Net income over the same twelve months moved the other way: it fell 86.4% to $34.3 million, even as revenue grew 27.6% to $1.1 billion.
The two figures describe the same business from different angles, and this year they disagree by a wide margin. For Digitalocean, cash generation strengthened through the year while the accounting measure of profit weakened sharply.
The year in numbers
| Metric (TTM to 30 Sep 2026) | Value | Change YoY |
|---|---|---|
| Revenue | $1.1 billion | up 27.6% |
| Free cash flow | $220.6 million | up 32.1% |
| Net income | $34.3 million | down 86.4% |
| Operating margin | 12.5% | down 5.0pp |
| Free cash flow margin | 20.0% | up 0.7pp |
| Diluted shares outstanding | — | up 15.7% |
Cash flow outpacing profit
Operating cash flow over the twelve months reached $375.4 million, up 16.0% year over year, a slower pace than the 32.1% rise in free cash flow itself. Capital expenditure fell 1.2% to $154.8 million, equal to 14.0% of revenue. Revenue growth is accelerating too: the trailing twelve-month rate of 27.6% is up 6.2 percentage points from the prior quarter's reading.
The other reading
Net income's 86.4% fall looks severe set against revenue growth of 27.6%, but several other figures point the other way. Revenue growth sits in the 63rd percentile of the company's own growth history, which has spanned 12.1% to 36.3% over its past 19 quarterly readings, and it is accelerating rather than slowing. Operating margin, despite falling 5.0 percentage points to 12.5%, still sits in the 74th percentile of its own past readings, which have ranged from a loss equal to 7.4% of revenue to a high of 17.4%. Read together, the figures are as consistent with a business whose cash economics are improving as with one whose reported profit is deteriorating.
Margins and net income
Gross margin over the twelve months stood at 54.7% of revenue, and net margin was just 3.1%.
Dilution continues
Diluted shares outstanding rose 15.7% year over year.
What it means for value
Growth carries more weight in the model than margin does. A 5-percentage-point lower growth assumption would cut the model's value per share by 23.4%, while a 5-percentage-point higher assumption would raise it by 29.9%. Raising the discount rate by 1 percentage point would lower value by 15.7%. Margin moves less value: each 1-percentage-point drop in free cash flow margin reduces model value by 4.3%, and if the past year's 0.7-percentage-point gain in FCF margin were to persist, model value would be 2.9% higher. These are model values under stated assumptions, not a comparison with the share price.
For the complete financial history, see Digitalocean's company page.
