DigitalOcean Holdings, Inc. (DOCN): Business Model Canvas [Dec-2025 Updated]

You're looking to see how DigitalOcean Holdings, Inc. is actually making money now that they're chasing those bigger AI and enterprise deals, right? Honestly, after two decades watching this space, the shift is defintely clear: they are aggressively moving upmarket, evidenced by their Scalers+ customers driving 41% year-over-year growth and contributing 26% of the projected $896 million to $897 million revenue for 2025. This canvas breaks down exactly how they are balancing their simple, developer-friendly core-serving over 640,000 customers-with their new focus on high-performance Gradient AI and enterprise partnerships. Dive in below to see the nine building blocks that define their path forward.

DigitalOcean Holdings, Inc. (DOCN) - Canvas Business Model: Key Partnerships

You're looking at the core relationships that power DigitalOcean Holdings, Inc.'s (DOCN) platform expansion, especially in the high-growth AI sector as of late 2025. These aren't just vendor agreements; they are strategic alignments to keep the platform simple and competitive against hyperscalers.

Technology partners like AMD and NVIDIA for GPU infrastructure

DigitalOcean Holdings, Inc. has aggressively expanded its AI infrastructure by deepening partnerships with key hardware providers. This focus is evident in the expanded GPU offerings available on the Gradient AI Agentic Cloud.

The company continues to grow its offerings by adding new GPUs from both NVIDIA and AMD. Specifically, DigitalOcean recently released NVIDIA HGX H200 systems to complement existing deployments like HGX H100, NVIDIA RTX 6000 Ada, NVIDIA RTX 4000 Ada Generation, and NVIDIA L40S GPUs. Also added are AMD Instinct™ MI325X GPUs, building on the existing AMD Instinct™ MI300X GPUs. DigitalOcean plans to offer AMD Instinct™ MI350X GPUs later in 2025, expanding access to powerful and affordable models across its European and US data centers.

The collaboration with AMD, for instance, makes AMD Instinct™ GPUs available as GPU Droplets or DigitalOcean Kubernetes worker nodes. Accessing these GPU Droplets can be as competitive as $1.99/GPU per hour for some configurations. This hardware integration is directly feeding the AI traction, as AI-related revenue more than doubled year-over-year in the second quarter of 2025.

Here's a look at the hardware partners and some of the infrastructure they provide:

Partner Category	Specific Partner/Product	Example DigitalOcean Offering	Availability/Status (as of late 2025)
GPU Technology	NVIDIA	NVIDIA HGX H200 systems, HGX H100, RTX 6000 Ada	Deployed, expanding capabilities
GPU Technology	AMD	AMD Instinct™ MI300X GPUs, AMD Instinct™ MI325X GPUs	MI325X recently added; MI350X planned for later in 2025
AI Compute Service	AMD/DigitalOcean	AMD Developer Cloud	Purpose-built for rapid, high-performance AI development

AI ecosystem partners (OpenAI, Meta, Mistral) for model access

The DigitalOcean AI Ecosystem bundles hardware with access to advanced models, making it a comprehensive environment for builders. This strategy aims to provide a 'just right' toolset for shipping AI products faster.

Users of DigitalOcean Gradient™ AI Agentic Cloud products benefit from access to advanced models from leading companies. The ecosystem integrates these models alongside development frameworks like LangChain, LiteLLM, and dStack.

• Access to models from OpenAI
• Access to models from Meta Platforms
• Access to models from Mistral
• Access to models from DeepSeek

Furthermore, planned additions include generative media tools from Fal.ai and Vector Search capabilities from MongoDB, showing a commitment to a broad, integrated AI stack.

Networking partners like Megaport for multi-cloud connectivity

To support distributed workloads in multi-cloud and hybrid cloud environments, DigitalOcean launched Partner Network Connect, which heavily relies on its integration with Megaport, a leading Network-as-a-Service (NaaS) provider. This service is designed to simplify networking between DigitalOcean and other clouds like AWS, Google Cloud, and Microsoft Azure, bypassing the public internet for better security and latency.

The connectivity offers low latency, high-bandwidth private connections ranging from 1 Gbps to 10 Gbps. DigitalOcean offers all-in pricing with no charges on egress data transfer, meaning you pay for the throughput reserved monthly. For example, reserving 1 Gbps throughput costs $840.00 per month from DigitalOcean, though Megaport and other cloud provider fees are separate.

This offering is available in all DigitalOcean regions except SYD1, LON1, BLR1, and TOR1.

Bandwidth Tier	DigitalOcean Monthly Charge (Reserved Throughput)	Key Benefit
1 Gbps	$840.00	Low latency, high-bandwidth private connectivity
2 Gbps	$1,540.00	Enhanced security off the public internet
5 Gbps	$2,520.00	Cost optimization by avoiding egress charges
10 Gbps	$3,850.00	Simplified management via the Networking console

Venture firms and systems integrators via the AI Partner Program

The formal introduction of the DigitalOcean AI Partner Program creates a growth engine for both DigitalOcean and its collaborators. The program is structured around four distinct tracks designed to foster deep collaboration.

This program is crucial for extending DigitalOcean's reach, as partners gain access to the company's renowned developer marketing engine, which reaches a global audience of over 3 million developers. DigitalOcean serves more than 640,000 customers, providing partners with a significant channel to market.

The four tracks within the AI Partner Program are:

• AI startups and natives
• Technology platforms
• System Integrators
• Venture Firms

Participants receive benefits like developer marketing support, community event access, and opportunities for joint product development.

Marketplace partners offering pre-configured applications

The DigitalOcean Marketplace serves as a hub connecting developers with ready-to-launch, partner-built solutions. This extends the platform's signature 1-click simplicity to third-party software stacks.

Marketplace offerings include several categories:

• Droplet 1-Click Apps: Pre-built images with preconfigured software.
• Kubernetes 1-Click Apps: Pre-configured applications for Kubernetes.
• SaaS Add-Ons: Third-party software-as-a-service offerings.
• Gradient™ AI 1-Click Models: For deploying third-party generative AI models instantly.

Apps actively supported by DigitalOcean are maintained by the company, while others are maintained by the respective third-party vendor. This structure allows partners to build, market, and sell their software stacks directly to DigitalOcean's community.

DigitalOcean Holdings, Inc. (DOCN) - Canvas Business Model: Key Activities

You're looking at the core engine driving DigitalOcean Holdings, Inc. right now, which is heavily tilted toward AI and serving larger, more established Digital Native Enterprises (DNEs). The key activities reflect a shift from pure simplicity to simple, scalable AI-enabled infrastructure.

Developing the unified agentic cloud and GenAI Platform is a major focus. This isn't just about virtual machines anymore; it's about the comprehensive agentic cloud platform. By Q3 2025, the platform was driving accelerated momentum, with direct AI revenue more than doubling year-over-year for the fifth consecutive quarter. Key platform developments in 2025 included making the Gradient AI Platform generally available in Q2, and later announcing the availability of Multi-Modal AI Model support, Function Calling, and Guardrails on the platform in Q3.

Managing global infrastructure across 17 data centers remains foundational, even as the focus shifts to high-density GPU capacity. While specific public counts vary, the operational footprint supports the global reach necessary for their platform. The company is actively investing in this capacity, as seen by the incremental costs related to bringing the new Atlanta data center online in Q1 2025.

The pace of rapid product innovation has significantly increased. You can see this clearly in the first quarter metrics:

• Released more than 50 new products and features in Q1 2025.
• This represented an increase of more than 5 times the features released in Q1 2024.

This velocity is essential for keeping pace with the AI demands of their customer base.

Maintaining the developer community and extensive documentation is supported by the platform's overall scale. DigitalOcean reports that more than 640K+ customers trust the platform to deliver their cloud, AI, and ML infrastructure. This large base relies on the documentation and simple interfaces to build and scale.

The strategic push is clearly visible in securing multi-year deals with Digital Native Enterprises (DNEs), which they track via their 'Higher Spend Customers' cohort, often defined as those spending over $100,000 in Annual Run-Rate Revenue (ARR).

Here's a look at the financial impact of this DNE focus:

Metric / Period	Q1 2025 Result	Q3 2025 Result
Revenue Growth from $100K+ ARR Customers (YoY)	41%	41%
Total Revenue Contribution from $100K+ ARR Customers	23%	26%
Revenue from $1M+ ARR Customers (Total ARR Contribution)	N/A	$110 million
YoY Growth for $1M+ ARR Customers	N/A	72%

The growth from the $1 million plus run-rate customers is particularly telling, showing a 72% year-over-year increase in their contribution to total ARR in Q3 2025. That's defintely where the enterprise focus is paying off.

DigitalOcean Holdings, Inc. (DOCN) - Canvas Business Model: Key Resources

You're looking at the core assets DigitalOcean Holdings, Inc. relies on to run its business, which is all about making cloud infrastructure simple for developers and growing tech companies. These aren't just line items on a balance sheet; these are the engines driving their growth, especially in the AI space.

The physical backbone is definitely a key resource. DigitalOcean Holdings, Inc. maintains a focused global footprint, which is part of its simplicity promise-fewer regions mean less complexity for customers to manage latency and compliance. Here's a snapshot of that infrastructure and customer scale as of late 2025:

Key Resource Metric	Value/Amount	Context/Date
Global Cloud Infrastructure Regions	9 regions	Late 2025
Total Global Datacenters	16 distributed data centers	Late 2025
Global Customer Base	Over 640,000 customers	Q3 2025
Digital Native Enterprises (DNEs) Served	174,000	Q2 2025
Customers in Countries Served	Approximately 190 countries	Q2 2025
Annual Run-Rate Revenue (ARR)	$919 million	End of Q3 2025

The proprietary software stack is what translates that infrastructure into value. It's all about polished, integrated products that developers actually want to use. You see this in the performance of their core offerings and the newer AI tools.

• Droplets (Virtual Machines)
• App Platform (Managed Application Deployment)
• Managed Databases (Managed Database Services)
• Spaces Cold Storage and Network File Storage (Newer Storage Offerings)

The push into AI is heavily reliant on the Gradient AI Platform and specialized hardware. This is where the growth is accelerating, honestly. Direct AI revenue more than doubled year-over-year for the fifth consecutive quarter as of Q3 2025.

The Gradient AI Platform, which gives one-click access to GPU droplets and preconfigured machine-learning tools, is seeing traction. Back in Q1 2025, the company reported over 5,000 customers and 8,000 agents deployed on its GenAI Platform. This platform is built to deliver GPU performance without the enterprise pricing friction of the hyperscalers.

Brand reputation is intangible but critical here. DigitalOcean Holdings, Inc. has built a strong reputation centered on simplicity and developer experience, which is its main differentiator against the larger cloud providers. This simplicity translates directly into financial performance from their high-value customers. For instance, customers with an annual run-rate of more than $1 million contributed $110 million to the total ARR in Q3 2025, showing a 72% year-over-year increase in that segment alone. That kind of growth from the top tier shows the brand loyalty is translating into higher spend, which is what you want to see.

Finance: draft 13-week cash view by Friday.

DigitalOcean Holdings, Inc. (DOCN) - Canvas Business Model: Value Propositions

You're a founder looking to scale without getting lost in complex cloud contracts. DigitalOcean Holdings, Inc. focuses on making the cloud simple, which is a major draw against the hyperscalers.

Simplified cloud computing and predictable, transparent pricing is a core promise. You can start basic Droplets (virtual machines) for as low as $5/month. Managed Databases start at $15/month, and Managed Kubernetes clusters begin at $12/month. The model is built on clarity; there are no hidden fees or complex billing structures to worry about at month-end.

For developers needing to integrate modern capabilities, DigitalOcean offers Accessible AI/ML tools via the GenAI Platform for non-experts. The DigitalOcean Gradient™ AI Platform reached General Availability, allowing builders to deploy Generative AI agents in minutes without managing the underlying infrastructure. This platform gives access to foundation models from Anthropic, Meta, Mistral, and OpenAI. The focus on AI is translating to financial results; direct AI revenue more than doubled year-over-year for the fifth consecutive quarter as of Q3 2025. By Q1 2025, over 5,000 customers and 8,000 agents had been deployed on the GenAI Platform. It's about getting AI into applications fast.

The platform delivers High-performance IaaS/PaaS for growing tech companies. The traction with larger, higher-spend customers shows this value proposition is working. In Q3 2025, revenue from customers spending over $100,000 in Annual Run-Rate (ARR) grew 41% year-over-year, now making up 26% of total revenue. Furthermore, customers with over $1 Million in ARR contributed $110 million to the total ARR, which was up 72% year-over-year in Q3 2025. The company raised its full-year 2025 revenue guidance to between $896 million and $897 million.

The inherent design supports Ease of use and fast deployment for developers and startups. You can deploy a server, or Droplet, in under 60 seconds without complicated configuration. This simplicity is why over 600,000 customers trust DigitalOcean Holdings, Inc. to deliver their infrastructure needs. The platform is famous for its clear documentation and step-by-step tutorials, which cuts down on time spent troubleshooting.

Finally, DigitalOcean Holdings, Inc. is positioned as a Cost-effective alternative to hyperscalers for SMBs. One client, Meiro, reported experiencing 30 to 50 percent cost savings after migrating. The company maintains strong profitability while keeping prices low; the Q3 2025 Adjusted EBITDA margin hit 43%, and the full-year 2025 guidance projects this margin between 40.7% and 41.0%.

Here's a quick look at the financial metrics supporting the value delivered to growing customers as of Q3 2025:

Metric	Value / Rate (Q3 2025)	Comparison/Context
Total Revenue	$230 million	16% year-over-year growth.
Adjusted EBITDA Margin	43%	Exceeded consensus estimates.
Revenue from $100k+ ARR Customers	26% of total revenue	Revenue from this cohort grew 41% year-over-year.
Customers with >$1M ARR	$110 million in annualized run rate revenue	Up 72% year-over-year.
Net Dollar Retention Rate (NDR)	99%	Up from 97% in Q3 2024.

The platform's focus on simplicity and clear pricing helps developers avoid the complexity that often leads to unexpected spending spikes seen elsewhere. If onboarding takes 14+ days due to complexity, churn risk rises, but DigitalOcean Holdings, Inc. aims for near-instant deployment. Finance: draft 13-week cash view by Friday.

DigitalOcean Holdings, Inc. (DOCN) - Canvas Business Model: Customer Relationships

You're hiring before product-market fit, and you need to know how DigitalOcean Holdings, Inc. keeps its builders happy while simultaneously landing bigger enterprise deals. Honestly, their customer relationship strategy is a dual approach: keep the self-service engine humming while building out a dedicated sales motion for the higher-value accounts.

High-touch, dedicated sales for Digital Native Enterprises

DigitalOcean Holdings, Inc. is actively building and strengthening relationships with its higher spend customers, specifically targeting digital native enterprises. This is moving beyond the purely product-led acquisition model. You see this in the focus on securing large, multi-year commitments. For instance, management noted securing multiple 8-figure committed contracts after Q3 2025 closed. This contrasts with Q2 2025, where they cited one $20 million plus committed deal. The Scalers+ cohort, defined as customers with annualized run-rate revenue greater than $100,000, is a key focus area. In Q2 2025, revenue from this group grew 35% year-over-year and represented 24% of total revenue. Even more telling, customers spending over $1 million annually generated $110 million in total ARR in Q3 2025, marking a 72% year-over-year leap and accounting for over 26% of total revenue.

Here's a quick look at how those higher-spend segments are performing as of mid-2025:

Customer Segment Metric	Q2 2025 Data Point	Latest Available Growth Rate
Scalers+ Revenue Share	24% of total revenue (Q2 2025)	Revenue up 35% YoY (Q2 2025)
$1M+ ARR Customers Revenue Share	Over 26% of total revenue (Q3 2025)	ARR up 72% YoY (Q3 2025)
Customer Count Growth (Scalers+)	23% increase in customer count (Q2 2025)	N/A

Self-service model via intuitive UI and extensive tutorials

The foundation of DigitalOcean Holdings, Inc.'s relationship model remains its product-led growth engine, which is inherently self-service. The platform is known for being 'very easy to use' and having a 'clean and beginner-friendly interface'. This simplicity helps drive adoption among individual builders and startups. The company supports this with extensive educational resources; in 2024 alone, they published hundreds of technical articles. For organizations moving to the cloud for AI workloads, the top reported reasons were access to advanced features at 42%, cost optimization at 38%, and scaling needs at 37%. This shows the self-service documentation and platform features directly address key decision drivers for new users.

Community-driven support and online forums for builders

For the core builder segment, community and documentation are the primary support channels, which is cost-effective and highly scalable. The platform is explicitly cited as having 'Strong community support'. This is a critical differentiator from hyperscalers. While specific forum user counts aren't public, the investment in community visibility is clear: in 2024, the company hosted 13 community meetups and spoke at 7 major industry events, with plans to embed deeper into these communities in 2025. This ecosystem helps lower the barrier to entry, which is important since 32% of organizations surveyed said they were just starting to explore AI in late 2024.

Value enhancement to increase existing customer spending (NDR 99%)

The success of both the high-touch and self-service motions is reflected in the expansion metrics. DigitalOcean Holdings, Inc. has seen its Net Dollar Retention Rate (NDR) improve to 99% in Q3 2025, up from 97% in the third quarter of 2024. This 99% figure means that, on average, existing customers spent 99% of what they spent the prior year, indicating successful retention and expansion from the base. While the overall NDR is 99%, management noted that the metric is weighed down by smaller customers, and with the largest customers, they are seeing 'very, very strong growth driven by increased expansion'. The Average Revenue Per Customer (ARPU) also reflects this value enhancement, reaching $111.70 in Q2 2025, a 12% increase over Q2 2024.

• Net Dollar Retention Rate (NDR) for Q3 2025: 99%.
• NDR for Q2 2025: 99%, up from 97% in Q2 2024.
• Average Revenue Per Customer (ARPU) in Q2 2025: $111.70.
• ARPU increase YoY in Q2 2025: 12%.

Finance: draft 13-week cash view by Friday.

DigitalOcean Holdings, Inc. (DOCN) - Canvas Business Model: Channels

You're looking at how DigitalOcean Holdings, Inc. gets its services into the hands of developers and growing technology companies as of late 2025. The channel strategy clearly blends self-service with an increasingly focused direct sales effort, especially as the company targets larger spenders.

Direct online platform and website for sign-ups and usage

This is the core product-led growth engine for DigitalOcean Holdings, Inc. The platform is designed for simplicity, driving initial adoption through the website and direct sign-ups. The success of this channel is reflected in the overall customer base metrics and retention figures.

• Total customers trusting the platform: Over 640,000 as of Q3 2025.
• Average Revenue Per User (ARPU) in Q1 2025: $108.56.
• Net Dollar Retention (NDR) rate in Q3 2025: Held steady at 99%.

The platform's ability to retain and grow existing customer spend, even with a 99% NDR, shows that the self-service experience is sticky enough to keep customers on the platform, which is crucial for the base revenue stream.

DigitalOcean Marketplace for one-click application deployment

The DigitalOcean Marketplace serves as a distribution channel for pre-configured applications and solutions, simplifying deployment for users. This is an integrated part of the overall platform experience, allowing developers to quickly spin up complex setups. The platform also includes PaaS (Platform-as-a-Service) and SaaS (Software-as-a-Service) solutions like managed databases and the Functions serverless compute solution, which are accessed via this direct channel.

Direct sales team targeting Scalers+ and DNE customers

DigitalOcean Holdings, Inc. has augmented its product-led growth engine with a focused direct sales motion. This team targets Digital Native Enterprises (DNEs) and higher-spending customers who are migrating workloads from hyperscalers. The company estimates there are approximately 4 million DNEs in the total addressable market, with 171,000 currently using the platform as of Q3 2025.

The focus on this segment is yielding clear financial results, showing the effectiveness of the direct outreach combined with product maturity.

Customer Segment (ARR)	Q3 2025 Revenue Contribution	Year-over-Year Revenue Growth (Q3 2025)
Greater than $100,000	26% of total revenue	41%
Greater than $1,000,000	$110 million in total ARR	72%

The direct sales motion is also securing larger commitments; management noted signing multiple 8-figure committed contracts after the close of Q3 2025.

Reseller and technology partner programs for wider reach

While specific revenue attribution for reseller and technology partner programs isn't broken out in the latest public figures, these programs form the ecosystem component of the go-to-market strategy. The platform's offerings, including its AI/ML applications like the Gradient AI Platform, are designed to be integrated within this broader technology ecosystem, extending reach beyond direct customer acquisition efforts.

Here's a quick look at the overall revenue context for the period ending September 30, 2025:

Metric	Value (Q3 2025)	Full Year 2025 Guidance
Total Revenue	$230 million	$896-$897 million
Adjusted EBITDA Margin	43%	40.7%-41.0%

DigitalOcean Holdings, Inc. (DOCN) - Canvas Business Model: Customer Segments

You're hiring before product-market fit... wait, DigitalOcean Holdings, Inc. is well past that, but understanding who is paying the bills now is key to forecasting 2026. The customer base is clearly segmenting into higher-value cohorts, though the foundation remains with individual builders.

DigitalOcean Holdings, Inc. simplifies cloud and AI infrastructure for over 640,000 customers globally as of Q3 2025.

Digital Native Enterprises (DNEs) and high-growth startups are a primary focus, representing a significant portion of the growth story. The estimated market opportunity for DNEs is $140 billion, with about 4 million potential customers. As of Q2 2025, DigitalOcean Holdings, Inc. was serving 174,000 of these DNEs.

Small to Medium-sized Businesses (SMBs) globally form the historical core, seeking scalable and cost-effective cloud solutions. This segment benefits from the platform's approachability, which contrasts with the complexity often found in hyperscalers.

The Scalers+ customers segment, defined as those spending over $100,000 in Annual Run-Rate Revenue (ARR), is showing material traction. In Q3 2025, revenue from this group represented 26% of total revenue. Furthermore, the revenue generated by these high-value customers grew 41% year-over-year in that quarter. This focus on larger spenders is clearly paying off, so you should watch this cohort closely.

Individual developers and open-source contributors continue to use the platform, often starting small before graduating to higher-spend tiers. The platform's initial appeal was built on serving this group with straightforward tools.

Companies with AI/ML workloads seeking accessible infrastructure represent a major near-term growth vector. DigitalOcean Holdings, Inc.'s unified agentic cloud platform is gaining traction here, evidenced by direct AI revenue more than doubling year-over-year for the fifth consecutive quarter in Q3 2025. For context on the broader market they are serving, 79% of organizations surveyed were integrating AI in some form as of late 2024/early 2025.

Here's a quick look at the financial performance across the key spending tiers as of Q3 2025:

Customer Cohort Metric	Value/Amount	Timeframe/Context
Revenue from $100K+ ARR Customers	26% of Total Revenue	Q3 2025
Revenue Growth from $100K+ ARR Customers	41% Year-over-Year	Q3 2025
Total ARR from $1M+ Customers	$110 million	Q3 2025
Growth in $1M+ ARR Customers	72% Year-over-Year	Q3 2025
Total Global Customers	Over 640,000	Q3 2025
AI Revenue Growth	More than doubled	Q3 2025 (Fifth Consecutive Quarter)

The shift toward larger customers is undeniable, but the long tail of individual developers and SMBs still provides a broad, durable base. If onboarding for new, smaller customers slows, churn risk rises. Finance: draft 13-week cash view by Friday.

DigitalOcean Holdings, Inc. (DOCN) - Canvas Business Model: Cost Structure

You're looking at the expenses DigitalOcean Holdings, Inc. incurs to keep the lights on and the servers humming, especially as they push hard into the agentic cloud space. Honestly, for a cloud provider, the cost structure is dominated by infrastructure and growth spending.

Significant capital expenditure on data center expansion is a major driver. For the third quarter ended September 30, 2025, capital expenditures (capex) were around $38.5 million. Management noted that demand for their agentic cloud exceeded supply, giving them confidence to increase investments in data centers and GPU capacity to accelerate growth. This spending is key to meeting the demand from larger digital native enterprises.

High cost of revenue (e.g., hardware, power, network bandwidth) directly impacts the gross margin. For Q3 2025, with revenue at $230 million and a gross profit of $137 million, the Cost of Revenue was $93 million. This $93 million covers the direct costs of delivering the cloud services, which includes the power draw, network egress fees, and the depreciation/leasing costs for the underlying hardware like servers and storage.

Research and development (R&D) for new product features and Sales and marketing expenses to acquire DNE customers fall under operating expenses. Total operating expenses in Q3 2025 were around $92.0 million. DigitalOcean Holdings, Inc. is actively investing here, having released over 60 new products and features during Q2 2025 alone, and introducing a direct sales motion to capture larger customers. The company is focusing on growing customers with over $100,000 in annual run-rate, which grew revenue 41% year-over-year in Q3 2025.

Personnel costs, including annual employee bonus payments, are embedded within those operating expenses. While the exact personnel cost isn't broken out separately in the latest reports, it is a significant component of the $92.0 million in total operating expenses for the quarter. The company is clearly scaling its team to support product innovation and go-to-market execution.

Here's a quick look at the key financial metrics from the Q3 2025 period and the updated full-year outlook, which helps frame the scale of these costs:

Metric	Q3 2025 Actual Amount	Full Year 2025 Guidance Range
Total Revenue	$230 million	$896 million to $897 million
Gross Profit Margin	60%	N/A
Adjusted EBITDA Margin	43%	40.7% to 41.0%
Adjusted Free Cash Flow Margin (Q3)	37%	18% to 19% of revenue (Overall)
Net Cash from Operating Activities	$96 million	N/A

The company also executed significant balance sheet activity, repurchasing approximately $1,188 million in aggregate principal of its 2026 Convertible Notes during the quarter. That's a major cash outlay, though offset by new financing and cash flow generation.

You can see the cost of growth baked into the operating expense structure, but the high gross margin of 60% shows the core service delivery is efficient. Finance: draft 13-week cash view by Friday.

DigitalOcean Holdings, Inc. (DOCN) - Canvas Business Model: Revenue Streams

You're looking at how DigitalOcean Holdings, Inc. actually brings in the money as of late 2025. It's not just one bucket; it's a mix driven by usage and customer size, with a clear pivot toward AI workloads.

The top-line expectation for the full year 2025 is set quite clearly now. Management raised the full-year 2025 revenue guidance to be between $896 million to $897 million, which reflects about a 15% year-over-year growth rate based on the Q3 results.

The core of the revenue growth is coming from the customers spending more with the platform. We see this clearly when we look at the higher-spending cohort, which DigitalOcean Holdings, Inc. calls Scalers+ customers. Revenue from these customers grew a strong 41% year-over-year in the third quarter of 2025. To put that in perspective, these higher-spend customers now account for 26% of the total revenue. Even more telling is the very top tier: customers with an annual run-rate of more than $1 million are driving $110 million in total Annual Run-Rate Revenue (ARR), and that segment is growing at 72% year-over-year.

The platform's core IaaS products, like Droplets and Storage, are definitely the foundation, but the newer, higher-value services are accelerating growth. The focus on the unified agentic cloud is paying off, especially in the AI space.

Revenue from AI/ML services, which includes things like GPU Droplets and the DigitalOcean Gradient AI Platform, is a major driver. In the second quarter of 2025, AI/ML revenue grew over 100% year-over-year. By the third quarter, management noted that Direct AI revenue had more than doubled year-over-year for the fifth consecutive quarter.

While we don't get a clean split between pure usage-based fees for IaaS and subscription revenue for PaaS like Managed Kubernetes or App Platform, we can map the revenue contribution by customer size and focus area. Here's how the key revenue drivers looked based on the latest reported quarter:

Revenue Metric/Segment	Latest Reported Value (Q3 2025)	Year-over-Year Change
Total Revenue (Q3 2025)	$230 million	16% growth
Annual Run-Rate Revenue (ARR)	$919 million	16% growth
Revenue from $100k+ ARR Customers (Scalers+)	26% of Total Revenue	41% growth
Revenue from $1M+ ARR Customers	$110 million in ARR	72% growth
Direct AI Revenue	Not specified as a dollar amount	More than doubled for 5th consecutive quarter

The platform's overall stickiness is reflected in the Net Dollar Retention Rate, which held steady at 99% in the third quarter. This means that even as they invest heavily in capacity for AI, the existing customer base is spending nearly the same amount or slightly more than the prior year. The revenue from the core platform, which is the usage-based component, is still the bulk, but the subscription-like elements and the high-value AI services are what's driving the acceleration in the higher-spend tiers.

You can see the shift in focus when you look at the customer tiers. The growth in the $100k+ ARR segment is outpacing the overall revenue growth significantly, which suggests that the PaaS offerings and specialized AI infrastructure are commanding higher average spend per customer. It's a good sign for future recurring revenue stability, honestly.

• Full-Year 2025 Revenue Guidance: $896 million to $897 million.
• Q3 2025 Revenue: $230 million.
• AI/ML Revenue Growth (Q2 2025): Over 100% year-over-year.
• Scalers+ Customer Revenue Growth (Q3 2025): 41% year-over-year.

Finance: draft 13-week cash view by Friday.