Digi International Stock Earnings Reports

Digi reported a strong start to fiscal 2026 with several record metrics and continued double-digit ARR growth. Q1 highlights: $122M revenue (up 18% YoY), $157M ARR (up 31% YoY), $32M adjusted EBITDA (up 23% YoY), a 25.8% adjusted EBITDA margin (record), and $36M cash generation. Growth was broad-based across product lines and verticals; IoT Solutions ARR grew 32% and IoT products & services ARR grew 26% YoY. The company completed the integration of Jolt into SmartSense One and announced the January acquisition of Particle, adding roughly $20M ARR and strengthening embedded edge-to-cloud and device-management capabilities. Particle is expected to contribute $13–$14M revenue and $20–$22M ARR in fiscal 2026, with modest near-term EBITDA impact and larger synergies in FY2027. Management reiterated longer-term targets (achieve $100M ARR and $200M adjusted EBITDA by fiscal 2028) and emphasized acquisitions as the top use of capital. For fiscal 2026 guidance (including Particle): ARR growth ~23%, revenue growth 14–18%, adjusted EBITDA growth 17–21%. Q2 revenue guide: $124–$128M; Q2 adjusted EBITDA: $31.5–$33M. Management also moved to include interest expense in the adjusted net income per diluted share metric (impact ~ $0.05–$0.06 per share). Key risks include memory/component supply and pricing volatility and uncertainty around the duration of AI infrastructure spending.