DigitalOcean Holdings Inc. shares rose 6.2% in morning trading after the company released preliminary results for the second quarter of 2026 that highlighted a substantial expansion in contracted revenue and customer commitments.
The company said remaining performance obligations are expected to top $800 million, an increase of more than tenfold compared with the same quarter a year earlier. Alongside that growth, DigitalOcean reported the weighted average life of those obligations has lengthened from 1.6 years to more than three years, signaling longer-duration contractual revenue.
Management also disclosed it secured multiple nine-figure annual customer commitments during the quarter for inference and cloud products. Those agreements were presented as evidence of growing enterprise-scale adoption of the company's AI-native platform.
On the top-line, DigitalOcean estimated Q2 revenue growth of roughly 29% year-over-year, about double the 14% pace it recorded in Q2 2025. The update further stated that adjusted EBITDA margin and non-GAAP earnings per share are both projected to finish at or above the top end of previously issued guidance.
Capacity expansion was another concrete item in the update. The company said it has secured an additional 20 megawatts of committed data center capacity scheduled to come online in late 2027 and early 2028, bringing total committed capacity to approximately 155 megawatts. DigitalOcean indicated that the customer momentum reflected in the quarter is expected to lift the company's exit 2026 revenue growth rate above prior projections.
The share move occurred against a difficult macro backdrop. The Nasdaq declined 1.1% and the S&P 500 slipped 0.4% during the session, and the broader cloud and infrastructure sector did not report any comparable company-specific catalysts. That context underscores that DigitalOcean's outperformance was driven by its own disclosure rather than a sector-wide rally or sympathy trading.
Key takeaways
- RPO expected to exceed $800 million with a weighted average life extending to over three years.
- Q2 revenue growth forecasted at about 29% year-over-year, with adjusted EBITDA margin and non-GAAP EPS at or above the top end of prior guidance.
- Secured multiple nine-figure annual customer commitments for inference and cloud products and added 20 MW of committed data center capacity, taking total to roughly 155 MW.
The combination of materially larger long-term contracted revenue, accelerated revenue growth, margin and earnings guidance beating prior targets, and a clear data center capacity roadmap provided investors with reasons to re-evaluate the stock positively despite broader market headwinds.