DigitalOcean mortgaged its GPUs for $725 million, and the bill runs to 2030

The debt is secured by the machines it buys

On 10 September 2026, CFO Matt Steinfort signed the paperwork behind the expansion: a $725 million equipment finance facility structured as a master lease↗, with MUFG Bank as administrative and collateral agent and Axos, BMO and Wells Fargo as joint lead arrangers ¹². Milbank, the deal's counsel, announced its role this week, which is why the structure is on the tape now ⁷.

Advances run until 10 September 2027 and fund up to 90% of what the 8-K defines only as "data center equipment" ¹. The company's own release↗ is more specific: the money buys "GPU, CPU, and other required equipment" ²¹⁰. Rent amortizes each advance in full by 10 September 2030 at a term SOFR swap rate plus 2.75%, and an accordion can lift the total to $1.025 billion, which the company intends to exercise ¹¹¹.

The banks hold a lien on the silicon; shareholders hold the lease payments.

The demand is contracted, not hoped for

The pivot is not a slide deck. Second-quarter revenue ran $281.2 million, up 28.6%↗, and remaining performance obligations reached $894 million from $71 million a year earlier ³⁴.

AI customer ARR grew 212% to $234 million, inference services grew 762%, and contract life stretched from 1.6 years to more than three as the first nine-figure commitments landed ³. For the platform's 680,000 customers, the same paper is capacity insurance for 2027 and 2028 ².

Growth is eating the GAAP line

Operating income fell 17.5% to $29.4 million in the quarter, with margin down to 10% from 16% ³. The filings show the shape underneath: revenue up eight straight quarters, operating income peaked in Q3 2025 and has slid three quarters since ⁹.

Gross margin slipped to 55.0% from 59.9%, and adjusted free cash flow margin narrowed to 22% from 26% ³. Concentration compounds it: customers spending $1 million or more now supply $259 million of ARR, 23% of the total, up 214% ³⁴.

The believers have their case

Steinfort's framing is "from a position of strength, with low leverage" ². Adjusted EBITDA margin held at 40%, third-quarter guidance sits at $304 million to $307 million, and management reiterated more than 50% revenue growth for 2027 ³. Stifel's Brad Reback reiterated Buy on 21 September↗ ⁶.

Hedge fund holders rose from 47 to 53 funds, against 8.74% of the float sold short ⁴. The tape argued with itself: down 15.7% in the month after the August report ³, then up 7.45% on the day the facility landed↗, by one tally ⁵.

Watch the accordion, not the press release

The extra $300 million needs fresh lender commitments ¹. The commitment fee on undrawn money steps from 0.20% to 0.40% six months after closing, and prepaying carries a 5% premium in the first year ¹. Insiders keep filing ownership changes monthly↗, five on 3 September alone ⁸. If demand cools before 2030, the lenders keep first claim on the machines, and the payments fall to everyone else.