DigitalOcean Holdings Inc reported a private repurchase of approximately $472 million of its 0.00% convertible senior notes due 2030, paired with a registered direct offering of common stock that was directed to holders of the convertible notes taking part in the buyback. Following the disclosure, the company's shares fell 2.2% on Friday.
Under the terms of the transaction, DigitalOcean issued roughly 12.5 million shares of common stock at $117.54 per share via the registered direct offering. The company states it used the net proceeds from that offering to finance the repurchase of the convertible notes, while cash on hand was allocated to pay transaction-related fees.
The $117.54 per-share price matched the volume-weighted average price of DigitalOcean's common shares on July 15, 2026, according to the company. DigitalOcean said 96% of the shares issued in the offering were associated with retiring the 2030 convertible notes, and the remaining 4% were tied to the premium paid to note holders participating in the repurchase.
To counteract dilution created by the premium component, DigitalOcean plans to opportunistically repurchase approximately 500,000 shares. After completing the buyback, about $153 million of the 2030 convertible notes remain outstanding.
"Retiring a substantial portion of our 2030 Convertibles Notes strengthened our balance sheet and freed capacity to fund our expansion while maintaining reasonable leverage," said Matt Steinfort, Chief Financial Officer of DigitalOcean. "In addition, we accomplished this with no dilution and minimal use of cash, which is further evidence of our disciplined execution."
Steinfort also noted the company continues to see demand for its AI Native Cloud that outstrips available capacity, and he indicated the transaction gives DigitalOcean additional flexibility to invest in meeting customer needs for inference and agentic workloads.
J. Wood Capital Advisors LLC served as financial advisor for the registered direct offering.
Contextual details: The company executed a private repurchase of $472 million in convertible notes due 2030 and simultaneously sold common stock through a registered direct offering to participating note holders. Net proceeds funded the repurchase; cash covered fees. The offering price equaled the VWAP on July 15, 2026. Roughly $153 million of the 2030 notes remain after the transaction. The company intends to repurchase about 500,000 shares to offset premium-related dilution.