Digi International (NASDAQ:DGII) Posts Earnings Results, Beats Estimates By $0.09 EPS

Digi International (NASDAQ:DGII) released its quarterly earnings data on Wednesday. The technology company reported $0.75 EPS for the quarter, topping analysts’ consensus estimates of $0.66 by $0.09, FiscalAI reports. The company had revenue of $138.67 million during the quarter, compared to the consensus estimate of $132.57 million. Digi International had a net margin of 9.10% and a return on equity of 11.28%. During the same period last year, the firm earned $0.53 EPS. The firm’s revenue for the quarter was up 29.0% compared to the same quarter last year. Digi International updated its Q4 2026 guidance to 0.750-0.780 EPS.

Here are the key takeaways from Digi International’s conference call:

• Record Q3 results: Revenue reached $139 million, up 29% year over year, while adjusted EBITDA rose to $40 million with a record 29.1% margin. Cash flow from operations increased 38% to $33 million.
• Full-year guidance was raised: Digi now expects fiscal 2026 revenue of $529 million to $533 million, adjusted EBITDA of $146 million to $147.5 million, adjusted EPS of $2.67 to $2.70, and ARR growth of at least 27%.
• Recurring revenue and balance-sheet trends remain strong: ARR reached a record $191 million, with management expecting to approach $193 million, while net debt declined to $81 million and leverage fell below one times.
• Management cited improving sales-cycle times, pipeline growth, AI-related infrastructure demand, and supply-chain urgency as business drivers, but said hyperscaler opportunities for Opengear remain difficult to predict and were excluded from guidance. Digi is also introducing its DANI AI tool within Digi Remote Manager, initially to improve customer adoption and support rather than generate separate revenue.

Digi International Price Performance

NASDAQ:DGII traded up $9.02 on Thursday, hitting $81.77. The company had a trading volume of 166,080 shares, compared to its average volume of 333,240. The firm has a 50 day moving average of $68.60 and a two-hundred day moving average of $57.86. The stock has a market capitalization of $3.08 billion, a price-to-earnings ratio of 72.16 and a beta of 0.97. Digi International has a 52 week low of $30.69 and a 52 week high of $82.65. The company has a current ratio of 1.11, a quick ratio of 0.77 and a debt-to-equity ratio of 0.21.

Insider Transactions at Digi International

In other Digi International news, VP Terrence G. Schneider sold 14,182 shares of the business’s stock in a transaction that occurred on Monday, May 11th. The shares were sold at an average price of $65.61, for a total transaction of $930,481.02. Following the sale, the vice president directly owned 26,759 shares of the company’s stock, valued at $1,755,657.99. The trade was a 34.64% decrease in their position. The transaction was disclosed in a legal filing with the SEC, which can be accessed through this link. Also, CFO James J. Loch sold 100,000 shares of the business’s stock in a transaction on Tuesday, June 2nd. The shares were sold at an average price of $69.44, for a total transaction of $6,944,000.00. Following the completion of the transaction, the chief financial officer owned 167,589 shares in the company, valued at approximately $11,637,380.16. The trade was a 37.37% decrease in their position. The disclosure for this sale is available in the SEC filing. Over the last quarter, insiders have sold 121,008 shares of company stock worth $8,320,222. 3.40% of the stock is currently owned by insiders.

Institutional Inflows and Outflows

A number of hedge funds and other institutional investors have recently added to or reduced their stakes in DGII. Millennium Management LLC raised its holdings in shares of Digi International by 138.3% in the 4th quarter. Millennium Management LLC now owns 19,055 shares of the technology company’s stock worth $825,000 after purchasing an additional 11,059 shares during the period. Russell Investments Group Ltd. lifted its position in shares of Digi International by 8.1% during the 4th quarter. Russell Investments Group Ltd. now owns 3,649 shares of the technology company’s stock valued at $158,000 after buying an additional 273 shares during the last quarter. Captrust Financial Advisors increased its holdings in Digi International by 15.2% in the 4th quarter. Captrust Financial Advisors now owns 18,204 shares of the technology company’s stock worth $788,000 after acquiring an additional 2,396 shares during the last quarter. Brooklyn Investment Group raised its stake in Digi International by 5.9% in the 4th quarter. Brooklyn Investment Group now owns 5,983 shares of the technology company’s stock valued at $265,000 after acquiring an additional 331 shares during the period. Finally, Campbell & CO Investment Adviser LLC lifted its holdings in Digi International by 65.0% during the fourth quarter. Campbell & CO Investment Adviser LLC now owns 47,468 shares of the technology company’s stock valued at $2,055,000 after purchasing an additional 18,706 shares during the last quarter. 95.90% of the stock is currently owned by hedge funds and other institutional investors.

Key Digi International News

Here are the key news stories impacting Digi International this week:

• Positive Sentiment: Digi reported fiscal third-quarter revenue of approximately $139 million, up 29% year over year, while adjusted earnings reached $0.75 per share versus analyst expectations of roughly $0.66-$0.67. Gross margin also improved 130 basis points to 64.8%, supporting the bullish reaction. Digi International Reports Third Fiscal Quarter 2026 Results
• Positive Sentiment: Management issued fiscal fourth-quarter EPS guidance of $0.750-$0.780, well above the $0.610 consensus estimate, and revenue guidance of $138 million-$142 million, ahead of the $135.9 million forecast.
• Positive Sentiment: Fiscal 2026 revenue guidance was set at $529 million-$533 million, exceeding the $521.6 million consensus estimate. The results call and investor commentary also highlighted record revenue and improving investor interest in small-cap growth companies. Digi International Strengthens on Record Revenue
• Neutral Sentiment: The earnings report showed net margin of 9.1% and return on equity of 11.28%. However, DGII trades at a relatively elevated P/E ratio of about 65, leaving the stock sensitive to any slowdown in growth or future guidance.
• Negative Sentiment: Zacks Research downgraded Digi International from “Strong Buy” to “Hold.” The downgrade may temper enthusiasm, although it was outweighed by the quarter’s earnings beat and stronger-than-expected outlook. Digi International Q3 Earnings and Revenues Top Estimates

Analyst Upgrades and Downgrades

Several equities analysts recently commented on DGII shares. Stephens raised their target price on Digi International from $75.00 to $85.00 and gave the stock an “overweight” rating in a research report on Thursday. Zacks Research lowered shares of Digi International from a “strong-buy” rating to a “hold” rating in a report on Monday. Weiss Ratings upgraded Digi International from a “hold (c)” rating to a “hold (c+)” rating in a report on Monday. Roth Capital reissued a “buy” rating and issued a $70.00 price target on shares of Digi International in a research note on Thursday, May 7th. Finally, Piper Sandler reaffirmed a “neutral” rating on shares of Digi International in a report on Thursday. Four analysts have rated the stock with a Buy rating and three have issued a Hold rating to the company’s stock. Based on data from MarketBeat.com, Digi International presently has a consensus rating of “Moderate Buy” and a consensus price target of $75.80.

About Digi International

Digi International Inc is a provider of Internet of Things (IoT) connectivity products and services designed to link devices to networks and applications securely. The company develops a broad range of networking hardware, including cellular and Ethernet routers, gateways, embedded modules and adaptors, as well as accessories and antennas. Digi’s solutions enable businesses to deploy remote monitoring, control and automation systems across diverse industries such as transportation, utilities, healthcare, retail and industrial manufacturing.

In addition to its physical devices, Digi offers cloud-based management software and professional services that simplify device configuration, monitoring and over-the-air updates.