DigitalOcean's debt fell. Its equipment leases and financing rose sevenfold.

DigitalOcean's growth is accelerating faster than it expected. The cloud-computing company now forecasts revenue growth of at least 60% in 2027, up from more than 50% in August. It has also opened a new program to sell as much as $1 billion of stock.

The changing funding mix helps explain how it can report much less debt while building more computing capacity. Share sales have paid off borrowings, while equipment financing and finance leases have expanded rapidly. Cash and marketable securities have also grown, giving it more room to invest.

Research by Ticker Byline shows that debt, finance leases and equipment financing together totaled about $1.39 billion at September 30, only $41 million below year-end. The debt line alone fell $834 million, but obligations for financed and leased equipment rose to $924 million from $131 million, roughly seven times their earlier level.

That comparison adds the two recorded balances before subtracting cash. It excludes operating leases and financing that has not been drawn.

The sales beat is real

Q3 revenue reached $321.2 million, up 40% from a year earlier and above August's $304 million to $307 million forecast. DigitalOcean now expects Q4 revenue to grow 44% to 45%, compared with an earlier expectation of at least 35%.

Chief Executive Officer Paddy Srinivasan says larger customers are adopting more of its platform. The company supplies cloud infrastructure and services used to run applications, including AI workloads.

Operating cash flow rose 68% to $161.2 million. Cash and marketable securities reached $844.7 million, compared with $254.5 million at year-end. The larger equipment commitments therefore sit alongside a substantially stronger cash position.

What the cash-flow number leaves outside

DigitalOcean reported $130.2 million of adjusted free cash flow for Q3. That subtracts cash spending on equipment and software from operating cash flow. It does not deduct repayments of equipment financing or finance-lease principal, which appear separately in financing cash flows.

New equipment leases also let it add servers without paying the full purchase price immediately. They create future payments rather than an equivalent cash outflow in the quarter the equipment arrives.

A separate equipment lease facility, expanded to $785 million in October, gives DigitalOcean another source of funding. The facility was undrawn at September 30.

Shareholders are part of the funding plan

In March, DigitalOcean repaid a $500 million term loan using proceeds from a stock offering. In July, another offering helped retire $471.8 million of convertible-note principal. Buying back those notes cost about $1.47 billion because their value reflected the right to convert into shares.

Shares outstanding rose to 117.9 million at September 30 from 91.9 million at year-end. The new November stock-sale program creates additional capacity to raise cash over time; DigitalOcean has not committed to sell the full $1 billion.

The buildout is already affecting profit. GAAP operating income fell to $33 million from $44.9 million despite higher sales, as infrastructure and other costs increased. Adjusted operating income, which removes stock compensation and acquired-intangible amortization, rose to $74.1 million from $69.6 million.

The next test is whether the additional capacity turns into the faster sales DigitalOcean now expects, with enough profit and cash to carry its growing equipment payments. The DigitalOcean company profile tracks the forecasts, financing and comparable results.