v3.26.1
Debt
 3 Months Ended
Mar. 31, 2026
Debt Disclosure [Abstract]  
Debt Debt
Debt, Long-term
The net carrying amount of the Company’s debt consisted of the following:
Outstanding as of
March 31, 2026December 31, 2025
2030 Convertible Notes $625,000 $625,000 
2026 Convertible Notes312,322 312,322 
Term Loan Facility— 380,000 
Total obligations937,322 1,317,322 
Unamortized debt issuance costs(17,600)(21,560)
Carrying value of debt 919,722 1,295,762 
Less: Debt, current (311,256)(325,109)
Debt, long-term$608,466 $970,653 
As of March 31, 2026, the total fair value of the 2030 Convertible Notes was $1,436,806, and the fair value of the 2026 Convertible Notes was $305,963. The fair value was determined based on the closing trading price as of the last day of trading for the period. The Company classifies the fair value to be a Level 2 valuation within the fair value measurement hierarchy due to the limited trading activity.
2030 Convertible Notes
On August 14, 2025, the Company issued $625,000 aggregate principal amount of 0.00% Convertible Senior Notes due 2030 (“2030 Convertible Notes”) in a private offering, including the exercise in full of the option granted to the initial purchasers to purchase an additional $75,000 principal amount of the 2030 Convertible Notes. The 2030 Convertible Notes are senior unsecured obligations of the Company and do not bear regular interest, and the principal amount of the 2030 Convertible Notes does not accrete. The 2030 Convertible Notes will mature on August 15, 2030, unless earlier converted, redeemed or repurchased.
The following table presents details of the 2030 Convertible Notes:
Initial Conversion Rate per $1,000 PrincipalInitial Conversion Price
(In whole $)		Initial Number of Shares
 (In thousands)
2030 Convertible Notes25.5317$39.17 15,957
Holders may convert the 2030 Convertible Notes at their option only in the following circumstances:
(1) during any calendar quarter (and only during such calendar quarter) commencing after the calendar quarter ending on December 31, 2025, if the last reported sale price per share of the Company’s common stock exceeds 130% of the conversion price for each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter;
(2) during the five consecutive business days immediately after any 10 consecutive trading day period (such 10 consecutive trading day period, the “measurement period”) if the trading price per $1,000 principal amount of 2030 Convertible Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price per share of the Company’s common stock on such trading day and the conversion rate on such trading day;
(3) if the Company calls the 2030 Convertible Notes for redemption; and
(4) upon the occurrence of certain corporate events or distributions of the Company’s common stock, as described in the indenture governing the 2030 Convertible Notes.
During the three months ended March 31, 2026, the circumstances allowing holders to convert the 2030 Convertible Notes were met since the Company’s last reported sale price per share of the Company’s common stock exceeded 130% of the conversion price of $39.17 for each of at least 20 trading days, whether or not consecutive, during
the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter. Therefore the 2030 Convertible Notes are currently convertible, in whole or in part, at the option of the holders between April 1, 2026 through June 30, 2026. Whether the 2030 Convertible Notes will be convertible following such period will depend on the continued satisfaction of this condition or another conversion condition in the future.
The Company has the election of settling any conversion of the 2030 Convertible Notes in cash, shares of our common stock, or a combination of both. The Company continues to classify the 2030 Convertible Notes as a long-term liability in its condensed consolidated balance sheets as of March 31, 2026 because the Company has the option to settle the 2030 Convertible Notes in shares and the maturity date exceeds one year from the balance sheet date.
2030 Capped Calls
In connection with the pricing and exercise in full by the initial purchasers of their option to purchase additional 2030 Convertible Notes, the Company entered into capped call transactions with one or more financial institutions, including an affiliate of an initial purchaser (“2030 Capped Calls”). The 2030 Capped Calls have an initial strike price of $39.17 per share, which corresponds to the initial conversion price of the 2030 Convertible Notes. The 2030 Capped Calls have an initial cap price of $66.51 per share. The 2030 Capped Calls are generally expected to reduce the potential dilution to the Company’s common stock upon any conversion of the 2030 Convertible Notes and/or offset any cash payments the Company is required to make in excess of the principal amount of converted 2030 Convertible Notes, with such reduction and/or offset subject to the cap price. The strike price, cap price and other terms of the 2030 Capped Calls are subject to certain adjustments under the terms of the capped call transactions. As of March 31, 2026, all of the 2030 Capped Calls remain outstanding.
2025 Credit Facility
On May 5, 2025, the Company entered into a credit agreement (the “Credit Agreement”) by and among the Company, its wholly owned subsidiary, DigitalOcean, LLC, as borrower (the “Borrower”), with Morgan Stanley Senior Funding, Inc., as administrative agent for a $500,000 senior secured delayed draw term loan facility (“Term Loan Facility”, and any loans thereunder “Term Loans”) and a $300,000 senior secured revolving credit facility (“Revolving Facility”, and any loans thereunder “Revolving Loans”) which includes a $30,000 sublimit for the issuance of letters of credit (collectively the “2025 Credit Facility”). The Term Loan Facility and Revolving Facility mature on May 5, 2030, and are subject to a springing maturity date in the event certain conditions occur as described in the Credit Agreement. Revolving Loans may be borrowed, repaid and reborrowed, until their maturity date. Term Loans may be borrowed between May 5, 2025 and February 5, 2026 and once borrowed and repaid, cannot be reborrowed.
On February 3, 2026, the Company drew down the remaining $120,000 available principal under its Term Loan Facility resulting in a total outstanding principal amount of $500,000. On March 27, 2026, the Company repaid the $500,000 outstanding principal of its Term Loan Facility in cash from the proceeds of its follow-on offering (see Note 9. Stockholders’ Equity ) and wrote-off $2,700 of related unamortized issuance costs. The repayment was accounted as an extinguishment, resulting in a loss on extinguishment of debt of $2,700 recorded in other (expense) income, net on the Company’s condensed consolidated statements of operations during the three months ended March 31, 2026.
The Credit Agreement includes customary representations, warranties, and affirmative and negative covenants, including financial covenants that require the Company to maintain certain levels of total net leverage ratio and interest coverage ratio. As of March 31, 2026, the Company was in compliance with all covenants under the 2025 Credit Facility. As of March 31, 2026, the Company has not made drawdowns on the Revolving Facility.
On May 4, 2026, the Company entered into an amendment to its Credit Agreement (the "First Amendment"). The First Amendment amends the Credit Agreement to, among other modifications, (i) provide for a $112,500 increase in the Revolving Facility thereunder, (ii) provide for a $50,000 increase in the letter of credit sublimit thereunder and (iii) amend the definition of “Indebtedness” therein to provide that capitalized leases shall be deemed to be an amount equal to 25% of the capitalized amount thereof.
2026 Convertible Notes
In November 2021, the Company issued $1,500,000 aggregate principal amount of convertible notes (“2026 Convertible Notes”) in a private offering, including the exercise in full of the over-allotment option granted to the initial purchasers of $200,000. The 2026 Convertible Notes are senior unsecured obligations of the Company and do not bear interest, and the principal amount of the 2026 Convertible Notes does not accrete.
On August 14, 2025, the Company repurchased approximately $1,187,678 aggregate principal amount of the 2026 Convertible Notes. The outstanding principal of $312,322 of the 2026 Convertible Notes will mature on December 1, 2026 unless earlier converted, redeemed, or repurchased. Upon conversion of the 2026 Convertible Notes, the Company will pay or deliver, as the case may be, cash, shares of common stock or a combination of cash and shares of common stock, at the Company’s election.
During the three months ended March 31, 2026, none of the circumstances allowing holders to convert the 2026 Convertible Notes were met.
Issuance Costs
Issuance costs are amortized to interest expense over the contractual term of the respective borrowing. Contractual interest expense consists of commitment fees and cash interest expense under the Company’s credit facilities. Interest expense related to the Company’s convertible notes and credit facilities consisted of the following:
Three Months Ended
March 31,
20262025
Contractual interest expense$5,688 $126 
Amortization of debt issuance costs1,527 2,003