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Mar 31, 2025
DigitalOcean Q1 2025 Earnings Report
DigitalOcean reported strong revenue and net income growth in Q1 2025.
Key Takeaways
DigitalOcean delivered a robust quarter with 14% revenue growth and a 170% surge in net income, fueled by AI-driven customer expansion and product innovation.
Revenue reached $211 million, a 14% increase year-over-year.
Net income rose to $38.2 million, representing an 18% margin.
Adjusted EBITDA margin came in at 41%, totaling $86.3 million.
AI Annual Recurring Revenue (ARR) continued to grow over 160% YoY.
Forward Guidance
DigitalOcean projects Q2 revenue of $215.5–$217.5 million with stable profit margins.
Positive Outlook
- Q2 revenue expected to grow to $215.5–$217.5 million.
- Adjusted EBITDA margin guided between 38% and 40%.
- Non-GAAP EPS guidance of $0.42 to $0.47.
- Full-year revenue guidance remains at $870–$890 million.
- Strong product adoption expected to support continued growth.
Challenges Ahead
- Adjusted free cash flow turned negative this quarter.
- Incremental costs from Atlanta data center impacted cash flows.
- Decline in net cash from operating activities versus Q1 2024.
- Stock repurchase activity reduced cash reserves.
- No clear geographic revenue breakdown provided.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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