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- **ARR Growth**: Q4 ARR up 31% YoY to $152 million, targeting $200 million by 2028.
- **Jolt Integration**: $20 million ARR contribution, on track for $11 million EBITDA by end-2026.
- **AI Adoption**: Tiny language models driving real-time decision-making.
- **Geographic Focus**: 70% North America, 15% Europe, 15% other.
- **M&A Criteria**: Seeking >$20 million ARR, recurring revenue focus.
- **Data Center Growth**: Opengear seeing 100% attach rates in data centers.
- **Risk Factors**: European regulatory uncertainty, government shutdown impacts.

**【CEO Opening Remarks】**
- Digi International reported Q4 revenue of $430 million, up 1% year-over-year, with ARR reaching $152 million.
- The company achieved $105 million in free cash flow, driven by Jolt's integration.
- Digi is targeting $200 million in ARR and EBITDA by fiscal 2028 through strategic acquisitions like Jolt.
- AI adoption is accelerating, with tiny language models at the edge for real-time decision-making.

**【CFO Financial Commentary】**
- Jolt contributed $20 million in ARR, with cross-selling opportunities in beauty and health verticals.
- Digi's North America-centric revenue mix (70%) is balanced with European growth in medical devices.
- Gross margins are expected to improve with recurring revenue growth and AI-driven efficiency.

**【Q&A Highlights】**
- Attach rates for subscriptions are 50-75%, targeting 100% by 2028.
- Data centers are a key growth driver, with Opengear seeing 100% attach rates.
- Europe's uncertain regulatory environment is slowing IoT adoption.
- Jolt integration is on track to meet $11 million EBITDA target by end-2026.
- AI at the edge will enable autonomous decision-making in manufacturing and healthcare.
- Digi's $200 million ARR target by 2028 assumes 10% ARR growth, while EBITDA requires 20%+ CAGR.
- The company prioritizes M&A in AI, IoT, and industrial IoT with >$20 million ARR criteria.

Digi International Inc. (DGII) Q4 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

DGII

DGII fundamentals

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