DigitalOcean Holdings Inc. (NYSE: DOCN) stock got the attention of investors with its second quarter 2026 earnings that beat Wall Street estimates for the company on a number of important metrics, including revenue, free cash flow, and non-GA profit. The firm also increased its full-year revenue outlook, attributing the increase in demand to its AI infrastructure and inference services.
The Broomfield, Colorado-based company reported $281 million in sales during its quarter that ended June 30, a 29% increase from the same period a year ago. Earnings per share (EPS) for non-GAAP were $0.45, surpassing the consensus estimate of $0.26 provided by analysts, and adjusted EBITDA and remaining performance obligations also beat expectations.
The findings further underscore investors’ faith in the company’s promise of enhancing the financial results of its artificial intelligence-driven approach, contributing to the recent uptick in DOCN stock prices.
AI Business Drives Growth
AI customer annual recurring revenue grew to $234 million, marking a 212% increase year-over-year, DigitalOcean said. The company achieved a record $93 million in incremental ARR during the quarter, which was 191% higher than in the same quarter last year.
Another key indicator, remaining performance obligations (RPO), also climbed to $894 million, up from $71 million in the prior quarter of 2025. RPO represents contracted future revenue that has yet to be recognized, providing investors with visibility into future business.
“Our growth rate is accelerating, as revenue grew 29% year-over-year, more than double our growth rate a year ago,” Chief Executive Officer Paddy Srinivasan said during the company’s earnings announcement.
He added that growth is increasingly coming from larger AI-focused customers and that the company has begun securing nine-figure annual customer commitments.
Inference Services Become a Larger Business
DigitalOcean said its Inference Services business expanded 800% year over year and now accounts for more than 70% of AI customer ARR.
The company said 85% of AI customer ARR now comes from inference products and core cloud services rather than bare-metal GPU infrastructure. Early customers using its Inference Engine increased token consumption by about 30 times within 60 days, according to the company.
Srinivasan attributed the growth to DigitalOcean’s software offerings.
“By working directly with our customers to build capabilities, such as our Inference Router that balances price and performance across both closed and open source models, we continue to extend our software advantage and further separate ourselves from bare-metal GPU rental companies,” he said.
Company Raises 2026 Outlook
Following the strong quarter, DigitalOcean increased its full-year 2026 revenue guidance to $1.17 billion to $1.18 billion and forecast third-quarter revenue between $304 million and $307 million.
Management now expects approximately 30% revenue growth for 2026 and projects growth accelerating to around 35% by the fourth quarter. Executives also said they believe the company has a path toward exceeding 50% revenue growth in 2027, supported by expanding AI demand.
To support future capacity, DigitalOcean secured an additional 20 megawatts of committed data center capacity expected to come online in late 2027 and early 2028, bringing total committed capacity to roughly 155 MW.
Why Investors Are Searching for Len Blavatnik
Retail investor interest in DigitalOcean frequently includes searches related to billionaire investor Len Blavatnik, whose investment firm Access Industries has long been one of the company’s largest shareholders.
Access Industries held about 22% of DigitalOcean following the company’s March 2021 initial public offering. In May 2026, entities affiliated with Access Industries sold approximately 3.3 million shares in a block transaction valued at roughly $496 million.
Following those sales, AI Droplet Holdings LLC, an affiliate of Access Industries, continued to own 21.66 million shares, according to regulatory filings. The filings state that Blavatnik and Access Industries Management may be deemed beneficial owners because of their control relationships, while disclaiming beneficial ownership beyond their direct pecuniary interests.
Despite the reduction, Blavatnik-linked entities remain among DigitalOcean’s largest shareholders, making his ownership position a continued point of interest for investors following DOCN.
Institutional Investors Increase Exposure
Institutional investors also expanded their holdings during 2026.
T. Rowe Price increased its position by more than 2.36 million shares during the first quarter, while Wellington Management added roughly 2.36 million shares over the same period.
Separately, BlackRock disclosed a 7.6% beneficial ownership stake in DigitalOcean in an amended Schedule 13G filing submitted to the U.S. Securities and Exchange Commission in late July.
Favorable earnings, rapid growth in AI revenue, a much bigger contracted revenue backlog, and a substantially higher full-year outlook have DigitalOcean in one of the watched midcap cloud infrastructure companies as investors watch closely for demand for AI computing services.
