DigitalOcean Holdings

DOCN

Software - Infrastructure · Technology

Price

$115.64

+1.29 (+1.13%)

Market Cap

$13.52B

Winston Score

Winston is curious

A decent business — some strong pillars, some weaker.

Data as of Aug 23, 2026 · filings through Jun 30, 2026

How the score breaks down

Quality

Good

Growth

Exceptional

Cash Flow

Strong

Stability

Good

Valuation

Weak

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Share count falling — buybacks

−1.7% over 4y

The company has reduced its share count over this period, returning value to shareholders through buybacks.

Diluted shares outstanding: 107.2M (2021) → 105.3M (2025)

Winston Score History

The full picture

DigitalOcean is a cloud computing company that helps small businesses, startups, and individual developers build and run apps and websites on the internet. Instead of buying their own servers, customers rent computing power, storage, and networking tools from DigitalOcean's data centers. The company competes in the cloud infrastructure industry, where it focuses specifically on smaller customers rather than large corporations.

DigitalOcean makes money by charging customers based on how much computing power and storage they use each month. It operates data centers across North America, Europe, and Asia, and serves over 600,000 customers worldwide. Its main advantage is offering simpler, more affordable pricing compared to giants like Amazon Web Services, Microsoft Azure, and Google Cloud, which tend to target large enterprises. The key growth driver is expanding its AI and machine learning tools for developers, but the main risk is that larger cloud providers have far more resources and could undercut DigitalOcean's pricing or match its simplicity over time.

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Growth Profile

For growth stock investors

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+28.6% YoY

YoY Growth Rate

Revenue accelerating

EPS Growth

-17.1% YoY

YoY Growth Rate

Earnings declining

R&D Spend

$162M/ year

↑ Rising (+13% vs prior year)

17.9% of revenue

In line with sector average (15%)

Investing heavily in future products and technology

Insider Activity

20.1%ownership

→ Flat

Insider ownership roughly steady over the past year

Cash Position

Cash flow positive

$767M cash & investments

Quarterly Free Cash Flow

↑ Burn rate improving

Company generates more cash than it spends — no dilution risk from fundraising

Revenue accelerating

DigitalOcean Holdings grew revenue 29% year-over-year and the growth rate is speeding up. That's the kind of momentum growth investors look for — the question is whether margins can follow.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

Every number that matters to educated investors.

Each metric is explained in plain language so you know exactly what you're looking at. Start your free trial now.

Quality

Profit per sale

Gross Margin

55.0%

Premium pricing power — 55.0% gross margin

Profit after running costs

Operating Margin

10.4%

Modest — 10.4% operating margin

Return on the money invested

ROCE

8.1%

Below par — 8.1% return on capital

ROIC between 5% and 15%. They earn 5 to 15 cents back per year on every dollar invested.

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Growth

Sales growth

Sales YoY

+21.4%

Fast-growing sales (+21.4% YoY)

Profit growth

EPS YoY

+81.3%

Earnings growing fast (+81.3% YoY)

Earnings growing 25%+ a year. The compounder zone.

How steady the profit is

EPS Consistency

6/8 quarters

Earnings grew in most of the last 8 quarters

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Cash Flow

Profit that turns into cash

Cash Conversion

152%

Turns 152% of profit into real cash

Spare cash per sale

FCF Margin

1.5%

Thin free cash flow (1.5%)

FCF margin between 0% and 10%. Some cash from sales, but not a lot.

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Stability

What it owes vs what it owns

Debt / Equity

0.99

Moderate — manageable debt (0.99)

Covers its interest

Interest Cover

5.36x

Adequate interest coverage (5.4x)

Interest coverage between 3 and 8. Profits cover interest several times over.

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Valuation

Price vs profit

P/E Ratio (TTM)

45.9x

Expensive — P/E 45.9

P/E over 35. The market is pricing in heavy, sustained growth.

Cheaper or dearer next year

P/E vs Forward

-23.6

SLOWING

Earnings expected to fall — forward P/E higher than today

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Dividends

Not applicable for this business.

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