Digi International Reports Strong Profit Growth in Q2 2025

Digi International ( (DGII) ) has released its Q2 earnings. Here is a breakdown of the information Digi International presented to its investors.

Digi International Inc. is a global leader in providing Internet of Things (IoT) connectivity products, services, and solutions, catering to the needs of businesses requiring secure and reliable communications infrastructure.

In its second fiscal quarter of 2025, Digi International reported a slight decline in revenue to $105 million, a 3% decrease compared to the previous year. However, the company achieved significant growth in profitability, with net income rising to $10 million from $4 million, and a notable increase in gross profit margin to 62.1%.

Key financial highlights include a 12% year-over-year growth in Annualized Recurring Revenue (ARR) to $123 million and a 9% increase in Adjusted EBITDA to $26 million. The company also reported strong cash flow from operations, amounting to $26 million, which enabled a reduction in outstanding debt by $25 million. The IoT Solutions segment saw a revenue increase driven by recurring revenue growth, while the IoT Products & Services segment experienced a decline due to reduced one-time sales.

Looking forward, Digi International remains focused on expanding its ARR and Adjusted EBITDA, with a target of reaching $200 million in ARR within four years. The company plans to continue deleveraging and optimizing inventory levels while exploring strategic acquisitions to enhance growth. Despite global economic uncertainties, Digi’s management is optimistic about maintaining strong demand for its solutions and achieving a net cash positive position by the fiscal year-end.