-year revenue guidance to a range of $888 million to $892 million, reflecting confidence in continued growth [7][32] - Net dollar retention (NDR) improved to 99%, up from 97% in the same quarter last year [25] Company Strategy and Development Direction - The company is focusing on product innovation and enhancing its go-to-market strategy, particularly in core cloud and AI [5][21] - A new dedicated migrations team was established to support customers transitioning from other cloud providers [12] - The launch of the Gradient AI platform aims to democratize access to AI and enhance customer capabilities [13][17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining growth momentum into the second half of the year, supported by strong customer acquisition and product adoption [21][23] - The company is addressing outstanding convertible debt and is on track to manage its capital allocation effectively [8][30] Other Important Information - The company released over 60 new products and features during the quarter, with significant adoption among top customers [8][9] - The Atlanta data center was officially announced, designed to support high-density GPU infrastructure optimized for AI [9][10] Q&A Session Summary Question: Can you elaborate on the AIML revenue growth? - Management noted that AIML revenue grew over 100% year-over-year, driven by the introduction of new NVIDIA gear and a three-layer AI stack [38][40] Question: What is the current status of net new ARR? - Management clarified that while AIML ARR was previously noted at over 160%, the current growth reflects a more challenging comparison due to last year's strong performance [47][49] Question: How are unit economics tracking in the AI business? - Management expressed confidence in the margins of the AI business, noting that higher layers of the AI stack command better margins than pure infrastructure [58][60] Question: What is the breakdown of AI versus non-AI revenue? - Management indicated that AI revenue is becoming a material part of the business but remains a small percentage overall, with expectations for growth in 2026 [84][86] Question: Is AI revenue included in the net dollar retention metric? - Management confirmed that AI revenue is not currently included in the NDR metric, but it is expected to contribute in the future as inferencing workloads scale [93][95]