DigitalOcean posts $321M Q3 revenue, up 40% as AI demand accelerates

The cloud provider beat estimates, raised its outlook, and reported AI customer ARR of $376 million DigitalOcean reported third-quarter revenue of $321 million, a 40% jump from a year earlier. The company beat consensus estimates on both revenue and earnings. According to the company’s results, it is DigitalOcean’s fastest expansion in a decade. It also marks the fifth straight quarter of accelerating growth. The numbers behind the beat DigitalOcean added a record $160 million in incremental ARR during the third quarter. That is up 266% year over year. AI was the standout driver. ARR from AI customers reached $376 million, up 288% from a year earlier. Large customers also grew quickly. ARR from customers spending more than $1 million annually hit $386 million, a 273% increase. Through the first nine months of the year, DigitalOcean has booked $860 million in revenue. Profitable growth, which is rarer than it sounds The company reported an adjusted EBITDA margin of 45%. Customer stickiness is also improving. About 60% of revenue now comes from customers using four or more DigitalOcean products. The AI-native pivot is showing up in usage Token volume tied to inference grew roughly 10...