DigitalOcean repurchased approximately $472 million of its 0.00% convertible senior notes due in 2030. It funded the buyback with a concurrent registered direct offering. This offering involved about 12.5 million shares of its common stock to the noteholders.
DigitalOcean structured the deal to reduce leverage. The transaction required minimal cash use. It resulted in no effective dilution to its share count.
To offset shares issued as a premium to noteholders, DigitalOcean plans to use its existing buyback program. The company intends this move to increase financial flexibility and support expansion. This expansion addresses growing customer demand for its AI cloud services.