How did DGII's revenue and expenses trend in Q1 2025 compared to previous quarters?

**Digi International (DGII) experienced a decrease in revenue and an increase in gross profit margin in Q1 2025 compared to the previous quarter.** Here's a detailed analysis: 1. **Revenue Trend**: - In the fourth fiscal quarter of 2024, DGII's revenue was $105 million. - In Q1 2025, revenue decreased to $104 million. - The decrease of $1 million in revenue from the previous quarter to Q1 2025 may indicate challenges or seasonal fluctuations in the business during this period. 2. **Gross Profit Margin Trend**: - The gross profit margin for the fourth fiscal quarter of 2024 was not available. - However, in Q1 2025, DGII reported a gross profit margin of 62.0%, which is a significant increase of 440 basis points. - This substantial increase in gross profit margin suggests that DGII was more efficient in generating profits from its revenues in Q1 2025 compared to the previous quarter. 3. **Net Income and Adjusted Financial Measures**: - DGII reported a net income of $10 million in Q1 2025, which is a substantial improvement from the net loss of $3 million in the previous quarter. - The adjusted net income per diluted share also increased from $0.48 to $0.50. - These improvements indicate better financial health and operational efficiency in Q1 2025. 4. **Annualized Recurring Revenue (ARR) and Cash Flow**: - DGII's ARR increased to $120 million at the end of Q1 2025, up from $116 million in the previous quarter. - Cash flow from operations was reported at $30 million, which is a positive indicator of the company's ability to generate cash to support its business activities. In conclusion, DGII's financial performance in Q1 2025 showed resilience with increased gross profit margin, net income, and ARR compared to the previous quarter, despite a slight decrease in revenue. This suggests that DGII is focusing on profitability and efficiency improvements, which is a positive signal for its financial outlook.