New York, July 7, 2026, 14:04 EDT
- DigitalOcean jumped roughly 9% during the session after the company said its Q2 RPO would be above $800 million.
- New RPO is now over 15 times higher than the $53 million the company reported this time last year.
- The stock moved more than Cloudflare and Snowflake. CoreWeave dropped.
- The main thing now is delivery for investors: average RPO life went above three years.
DigitalOcean Holdings, Inc. NYSE:DOCN climbed 9.3% to $143.64 Wednesday afternoon after the company forecasted its Q2 remaining performance obligations topping $800 million. That puts focus on backlog and capacity instead of just stronger AI revenue. Shares touched $157.99 at their high and 3.28 million shares changed hands as of 1:50 p.m. EDT, valuing DigitalOcean near $16.1 billion.
DigitalOcean reported a big jump in its RPO for its size. RPO for Q2 2025 was $53 million, with revenue at $219 million. A July 7 update suggests RPO is now at least 15.1 times what it was a year ago, while revenue growth is set to pick up to around 29%, compared with 14% growth in the same period a year earlier. The company also said its weighted average obligation life rose from 1.6 years to over three years.
| Metric | Q2 2025 actual | Q2 2026 update / implied | Change |
|---|---|---|---|
| Revenue | $219 mln | Roughly $283 mln implied | +29% |
| RPO | $53 mln | Over $800 mln | At least 15.1x |
| RPO / quarterly revenue | 0.24x | Above 2.8x | About 12x higher |
| Weighted average RPO life | 1.6 years | Over 3 years | Nearly doubled |
Why it matters: DigitalOcean isn’t just getting priced on short-term cloud spend by SMB developers. Now, the market is watching if longer AI and inference deals will bring steadier revenue. That also means longer RPO terms can push revenue out, so shares could take a hit if delivery or customers slow down.
DigitalOcean had told investors in May to expect Q2 revenue between $272 million and $274 million, an increase of 24% to 25%. Now, after lifting its growth forecast to 29%, the company’s new figure comes to around $283 million. That’s about $9 million more than the previous high end. The company also said it now expects adjusted EBITDA margin and non-GAAP EPS at or above its earlier high targets.
| Q2 item | May 5 guide | July 7 update | Investor read-through |
|---|---|---|---|
| Revenue growth | 24%-25% | Close to 29% | Above earlier range |
| Revenue dollars | $272 mln-$274 mln | About $283 mln implied | Nearly $9 mln over prior high |
| Adjusted EBITDA margin | 37%-38% | At or north of top end | Margin holding, no cut for growth |
| Non-GAAP EPS | $0.20-$0.23 | At or higher than high end | No new EPS figure yet |
CEO Paddy Srinivasan said customers are looking for DigitalOcean’s cost edge and that “demand continues to accelerate.” He referenced the company’s Inference Router, which DigitalOcean claims balances price and performance between closed and open-source models. DigitalOcean Investor Relations
DigitalOcean said it booked several new annual customer deals worth at least nine figures each for its inference and cloud products last quarter. The company also locked in another 20 MW of data center capacity to be delivered in late 2027 and early 2028, bringing total committed capacity to about 155 MW.
That capacity figure is the other piece of the trade. DigitalOcean said in May it brought on about 60 MW of additional committed data center capacity for 2027. Then on July 7, it secured another 20 MW. The company lifted its 2026 revenue growth outlook to 26% and said 2027 revenue growth would top 50% in the Q1 release, ahead of a stronger Q2 update Tuesday.
DigitalOcean joined a new index-owner base last week. The company said after the U.S. open on June 29, it moved from the Russell 2000 Index over to the Russell 1000 Index during FTSE Russell’s semi-annual reshuffle.
| Security | Price | Intraday move | Market cap / fund size |
|---|---|---|---|
| DigitalOcean Holdings, Inc. NYSE:DOCN | $143.64 | up 9.3% | $16.1 bln |
| CoreWeave Inc. NASDAQ:CRWV | $83.28 | down 3.7% | $43.9 bln |
| Cloudflare Inc. NYSE:NET | $268.70 | gained 8.5% | $94.8 bln |
| Snowflake Inc. NYSE:SNOW | $268.58 | rose 2.5% | $92.8 bln |
| Invesco QQQ Trust Series 1 NASDAQ:QQQ | $713.01 | slipped 1.4% | $339.9 bln |
| iShares Russell 2000 ETF NYSEARCA:IWM | $297.27 | off 0.5% | $77.3 bln |
The Russell reshuffle matters because it affects who needs to hold the stock. Reuters said ahead of the reconstitution that fund managers were moving portfolios for new FTSE Russell weights, and Stephens analyst Melissa Roberts called it a “key liquidity day.” Reuters
DigitalOcean tweaked its balance sheet before the backlog surged. Back in March, the company sold 10.4 million shares for $77 each, pulling in roughly $773 million before expenses. It said the funds would go to ramping up infrastructure, repaying Term Loan A, and for general corporate needs. As of Tuesday, shares traded about 86% higher than that $77 offer.
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