Digi International Q4 gross profit margin falls; revenue up
Overview
U.S. IoT connectivity provider's fiscal Q4 revenue rose 25%
Company repored a decrease of 20 basis points in the current quarter's gross profit margin
Adjusted EPS for fiscal Q4 increased 47% to $0.78, beating analyst expectations
Outlook
Company expects fiscal 2027 ARR growth of at least 15% versus fiscal 2026
Digi International forecasts fiscal 2027 revenue growth of 10-15% versus fiscal 2026
Company sees Q1 revenue between $140 mln and $144 mln, adj EBITDA $39.5 mln to $41 mln
Result Drivers
ACQUISITIONS - Particle and Jolt acquisitions contributed to recurring revenue and ARR growth, particularly in IoT Products & Services and IoT Solutions
ORGANIC DEMAND - Higher customer demand drove organic revenue growth in both IoT segments
OPERATING EFFICIENCIES - Improved operating expense efficiencies as revenue expanded faster than operating costs boosted margins
Company press release:
Key Details
Metric | Beat/Miss | Actual | Consensus Estimate |
Q4 Revenue | Beat | $143.32 mln | $140.33 mln (4 Analysts) |
Q4 Adjusted EPS | Beat | $0.78 | $0.76 (5 Analysts) |
Q4 Net Income | $14.94 mln | ||
Q4 Gross Margin | 63.70% | ||
Q4 Operating Income | $23.71 mln | ||
Q4 Pretax Profit | $22.44 mln |
Analyst Coverage
The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 4 "strong buy" or "buy", 1 "hold" and no "sell" or "strong sell"
The average consensus recommendation for the communications & networking peer group is "buy"
Wall Street's median 12-month price target for Digi International Inc. is $86.00, about 32.2% above its November 10 closing price of $65.05
The stock recently traded at 21 times the next 12-month earnings vs. a P/E of 26 three months ago
Reuters Recommended Reads
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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)