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Dec 31, 2024
Digi Q1 2025 Earnings Report
Digi International reported its first fiscal quarter 2025 results, with revenue of $104 million and record end-of-quarter ARR of $120 million.
Key Takeaways
Digi International reported a strong start to fiscal year 2025, with revenue of $104 million, a slight decrease of 2% year-over-year, but a significant increase in gross profit margin to 62.0%. The company achieved a net income of $10 million, a substantial improvement from a net loss in the prior year, and saw its Annualized Recurring Revenue (ARR) grow by 11% to $120 million.
Revenue for the first fiscal quarter of 2025 was $104 million, a 2% decrease compared to the same period in the prior year.
Gross profit margin increased significantly to 62.0%, up 440 basis points from the prior year.
Net income for the quarter was $10 million, a substantial improvement from a net loss of $3 million in the prior year.
Annualized Recurring Revenue (ARR) reached $120 million at quarter end, representing an 11% increase year-over-year.
Digi
Digi
Digi Revenue by Segment
Revenue by Segment
IoT Product & Services Revenue
CapyFin.comIoT Solutions Revenue
CapyFin.com Forward Guidance
Digi International's outlook for fiscal 2025 remains unchanged, with a focus on growing ARR and Adjusted EBITDA to $200 million within the next four years. For the second fiscal quarter, revenues are estimated to be between $102 million and $106 million, and Adjusted EBITDA is projected to be between $24.0 million and $25.5 million.
Positive Outlook
- ARR is the top priority, aiming to deliver high-value solutions and grow to $200 million within four years.
- Strategic acquisitions aligned with key metrics could accelerate the timeline for ARR and Adjusted EBITDA growth.
- Demand for Digi's solutions remains strong, delivering meaningful ROI for customers.
- Outlook for fiscal 2025 remains unchanged, with ARR growing approximately 10% year over year.
- Adjusted EBITDA projects to be flat year over year, indicating stable profitability.
Challenges Ahead
- The current dynamic political landscape introduces new uncertainty regarding economic policies, regulation, and taxation.
- Continued macroeconomic headwinds, particularly in industrial markets, pose challenges.
- It is difficult to predict and reconcile non-GAAP guidance items to GAAP measures due to various unpredictable factors.
- Potential impacts from foreign exchange translation, restructuring, interest, and certain tax-related events could significantly affect U.S. GAAP results.
- The guidance for Adjusted net income per share is provided on a non-GAAP basis, making direct comparison to GAAP challenging.
Revenue & Expenses
Visualization of income flow from segment revenue to net income