A：For Digitalocean's third quarter, the key financial results include exceeding revenue and profitability guidance with 16% revenue growth, the highest incremental organic ARR in the company's history at $44 million, a 21% trailing 12 months adjusted free cash flow margin, and strong balance sheet with adjusted EBITDA and non-GAAP earnings per share well above guidance.

A：The increase in the largest customers' revenue, which grew 41% year over year and now account for 26% of total revenue, signifies strong customer retention and growth on the Digitalocean platform. It indicates that customers are able to scale without leaving the platform and are increasingly leveraging both AI and general-purpose cloud capabilities.

A：The unified AI cloud platform is gaining increasing traction with larger, well-funded AI native companies that are in inference mode. It offers a full-stack inference platform for AI native customers with their own models, featuring a powerful line-up of GPUs in both bare metal and droplet configurations for optimized inference workloads globally on DL. The platform also includes a generative AI model platform for major customers like Canva and Shopify, providing text to image and text to video models.

A：The strategic partnership between Digitalocean and Fall aims to accelerate generative AI content creation by making image and audio generation more accessible. Through this partnership, Fall will host and run its models on Digitalocean's infrastructure, which will facilitate applications across creative and enterprise use cases. This partnership benefits customers by allowing them to create agents that understand and generate various forms of input, significantly expanding the range of problems they can solve.

A：Newspick is an AI-native customer leveraging a unified cloud to deliver timely and relevant local news and information to 40 million monthly active users. They utilize AI infrastructure to train and deploy complex recommendation systems and natural language processing models for personalization.

A：The benefits include optimizing cost and performance, enabling the use of vector search services, and providing high throughput performance for both GPU and non-GPU tasks. Features like NFS and U-Droplet facilitate easy storage attachment and provisioning, and applications can be scaled while maintaining speed, reliability, and efficiency.

A：The AI platform layer enables companies that are users or consumers of AI to build intelligent applications without directly managing the infrastructure.

A：The AI platform supports serverless inferencing across popular models and includes a knowledge-based service that allows for data integration and improved accuracy. It also offers built-in safety measures, visual agent orchestration, enterprise-grade features like observability, git integration, and auto-scaling.

A：A significant customer signed an eight-figure per year multi-year contract to leverage the AI cloud for AI transformation for its digital native enterprise customer base. The focus is on the software engineering lifecycle, including planning, backlog, and roadmap management, release planning, execution, and customer support.

A：The purpose of the Digitalocean AI Partner Program is to empower AI and digital native enterprises with a unified cloud and AI platform to seamlessly build and scale intelligent applications using agents, without dealing with fragmented infrastructure.

A：New features include PacesCold Storage, an enterprise object storage solution for massive data management, and enhanced managed databases with automated storage auto-scaling, ensuring seamless scaling and no downtime across major database engines.

A：Customers with over 100,000 in ARR who have adopted at least one new feature released over the past year have seen a several hundred basis points increase in their growth rate after adopting those new products.

A：To support growth, the company has ordered more GPU capacity to meet the needs from AI native customers and secured around 30 MW of incremental data center capacity. They have also added equipment financing and ramped engineering resources to accelerate the unified AI cloud roadmap, along with targeted investments in sales and marketing.

A：Strategic investments include increased equipment financing, ramped engineering resources for the unified AI cloud roadmap, and targeted investments in sales and marketing. These investments are expected to build on the company's recent success and set them up for strong growth in 2026 and 2027.

A：The company expects to deliver 18% to 20% growth in 2026, achieving its 2027 growth target a full year earlier than previously projected. They will maintain strong adjusted free cash flow margins in the mid to high teens.

A：In Q3, the company delivered strong performance with guidance on both revenue and profitability. The unified AI cloud is gaining traction, resulting in strong revenue growth from high-spending customers, exceeding current capacity. This momentum and visibility into demand have led to the company raising its revenue and adjusted free cash flow outlook for 2025 and 2026.

A：Q3 revenue was $230 million, up 16% year over year, with a record for the highest revenue growth since Q3 2023. Revenue growth was balanced across the unified AI cloud and was primarily driven by higher spending AI digital native customers. The company delivered the highest incremental organic AR in company history at $44 million, with strong AI ML revenue growth and customers whose annualized run rate revenue grew 40% year over year. Gross profit was $137 million, with adjusted EBITDA at $100 million, and non GAAP diluted net income per share at 54 cents.

A：Recent financial activities, including equipment financing and balance sheet transactions, impacted adjusted free cash flow positively. Adjusted free cash flow was $85 million, or 37% of revenue, an increase from the prior year's $19 million. The company entered into an equipment financing arrangement to better align investments with future revenue generation, contributing to the increase in adjusted free cash flow.

A：The updated outlook for the fourth quarter of 2025 includes revenue expected to be in the range of $237 to $238 million, representing approximately 16% year-over-year growth. For the full year 2025, the projected revenue is between $896 to $897 million. The adjusted EBITDA margin is expected to be in the range of 38.5% to 39.5%, and the full year adjusted free cash flow margin is projected to be between 18% to 19%.

A：The new data centers and investments in incremental GPU capacity are expected to further accelerate growth, with the potential to deliver script to script growth in revenue, a full year earlier than previously projected. While COGS and operating expenses will increase in early 2026 as the company ramps into new data center capacity, it anticipates delivering high 30s% to 40% adjusted EBITDA margins while maintaining mid to high teens adjusted free cash flow.

A：The multiple 8 figure committed contracts primarily involve AI native companies that are looking to leverage the company's infrastructure as well as a series of agents for building AI experiences for software engineering, utilizing their AI platform layer. However, as explained in the earlier remarks, the lines between AI and cloud are becoming increasingly blurred, hence the contracts reflect a more unified cloud platform approach being called 'agent-based cloud'.

A：These new contracts are different from previous engagements as they are not just with AI companies; they also include traditional cloud customers that are increasingly using AI-related services like storage artifacts, networking capabilities, and others. This indicates a blurring of the line between AI and cloud services and reflects a more integrated approach to technology usage among the customers.

A：The scaling of customers' commitments is attributed to the growing use of AI among customers who initially started with the company's AI platform but are now expanding to include other cloud services. This expansion is prompting the company to scale with these customers by expanding its data center footprint to support their growth.

A：The new AI workloads are contributing positively to the company's financial outlook as they are durable, predictable, and offer a great opportunity to scale with customers as they achieve real-world traction globally. The company is focusing on capacity expansion to support marquee AI native companies that are finding success with real end customers.

A：The migration of workloads to new cloud providers is driven by a combination of factors, including dissatisfaction with an incumbent cloud provider and the吸引力 of new solutions offered by the new cloud provider. Specific factors include advanced networking capabilities, various droplet configurations or storage options like cold storage, and features such as auto scaling for DBAs. These are fundamental building block type capabilities that are particularly attractive to customers with sophisticated workloads.

A：The company's platform is being enhanced by new capabilities such as virtual private cloud, Direct Connect, and others which make it more attractive for migration workloads. Additionally, features related to AI native workloads include an expanded data center capacity that will come online progressively through 2026, with an expectation of a revenue ramp that is expected to be relatively smooth over time. Moreover, the company is focusing on building a unified agent cloud stack catering to AI native companies that require not only GPU and inferencing capabilities but also agent workflow, storage, databases, authentication, authorization, and orchestration from a Kubernetes perspective.

A：The company plans to accommodate these new 8-figure contracts by leveraging existing data center capacity and expanding their data center footprint progressively through 2026. They have a build schedule from providers and coordinate closely to ensure they receive a warm shell in new data centers, allowing them to start racking servers as soon as the capacity is available. Some capacity is already available in existing data centers, which, combined with the new builds, will facilitate the ramp-up needed to support the workload from these contracts.

A：The new data center capacity is expected to come online progressively through 2026. Most of the capacity is anticipated to be available in the first half of the next year. In the fourth quarter of the upcoming year, some of the build-outs will be paid for, which indicates that the capacity will become available in the months and quarters following that. This is expected to result in an early ramp of data center capacity, allowing time for the deployment of GPUs and for customers to ramp up, leading to a relatively smooth revenue ramp over the course of the year.

A：The company's strategy is focused on AI native companies that build real businesses running models in inferencing mode. These companies need a unified agent cloud stack that includes not only GPU and inferencing capabilities but also agent workflow, storage databases, authentication, authorization, and orchestration from a Kubernetes perspective. The company's strategy aligns with customer needs for AI applications and has been executed upon by providing a comprehensive software stack. The enhancements and feedback from customers have been integrated into the platform rapidly, showcasing the power of co-inventing with customers and leveraging the company's strength in software differentiation and a 12-year-old full-stack general-purpose cloud. This focus on software and AI differentiation positions the company favorably for scaling AI native companies.