DigitalOcean posts strong Q2 earnings, lifts AI growth outlook

DigitalOcean Holdings Inc. reported second‑quarter revenue of $281 million, a 29% year‑over‑year increase that beat analyst estimates by about $2.6 million. Revenue from AI‑focused customers surged 212% YoY to $234 million, driven by new services such as the Inference Engine and Neural Engine.

Chief executive Paddy Srinivasan said the company’s growth is accelerating, noting that its highest‑spending customers and sophisticated AI users are now signing nine‑figure annual contracts. The firm raised its third‑quarter revenue guidance to $304‑$307 million and EPS guidance to $0.280‑$0.300, above consensus forecasts. Analysts upgraded their ratings and price targets, with several firms moving to buy recommendations.

DigitalOcean, which serves more than 680,000 developers and small‑project customers, highlighted a dozen AI feature launches in the quarter and emphasized its lower‑cost, developer‑friendly cloud platform as a competitive alternative to the major public cloud providers.