CapitalUnited States
DigitalOcean sets up a $1bn share sale as its lease bill grows
DigitalOcean can now sell up to $1bn of new shares into the market over time through eight banks, including Goldman Sachs, J.P. Morgan and Morgan Stanley, under a prospectus supplement filed on Nov. 3. At the Nov. 2 closing price of $89.79, the full program would mean about 11.1m new shares, roughly 9.4%* of the stock outstanding at Sept. 30.
The company, which now calls itself an AI-native cloud built for inference and agent workloads, named no specific use for the money beyond general corporate purposes, including operations, growth initiatives and possible acquisitions. The banks can earn up to 2% of gross proceeds.
The supplement came out the same morning as third-quarter results and the 10-Q, and the 10-Q shows why a standing source of equity is useful. DigitalOcean is paying for more of its expansion with leases. Equipment held under finance leases rose to $758.9m at Sept. 30 from $13.3m at the end of 2025, and finance-lease and equipment-financing liabilities reached $923.6m*, up from $130.5m*.
More is lined up. On Sept. 10 DigitalOcean signed an equipment lease facility with MUFG's leasing arm, still undrawn at Sept. 30. It funds up to 90% of the cost of data-center equipment, with DigitalOcean paying the rest as prepaid rent. Commitments started at $725m and rose to $785m on Oct. 6, when the company used part of a $300m expansion option. Each drawing carries a fixed rate set at the time, 2.75 percentage points over a swap benchmark, and is paid off in full by Sept. 10, 2030.
DigitalOcean swapped debt for leases this year
Balance-sheet obligations, $m, end-2025 against Sept. 30, 2026
$m
Convertible notes and term loan
Dec. 31, 20251,317.3Sept. 30, 2026465.5Finance leases and equipment financing
Dec. 31, 2025130.5Sept. 30, 2026923.6Operating leases
Dec. 31, 2025274.9Sept. 30, 2026666.6
View chart data
| Obligation | Dec. 31, 2025 | Sept. 30, 2026 |
|---|---|---|
| Convertible notes and term loan | 1,317.3 | 465.5 |
| Finance leases and equipment financing | 130.5 | 923.6 |
| Operating leases | 274.9 | 666.6 |
The buildings come on longer terms. At Sept. 30, DigitalOcean had $2.96bn of signed data-center leases, mostly colocation space, that had not yet started. They begin between November 2026 and June 2028 and run 11.1 years on a weighted average. The company says it has about 180MW of committed capacity, including 20MW added for 2028.
That is a mismatch in timing. Equipment drawn on the MUFG facility must be paid off by September 2030, while the space that houses them is leased for more than a decade. Equity fills the gap without adding fixed payments, and DigitalOcean has leaned on it all year. It raised $887.9m net in a follow-on share sale, paid off its term loan and cut its 2030 convertible notes to $153.2m from $625.0m, funding the buyback with a concurrent share sale.
What debt remains is small and close. $312.3m of convertible notes fall due on Dec. 1, 2026. Cash stood at $666.1m at Sept. 30, plus $178.6m of marketable securities.
Demand is what the leases are betting on. Third-quarter revenue rose 40% to $321m, and remaining performance obligations reached $800m, against $61m a year earlier. The share program gives DigitalOcean a way to fund its part of that build-out with equity rather than more borrowing.
* Rackline estimate, calculated from DigitalOcean's Nov. 3, 2026 prospectus supplement and 10-Q: 11,137,097 shares over 117,920,731 outstanding at Sept. 30; liabilities sum current and long-term finance-lease and equipment-financing balances.