ARR growing 12% year-over-year to a record $123 million in the quarter. ARR now represents a record 29% of our annualized quarterly revenues.
— Ron Konezny
03Detailed Report
DGII
Company DGII
Period
Q2 2025
CurrencyUSD
Report TypeQuarterly Earnings
GeneratedJun 19, 2026
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Executive Summary
Digi International reported a solid Q2 2025 despite a modest revenue decline, driven by a stronger embedded services and software component and a healthier mix of recurring revenue. Revenue for the quarter was $104.5 million, down 2.97% year-over-year, but gross profit rose to $64.9 million for a gross margin of approximately 62.1%, aided by favorable product mix and early-stage software attach trends. Most important, ARR accelerated to a record $123 million, up 12% YoY and representing 29% of annualized quarterly revenues, signaling meaningful progress toward Digi’s solution-oriented, recurring-revenue model.
Key Performance Indicators
Revenue
Decreasing
104.50M
QoQ: 0.61% | YoY: -2.97%
Gross Profit
Increasing
64.93M
62.14% margin
QoQ: 0.83% | YoY: 13.57%
Operating Income
Increasing
13.73M
QoQ: 2.75% | YoY: 68.41%
Net Income
Increasing
10.50M
QoQ: 4.11% | YoY: 162.82%
EPS
Increasing
0.28
QoQ: 3.70% | YoY: 154.55%
Revenue Trend
Margin Analysis
Financial Highlights
Key quarterly metrics and trends (Q2 2025, USD):
- Revenue: $104.503 million; YoY down 2.97%; QoQ up 0.61%
- Gross Profit: $64.933 million; Gross Margin 62.1%; YoY +13.57%; QoQ +0.83%
- Operating Income: $13.727 million; Margin 13.14%; YoY +68.41%; QoQ +2.75%
- Net Income: $10.497 million; Net Margin 10.04%; YoY +162.82%; QoQ +4.11%
- EPS (diluted): $0.28; YoY +154.55%; QoQ +3.70%
- EBITDA: $21.913 million; EBITDA Margin ~21.0%
- ARR: $123.0 million; YoY +12%; Constitutes 29% of trailing quarterly revenues
- Operating Cash Flow: $26.287 million; Free Cash Flow: $25.728 million; Free Cash Flow Yield ~9%
- Balance Sheet (as of 3/31/2025): Cash $26.296 million; Total Debt $82.950 million; Net Debt $56.654 million; Total Assets $781.024 million; Stockholders’ Equity $605.218 million
- Liquidity Metrics: Current ratio 1.573; Quick ratio 1.122; Cash ratio 0.307
- Capex: $0.558 million (net); Capex coverage and efficiency reflected in balance sheet improvements
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
104.50M
-2.97%
0.61%
Gross Profit
64.93M
13.57%
0.83%
Operating Income
13.73M
68.41%
2.75%
Net Income
10.50M
162.82%
4.11%
EPS
0.28
154.55%
3.70%
Key Financial Ratios
Gross Profit Margin
Excellent
62.10%
Gross profit margin is exceptional, indicating strong pricing power and operational efficiency
Operating Profit Margin
Fair
13.10%
Operating margin is moderate, room for improvement in cost management
Net Profit Margin
Good
10.00%
Net profit margin is healthy and competitive within industry standards
Return on Assets
Weak
1.34%
Return on assets suggests inefficient capital allocation
Return on Equity
Weak
1.73%
Return on equity suggests inefficient capital allocation
Current Ratio
Healthy
1.57
Current ratio shows adequate liquidity to meet short-term obligations
Debt to Equity
Conservative
0.14
Debt-to-equity shows conservative leverage and low financial risk
P/E Ratio
Fair Value
24.49x
P/E ratio in line with market averages
Price to Book
Fair Value
1.70x
Price-to-book ratio reasonable for profitable companies
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