Digi International Reports $107.5 Million Revenue for Q2 2025, 2.2% Year-Over-Year Increase

Digi International Inc. reported a total revenue of $107.5 million for the three months ended June 30, 2025, reflecting a 2.2% increase from $105.2 million in the same period last year. For the nine months ending June 30, 2025, revenue decreased slightly to $315.9 million from $319.0 million in the prior year. The company's gross profit for the quarter was $68.3 million, a 9.7% increase compared to $62.3 million in the previous year, resulting in a gross profit margin of 63.5%, up from 59.2%. Net income for the quarter was $10.2 million, a 5.6% increase from $9.7 million in the same quarter of 2024, translating to a diluted earnings per share of $0.27, up from $0.26.

The company experienced notable changes in its revenue streams, particularly within its two segments: IoT Products & Services and IoT Solutions. Revenue from IoT Products & Services remained flat at $80.0 million, while IoT Solutions saw a 9.1% increase to $27.5 million. The overall decline in revenue for the nine-month period was attributed to a decrease in one-time sales, as customers reduced inventory levels accumulated during previous supply chain disruptions. However, recurring revenue growth in both segments helped mitigate some of the declines.

Digi International has also made strategic moves, including the establishment of a new credit agreement in December 2023, which provides a $250 million senior secured revolving credit facility. This facility is intended to support general corporate purposes and replace a previous credit agreement. The company reported a significant reduction in long-term debt, decreasing from $123.2 million in September 2024 to $40.1 million by June 2025, primarily due to repayments made under the new credit facility.

Operationally, Digi reported an increase in Annualized Recurring Revenue (ARR) to $126 million, a 12% rise from the previous year. This growth was driven by an increase in subscription-based services, particularly in the IoT Solutions segment. The company also noted a slight increase in operating expenses, which rose to $53.3 million for the quarter, primarily due to higher labor costs. Despite these increases, the company maintained a strong operating income of $14.9 million, reflecting a 15.6% increase year-over-year.

Looking ahead, Digi International anticipates continued challenges related to macroeconomic conditions, including longer sales cycles and potential impacts from global tariffs. The company remains focused on enhancing its service offerings and customer engagement to drive future growth. Management expressed optimism about the company's ability to generate positive cash flows and sustain operations through its current liquidity position and credit facilities.