DigitalOcean Holdings Inc. (NYSE:DOCN) rolled out new artificial intelligence initiatives at its Deploy London conference, introducing the DigitalOcean AI Ecosystem and the DigitalOcean AI Partner Program. The company stated that the additions aim to establish a stronger hub for AI-native startups, technology partners, and systems integrators to develop and scale the next generation of applications. The launch highlights DigitalOcean's effort to combine hardware, advanced models, and developer tools into ...

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]