BROOMFIELD, Colo., July 15, 2026--(BUSINESS WIRE)--DigitalOcean Holdings, Inc. (NYSE: DOCN), the AI-Native Cloud, purpose-built for inference and agentic workloads, today announced a cash repurchase (the "Repurchase") of a majority of its 0.00% convertible senior notes due 2030 (the "2030 Convertible Notes") and its intention to offer, subject to market and other conditions, shares of its common stock to holders of 2030 Convertible Notes participating in the Repurchase in a direct placement registered under the Securities Act of 1933, as amended (the "Registered Direct Offering").
Key Elements of the Transactions
DigitalOcean intends to repurchase up to $500.0 million of the 2030 Convertible Notes in privately negotiated transactions.
The repurchases will be funded by the Registered Direct Offering of DigitalOcean's common stock.
The transaction is expected to reduce net leverage with minimal change in cash or shares outstanding.
Repurchased notes will be retired, and shares issued in the Registered Direct Offering are expected to be largely offset by shares underlying the repurchased notes.
The Company intends to use its existing share repurchase authorization to repurchase any incremental shares issued as part of this transaction to eliminate any dilution.
The transaction creates capacity to support expansion of DigitalOcean's AI-Native Cloud.
Repurchase of 2030 Convertible Notes
DigitalOcean intends to use the net proceeds from the Registered Direct Offering to enter into one or more separate, privately negotiated transactions with a limited number of holders of the 2030 Convertible Notes to repurchase up to $500.0 million principal amount of the 2030 Convertible Notes for cash. The Company will use cash on hand to pay expenses related to the transactions. The repurchase price will be determined based on a volume-weighted average price of DigitalOcean's common stock following the signing of the applicable note purchase agreement with each participating noteholder measured over the next trading day, which is expected to be July 15, 2026. The Repurchase will be subject to closing conditions that may not be satisfied. No assurance can be given as to how many, if any, of the 2030 Convertible Notes will be repurchased or the terms on which they will be repurchased. The transactions are expected to close on July 23, 2026, subject to customary closing conditions.
In connection with the Repurchase, certain holders of the 2030 Convertible Notes that participate in the Repurchase may purchase or sell shares of DigitalOcean's common stock in the open market or enter into or unwind various derivative transactions with respect to DigitalOcean's common stock to unwind any hedge positions they may have with respect to the 2030 Convertible Notes or to hedge or unwind their exposure in connection with the Repurchase.