DigitalOcean Holdings, Inc.DOCN

DigitalOcean Holdings, Inc. Leases Disclosure

10-KFiled Feb 24, 20262 min read
Operating Leases
The Company leases co-location space at data center facilities and, to a lesser extent, corporate offices, all of which are classified as operating leases. The operating leases generally have initial lease terms ranging from three to ten years, which includes any option to renew or terminate the lease when it is reasonably certain that the option will be exercised.
The components of operating lease expense were as follows:
December 31,
202520242023
Operating lease expense$116,713 $89,831 $80,639 
Variable lease expense10,365 8,653 11,317 
Short-term lease expense335 37 418 
Total operating lease expense
$127,413 $98,521 $92,374 
Weighted-average remaining lease term and discount rate were as follows:
December 31,
20252024
Weighted-average remaining lease term (in years)3.43.8
Weighted-average discount rate6%6%
For the year ended December 31, 2025, the Company recognized $838 in sublease income for operating leases. For the years ended December 31, 2024 and 2023, the Company recognized $1,677 in sublease income for operating leases. Sublease income is recorded as a reduction to general and administrative expenses in the consolidated statements of operations.
Maturities of operating lease liabilities as of December 31, 2025 were as follows:
2026$119,171 
202785,241 
202835,318 
202925,004 
203020,154 
Thereafter17,538 
Total undiscounted operating lease liabilities
302,426
Less: Imputed interest(27,494)
Total present value of operating lease liabilities
274,932
Less: Current portion of operating lease liabilities
(108,037)
Operating lease liabilities, long-term
$166,895 
As of December 31, 2025, the Company had $599,408 of estimated undiscounted fixed payment obligations primarily for leases of co-location space at data center facilities that have not yet commenced and were not included in the consolidated balance sheets. These leases are scheduled to commence between January 2026 and April 2026, and have a weighted-average lease term of 9.6 years.
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Historical Timeline

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

About Leases Disclosures

Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.

Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.

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