DigitalOcean (NYSE:DOCN) Issues Q1 2026 Earnings Guidance

DigitalOcean (NYSE:DOCN) issued an update on its first quarter 2026 earnings guidance on Tuesday morning. The company provided EPS guidance of 0.220-0.270 for the period, compared to the consensus EPS estimate of 0.390. The company issued revenue guidance of $249.0 million-$250.0 million, compared to the consensus revenue estimate of $248.5 million. DigitalOcean also updated its FY 2026 guidance to 0.750-1.000 EPS.

DigitalOcean Stock Down 5.0%

Shares of DOCN traded down $3.11 during trading hours on Wednesday, reaching $59.63. 828,551 shares of the company traded hands, compared to its average volume of 3,141,051. The stock has a market capitalization of $5.46 billion, a PE ratio of 23.98, a price-to-earnings-growth ratio of 8.32 and a beta of 1.76. DigitalOcean has a fifty-two week low of $25.45 and a fifty-two week high of $70.43. The stock has a fifty day simple moving average of $55.78 and a 200 day simple moving average of $45.13.

Wall Street Analyst Weigh In

Several equities research analysts have issued reports on the stock. Weiss Ratings reaffirmed a “hold (c+)” rating on shares of DigitalOcean in a research note on Monday, December 29th. Oppenheimer began coverage on shares of DigitalOcean in a research note on Monday, November 10th. They set an “outperform” rating and a $60.00 price objective on the stock. Cantor Fitzgerald boosted their price target on DigitalOcean from $68.00 to $83.00 and gave the company an “overweight” rating in a report on Wednesday. UBS Group increased their price target on DigitalOcean from $40.00 to $48.00 and gave the stock a “neutral” rating in a research note on Thursday, November 6th. Finally, Citigroup reaffirmed a “buy” rating on shares of DigitalOcean in a research report on Friday, February 13th. Nine research analysts have rated the stock with a Buy rating and six have assigned a Hold rating to the stock. According to data from MarketBeat.com, the stock has an average rating of “Moderate Buy” and a consensus price target of $61.21.

Trending Headlines about DigitalOcean

Here are the key news stories impacting DigitalOcean this week:

• Positive Sentiment: Q4 results beat consensus: EPS of $0.44 vs. $0.38 expected and revenue of ~$242M, signaling better-than-expected near-term performance. DigitalOcean (NYSE:DOCN) Beats Q4 CY2025 Sales Expectations
• Positive Sentiment: AI momentum: management reported a large AI ARR ramp (reported ~150% ARR growth for AI-related revenue), suggesting durable, higher‑value customer adoption in inference workloads. AI Momentum Propels DigitalOcean Past Estimates With 150% ARR Surge
• Positive Sentiment: Up‑market traction and retention: large‑customer spending rose substantially (>$1M customers +123%), 0% churn among top customers this quarter and NDR ~101%, indicating stickier, higher‑quality revenue. DigitalOcean (DOCN) Q4 2025 Earnings Transcript
• Positive Sentiment: Strategic GPU diversification: expanded AMD Instinct GPU deployment to improve price/performance and supply resiliency for inference workloads. This supports competitive positioning vs. hyperscalers. DigitalOcean Expands AMD AI Cloud As Investors Weigh Growth And Margins
• Positive Sentiment: Analyst upgrade: Bank of America raised its price target (to $86) and maintains a buy rating, providing incremental buy-side validation. Benzinga – Bank of America price target raise
• Neutral Sentiment: Profitability: DigitalOcean reported strong GAAP net income and healthy margins for FY2025, underscoring that growth is not coming at the expense of profitability. DigitalOcean Announces Fourth Quarter and Fiscal Year 2025 Financial Results
• Neutral Sentiment: Market dynamics: relatively elevated short interest (~10%+) and the stock’s mid‑cap profile can amplify moves as news validates the AI growth story (potential technical support for further rallies).
• Negative Sentiment: Guidance cut on EPS: management issued Q1 and FY2026 EPS ranges below Street consensus (Q1 EPS guide 0.22–0.27 vs. ~0.39 consensus; FY guide 0.75–1.00 vs. ~1.68), which may temper expectations on near‑term profitability. DigitalOcean Announces Fourth Quarter and Fiscal Year 2025 Financial Results
• Negative Sentiment: Near‑term free‑cash‑flow pressure: management expects lower FCF margins in 2026 (investing in data centers/capex to meet demand), which could worry income‑sensitive investors despite being growth‑oriented spending.

Institutional Trading of DigitalOcean

Institutional investors and hedge funds have recently bought and sold shares of the business. Alyeska Investment Group L.P. purchased a new stake in DigitalOcean during the 3rd quarter worth $21,808,000. Arrowstreet Capital Limited Partnership boosted its position in 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 buying an additional 568,823 shares during the last quarter. Franklin Resources Inc. grew its stake in shares of DigitalOcean by 784.2% during the fourth quarter. Franklin Resources Inc. now owns 494,314 shares of the company’s stock valued at $23,786,000 after acquiring an additional 438,411 shares in the last quarter. Danske Bank A S purchased a new stake in shares of DigitalOcean during the third quarter worth about $14,582,000. Finally, Lazard Asset Management LLC lifted its stake in shares of DigitalOcean by 34.5% in the second quarter. Lazard Asset Management LLC now owns 1,660,731 shares of the company’s stock worth $47,430,000 after acquiring an additional 426,264 shares in the last quarter. Institutional investors and hedge funds own 49.77% of the company’s stock.

About DigitalOcean

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.