DigitalOcean Holdings, Inc. priced an upsized underwritten public offering of 10,389,611 shares of its common stock at $77.20 per share, generating gross proceeds of roughly $800 million. The offering, which was priced on March 25 2026 and is expected to close on March 26 2026, expands the original $700 million plan and includes a 30‑day option for underwriters to purchase an additional 1,558,441 shares at the same price.
The proceeds will be used to fund the company’s AI‑infrastructure expansion and to reduce existing debt, specifically paying down Term Loan A. DigitalOcean’s Q4 2025 earnings release highlighted a 18% year‑over‑year revenue increase to $242 million and a net income of $259 million for the full year, up 207% YoY, underscoring the company’s strong financial position and the strategic need for additional capital to support its AI‑native growth trajectory.
CEO Paddy Srinivasan said, "AI is reshaping entire industries, and we are built for this shift. DigitalOcean's Agentic Inference Cloud is gaining further traction with large Cloud and AI Native customers that are driving the shift, which is evident in our strong Q4 performance and our increased outlook for 2026 and 2027." He added, "There is a lot of momentum across the business. We delivered 18% top‑line growth in Q4 and reached $1 billion in annualized monthly run‑rate revenue in December. We added a record $51 million in organic incremental ARR. Our million+ dollar customer ARR was $133 million, growing 123% year‑over‑year. We reached $120 million in AI customer ARR, growing 150% year‑over‑year." He further noted, "With this growing momentum, we are raising our growth outlook again after raising it just last quarter. We now expect to deliver 21% growth in 2026, to exit 2026 at 25%+ growth and to reach 30% growth in 2027 – and we expect to do so profitably, as we are on track to being a weighted Rule of 50 company in 2027."
Investors reacted to the announcement with concerns about dilution, as the offering increases the number of outstanding shares. Analysts highlighted that while the financing is dilutive in the short term, it is intended to strengthen the balance sheet and fund the company’s high‑growth AI infrastructure initiatives, which are expected to drive future revenue and margin expansion.
The upsized offering reflects DigitalOcean’s confidence in sustained demand for its AI‑native services and its commitment to scaling data‑center capacity to meet that demand. By reducing debt and investing in infrastructure, the company aims to maintain its competitive position in the rapidly evolving cloud and AI market while positioning itself for long‑term profitability.
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