DigitalOcean Holdings, Inc.DOCN

DigitalOcean Holdings, Inc. Fair Value Disclosure

10-KFiled Feb 24, 20261 min read
Fair Value Measurements
The fair value of the Company’s financial assets measured on a recurring basis was as follows:
December 31, 2025
Level ITotal
Cash and cash equivalents:
Cash$57,363 $57,363 
Money market funds197,112 197,112 
Total Cash and cash equivalents$254,475 $254,475 
December 31, 2024
Level ITotal
Cash and cash equivalents:
Cash$79,378 $79,378 
Money market funds349,068 349,068 
Total Cash and cash equivalents$428,446 $428,446 
The Company classifies its highly liquid money market funds within Level 1 of the fair value hierarchy because they are valued based on quoted market prices in active markets. The Company had no Level 2 or Level 3 financial assets as of December 31, 2025 and 2024.
Interest income from investments was $11,310, $19,875 and $23,767 for the years ended December 31, 2025, 2024 and 2023, respectively.
Financial Instruments Not Recorded at Fair Value on a Recurring Basis
The Company reports financial instruments at fair value, with the exception of its convertible notes and Term Loan A (as defined in Note 7. Debt). The amortized cost of Term Loan A approximates fair value as of December 31, 2025.
Financial instruments that are not recorded at fair value on a recurring basis are measured at fair value on a quarterly basis for disclosure purposes. Refer to Note 7. Debt for the carrying values and estimated fair values of financial instruments not recorded at fair value.
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Historical Timeline

Fiscal YearFiled
2025Feb 24, 2026Showing above
2024Feb 25, 2025
2023Feb 21, 2024
2022Feb 22, 2023
2021Feb 25, 2022

About Fair Value Disclosures

Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.

Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.

Other Available Disclosures

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