GET DAILY SIGNALSDigi International (DGII) Reports +25% Q4 Revenue Growth and Closes Out a Record Fiscal Year
Key Takeaways
- Digi International reported fourth fiscal quarter 2026 revenue of $143 million, up 25% year over year, capping a record fiscal year.
- Adjusted earnings per share (EPS) climbed 47% to $0.78, while adjusted EBITDA rose 43% to $42 million for the quarter.
- Annualized Recurring Revenue (ARR) reached $197 million at year end, up 30% and closing in on the company's $200 million target.
- Full-year fiscal 2026 revenue grew 24% to $535 million, with adjusted EBITDA up 37% to $148 million.
- For fiscal 2027, management guided to revenue growth of 10–15% and ARR growth of at least 15%.
- Digi announced a $130 million cash agreement to acquire Norway-based sensor provider Disruptive Technologies (DT), expected to close before November 30, 2026.
Earnings Context and Its Significance
Digi International's fourth fiscal quarter results stand out because they wrap up a fiscal year that management has called defining for the business. The company has been shifting from one-time hardware sales toward higher-margin recurring software and subscription revenue, a change that affects valuation and profitability. Acquisitions such as Jolt, Particle, and the pending Disruptive Technologies deal have altered the revenue mix. I pay close attention to ARR, adjusted EBITDA, and gross margin as indicators of whether this transformation is gaining traction. With industrial, infrastructure, and data-center customers viewing connectivity as essential infrastructure, this report offers an important check on whether Digi's recurring-revenue model can maintain double-digit growth into fiscal 2027. I also checked this using Tickeron's AI Screener to see how the stock compares to others in the industry.
Reported Results
For the fourth fiscal quarter ended September 30, 2026, DGII reported revenue of $143 million, a 25% increase over the prior-year period. Gross profit margin was 63.7%, down 20 basis points, while operating margin expanded 400 basis points to 16.5%. Net income rose 50% to $15 million, with net income per diluted share up 46% to $0.38. Adjusted net income increased 53% to $30 million, or $0.78 per diluted share, and adjusted EBITDA climbed 43% to $42 million.
For full-year fiscal 2026, revenue grew 24% to $535 million, adjusted EBITDA rose 37% to $148 million, and adjusted EPS increased 38% to $2.70. ARR ended the year at $197 million, up 30%. The company's IoT Products & Services segment generated $105 million in quarterly revenue (up 28%), while IoT Solutions contributed $38 million (up 20%). Management attributed the momentum to organic demand, successful integration of Jolt and Particle, and strong operating leverage.
Market Reaction and Investor Sentiment
Digi reported results after the close on November 11, 2026, so the full market response will unfold in subsequent trading sessions. Heading into the release, sentiment had been supported by a series of record-setting quarters and a track record of estimate beats, most notably after fiscal 2025's fourth quarter. The fourth fiscal quarter 2026 print extended that momentum, with full-year adjusted EBITDA growth of 37% comfortably ahead of the 23–26% growth range management had outlined earlier in the year. Investor attention is likely to focus on the sustainability of ARR growth, the pace of margin expansion, and the terms and timing of the Disruptive Technologies acquisition, which adds scale in sensing technology but introduces integration and leverage considerations.
Forward Outlook and Key Factors to Monitor
Digi enters fiscal 2027 with clear targets: revenue growth of 10–15%, ARR growth of at least 15%, and adjusted EBITDA growth of 12.5–17.5% versus fiscal 2026. For the first fiscal quarter, management guided to revenue of $140 million to $144 million and adjusted EBITDA of $39.5 million to $41.0 million.
A central watch item is the pending $130 million acquisition of Disruptive Technologies, expected to close before November 30, 2026. Investors will monitor integration progress, the deal's contribution to ARR, and any impact on the balance sheet, where debt net of cash stood at $39 million at year end.
On the demand side, management cited strengthening industrial activity and accelerating investment across automation, energy, and data infrastructure. At the same time, it flagged rising component costs, most notably memory, as a headwind being managed through pricing and supply-chain discipline. Continued margin expansion, customer retention, and progress toward the dual goals of $200 million in ARR and $200 million in adjusted EBITDA remain the key metrics that will shape investor confidence in the quarters ahead.
Using Tickeron AI Tools in My Research
I often turn to Tickeron's AI-powered tools when reviewing companies like DGII. The AI Screener helps me quickly filter for stocks with similar fundamentals, technical patterns, and industry trends, which saves time compared to manual searches. It has become a regular part of how I cross-check ideas and surface comparable names in the industrial and technology space.
Disclaimer
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Contributor
Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.
DGII in upward trend: price may ascend as a result of having broken its lower Bollinger Band on November 05, 2026
DGII may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options. In 29 of 38 cases where DGII's price broke its lower Bollinger Band, its price rose further in the following month. The odds of a continued upward trend are 76%.
Technical Analysis (Indicators)
Bullish Trend Analysis
The RSI Oscillator points to a transition from a downward trend to an upward trend -- in cases where DGII's RSI Oscillator exited the oversold zone, 15 of 22 resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are 68%.
The Stochastic Oscillator shows that the ticker has stayed in the oversold zone for 5 days. The price of this ticker is presumed to bounce back soon, since the longer the ticker stays in the oversold zone, the more promptly an upward trend is expected.
Following a +7.68% 3-day Advance, the price is estimated to grow further. Considering data from situations where DGII advanced for three days, in 237 of 323 cases, the price rose further within the following month. The odds of a continued upward trend are 73%.
Bearish Trend Analysis
The Momentum Indicator moved below the 0 level on November 02, 2026. You may want to consider selling the stock, shorting the stock, or exploring put options on DGII as a result. In 51 of 73 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are 70%.
The Moving Average Convergence Divergence Histogram (MACD) for DGII turned negative on November 02, 2026. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 43 similar instances when the indicator turned negative. In 34 of the 43 cases the stock turned lower in the days that followed. This puts the odds of success at 79%.
DGII moved below its 50-day moving average on October 30, 2026 date and that indicates a change from an upward trend to a downward trend.
The 10-day moving average for DGII crossed bearishly below the 50-day moving average on November 06, 2026. This indicates that the trend has shifted lower and could be considered a sell signal. In 7 of 14 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are 50%.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where DGII declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 68%.
Fundamental Analysis (Ratings)
The Tickeron PE Growth Rating for this company is 9 (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is 20 (best 1 - 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 81, placing this stock better than average.
The Tickeron Seasonality Score of 50 (best 1 - 100 worst) indicates that the company is fair valued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron Price Growth Rating for this company is 51 (best 1 - 100 worst), indicating steady price growth. DGII’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Valuation Rating of 74 (best 1 - 100 worst) indicates that the company is slightly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (3.501) is normal, around the industry mean (5.210). P/E Ratio (49.000) is within average values for comparable stocks, (3.688). Projected Growth (PEG Ratio) (0.981) is also within normal values, averaging (0.778). Dividend Yield (0.000) settles around the average of (0.067) among similar stocks. P/S Ratio (5.330) is also within normal values, averaging (11.937).
The Tickeron SMR rating for this company is 78 (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
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General Information
a provider of communications adapters that enable open systems, server-based applications
Industry TelecommunicationsEquipment
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