Digi International Reports 25.1% Revenue Growth to $130.7 Million in Latest Quarter

Digi International Inc. reported significant financial growth in its latest quarterly results, with total revenue reaching $130.7 million for the three months ended March 31, 2026, a 25.1% increase from $104.5 million in the same period last year. The company's net income also rose to $11.3 million, up 7.7% from $10.5 million year-over-year. For the first half of fiscal 2026, Digi's revenue totaled $253.2 million, a 21.5% increase compared to $208.4 million in the prior year, while net income for the same period increased by 11.8% to $23 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 $93.6 million in revenue, a 20.4% increase from the previous year, while the IoT Solutions segment saw a 38.9% increase, bringing in $37.1 million. The company attributed this growth to increased customer demand, particularly in recurring revenue streams, and contributions from recent acquisitions, including Jolt Software and Particle Industries.

Digi's operational metrics also showed positive trends, with Annualized Recurring Revenue (ARR) reaching $184 million, a 50% increase from the previous year. The company reported a gross profit margin of 64.0%, up 190 basis points from the prior year, reflecting lower manufacturing costs and a higher proportion of recurring revenue. However, operating expenses increased by 30.1% to $66.6 million, primarily due to higher labor costs and amortization expenses related to acquisitions.

In terms of strategic developments, Digi completed the acquisition of Jolt Software in August 2025 for approximately $148.5 million and acquired Particle Industries in January 2026 for about $50.4 million. These acquisitions are expected to enhance Digi's IoT product offerings and service capabilities. The company also reported a cash balance of $31.7 million as of March 31, 2026, up from $21.9 million at the end of the previous fiscal year, indicating improved liquidity.

Looking ahead, Digi International remains optimistic about its growth trajectory, driven by the expanding market for industrial IoT products and services. The company plans to continue focusing on increasing its ARR and operational efficiency while navigating potential macroeconomic challenges, including inflationary pressures and geopolitical tensions that could impact supply chains.