Digi Expected to Post EPS of $0.764 and Revenue of $140.27 Million
Key Facts
Investors are awaiting Digi International’s fourth-quarter and fiscal 2026 results, with analysts expecting earnings of $0.764 per share and revenue of $140.27 million, according to MarketBeat estimates. The company scheduled the results release for after the market close on November 11, at around 4:00 p.m. Eastern Time, with the earnings call an hour later. The announcement follows a third quarter in which the company posted strong revenue and earnings growth, while the coming results will offer an indication of its performance at the close of the fiscal year. Analysts’ estimates remain separate from management’s outlook, which the company announced after its third-quarter results. The focus is therefore on comparing actual fourth-quarter figures with the official guidance range and published estimates.
Digi had forecast fourth-quarter revenue of between $138 million and $142 million, adjusted diluted EPS of between $0.75 and $0.78, and adjusted EBITDA of between $40 million and $41.5 million. Analysts’ revenue estimate of $140.27 million falls within the company’s range, as does their EPS estimate of $0.764 within the stated adjusted EPS range. The adjusted EPS metric used by the company differs from the analysts’ estimate as published, making the comparison dependent on how each measure is defined. For the fiscal year, Digi raised its revenue guidance to $529–$533 million, implying expected annual growth of between 23% and 24%. It also forecast annual growth in adjusted EBITDA of between 35% and 36%, estimating it would reach $146–$147.5 million for the fiscal year.
In the fiscal third quarter, the company reported revenue of $139 million, up 29% year over year, while net income rose 54% to $16 million. Adjusted diluted EPS was $0.75, up 47% year over year. Chief Executive Ron Konezny said the company achieved records for revenue, annual recurring revenue and earnings in the quarter. He added that annual recurring revenue growth reflects customers’ returns from remote monitoring and control of assets critical to their businesses. At the end of the third quarter, total annual recurring revenue was $191 million, up 52% from the year-earlier period.
Growth in the IoT Solutions segment in the third quarter was driven largely by the earlier acquisition of Jolt, the company said. Segment revenue was $39 million, up 41% year over year, while annual recurring revenue reached $131 million, a 36% increase. In the IoT Products and Services segment, revenue rose 25% to $100 million, and annual recurring revenue was $60 million, up 100% year over year. Gross and operating margins also improved to 64.8% and 16.5%, respectively, increases of 130 and 260 basis points year over year. Cash flow from operations rose to $33 million, compared with $24 million in the third quarter of the previous fiscal year.
In an acquisition, Digi announced on October 1 a definitive agreement to buy Disruptive Technologies for $130 million in cash, with the deal to be funded through its existing revolving credit facility. The company said closing was expected before the end of 2026, subject to regulatory approval, so the deal remained announced and had not been completed when the statement was issued. The target generated revenue of $15 million and annual recurring revenue of $4 million in 2025. Digi expects combining it with SmartSense to add about $9 million to each of adjusted EBITDA and free cash flow in fiscal 2028. The technology includes more than 250,000 deployed sensors, while the deal is expected to give SmartSense a significant commercial presence in Europe and customer relationships and infrastructure in more than 25 countries.
The acquisition financing extends the company’s use of its credit facility; Digi announced on August 31 that it had expanded its secured revolving credit facility to $350 million. At the end of the third quarter, debt was $109 million and cash and equivalents were $28 million, bringing net debt to $81 million. Management said it intended to continue reducing balance-sheet leverage, while acquisitions remained among its capital-allocation priorities. Looking further ahead, the company said growth in annual recurring revenue, margin expansion and customer retention underpin its confidence in reaching $200 million in both annual recurring revenue and adjusted EBITDA within its target time frame. The upcoming fiscal-year results will provide an update on growth, debt and cash flows, while the company did not tie that long-term goal to a specific date in its statement.
Digi shares closed at $65.05 on November 10, down 3.10% from the previous close, according to historical data Stock Analysis attributes to S&P Global Market Intelligence. The price-target revisions that could be verified date to August 6, before the company announced its intention in October to acquire Disruptive Technologies. Piper Sandler raised its target from $63 to $76, Stephens raised its target from $75 to $85, and B. Riley Securities raised its target from $78 to $86. These revisions reflect expectations set before the deal announcement and do not represent a response to it. Chief Executive Ron Konezny and Chief Financial Officer Jamie Loch are scheduled to discuss the fourth-quarter and fiscal-year results on a video call at 5:00 p.m. Eastern Time on November 11.