DigitalOcean Q3 Revenue Climbs 40% as AI Customer ARR Reaches $376 Million

DigitalOcean, a cloud provider, generated $321.2 million in third-quarter revenue, up 40% year over year, as AI Customer ARR rose 288% to $376 million and the company lifted its 2026 sales outlook.

Revenue for the quarter ended Sept. 30, 2026, increased from $229.6 million in the same period a year earlier. The result exceeded DigitalOcean’s prior Q3 forecast of $304 million to $307 million. The company’s exact revenue was $321.192 million.

Non-GAAP diluted net income per share was $0.45. On a GAAP basis, DigitalOcean posted a diluted loss of $0.37 per share, including a $57.1 million induced conversion expense tied to a partial repurchase of its convertible notes due in 2030. The company’s non-GAAP calculation excluded a $0.46-per-share impact from that expense.

AI Customer ARR is calculated by multiplying quarterly AI Customer Revenue by four. DigitalOcean counts a customer’s full spend toward this measure if the customer uses any AI or machine-learning service, including its infrastructure and platform purchases. It is not limited to revenue from AI products. Total ARR reached $1.285 billion, up 40% year over year.

“Revenue growth accelerated year-over-year to 40%, our fifth consecutive quarter of acceleration, and we added a record $160 million of ARR,” DigitalOcean CEO Paddy Srinivasan said.

For Q4 2026, DigitalOcean forecast revenue of $348 million to $351 million, or 44% to 45% growth year over year, and non-GAAP diluted net income of $0.30 to $0.32 per share. It raised its full-year 2026 revenue outlook to $1.208 billion to $1.211 billion, up about 34%, from its prior range of $1.170 billion to $1.180 billion. The company expects full-year 2027 revenue growth above 60%.

DigitalOcean also disclosed an agreement permitting up to $1 billion in common-stock sales through an at-the-market offering. The company has no obligation to sell shares under the agreement.