Digi International announced its financial results for the second fiscal quarter ended March 31, 2025, reporting total revenue of $104.5 million, a 3% decrease compared to $107.7 million in the prior-year quarter. Despite the slight revenue dip, net income for the quarter surged by 162.8% to $10.5 million, up from $4.0 million in Q2 FY24.
The company achieved a record end-of-quarter Annualized Recurring Revenue (ARR) of $123 million, marking a 12% increase year-over-year. This ARR now represents 29% of the company's annualized quarterly revenue, reflecting the success of its solution-oriented approach.
Consolidated gross profit margin expanded significantly to 62.1% for the quarter, an increase of 420 basis points from 57.9% in the prior-year quarter. Operating expenses decreased by 5.5% to $51.2 million, contributing to a 68.4% rise in operating income to $13.7 million.
Digi also reported strong cash flow from operations of $26 million for the quarter, bringing the six-month total to $56 million. The company paid down $25 million of debt, reducing net debt to $45 million and accelerating its projection to become net cash positive by the end of fiscal year 2025, a quarter earlier than initially projected.
For fiscal year 2025, the company maintained its revenue and ARR outlook (flat revenue, 10% ARR growth) but increased its Adjusted EBITDA growth projection to 5% year-over-year, up from flat. For the third fiscal quarter, revenues are estimated to be between $104 million and $108 million, with adjusted net income per share anticipated between $0.47 and $0.51.
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