Digi International Reports 18% Revenue Growth to $122.5 Million in Q1 Fiscal 2026

Digi International Inc. reported a significant increase in its financial performance for the first quarter of fiscal 2026, ending December 31, 2025. The company achieved total revenue of $122.5 million, marking an 18% increase from $103.9 million in the same period last year. This growth was driven by a 12% rise in revenue from its IoT Products & Services segment, which generated $86.4 million, and a substantial 38.6% increase in its IoT Solutions segment, which brought in $36.1 million. The company's net income also rose to $11.7 million, a 16% increase compared to $10.1 million in the prior year, resulting in a net income per diluted share of $0.31, up from $0.27.

The financial results reflect several strategic developments, including the acquisition of Jolt in August 2025, which contributed to the growth in the IoT Solutions segment. The acquisition was valued at approximately $148.5 million, and adjustments made in the first quarter resulted in a reduction of goodwill to $49.3 million. Additionally, Digi's Annualized Recurring Revenue (ARR) reached $157 million, a 31% increase year-over-year, indicating strong growth in subscription-based services. The company also reported a gross profit margin of 62.4%, up 40 basis points from the previous year, attributed to a favorable product mix and increased recurring revenue.

Operationally, Digi International saw an increase in its customer base and engagement metrics. The company reported a total of 44.2 million shares outstanding as of December 31, 2025, with a weighted average of 38.2 million diluted shares. The company’s cash and cash equivalents rose to $30.9 million from $21.9 million at the end of the previous quarter, reflecting improved liquidity. However, accounts receivable decreased to $59.7 million from $63.5 million, indicating a potential tightening in credit terms or improved collection efforts.

Looking ahead, Digi International remains optimistic about its growth trajectory, emphasizing the long-term expansion of the Industrial IoT market. The company plans to continue focusing on increasing its ARR and improving operational efficiencies. However, it also acknowledges potential risks, including global economic conditions, supply chain disruptions, and geopolitical tensions that could impact its operations. The company’s management is committed to navigating these challenges while leveraging its recent acquisitions to enhance its market position and drive future growth.