Digi International (DGII) investor relations material

Executive summary

• Achieved record Q4 revenue of $114 million, up 9% year-over-year, and full-year revenue of $430 million, up 1% year-over-year, with net income of $41 million, up 81% year-over-year.

• Annualized Recurring Revenue (ARR) reached $152 million, a 31% year-over-year increase, now representing 35% of total revenue.

• Integration of Jolt Software, acquired for $145.7 million in August, contributed to ARR and segment growth, with cross-selling opportunities emerging.

• Paid off all debt from the Ventus acquisition and generated $105 million in free cash flow, yielding 8%.

• Cash flow from operations was $28 million in Q4 and $108 million for the year.

Financial highlights

• Adjusted EBITDA for the year was $108 million, up 11% year-over-year.

• Jolt Software contributed over $20 million in ARR, with partial Q4 revenue impact.

• Q4 gross profit margin rose to 63.9% (+280 bps), with full-year gross margin at 62.9% (+400 bps).

• Q4 adjusted net income was $21 million (+10%), and adjusted EBITDA was $29 million (+11%).

• Q4 adjusted EBITDA margin was 25.6%; full-year adjusted EBITDA margin was 25.2%.

Outlook and guidance

• Fiscal 2026 guidance calls for double-digit growth in ARR, revenue, and adjusted EBITDA, with ARR growth of ~10%, revenue growth of 10–15%, and adjusted EBITDA growth of 15–20%.

• Q1 2026 revenue expected between $114 million–$118 million, adjusted EBITDA $28.5 million–$30 million, and adjusted net income per diluted share $0.53–$0.57.

• Long-term targets reaffirmed: $200 million ARR and $200 million adjusted EBITDA by fiscal 2028, with acquisitions as a key lever.

• Additional strategic acquisitions may accelerate achievement of long-term goals.