DigitalOcean Holdings Inc

DigitalOcean is a cloud infrastructure provider focused on serving developers, startups, and small-to-medium-sized businesses. The company offers a simple and cost-effective platform for deploying, managing, and scaling applications in the cloud. Shares outperformed during the quarter as investors responded favorably to company execution, improving growth expectations, and increasing confidence in the company’s ability to benefit from the broader demand for cloud infrastructure and AI-related workloads.

DigitalOcean is a cloud infrastructure provider that offers scalable computing, storage, and networking solutions tailored to startups, small and mid-sized businesses, and individual developers. The company has differentiated itself by delivering a simplified, developer-friendly platform that lowers the barrier to cloud adoption for customers who may be underserved by the larger hyperscale providers. During the quarter, shares contributed positively to performance after the company delivered a strong fiscal fourth-quarter report that exceeded expectations on both revenue and profitability. Net new annual recurring revenue reached a record level, net revenue retention accelerated, and the company’s largest customers emerged as an increasingly meaningful growth driver — reinforcing a business that we believe is steadily moving up the quality curve.

DigitalOcean provides cloud computing infrastructure to developers and small businesses. DigitalOcean’s new CEO has increased investment in its service offering, which should enable the company to grow its share of wallet and reduce churn in the customer base. As use cases for AI develop, we expect more developers will use DigitalOcean’s services to build their businesses in a more cost-effective manner, driving increasing earnings for years to come.

DigitalOcean Inc. (DOCN) 0% convertibles were among the top contributors to the Portfolio, which saw a basis improvement as the company continued to progress towards refinancing.