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Mar 31
Digi Q2 2025 Earnings Report
Reported second quarter fiscal year 2025 results with increased net income and adjusted EBITDA despite a decrease in revenue.
Key Takeaways
Digi International reported its second fiscal quarter 2025 results, showing a decrease in revenue but significant increases in net income and adjusted EBITDA, driven by improved gross profit margins and strong cash generation. The company also saw a notable increase in Annualized Recurring Revenue (ARR) and reduced its outstanding debt.
Revenue for Q2 2025 was $105 million, a 3% decrease compared to Q2 2024.
Net income for Q2 2025 was $10 million, a significant increase from $4 million in Q2 2024.
Adjusted EBITDA for Q2 2025 was $26 million, a 9% increase compared to Q2 2024.
Annualized Recurring Revenue (ARR) reached a record $123 million at the end of the quarter, a 12% 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 aims to grow ARR and Adjusted EBITDA to $200 million within the next 4 years, potentially accelerated by strategic acquisitions. The company is increasing its profit outlook for fiscal 2025, projecting Adjusted EBITDA to grow 5% year over year, and anticipates being in a net cash positive position by the end of the fiscal year. Revenue and ARR outlook remain unchanged, projecting approximately flat year-over-year revenue and 10% ARR growth.
Positive Outlook
- Aim to grow ARR and Adjusted EBITDA to $200 million within 4 years.
- Strategic acquisitions could accelerate growth timeline.
- Increasing profit outlook for fiscal 2025.
- Projecting Adjusted EBITDA to grow 5% year over year.
- Anticipate being in a net cash positive position by fiscal year end.
Challenges Ahead
- Current dynamic global political landscape impacting economic policies, regulations, taxation, and market conditions.
- Adaptability is crucial due to uncertain marketplace.
- Potential impact from current and potential tariffs.
- Evolving global political and economic climate presents challenges.
- Revenue projects to be approximately flat year over year.
Revenue & Expenses
Visualization of income flow from segment revenue to net income