Digi International Reports 29% Revenue Growth to $138.7 Million in Latest Quarter

Digi International Inc. reported significant financial growth in its latest quarterly results, with total revenue reaching $138.7 million for the three months ended June 30, 2026, a 29% increase from $107.5 million in the same period last year. The company's net income also saw a substantial rise, climbing 54% to $15.7 million, or $0.40 per diluted share, compared to $10.2 million, or $0.27 per diluted share, in the prior year. For the nine months ending June 30, 2026, total revenue was $391.9 million, up 24% from $315.9 million, while net income increased by 25.7% to $38.8 million.

The growth in revenue was driven by strong performance in both of Digi's segments: IoT Products & Services and IoT Solutions. The IoT Products & Services segment generated $99.8 million in revenue, a 24.7% increase year-over-year, while the IoT Solutions segment reported a 41.5% increase, bringing in $38.9 million. The company attributed much of this growth to organic demand and the recent acquisitions of Jolt Software and Particle Industries, which contributed to increased recurring revenue streams.

Digi's operational metrics also reflected positive trends, with Annualized Recurring Revenue (ARR) reaching $191 million, a 52% increase from the previous year. The company reported a gross profit margin of 64.8%, up 130 basis points from the prior year, primarily due to reduced inventory-related costs. Operating income for the quarter was $22.9 million, representing a 53.4% increase compared to the same period last year, driven by improved operational efficiencies and revenue growth outpacing operating expenses.

In terms of strategic developments, Digi completed the acquisition of Particle Industries in January 2026 for approximately $50.4 million, following the acquisition of Jolt Software in August 2025 for $148.5 million. These acquisitions are expected to enhance Digi's IoT product offerings and expand its market presence. The company also reported an increase in its employee headcount, reflecting its growth strategy and the integration of new acquisitions.

Looking ahead, Digi International remains optimistic about its growth trajectory, with management emphasizing the long-term expansion of the Industrial IoT market. The company plans to continue focusing on increasing its ARR and improving operational efficiencies while monitoring macroeconomic conditions that could impact its business. Digi's management expressed confidence in its ability to generate positive cash flows and maintain sufficient liquidity to support ongoing operations and future acquisitions.