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Jun 30
Digi Q3 2025 Earnings Report
Digi International reported its third fiscal quarter 2025 results, with revenue of $108 million and record end-of-quarter ARR of $126 million, and raised its fiscal year 2025 guidance.
Key Takeaways
Digi International delivered a solid third fiscal quarter, achieving a 2% increase in revenue to $108 million and a 6% rise in net income to $10 million. The company demonstrated strong profitability improvements with a gross profit margin of 63.5% and an 11% increase in Adjusted EBITDA to $28 million. Annualized Recurring Revenue (ARR) grew by 12% to $126 million, highlighting the success of its recurring revenue strategies. The company also significantly reduced its debt by $30 million, ending the quarter with $20.1 million in cash and cash equivalents.
Revenue increased by 2% to $108 million compared to the third fiscal quarter of 2024.
Net income rose by 6% to $10 million, and diluted EPS increased by 4% to $0.27.
Adjusted EBITDA grew by 11% to $28 million, and gross profit margin improved by 430 basis points to 63.5%.
Annualized Recurring Revenue (ARR) reached a record $126 million, up 12% year-over-year, and the company reduced its outstanding debt by $30 million.
Digi
Digi
Digi Revenue by Segment
Revenue by Segment
IoT Product & Services Revenue
CapyFin.comIoT Solutions Revenue
CapyFin.com Forward Guidance
Digi International is raising its profit outlook for fiscal year 2025, anticipating Adjusted EBITDA growth of 7-8% year-over-year, up from the prior estimate of approximately 5%. ARR and revenue projections remain unchanged, with ARR projected to grow 10% and revenue to be flat year over year. The company aims to reach $200 million in ARR and Adjusted EBITDA by the end of fiscal 2028 and expects to be net cash positive by the end of the fiscal year.
Positive Outlook
- Raising profit outlook for fiscal 2025, with Adjusted EBITDA growth now projected at 7-8% year-over-year.
- Maintaining ARR growth projection of 10% year-over-year.
- Maintaining revenue projection of flat year-over-year.
- Improved profitability outlook enhances expectations for cash flow from operations.
- Commitment to be in a net cash positive position by the end of the fiscal year.
Challenges Ahead
- The global geopolitical landscape continues to evolve, influencing policies, regulations, taxation, and market dynamics.
- Fluctuating timing of many operational investments by customers.
- No specific negative financial guidance provided beyond general market uncertainties.
- No specific negative impact on revenue or ARR projections mentioned.
- No specific negative impact on cash flow from operations mentioned.
Revenue & Expenses
Visualization of income flow from segment revenue to net income