Slides
Page 1
2026 DigitalOcean. All rights reserved Q4 2025 Earnings and Investor Update Presentation February 24, 2026 1
Page 2
2026 DigitalOcean. All rights reserved Safe Harbor 2 This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding our financial outlook. These statements are subject to known and unknown risks, uncertainties, assumptions, and other factors that may cause actual results or outcomes to be materially different from any future results or outcomes expressed or implied by the forward-looking statements. These risks, uncertainties, assumptions, and other factors include, but are not limited to: 1) fluctuations in our financial results make it difficult to project future results; 2) our ability to sustain profitability in the future; 3) our ability to expand usage of our platform by existing customers and/or attract new customers and/ or retain existing customers; 4) the speed at which the market for our platform and solutions develops; 5) the success of the development and use of our artificial intelligence and machine learning AI/ML) product offerings or use of third-party AI/ML-based tools; 6) our ability to release updates and new features to our platform and adapt and respond effectively to rapidly changing technology or customer needs; 7) our ability to control costs, including our operating expenses, and the timing of payment for expenses; 8 the amount and timing of non-cash expenses, including stock-based compensation, goodwill impairments and other non-cash charges; 9 breaches in our security measures allowing unauthorized access to our platform, data, or customers' data; 10) the competitive markets in which we participate; 11) our ability to effectively integrate and retain new members of our executive leadership team and senior management; 12) the effects of acquisitions and their integration; 13) general market, political, economic, and business conditions, including changes in trade policies, such as trade wars, tariffs and other restrictions or the threat of such actions; 14) the impact of new accounting pronouncements; 15) our ability to control fraudulent registrations and usage of our platform, reduce bad debt and lessen capacity constraints on our data centers, servers and equipment; 16) our customers' ability to have continued and unimpeded access to our platform, including as a result of evolving laws and industry standards; and 17) our plans with respect to accelerating investments in data centers and GPU capacity. Further information on these and additional risks, uncertainties, assumptions and other factors that could cause actual results or outcomes to differ materially from those included in or contemplated by the forward-looking statements in this presentation are included under the caption “Risk Factorsˮ and elsewhere in our Annual Report on Form 10K for the year ended December 31, 2025 and subsequent filings and reports we make with the SEC. We operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this presentation. The results, events and circumstances reflected in the forward-looking statements may not be achieved or occur. The forward-looking statements in this presentation relate only to events as of the date on which the statements are made. We assume no obligation to, and do not currently intend to, update any such forward-looking statements after the date hereof.
Page 3
2026 DigitalOcean. All rights reserved Q4 2025 Earnings and Investor Update Presentation February 24, 2026 3
Page 4
2026 DigitalOcean. All rights reserved 4 AI is reshaping entire industries, and we are built for this shift
Page 5
2026 DigitalOcean. All rights reserved Key Takeaways: 5 Note: Refer to the Appendix for definitions of metrics, other terms and reconciliations of Non-GAAP measures to GAAP. Top customers are our growth engine We’re on the right side of SW disruption ● We put the Cloud in neo-cloud Building durable & profitable growth engine
Page 6
2026 DigitalOcean. All rights reserved 6 Note: Refer to the Appendix for definitions of metrics. Note: Annualized Monthly Revenue is calculated as MRR 12 20252012 IPO Mar 2021TechStars NYC Aug 2012 Reached $1B in annualized monthly revenue Top customers are our growth engine $388M $1B Reached $1B annualized monthly revenue Dec 2025
Page 7
2026 DigitalOcean. All rights reserved Key Takeaways: 7 Note: Refer to the Appendix for definitions of metrics, other terms and reconciliations of Non-GAAP measures to GAAP. Top customers are our growth engine We’re on the right side of SW disruption ● We put the Cloud in neo-cloud Building durable & profitable growth engine ● Focus on top customers drove record $51M incr organic ARR ● 21K DNEs are 62% of total ARR, growing 30% YoY ● $133M $1M Customer ARR, growing 123% YoY ● $120M AI Customer ARR, growing 150% YoY
Page 8
2026 DigitalOcean. All rights reserved Highest organic incremental ARR in company history 8 Note: Refer to the Appendix for definitions of metrics. Top customers are our growth engine 48% of TTM Organic Incremental ARR in Q4 2025 from AI Customers
Page 9
2026 DigitalOcean. All rights reserved Focus on Digital Native Enterprises (DNEs) is driving growth 9 Top customers are our growth engine Note: Refer to the Appendix for revised definitions of customer categories, customer count and ARR metrics and our Form 10K filed with the SEC for a presentation of each metric using our prior and current methodology. Y oY ARR Growth Net Dollar Retention (“NDR”) Developers DNE Q4 2025
Page 10
2026 DigitalOcean. All rights reserved Our top DNEs are our fastest growing 10 Top customers are our growth engine Note: Refer to the Appendix for revised definitions of customer categories, customer count and ARR metrics and our Form 10K filed with the SEC for a presentation of each metric using our prior and current methodology. Certain growth rates may not recalculate precisely to numbers shown due to rounding. % of total ARR 21% 28% 10% 17% 7% 14% Q4 2024 Q4 2025 Q4 2024 Q4 2025 Q4 2024 Q4 2025 +58% +97% +123% $100,000+ Customer ARR ($M) $500,000+ Customer ARR ($M) $1,000,000+ Customer ARR ($M)
Page 11
2026 DigitalOcean. All rights reserved Performance with these top DNEs is now a strength 11 Top customers are our growth engine Net Expansion Churn Net Dollar Retention (NDR) Note: Refer to the Appendix for revised definitions of customer categories, customer count and ARR metrics and our Form 10K filed with the SEC for a presentation of each metric using our prior and current methodology. Note: Some totals may not foot due to rounding. $100K $500K $1M Q4 2025 $100K $500K 00K $1M Q4 2025 $100K $500K $1M Q4 2025
Page 12
2026 DigitalOcean. All rights reserved Top Cloud and AI Natives are driving our growth 12 Top customers are our growth engine Note: Refer to the Appendix for revised definitions of customer categories, customer count and ARR metrics and our Form 10K filed with the SEC for a presentation of each metric using our prior and current methodology. Developers DNE % of total ARR 7% 4% 7% 14% $1,000,000+ customers drove ~900 bps of our total Y oY ARR growth in Q4 2025 from resurgence of top Cloud Natives coupled with surging traction with AI Natives
Page 13
2026 DigitalOcean. All rights reserved Key Takeaways: 13 Note: Refer to the Appendix for definitions of metrics, other terms and reconciliations of Non-GAAP measures to GAAP. Top customers are our growth engine We’re on the right side of SW disruption ● We put the Cloud in neo-cloud Building durable & profitable growth engine Top customers are our growth engine ● Modern Cloud and AI native companies are going after large markets with disruptive AI centric software innovation ● They are increasingly choosing DigitalOcean as a natural platform to build and scale their Agentic AI software ● AI Natives become $1M+ customers in months not quarters
Page 14
2026 DigitalOcean. All rights reserved AI Native Companies 14 We're on the right side of SW disruption AI Native attributes ● Solve a business or consumer problem primarily with AI ● AI inference runs every time value is delivered ● $ spend on AI Inference scales as the company grows ● Product quality scales with model quality + inference performance AI Native segment ● A large, growing Total Addressable Market TAM) which will eventually take share from horizontal and vertical SaaS, legacy software and will automate human services ● Hypergrowth businesses serving both consumer and enterprise ● AI model and Inference centric development vs infrastructure centric paradigm of SaaS era
Page 15
2026 DigitalOcean. All rights reserved Visible success with marquee AI customer wins 15 Consumer AI platform delivering conversational, character based experiences to tens of millions of monthly users globally Built on DigitalOcean for: Optimized for large-scale, inference supporting real-time applications Compelling performance-per-dollar economics at high utilization Enterprise-AI leader in Model Context Protocol MCP, provides orchestration infrastructure that gives AI agents secure, governed access to enterprise systems, apps, and data. Built on DigitalOcean for: Frontier model research and AI training and optimization of proprietary models AINative healthcare company focused on deploying clinically aligned conversational AI to support over 115 million patient and provider interactions Built on DigitalOcean for: Strong security and compliance posture, including HIPAA and SOC alignment, to meet strict healthcare data protection and certification requirements We're on the right side of SW disruption
Page 16
2026 DigitalOcean. All rights reserved Serving rapidly growing AI customers 16 We're on the right side of SW disruption Q4 2025Q3 2025 Q4 2025Q3 2025 Q4 2025 Q3 2025 Note: Reflects usage growth on DigitalOcean platform; Scales on X axis are different for each customer, not indicative of relative usage across customers
Page 17
2026 DigitalOcean. All rights reserved Key Takeaways: 17 Note: Refer to the Appendix for definitions of metrics, other terms and reconciliations of Non-GAAP measures to GAAP. Top customers are our growth engine We’re on the right side of SW disruption ● We put the Cloud in neo-cloud Building durable & profitable growth engine Top customers are our growth engine ● AI Natives need inference with great model performance, high accuracy, low latency, and good token unit economics all with a co-located, scalable cloud ● GPU-farms rent GPUs, Inference platforms offer model APIs, Hyperscalers provide breadth & enterprise SLAs ● DigitalOceanʼs vertically integrated Agentic Inference Cloud is purpose-built to serve the inference market
Page 18
2026 DigitalOcean. All rights reserved Burning Needs of AI Natives 18 How DO solves these problems 1. Access to the latest AI models, optimized for low latency, high accuracy, efficient token costs and high throughput 2. AI Infrastructure with serverless APIs to AI models, dedicated model inferencing, containerization/code execution, GPU infrastructure 3. Integrated and colocated Core Cloud capabilities like compute, storage, databases, PaaS to run and scale applications Versatile AI Inferencing: A flexible offering that ranges from serverless inference APIs to dedicated inference to GPU Droplets, allowing customers to choose the solution that best fits their needs and skills. AI Model Lineup: A comprehensive lineup of performance-optimized open-source models to deliver high levels of token accuracy, high throughput, low latencies, and a compelling Total Cost of Ownership TCO. Full Stack Cloud: A core cloud computing platform (compute, storage, databases, PaaS) running alongside the AI Inference Cloud to run and scale the full application stack. Agent Development Platform: A full platform to help customers build, test, deploy, and scale real-world agents. Diverse GPU Infrastructure: Access to 10 GPU families from NVIDIA and AMD. World class data centers: Expanding global footprint with 12+ years of experience going through the school of hard knocks. We put the Cloud in neo-cloud 1 2 3
Page 19
Coming in April DigitalOcean Agentic Inference Cloud Data Services & Tools Guardrails VPC Support Access Control Audit Logging Encryption Limits Zero Data Retention Databases Search Caching Knowledge- base Event Processing Object Storage VectorDB NFS Serverless Functions MCP Agents FinOps* , SecOps* , Advisor Agents, Agent Marketplace Agent Development Inference Hub Intelligent Inference Gateway Model Hosting and Serving Inference Optimization Orchestration Layer CPU & GPU Droplet Infrastructure Global Data Center Network Agent runtime ADK, APIs, CLI, Console, Agent Hosting Catalog, Model Evals* , Benchmarking, Fine Tuning, Distillation* , Playground Serverless Inference, AI Container as a Service* , Dedicated Inference, Batch Inference* Optimized Kernels, Model Execution, Memory Mgmt, Inference Engine, Quantization* , Scheduler & Batcher Kubernetes, Scheduling, Autoscaling, Isolation High Performance Compute, High Performance GPUs, Optimized Networking Fabric, High Speed Storage Security Compliance Governance Observability 192026 DigitalOcean. All rights reserved 19
Page 20
2026 DigitalOcean. All rights reserved DigitalOcean vs. neo-“clouds” and Inference Wrappers 20 We put the Cloud in neo-cloud Neo-Clouds Inference Wrappers AI Inference Engine Serverless, Inference Containers, Dedicated Inference, Model Optimizations) Comprehensive Model Lineup with performance, throughput, latency, FDE Agent Platform GPU Infrastructure Full stack Cloud platform Experience operating global, mission critical applications at scale Simplicity, transparency of pricing, ROI
Page 21
2026 DigitalOcean. All rights reserved DigitalOcean vs. neo-“clouds” 21 We put the Cloud in neo-cloud Top 25 Customers % of Revenue vs 70%-80% Top 2−5 Concentration vs $9M-$12M GAAP Operating Margin vs -90% to +5% Note:DigitalOcean results as of Q4 2025; Based on company filings and other publicly available information. Certain metrics may reflect company-reported data and sell-side research estimates. ARR per MW
Page 22
2026 DigitalOcean. All rights reserved Recent Product Innovation & Executive Addition 22 We put the Cloud in neo-cloud Core Cloud From Experimentation to Production with Agent Development Kit and enhanced agent evaluation Agent Platform Observability for GPU droplets, NFS for elastic high performance storage, and multi-node GPU support Production Grade Inference AIEmbedded Infrastructure with Remote MCP support Vinay Kumar Chief Product and Technology Officer Ex-Oracle, AWS, Akamai Advanced networking, VPC, Premium droplets, high perf storage, autoscaling, RBAC, NFS, Cold Storage etc. Recent Enterprise Innovations
Page 23
2026 DigitalOcean. All rights reserved 150% Y oY AI Customer ARR growth, driven by non-Bare Metal 23 Developers DNE Q4 Y oY ARR Growth Bare Metal Inference Services Core Cloud Total We put the Cloud in neo-cloud $120M ARR Q4 2025 70% non-Bare Metal Note: Refer to the Appendix for definitions of AI Customers and AI Customer Revenue.
Page 24
2026 DigitalOcean. All rights reserved Key Takeaways: 24 Note: Refer to the Appendix for definitions of metrics, other terms and reconciliations of Non-GAAP measures to GAAP. Top customers are our growth engine We’re on the right side of SW disruption ● We put the Cloud in neo-cloud Building durable & profitable growth engine Top customers are our growth engine ● Exceeded Q4 revenue and profitability guidance ● Generated 19% full year 2025 adjusted free cash flow margin ● DC expansion investments on track; Demand exceeds supply ● Increasing revenue growth outlook to 21% in 2026, 25%+ by Q4 2026, 30% in 2027 ● On path to weighted rule of 50 in 2027
Page 25
2026 DigitalOcean. All rights reserved Accelerating growth with strong profitability 25 Building durable & profitable growth engine 15% 123% 150% Adjusted EBITDA ($M) & Margin 14% Adjusted Free Cash Flow ($M) & Margin 25% Note: Refer to the Appendix for reconciliations of Non-GAAP measures to GAAP.
Page 26
2026 DigitalOcean. All rights reserved Exited 2025 at 18% top-line growth, up 500 bps Y oY 26 Building durable & profitable growth engine Note: Refer to the Appendix for definitions of metrics. Q4 2024 Q4 2025 Y oY Growth FY 2024 FY 2025 Y oY Growth Revenue $205M $242M 18% $781M $901M 15% Revenue Growth 13% 18% 500 bps 13% 15% 200 bps Annual Run-rate Revenue (“ARRˮ) $820M $970M 18% $820M $970M 18% Incremental ARR $26M $51M 98% $96M $150M 56% Net Dollar Retention Rate (“NDRˮ) 99% 101% 200 bps 98% 100% 200 bps
Page 27
2026 DigitalOcean. All rights reserved Maintaining profitability while accelerating growth 27 Building durable & profitable growth engine 42% 42% Margin 60% 60% 17% 19% Note: Refer to the Appendix for reconciliations of Non-GAAP measures to GAAP. 16% GAAP Gross Profit ($M) Adjusted EBITDA ($M) TTM Adjusted Free Cash Flow ($M) 14% 25%
Page 28
2026 DigitalOcean. All rights reserved Effectively managing equity 28 Building durable & profitable growth engine Stock-based Compensation % Revenue) 300 bps aEBITDA less SBC was 33% in 2025, in 80th+ percentile, well above 13% median of broad-based software comp set* Note: Comp set includes 157 public software companies per Factset as of 2/20/26.
Page 29
2026 DigitalOcean. All rights reserved Healthy Net Income Per Share growth 29 Building durable & profitable growth engine Note: Refer to the Appendix for reconciliations of Non-GAAP measures to GAAP. 183% Diluted Net Income Per Share, GAAP Diluted Net Income Per Share, Non-GAAP 10%
Page 30
2026 DigitalOcean. All rights reserved Strong Balance Sheet 30 Building durable & profitable growth engine No material debt maturities until 2030 Ample liquidity with cash of $254M and $300M undrawn revolving credit facility Zero coupon 2026 and 2030 convertible notes 3.2X Net Leverage Note: Refer to the Appendix for reconciliations of Non-GAAP measures to GAAP. Note: Net Leverage calculated using TTM aEBITDA. Note: Subsequent to 12/31/2025, the Company entered into finance leases with total estimated payments of $60.7M. Debt Maturities as of 12/31 ($M)
Page 31
2026 DigitalOcean. All rights reserved 31 Metric Q4 2025 Actual Q4 2025 Pro Forma $1M Customer ARR $146M $133M $1M Customer Yo Y ARR Growth 107% 123% Pro Forma Impact on Key Metrics● Strategic Rationale: Winding-down product to focus on cloud and AI platform ● Exit Costs: Anticipate $5M$8M in wind-down costs in 2026, including asset disposition costs ● Guidance Impact: $13M ARR decrease and exit costs reflected in 2026 guidance Winding down legacy dedicated bare metal CPU offering Building durable & profitable growth engine
Page 32
2026 DigitalOcean. All rights reserved 32 Raising 2026 outlook Building durable & profitable growth engine Note: Refer to the Appendix for definitions of key metrics and reconciliations of Non-GAAP measures to GAAP. *The impact from our current debt structure after the refinancing activities in Q3 drove a negative ~$0.15-$0.20 on Non-GAAP Diluted Net Income Per Share for full fiscal year 2025 Metric Q1 2026 FY 2026 (as of 2/24) Revenue $M $249 $250 $1,075 $1,105 Revenue Growth 18.2% 18.7% 19.3% 22.6% Adjusted EBITDA Margin 36% 37% 36% 38% Non-GAAP Diluted Net Income Per Share $0.22 $0.27 $0.75 $1.00 Adjusted Free Cash Flow Margin N/A 15% 17% Unlevered Adjusted Free Cash Flow Margin N/A 18% 20% Non-GAAP Diluted Weighted Average Shares Outstanding 111M 112M 111M 112M
Page 33
2026 DigitalOcean. All rights reserved 33 Capacity Timing Impact on Financials Building durable & profitable growth engine Capacity Ramp Implications Note: Refer to the Appendix for reconciliations of Non-GAAP measures to GAAP. ● Data center timing: 6MW data center will start ramping revenue in Q2, other two data centers (remaining 25MW) start ramping in 2nd half ● Timing of financials: Expense precedes revenue as we recognize colocation and D&A expense several months prior to revenue ready dates Revenue 1819% growth in Q1 and Q2; Growth accelerates in Q3, reaching 25% by Q4 Gross Margin aEBITDA Margin Net Income Near-term pressure as GPU depreciation and lease expense precede revenue Net Leverage Above 4X in near-term with incremental finance lease obligations before returning below 4X medium and long-term
Page 34
● Scale top DNEs 2026 DigitalOcean. All rights reserved 34 Key Growth Levers Building durable & profitable growth engine ● Expand AI Native base Growth lever Key metrics Investments ● AI Customer ARR ● $100,000 Customer ARR ● $1,000,000 Customer ARR ● DNE Product innovation ● Top customer engagement ● Drive workload migrations ● Grow DC and GPU capacity ● Launch leading Agentic Inference Cloud capabilities 1 2
Page 35
2026 DigitalOcean. All rights reserved 35 Projected Financial Profile Responsible investment, rapid and durable growth Note: Refer to the Appendix for definitions of metrics and reconciliations of Non-GAAP measures to GAAP. 2025 2026E 2027E Revenue Growth 15% 21% 30% aEBITDA Margin 42% 37% 40% Unlevered Adjusted FCF Margin 19% 19% 20% Rule of 40 50! 33% 40% 50% On path to Rule of 50+ in 2027 with existing committed capacity alone
Page 36
2026 DigitalOcean. All rights reserved Key Takeaways: 36 ● Focus on top customers drove record $51M incr organic ARR ● 21K DNEs are 62% of total ARR, growing 30% YoY ● $133M $1M Customer ARR, growing 123% YoY ● $120M AI Customer ARR, growing 150% YoY ● Modern Cloud and AI native companies are going after large markets with disruptive AI centric software innovation ● They are increasingly choosing DigitalOcean as a natural platform to build and scale their Agentic AI software ● AI Natives become $1M+ customers in months not quarters ● AI Natives need inference with great model performance, high accuracy, low latency, and good token unit economics all with a co-located, scalable cloud ● GPU-farms rent GPUs, Inference platforms offer model APIs, Hyperscalers provide breadth & enterprise SLAs ● DigitalOceanʼs vertically integrated Agentic Inference Cloud is purpose-built to serve the inference market ● Exceeded Q4 revenue and profitability guidance ● Generated 19% full year 2025 adjusted free cash flow margin ● DC expansion investments on track; Demand exceeds supply ● Increasing revenue growth outlook to 21% in 2026, 25%+ by Q4 2026, 30% in 2027 ● On path to weighted rule of 50 in 2027 Note: Refer to the Appendix for definitions of metrics, other terms and reconciliations of Non-GAAP measures to GAAP. Top customers are our growth engine We’re on the right side of SW disruption ● We put the Cloud in neo-cloud Building durable & profitable growth engine
Page 37
2026 DigitalOcean. All rights reserved AI is reshaping entire industries, and we are built for this shift 37
Page 38
2026 DigitalOcean. All rights reserved Appendix 38
Page 39
Our mission is to simplify cloud and AI so builders can spend more time creating software that changes the world 2026 DigitalOcean. All rights reserved 39
Page 40
Public Cloud & AI Market 2026 DigitalOcean. All rights reserved We address the full stack needs of AI and Cloud Natives 40 Apps & Agents Cloud & AI PaaS Cloud & AI Infrastructure Hyperscalers VPS & Small Clouds z Inference Wrappers Neoclouds/GPU farms Large Traditional Enterprises Cloud Native Companies AI Native Companies (ANE)SMBs
Page 41
2026 DigitalOcean. All rights reserved Presence to power businesses worldwide 41 North America 38% of revenue Asia 23% of revenue Europe 28% of revenue RoW 11% of revenue MW 76 190 20 99.9% 247 Countries Data Centers Uptime Support Note: % based on FYʼ25 revenue.
Page 42
2026 DigitalOcean. All rights reserved Financial Highlights and Key Business Metrics 42 Q4 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025 Revenue (M) $204.9 $210.7 $218.7 $229.6 $242.4 Revenue Growth Y ear-over-year 13% 14% 14% 16% 18% ARR (M) $820 $843 $875 $919 $970 ARR Increase (M) $26 $23 $32 $44 $51 Adj. EBITDA (M) $85.9 $86.3 $89.5 $99.8 $99.3 Net Dollar Retention Rate (NDR) 99% 100% 99% 99% 101% Digital Native Enterprise (DNE) Customers 18.5K 19.6K 20.3K 20.8K 21.4K DNE Customer ARR % of total company ARR 57% 58% 59% 60% 62% $1,000,000+ Customer ARR ($M) $60 $65 $83 $104 $133 AI Customer ARR % of total company ARR 6% 6% 9% 11% 12%
Page 43
Metrics Definitions 2026 DigitalOcean. All rights reserved 43 Customers We calculate customer count as the average number of customers as of the last day of the month for each month in the most recent quarter. Beginning in the fourth quarter of 2025, we redefined our total customer count and excluded the number of users that spend less than or equal to $500 in a month, formerly known as Builders, and the number of customers using certain legacy Bare Metal CPU offerings. We also further refined our customer category naming and disaggregation. Customers are now classified in the following categories based on the amount of their spend in a given month and individual customers may fall within different categories within a reporting period (customer spend in a month in whole dollars): ● Digital Native Enterprise Customers: users that spend more than $500 in a month. ● $100K Customers: users that spend more than $8,333 in a month. ● $500K Customers: users that spend more than $41,667 in a month ● $1M Customers: users that spend more than $83,333 in a month. AI Customers and AI Customer Revenue We define AI Customers as customers that utilize one or more of our AI-related products or infrastructure offerings during a given month. A customer is classified as an AI Customer in any month in which they incur revenue associated with AI-specific workloads, including but not limited to GPU-based infrastructure, AI platform services, model deployment, or other AI-optimized offerings. We define AI Customer Revenue as all revenue generated from our AI Customers during the applicable reporting period. Net Dollar Retention Rate We calculate net dollar retention rate (“NDRˮ) monthly by starting with total revenue for our IaaS and PaaS/SaaS offerings during the corresponding month 12 months prior, or the Prior Period Revenue. We then calculate the revenue from these same customers as of the current month, or the Current Period Revenue, including any expansion and net of any contraction or attrition from these customers over the last 12 months. The calculation also includes revenue from customers that generated revenue before, but not in, the corresponding month 12 months prior, but subsequently generated revenue in the current month and are therefore reflected in the Current Period Revenue. We include this group of re-engaged customers in this calculation because some of our customers use our platform for projects that stop and start over time. We then divide the total Current Period Revenue by the total Prior Period Revenue to arrive at the net dollar retention rate for the relevant month. For a quarterly or annual period, the net dollar retention rate is determined as the average monthly net dollar retention rates over such three or 12-month period.
Page 44
Metrics Definitions 2026 DigitalOcean. All rights reserved 44 ARR We calculate Annual Run-Rate revenue (“ARRˮ) by multiplying total revenue for the most recent quarter by four. Organic ARR We define Organic Annual Run-Rate revenue (“Organic ARRˮ) as ARR excluding the impacts of (i) revenue from acquisitions that closed in the prior 12 months, and (ii) incremental revenue from broad-based pricing increases that occurred on July 1, 2022 for our IaaS and PaaS/ SaaS offerings and April 1, 2023 for our Managed Hosting offerings, in each case until the beginning of the first full quarter following the one-year anniversary of the closing date of such acquisition or date pricing changes were effective. Remaining Performance Obligation Remaining performance obligation (“RPOˮ) represents commitments in customer contracts for future services that have not yet been recognized in the condensed consolidated financial statements. RPO is not necessarily indicative of future revenue growth because it does not account for the timing of customersʼ consumption or their usage beyond their contracted capacity. Additionally, RPO may increase when customers transition from usage-based to commitment-based agreements, which does not always reflect incremental revenue growth. RPO is influenced by a number of factors, including the timing and size of renewals, the timing and size of purchases of additional capacity and average contract term. Due to these factors, it is important to review RPO in conjunction with revenue and other financial metrics contained in this release and elsewhere in our Annual Report on Form 10K for the year ended December 31, 2025 and subsequent filings and reports we make with the SEC. Weighted Rule of 40 We calculate weighted rule of 40 by summing our revenue growth rate and our adjusted free cash flow margin for an annual period. Revenue growth rate is weighted 1.5x and our adjusted free cash flow margin is weighted 0.5x.
Page 45
Metrics Definitions 2026 DigitalOcean. All rights reserved 45 Net Leverage We calculate net leverage as Net Debt divided by trailing-12-months (“TTMˮ) adjusted EBITDA. Net debt is calculated as Total debt less cash and cash equivalents. Churn We calculate churn as attrition attributable to our NDR cohort. See slide 42 for NDR definition. Net Expansion We calculate net expansion as expansion from existing NDR customers net of contraction from that same set of customers. See slide 41 for NDR definition.
Page 46
Use of Non-GAAP Metrics 2026 DigitalOcean. All rights reserved 46 This presentation includes certain non-GAAP metrics, which have not been prepared in accordance with generally accepted accounting principles in the United States (“GAAPˮ). These non-GAAP metrics are in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. There are a number of limitations related to the use of these non-GAAP metrics versus their nearest GAAP equivalents. Other companies, including companies in our industry, may calculate non-GAAP metrics differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP metrics as tools for comparison. We urge you to review the reconciliation of our non-GAAP metrics to the most directly comparable GAAP financial measures, and not to rely on any single financial measure to evaluate our business. See this Appendix for a reconciliation between each non-GAAP metric and the most comparable GAAP measure and our press release dated February 24, 2026 for a definition of each non-GAAP metric not otherwise defined herein. Adjusted Free Cash Flow and Adjusted Free Cash Flow Margin Adjusted free cash flow is a non-GAAP financial measure that we define as net cash provided by operating activities less purchases of property and equipment, capitalized internal-use software costs, purchase of intangible assets, and excluding cash paid for restructuring and other charges, acquisition related compensation, restructuring related charges, and acquisition and integration related costs. Adjusted free cash flow margin is calculated as adjusted free cash flow divided by total revenue. Unlevered Adjusted Free Cash Flow and Unlevered Adjusted Free Cash Flow Margin Unlevered adjusted free cash flow is a non-GAAP financial measure that we define as adjusted free cash flow excluding cash paid for interest and interest income. Unlevered adjusted free cash flow margin is calculated as unlevered adjusted free cash flow divided by total revenue. TTM Adjusted Free Cash Flow and TTM Adjusted Free Cash Flow Margin TTM Adjusted free cash flow is Adjusted free cash flow for the most recent 12 consecutive months. TTM Adjusted free cash flow margin is calculated as Adjusted free cash flow for the most recent 12 consecutive months divided by total Revenue for the most recent 12 consecutive months.
Page 47
2026 DigitalOcean. All rights reserved Adjusted EBITDA and Adjusted EBITDA Margin 47 1 For the year ended December 31, 2024, non-GAAP stock-based compensation excludes $0.1 million as it is presented in restructuring related charges. 2 For the year ended December 31, 2024, primarily consists of executive reorganization charges. 3 For the year ended December 31, 2025, primarily consists of interest income from our cash and cash equivalents. For the year ended December 31, 2024, primarily consists of interest and accretion income from our cash and cash equivalents and marketable securities.
Page 48
2026 DigitalOcean. All rights reserved Non-GAAP Net Income 48 1 For the year ended December 31, 2024, non-GAAP stock-based compensation excludes $0.1 million as it is presented in restructuring related charges. 2 For the year ended December 31, 2024, primarily consists of executive reorganization charges. 3 For the periods in fiscal year 2025 and 2024, we used a tax rate of 16%, which we believe is a reasonable estimate of our long-term effective tax rate applicable to non-GAAP pre-tax income for each respective year. 4 Consists of non-cash interest expense for amortization of debt issuance costs related to the 2026 and 2030 Convertible Notes.
Page 49
2026 DigitalOcean. All rights reserved Non-GAAP Diluted Net Income per Share 49 1 For the year ended December 31, 2024, non-GAAP stock-based compensation excludes $0.1 million as it is presented in restructuring related charges. 2 For the year ended December 31, 2024, primarily consists of executive reorganization charges. 3 For the periods in fiscal year 2025 and 2024, we used a tax rate of 16%, which we believe is a reasonable estimate of our long-term effective tax rate applicable to non-GAAP pre-tax income for each respective year. 4 Consists of non-cash interest expense for amortization of debt issuance costs related to the 2026 and 2030 Convertible Notes. 5 For the year ended December 31, 2025, excludes tax impact which is presented in Non-GAAP income tax adjustment. 6 May not foot due to rounding.
Page 50
2026 DigitalOcean. All rights reserved Adjusted Free Cash Flow, Unlevered Adjusted Free Cash Flow, Adjusted Free Cash Flow Margin and Unlevered Adjusted Free Cash Flow Margin 50 1 For the year ended December 31, 2024, primarily consists of executive reorganization charges.
Page 51
2026 DigitalOcean. All rights reserved 51 1 For the periods September 30, 2024 through December 31, 2024, primarily consists of executive reorganization charges. TTM Adjusted Free Cash Flow and TTM Adjusted Free Cash Flow Margin
Page 52
2026 DigitalOcean. All rights reserved Non-GAAP Operating Expenses 52 1 For the year ended December 31, 2024, non-GAAP stock-based compensation excludes $0.1 million as it is presented in restructuring related charges.
Page 53
2026 DigitalOcean. All rights reserved Adjusted EBITDA and Adjusted EBITDA Margin 53 1 For the year ended December 31, 2023, non-GAAP stock-based compensation excludes the $31.3 million reversal related to the former CEOʼs forfeited MRSU award that is reported in Restructuring related charges, as well as $3.9 million that is reported in Restructuring and other charges. For the year ended December 31, 2024, non-GAAP stock-based compensation excludes $0.1 million as it is presented in Restructuring related charges. 2 For the year ended December 31, 2023, primarily consists of the $31.3 million reversal of stock-based compensation related to the former CEOʼs forfeited MRSU award, partially offset by salary continuation charges, executive reorganization charges including severance, CEO search firm fees, and other legal and professional service costs. For the year ended December 31, 2024, primarily consists of executive reorganization charges. 3 For the years ended December 31, 2022, 2023, 2024 and 2025 primarily consists of interest and accretion income from our cash and cash equivalents and marketable securities.
Page 54
2026 DigitalOcean. All rights reserved Adjusted Free Cash Flow and Adjusted Free Cash Flow Margin 54 1 For the year ended December 31, 2023, primarily consists of salary continuation charges and executive reorganization charges, including CEO search firm fees and other legal and professional service costs. For the year ended December 31, 2024, primarily consists of executive reorganization charges.