Digi International (DGII) investor relations material

Executive summary

• Achieved record quarterly revenue of $131 million, up 25% year-over-year, with full-quarter contributions from Jolt and Particle acquisitions.

• Annualized recurring revenue (ARR) reached $184 million, up 50% year-over-year, reflecting strong growth in subscription-based services.

• Adjusted EBITDA was $34 million, up 32% year-over-year, with a record 26.3% margin.

• Net income rose 8% to $11 million; adjusted net income increased 33% to $24 million.

• Growth driven by both organic performance and successful integration of Jolt and Particle acquisitions.

Financial highlights

• Gross profit margin improved by 190 basis points to 64.0%.

• Operating margin remained steady at 13.1%.

• Cash flow from operations was $41 million for the quarter, up 58% year-over-year, and $77 million year-to-date.

• Adjusted net income per diluted share was $0.62, up 29% year-over-year.

• Cash and cash equivalents at quarter end were $32 million; outstanding debt was $143 million.

Outlook and guidance

• Fiscal 2026 guidance raised: ARR growth of 25%, revenue growth of 20-22%, and adjusted EBITDA growth of 23-26% over fiscal 2025.

• Targeting $200 million in both ARR and adjusted EBITDA within the planned time horizon.

• Third fiscal quarter revenue expected between $130 million and $134 million; adjusted EBITDA between $35.5 million and $37 million.

• Sequential Q4 guidance reflects potential margin variability due to product mix and memory pricing.

• Management anticipates ongoing expansion in the Industrial IoT market and higher operating margins as recurring revenue increases.