DigitalOcean Plans 75 Megawatts of New Capacity in 2027

DigitalOcean plans to bring about 75 megawatts of capacity online during 2027. The cloud provider’s management said it believes equipment financing can fund most of the company’s growth that year.

The company expects newer, token-efficient GPUs to raise annual recurring revenue per megawatt. New data centers and GPU capacity can weigh on gross margins before utilization ramps up. DigitalOcean’s trailing 12-month adjusted free cash flow margin was 20%.

DigitalOcean had about $1.2 billion in total liquidity. Its agreement allowing up to $1 billion in common-stock sales through an at-the-market offering provides another funding option, though the company is not required to sell shares.

DigitalOcean CEO Padmanabhan Srinivasan tied the quarter’s performance to capabilities for agentic systems and said token volume grew by an order of magnitude. Third-quarter revenue rose 40% to $321.2 million, while AI customer annual recurring revenue reached $376 million, up 288%. Total annual recurring revenue was $1.285 billion, up 40%. The company’s third-quarter results and AI customer metrics provide context for the capacity plan.