DigitalOcean DOCN is scheduled to report first-quarter 2026 results on May 5.
For the first quarter of 2026, the company expects revenues in the range of $249-$250 million, which is approximately 18% to 19% year-over-year growth.
The Zacks Consensus Estimate for first-quarter revenues is pegged at $250.06 million, suggesting growth of 18.68% year over year.
The company projects earnings per share in the range of 22-27 cents. The consensus mark for first-quarter earnings has remained unchanged in the past 30 days at 27 cents per share, suggesting a year-over-year decline of 51.79%.
DigitalOcean Holdings, Inc. Price and EPS Surprise
DigitalOcean Holdings, Inc. price-eps-surprise | DigitalOcean Holdings, Inc. Quote
DOCN beat the Zacks Consensus Estimate for earnings in all the trailing four quarters, the average surprise being 18.44%.
Let’s see how things have shaped up for the upcoming announcement.
Factors to Note
DOCN's first-quarter 2026 performance is expected to have benefited from its expanding portfolio and robust demand for its Agentic Inference Cloud, which is purpose-built for AI-native and cloud-native companies. The company highlighted that its AI customer annual recurring revenue (ARR) reached $120 million in the fourth quarter of 2025, growing 150% year over year, and this segment is expected to have contributed to rapid growth in the to-be-reported quarter.
DOCN's top customers, particularly digital native enterprises and AI-native companies, are now the fastest-growing segment. These customers are now the company's primary growth engine, growing significantly faster than the broader market on DigitalOcean's platform. In the fourth quarter of 2025, $1 million ARR customers grew 123% year over year, while customers spending at least $100,000 annually continued to outpace the broader base in both growth and retention metrics. This trend is expected to have continued in the to-be-reported quarter as well.
DOCN is expected to have benefited from its differentiated approach to AI and cloud integration. DigitalOcean offers a vertically integrated platform that combines GPU infrastructure, optimized AI models (both open and closed source), production-grade inferencing and a full-stack cloud environment. This integration allows customers to build, deploy and scale AI applications efficiently, with predictable and transparent unit economics. The success of deployments like OpenClaw, which saw nearly 30,000 one-click droplets created within days, exemplifies the platform's appeal and scalability for AI agentic software.
However, margins are expected to compress in the near term as depreciation and lease expense arrive before revenues, while execution and supply-chain timing add risk. Elevated leverage and a legacy sunset and mix shift are headwinds.
What Our Model Indicates
Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That's the exact case here.
DigitalOcean has an Earnings ESP of +35.37% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Other Stocks to Consider
Here are some companies worth considering, as our model shows that these have the right combination of elements to beat earnings in their upcoming releases:
Arista Networks ANET has an Earnings ESP of +2.79% and a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Arista Networks shares have gained 28.8% in the year-to-date period. Arista Networks is scheduled to report its first-quarter 2026 results on May 5.
Audioeye AEYE has an Earnings ESP of +9.62% and a Zacks Rank #2.
Audioeye shares have lost 27% in the year-to-date period. Audioeye is set to report its first-quarter 2026 results on May 13.
CDW CDW has an Earnings ESP of +1.90% and a Zacks Rank #2 at present.
CDW shares have lost 0.4% in the year-to-date period. CDW is set to report first-quarter fiscal 2026 results on May 6.
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CDW Corporation (CDW): Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).