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DOCN, DigitalOcean

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DigitalOcean is an agentic inference cloud platform that helps AI and Digital Native Enterprises build, run, and scale intelligent applications with speed, simplicity, and predictable economics.

The platform combines production-ready GPU infrastructure, a full-stack cloud, model-first inference workflows, and an agentic experience layer to reduce operational complexity and accelerate time to production.

Our platform is designed to be simple, scalable and approachable by providing a variety of product offerings that were built with the needs of growing technology companies in mind.

Latest annual: FY2025 10-K

DOCN · DigitalOcean

The business

What it sells, where the money comes from, the kind of company it is.

Revenue · FY2025

$901M

+15.5% YoY · 23% 5-yr CAGR

Vital signs · TTM, with 5-yr average

Revenue $949M 5-yr avg $676M

Gross margin 58% 5-yr avg 60%

Operating margin 16.4% 5-yr avg 4.7%

ROIC 15% 5-yr avg 4%

Owner-earnings margin 20% 5-yr avg 16%

Free cash flow margin 20% 5-yr avg 15%

The business in brief

read the 10-K →

What this business is and what moves its needle, from its own SEC filings.

What moves the needle: Operating margin has reached 17% at its best but run negative through the cycle (median −2.6%) on a 60% gross margin — so the question is which reading is truer: whether the median was pulled below zero by one-off charges, by the cycle, or by spending it is still growing into, and whether it settles back at a profit. Capital spending runs about 21% of sales, so the return earned on what it sinks into that plant weighs as much as the margin. Read this kind of business on retention and the cost of growth. On its own account, the filing leans hardest on customer concentration, set against the numbers in what the filing emphasizes, below.
Is it a good business?: Return on capital has rarely cleared the cost of capital (median −0%, above 15% in 1 of 6 years). The steadier read is owner earnings: roughly 15% of revenue reaches owners as cash, though it swings, and customers and suppliers fund the business through negative working capital. This is price-taker territory, where the balance sheet and the cycle matter more than any multiple; the rest is in the 10-K.

Every line is arithmetic on the company's filings, shown in full in the sections below.

The record

Ten years of arithmetic, read across the cycle.

The record, 2019–2025

realized figures from each filing · older years to the left

2019’19	2020’20	2021’21	2022’22	2023’23	2024’24	2025’25	TTMTTMMar 2026
								Income statement
$255M	$318M	$429M	$576M	$693M	$781M	$901M	$949M	RevenueRevenue
52%	54%	60%	63%	57%	60%	60%	58%	Gross marginGross mgn
28%	25%	24%	29%	23%	21%	15%	15%	SG&A / revenueSG&A/rev
24%	24%	27%	25%	20%	18%	18%	18%	R&D / revenueR&D/rev
($30M)	($16M)	($11M)	($26M)	$12M	$91M	$157M	$156M	Operating incomeOp. inc.
−11.7%	−5.0%	−2.6%	−4.5%	1.7%	11.7%	17.4%	16.4%	Operating marginOp. mgn
($40M)	($44M)	($20M)	($28M)	$19M	$84M	$259M	$237M	Net incomeNet inc.
								Cash flow & returns
$40M	$58M	$133M	$195M	$235M	$283M	$310M	$292M	Operating cash flowOp. cash
$63M	$76M	$88M	$102M	$118M	$130M	$137M	$154M	DepreciationDeprec.
($1M)	($3M)	$3M	$15M	$9M	($22M)	($167M)	($181M)	Working capital & otherWC & other
$54M	$98M	$97M	$106M	$119M	$178M	$129M	$107M	CapexCapex
21.0%	30.9%	22.7%	18.5%	17.2%	22.8%	14.3%	11.3%	Capex / revenueCapex/rev
($14M)	($17M)	$36M	$89M	$116M	$153M	$181M	$185M	Owner earningsOwner earn.
−5.3%	−5.4%	8.4%	15.4%	16.7%	19.6%	20.0%	19.5%	Owner earnings marginOE mgn
($14M)	($40M)	$36M	$89M	$116M	$105M	$181M	$185M	Free cash flowFCF
−5.3%	−12.5%	8.4%	15.4%	16.7%	13.4%	20.0%	19.5%	Free cash flow marginFCF mgn
$3M	$0	$5M	$305M	$99M	$0	—	$0	AcquisitionsAcquis.
$0	$0	$350M	$600M	$488M	$60M	$82M	—	BuybacksBuybacks
—	-14%	-3%	-1%	1%	9%	16%	15%	ROICROIC
—	—	-3%	-58%	—	—	—	27%	Return on equityROE
—	—	−3%	−58%	—	—	—	27%	Retained to equityRetained/eq
								Balance sheet
$36M	$100M	$1.7B	$864M	$412M	$428M	$254M	$741M	Cash & investmentsCash+inv
—	$28M	$40M	$54M	$62M	$72M	$91M	$105M	ReceivablesReceiv.
—	$12M	$13M	$21M	$4M	$55M	$39M	$32M	Accounts payablePayables
—	$16M	$27M	$33M	$58M	$18M	$52M	$74M	Operating working capitalOper. WC
—	$148M	$1.8B	$946M	$503M	$542M	$427M	$944M	Current assetsCur. assets
—	$85M	$58M	$166M	$193M	$221M	$619M	$647M	Current liabilitiesCur. liab.
—	1.7×	30.4×	5.7×	2.6×	2.5×	0.7×	1.5×	Current ratioCurr. ratio
$3M	$3M	$32M	$315M	$348M	$349M	$349M	$351M	GoodwillGoodwill
—	$430M	$2.1B	$1.8B	$1.5B	$1.6B	$1.8B	$2.6B	Total assetsAssets
—	$260M	$1.5B	$1.5B	$1.5B	$1.5B	$1.3B	$920M	Total debtDebt
—	$159M	($251M)	$606M	$1.1B	$1.1B	$1.0B	$178M	Net debt / (cash)Net debt
-3.2×	-1.2×	-3.0×	-3.1×	1.3×	10.0×	8.8×	5.9×	Interest coverageInt. cov.
($72M)	($72M)	$578M	$48M	($314M)	($203M)	($29M)	$887M	Shareholders’ equityEquity
7.3%	9.3%	14.4%	18.4%	12.8%	11.6%	8.9%	8.8%	Stock comp / revenueSBC/rev
								Per share
38.0M	41.7M	93.2M	101M	96.4M	94.5M	105M	112M	Shares out (diluted)Shares
$6.71	$7.64	$4.60	$5.72	$7.19	$8.26	$8.56	$8.48	Revenue / shareRev/sh
$-1.06	$-1.05	$-0.21	$-0.28	$0.20	$0.89	$2.46	$2.12	EPS (diluted)EPS
$-0.36	$-0.41	$0.39	$0.88	$1.20	$1.62	$1.71	$1.66	Owner earnings / shareOE/sh
$-0.36	$-0.96	$0.39	$0.88	$1.20	$1.11	$1.71	$1.66	Free cash flow / shareFCF/sh
$1.41	$2.36	$1.04	$1.06	$1.24	$1.89	$1.23	$0.96	Cap. spending / shareCapex/sh
$-1.90	$-1.73	$6.20	$0.47	$-3.25	$-2.15	$-0.27	$7.93	Book value / shareBVPS

The diluted share count moved ×2.24 into 2021 — shares issued, not a split the totals corroborate — and the per-share figures carry the counts as filed.

Per-share growththe realized rate an owner's share compounded

	6-yr	5-yr
Revenue / share	+4.1%/yr	+2.3%/yr
Capital spending / share	−2.3%/yr	−12.3%/yr

The record, charted

FY2019–2025

Each measure over its full record; the current point and the worst year marked.

Share count

105Mpeak FY2025

ROIC

16%low FY2020

Gross margin

60%low FY2019

Net debt ÷ owner earnings

5.8×peak FY2023

Owner earnings vs. net income

Owner earningsNet income

The accountant's number, and the cash an owner can take; the gap is the tell.

$181Mowner earningsvs.$259Mnet incomelow FY2020

Where the cash went

ReinvestBuybacksDividendsAcquisitionsRetainedBeyond op. cash

Each year's outlays against its operating cash: the mix, and how it drifts. The hatched cap is spending beyond that year's operating cash — financed from the balance sheet or borrowing, not operations.

FY2019FY2025

Owner-earnings bridge

FY2021–FY2025cash-flow statement, SEC EDGAR →

Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.

In fiscal 2025 the business reported $259M of profit but $181M of owner earnings: $79M less than the profit line, taken out by capital spending and the timing of cash.

Reported net income$259M

Owner earnings$181M · 20% of revenue

	FY2025	FY2024	FY2023	FY2022	FY2021
Reported net income	$259M	$84M	$19M	($28M)	($20M)
Depreciation & amortizationnon-cash charge added back	+$137M	+$130M	+$118M	+$102M	+$88M
Stock-based compensationreal costnon-cash, but a real cost	+$80M	+$91M	+$88M	+$106M	+$62M
Working capital & othertiming of cash in and out, other non-cash items	−$167M	−$22M	+$9M	+$15M	+$3M
Cash from operations	$310M	$283M	$235M	$195M	$133M
Maintenance capital expenditurethe spending needed just to hold position and volume	−$129M	−$130M	−$119M	−$106M	−$97M
Owner earnings	$181M	$153M	$116M	$89M	$36M
Growth capital expenditurediscretionary; spent to get bigger, not to stand still	—	−$48M	—	—	—
Free cash flow	$181M	$105M	$116M	$89M	$36M
Owner-earnings marginowner earnings ÷ revenue	20%	20%	17%	15%	8%

Owner earnings is the cash an owner could pull out without starving the business: operating cash less the capital it must spend to hold its position . The cash-flow statement also adds stock comp back as non-cash, but it is a real cost paid in shares; counted as the expense it is (less $80M), owner earnings is nearer $100M.

Much of fiscal 2025's profit didn't arrive as operating cash; it sits in “working capital & other” above. That can be a real inventory or timing swing, or profit that doesn't run through operating cash at all: a heavy tax year, equity-method earnings, or investment income booked through investing. For a year like this, owner earnings understates the cash earned; the full cash-flow statement carries the rest.

Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.

III

Quality & stewardship

Returns, the balance sheet, capital allocation, and pay.

Owner’s Scorecard

FY2025 10-K · source on SEC EDGAR →

Will it survive?

Can it pay its interest? 8.8×

Comfortable

Operating income $157M ÷ interest expense $18M

What this means
Operating profit covers interest with the kind of margin Graham wanted for a defensive holding. Necessary, not sufficient, it says solvent, not cheap.
How heavy is the debt, net of cash? $1.0B · 6.6× operating profit

Heavy net debt

Cash $254M − debt $1.3B

What this means
Netting $254M of cash and short-term investments against $1.3B of debt leaves $1.0B owed, about 6.6× a year's operating profit (8.3× on the gross debt, before the cash). Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
How long is cash tied up? -2d

Negative, funded by others

DSO 37 + DIO 0 − DPO 39 days

What this means
Days cash is tied up between paying suppliers and collecting from customers. A negative cycle is a quiet moat: suppliers and customers fund the operation (Buffett's “float”), the company grows on other people's money. (Little or no inventory, a services / asset-light model, so the inventory leg is ~0.)

Is it a good business?

Return on invested capital -1%

Below average through the cycle

6-yr median, range -14%–16%; 16% latest = NOPAT $157M ÷ invested capital $1.0B

Industry peers: median -6%

What this means
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 6 years (it ran 16% most recently), so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
Owner-earnings margin 15%

High through the cycle

7-yr median margin, range -5%–20%; latest $181M = operating cash $310M − maintenance capex $129M

Industry peers: median 18%

What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's 20% of revenue this year, a 15% median across 7 years. Treating stock comp as the real expense it is (less $80M of SBC) leaves $100M.
Are earnings backed by cash? 1.19×

Cash-backed

Cash from ops $310M ÷ net income $259M

In the filing’s words The filing leans on adjusted, non-GAAP earnings, but the GAAP profit is itself cash-backed — the adjustments are not papering over a cash shortfall here.

What this means
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.

How is the cash used?

Where do the earnings go? 45%

Returns about half

Dividends + buybacks $82M ÷ Owner Earnings $181M

What this means
Of $181M Owner Earnings, $82M (45%) went back to shareholders, $0 dividends, $82M buybacks. Net of $80M stock comp, the real buyback was about $2M. Returning most of it is the mark of a mature business with little left to reinvest at a high return; reinvesting most could mean a long runway, or empire-building. The split doesn't say which; the return earned on it (see ROIC) does.
Investing or harvesting? 0.94×

Maintaining

Capex $129M ÷ depreciation $137M

What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.

Graham’s defensive tests · 0 of 5 met

Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.

Adequate size Miss

Revenue ≥ $2B · $901M

What this means
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
Strong liquidity Miss

Current ratio ≥ 2× · 0.69×

What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
Conservative debt Miss

Debt ≤ working capital · $1.3B vs ($192M) WC

What this means
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
Earnings stability Miss

A profit every year (7-yr record) · 4 loss years

What this means
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
Dividend record Miss

Uninterrupted dividends · none paid

What this means
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
Earnings growth —

Earnings +33% over the record · —

What this means
Earnings were negative early in the record, a growth rate isn't meaningful.
Moderate price —

P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price

What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $1.16/share (latest year $2.48), the averaged base the calculator's gate runs on, and book value is $-0.27/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.

Durability & moat, 2019–2025

Whether the record’s returns held, and what the capital reinvested earned.

Profitable years 3 of 7

What this means
Lost money in 4 year(s), look at what happened there before trusting the average.
Return on capital ≥ 15% 1 of 6 yrs

What this means
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
Operating margin −6% → 10% (3-yr avg ends)

What this means
Through the cycle the operating margin widened — about −6% early to 10% lately, median −3% — pricing power intact or improving.
Reinvestment, incremental ROIC 31%

What this means
Every extra dollar the business reinvested came back at a high incremental return — the lens GBM read for a moat that reinvests rather than merely harvests. The record and the 10-K are where you check whether the rate holds.
Worst year 2019 · −11.7% op. margin

What this means
Operations went underwater in 2019, understand why before trusting the good years.
How management talks about it Owner’s terms

What this means
The record and the register agree: capital is compounding and the filing reasons in an owner’s terms — per-share value, return on capital, the long term — not a promoter’s.

Does AI threaten the moat?

Elevated contestability

The product is software or information, the very thing capable AI now produces more cheaply, so the moat is more contestable than the record alone implies.

In its own filing A competitive risk, new this year

Its FY2025 10-K names artificial intelligence as a competitive threat, in language that was not in the prior year's filing.

“Accordingly, it is uncertain whether our AI/ML strategies will attract customers or generate revenue required to succeed in this highly competitive and rapidly changing market, and the failure to realize the anticipated benefits could adversely affect our business operating results or financial condition.…”

AI has collapsed the cost of building a capable substitute for the very thing this business sells. When a credible alternative can be assembled for a fraction of the incumbent's price, it is pricing power that erodes first, not revenue tomorrow. The live question is whether the moat survives that, not whether it held in the past. Whether that question is answerable at all is yours to decide, against your own circle of competence.

Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.

All figures as filed; the source filing is linked above.

Current Position

as of the latest quarter, Mar 31, 2026

Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.

Current assets$944M

Cash & short-term investments$741M
Receivables$105M
Other current assets$97M

Current liabilities$647M

Debt due within a year$311M
Accounts payable$32M
Other current liabilities$304M

Current ratio1.46×all current assets ÷ what's due · Graham looked for 2×

Quick ratio1.46×stricter: inventory excluded

Cash ratio1.15×strictest: cash alone against what's due

Working capital$297Mthe cushion left after near-term bills

Debt due this year vs. cash$311M due · $741M cash covered by cash on hand, no refinancing forced · both figures from the Mar 31, 2026 balance sheet

Revenue, latest quarter vs. a year ago+22.4%the freshest read on whether the business is still growing

Current ratio, recent quarters2.5× → 1.5×

Deeper floors

Tangible book value$439Mequity stripped of goodwill & intangibles

Net current asset value($739M)Graham's net-net: current assets less all liabilities

Debt incl. operating leases$1.2B$321M of it operating leases; with finance leases, “total fixed claims” below reaches $1.7B (annual-report basis)

Deferred revenue$6Mcustomer cash collected before delivery; operating float

From the company's latest filing.

Lease obligations

the lease note, SEC EDGAR →

Debt by another name. What the business owes on the property, aircraft, stores and equipment it rents rather than owns is a fixed claim due on a schedule; added back to the debt, it is the true leverage. That ladder, operating and finance leases together, and what it adds to the debt on the page above.

Operating leasesFinance leases

'26$158M

'27$123M

'28$73M

'29$59M

'30$20M

later$18M

Lease payments by year, scaled to the largest; “later” is everything beyond year five, shown apart. These are the contractual cash payments, before the interest the filing imputes back out to the balance-sheet liability.

Due in the next 12 months$158Ma fixed cash payment, owed whether or not the business has a good year

Total lease payments$451Mevery year plus the tail, undiscounted: the full cash the leases will take

On the balance sheet$406Mthe present value of those payments, the recognised lease liability

True leverage: debt plus leases

On-balance-sheet debt$1.3B

Lease obligations (present value)$406M

Total fixed claims on the business$1.7B

Counting the leases the way Buffett does, the fixed claims on this business come to $1.7B, of which the leases are 24%. The lease wall above and the debt schedule together are the calendar of what must be paid, and when.

Lease ladder read from the ASC 842 tags in the company’s Dec 31, 2025 annual report and reconciled: the yearly buckets sum to the undiscounted total, which less the imputed interest equals the balance-sheet liability; a ladder that doesn’t tie out is withheld.

How the cash was used, 2019–2025

Over the record, the business generated $1.3B of operating cash; how management split it reads as a cash returner, paying most of what it earns straight back to owners.

Reinvested$782M · 62%
Buybacks$1.6B · 126%

Returned to owners$1.6B
291% of the owner earnings the business produced over the span, $0 as dividends and $1.6B as buybacks.
Source of funding−$1.1B
Reinvestment and shareholder returns ran $1.1B beyond the operating cash the business generated, so the gap was financed off the balance sheet.
Average price paid for buybacks$44.03
Across the years where the filing reports a share count, 14M shares were bought for $600M, about $44.03 each.
Net change in share count194.5%
The diluted count rose from 38M to 112M: issuance (stock pay, deals) outran any buybacks, so owners were diluted on net.
Dividend record—
No dividend line was reported in the filing data over the span; the record here neither confirms nor rules out a payout.

Buybacks are gross of stock issued to staff; the share-count line above is the net of that, the figure that decides whether owners gained. The average price paid blends a year of purchases (and any accelerated repurchase), so it is close, not exact. The record of where the cash went and on what terms.

Acquisitions & goodwill

from the balance sheet & the 7-year cash-flow record

Goodwill grows only when a company acquires and falls only when it concedes it overpaid. The size of that bet, the cash put into buying rather than building, and how much has already been written off.

Goodwill & intangibles$448M24% of all assets; the premium carried on the balance sheet for businesses acquired

Against book equity—goodwill is this share of book equity; the rest is the company’s own retained and paid-in capital

Cash spent acquiring$412Mover 7 years buying other businesses, against $782M of capital spent building

None written down over the record; the goodwill is still carried at full cost. That is the deals holding their value on the books so far; whether they keep doing so is the test an owner watches, since the write-down, when it comes, is the admission the price was too high.

Goodwill, acquired intangibles and equity from the latest balance sheet; acquisition spend and write-downs summed across the 7-year record, from the company's own filings.

Management, ownership & pay

read the proxy →

From the proxy: how much of the business the people running it own, and how they are paid, beside what the business earned for its owners in the same years.

Fiscal year	Chief executive	Pay, as filed	“Actually paid”	Owner earnings
2021	Yancey Spruill	$82.5M	$293.3M	$36M
2022	Yancey Spruill	$797k	−$200.1M	$89M
2023	Yancey Spruill	$1.0M	$30.0M	$116M
2024	Padmanabhan Srinivasan	$28.2M	$23.3M	$153M
2024	Yancey Spruill	$508k	−$58.8M	$153M
2025	Padmanabhan Srinivasan	$1.2M	$7.5M	$181M

Both pay figures are the company’s own, from the pay-versus-performance table its proxy statement files. “As filed” is the Summary Compensation Table total: salary, bonus, and equity awards at their value on the day of grant. “Actually paid” is the SEC’s prescribed recalculation, which re-marks those equity awards to what they became as they vested; it can swing far above or below the filed figure in either direction, and negative years occur. Owner earnings are the whole business's, from the record above, for the same fiscal years.

Insider ownership<1%
The stake all directors and executive officers hold together, per the 2026 proxy: skin in the game, the first thing Munger reads.
Stock-based compensation$80M
The slice of the business handed to employees in shares this year, 9% of revenue, equal to 51% of operating profit. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. One trap: the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.

Inverting the record

Invert: instead of why DigitalOcean is a good business, the question is what would make owning it a mistake, and whether those marks are in the record. Disconfirming tests across 2019–2025.

2 of the 4 tests turned up something to look into; the other 2 came back clean.

Look hereDid the share count rise anyway?194.5%
Diluted shares grew 194.5% over 2019–2025, even as the company spent $1.6B on buybacks. The repurchases were outrun by issuance — to staff, in a raise, or in a deal — and the filing says which; owners' slice still shrank. Read the buyback line beside this one, not on its own.
Look hereAre "one-time" charges a yearly habit?7 of 7 years
Management took an impairment or write-down in 7 of the last 7 years, $5M in all. A charge taken almost every year is not one-time; it is the business — past deals coming due, and an admission the assets were worth less than what was paid. Munger's rule: when the "one-time" keeps happening, it is the business. Read it beside the goodwill the company still carries.

And these came back clean

Is it less profitable than it was?
Did reported profit become cash?

Each test is read from the filings and is noisy alone; a flag can mark a cyclical trough or a year of heavy investment as easily as a problem. The filing says which.

What an owner would ask, FY2025

read the 10-K →

Which reported numbers are a judgment call?
Management names Revenue recognition, Income taxes, Stock compensation as critical estimates
each rests partly on management's judgment; the filing's note sets out the assumptionsverify →

The questions the record and the charts do not answer on their own; each carries the figure and the place to look.

Peers, Software

The same industry, side by side on owner economics. Each figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.

Company	Revenue	Gross margin	Op. margin	ROIC	Owner earn. margin
TEMTempus AI Inc.	$1.3B	—	-59.8%	-210%	-37%
BMBLBumble Inc.	$966M	71%	-14.5%	-6%	—
EVTCEvertec Inc.	$932M	100%	26.5%	15%	33%
DOCNDigitalOcean	$901M	60%	-2.6%	-0%	15%
YOUClear Secure Inc.	$901M	—	-8.2%	52%	33%
DVDoubleVerify	$748M	83%	12.5%	7%	18%
MGNIMagnite Inc.	$714M	62%	-18.6%	-13%	18%
EVEREverQuote Inc.	$693M	94%	-3.7%	-34%	1%
Group median	—	77%	-6.0%	-3%	18%

The price

What a price has to assume.

What the price implies

reverse-DCF

Type today's close and see the owner-earnings growth you'd have to believe to justify it, beside what DigitalOcean has delivered.

DigitalOcean’s latest year runs above its own through-cycle margin — the reported figure may flatter a peak. So the tool opens on the through-cycle base, Graham’s averaging cutting both ways; clear the toggle below to read the latest year exactly as reported.

Today’s price $

Through the cycle, DigitalOcean earns about $139M on its 15.4% median owner-earnings margin. This year’s 20.0% margin runs above that; the reported figure may flatter a peak you'd be paying on. Normalize, below, values the price on that through-cycle figure rather than the latest year. It comes pre-checked here for that reason, the same rule that already normalizes a trough; clear it to price the year as filed.

Base Normalize · through-cycle ($139M) Net of stock comp (−$83M)

—

The assumptions Required return 9% Years of high growth 10 Terminal growth 2.5%

9.0% = the 4.55% 10-year Treasury (Jul 15, 2026) + 4.45 points of equity premium. The rate you require is yours to set.

Enter a price above to run it.

Implied by the price—

Owner-earnings growth · ’21→’25+28%/yr

Owner-earnings growth · since FY2021+50%/yr

Owner-earnings yield—

P/E (3-yr earnings ’23–’25)—

P/B—

Graham’s price gate—

Graham capped the multiple at 15×; Buffett and Munger let that rule go: a wonderful business can deserve 50× if the thesis holds. The gate marks the bargain-hunter's floor.

Against a high-grade bond: Graham’s yardstick bond yield%

Prefilled with the 10-year Treasury (4.55%, as of Jul 15, 2026). Edit it for today’s exact figure, or a AAA corporate yield.

Graham measured a stock against the bond you could own instead, the heart of his margin of safety. Enter a price above to weigh the owner-earnings yield against this bond.

Owner earnings $185M on 104M shares outstanding, per the 10-Q cover, as of 2026-04-30; net debt $178M. The if-converted diluted count is 112M, 7% above the shares outstanding: the dilution overhang (convertibles, options) a buyer inherits. The base opens on the through-cycle figure (the latest year sits above the record’s own median, and Graham’s averaging cuts both ways); clear Normalize to use the year as filed. Net of stock comp treats option pay as the expense it is. The dials set the multiple a growth belief justifies; the price, and every dollar on this page, is yours.

Weigh DOCN against another business →

Cite: Owner Scorecard, "DigitalOcean (DOCN), the owner's record," https://ownerscorecard.com/c/DOCN, data as of 2026-07-09.

Manual order: ← DOC its page in the Manual DOCS →

Industry order: ← DJTWW the Software chapter DOCU →