Digi International announced its financial results for the third fiscal quarter ended June 30, 2025, reporting total revenue of $107.5 million, a 2.2% increase compared to $105.2 million in the prior-year quarter. Net income for the quarter was $10.2 million, up 5.6% year-over-year.
The company achieved a record end-of-quarter Annualized Recurring Revenue (ARR) of $126 million, marking a 10% increase year-over-year. This growth in ARR underscores the success of Digi's strategic shift towards solution-oriented offerings.
Consolidated gross profit margin for the quarter increased by 130 basis points to 63.5% from 62.2% in the prior-year period. The IoT Product & Services segment's ARR grew 30% to $30 million, while its gross margin increased by 620 basis points to 60.6%.
Digi continued its debt reduction efforts, paying down $30 million of debt during the quarter. The company reiterated its commitment to achieving a net cash positive position by the end of the fiscal year, driven by strong cash flow and normalizing inventory levels.
For fiscal year 2025, Digi International raised its Adjusted EBITDA growth outlook to 7-8% year-over-year, up from the prior estimate of approximately 5%. Revenue and ARR projections remained unchanged, with ARR expected to grow 10% and revenue to be flat year-over-year. For the fourth fiscal quarter, revenues are estimated to be between $106 million and $110 million, with adjusted net income per share anticipated between $0.49 and $0.53.
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