.jpg)
DigitalOcean Holdings, Inc., a leading cloud computing platform, has finalized a $625 million convertible senior notes offering, including an additional $75 million exercised by initial purchasers. This strategic financial move strengthens the company’s balance sheet and supports its growth objectives while addressing its 2026 notes maturity.
DigitalOcean closes $625M convertible senior notes offering due 2030.
Includes full $75M option exercised by initial purchasers.
Net proceeds of $605.6M to fund capped call transactions and debt repurchase.
$1,131.3M used to repurchase $1,187.7M of 2026 convertible notes.
New $100M stock repurchase program authorized through July 31, 2027.
Strengthens financial flexibility for cloud computing growth strategy.
DigitalOcean’s $625 million convertible senior notes offering, maturing on August 15, 2030, marks a pivotal step in its financial strategy. The offering, which includes the full exercise of a $75 million option by initial purchasers, generated approximately $605.6 million in net proceeds after expenses. These funds are earmarked to address the company’s existing 0.00% convertible senior notes due 2026, with $1,131.3 million allocated to repurchase $1,187.7 million of the 2026 notes.
In connection with the notes offering, DigitalOcean entered into capped call transactions costing $83.9 million. These transactions, negotiated with financial institutions, aim to reduce potential dilution to shareholders upon conversion of the notes. This proactive measure enhances the company’s ability to manage its capital structure efficiently.
DigitalOcean also announced a $100 million stock repurchase program, authorized through July 31, 2027. This initiative complements the company’s efforts to mitigate future dilution and reflects confidence in its long-term growth prospects. The program will allow DigitalOcean to repurchase its common stock strategically over the next two years.
“We are pleased to have successfully raised $625 million in convertible notes - marking a major milestone as we have completed our objective of securing the financing to retire our 2026 convertible notes through a balanced combination of our existing term loan, the recently completed convertible notes, and our cash on hand,” said Matt Steinfort, Chief Financial Officer, DigitalOcean. “Having delivered on our commitment to address the 2026 maturity in 2025, we also received board approval to continue our regular share repurchase program with a new $100 million share repurchase authorization through July 31, 2027, which we intend to utilize to mitigate future dilution. These achievements create a strong balance sheet, with low cash interest expense, and protection against future dilution, giving the company tremendous flexibility as we work to deliver on our growth strategy.”
The successful notes offering, combined with available borrowings under DigitalOcean’s term loan facility and anticipated free cash flow, exceeds the outstanding principal of the 2026 notes. This financial restructuring provides DigitalOcean with enhanced flexibility to pursue its cloud computing growth strategy, supporting businesses worldwide with scalable infrastructure solutions.
DigitalOcean is the simplest scalable cloud platform that democratizes cloud and AI for digital native enterprises around the world. Our mission is to simplify cloud and AI so builders can spend more time creating software that changes the world. More than 600,000 customers trust DigitalOcean to deliver the cloud, AI, and ML infrastructure they need to build and scale their organizations.
TechIntelPro empowers B2B technology decision-makers with the latest industry trends, deep insights, leadership perspectives and actionable intelligence to drive both organizational and professional milestones—and thrive on the tech pulse.