DGIIMEDIUM SIGNALOPERATIONAL10-K

DGII completed the acquisition of Jolt Software while delivering strong financial performance with 81% net income growth and improved cash generation.

The Jolt acquisition expands DGII's IoT Solutions segment capabilities, adding label printing and enhanced employee task management services to complement their existing SmartSense offerings. The company is proactively warning investors about potential volatility in fiscal 2026 due to macro-economic uncertainties including tariffs and geopolitical conditions, suggesting management expects a more challenging operating environment ahead.

Comparing 2025-11-21 vs 2024-11-22View on EDGAR →
FINANCIAL ANALYSIS

DGII demonstrated strong operational performance with net income surging 81% to $40.8M and operating cash flow increasing 30% to $108M, while interest expenses declined significantly by 59%. However, the company increased total debt by 29% to $159.2M (likely funding the Jolt acquisition) and cash reserves dropped 20% to $21.9M, though inventory optimization freed up $14.5M in working capital. The overall financial picture shows healthy profitability growth funded through increased leverage, with improved cash generation offsetting higher debt levels.

FINANCIAL STATEMENT CHANGES
Share Buybacks
Cash Flow
+92.9%
$3.6M→$6.9M

Share repurchases increased 92.9% — management returning capital, signals confidence in intrinsic value.

Net Income
P&L
+81.3%
$22.5M→$40.8M

Net income grew 81.3% — bottom-line growth signals improving overall business health.

Interest Expense
P&L
-59%
$15.4M→$6.3M

Interest expense declined — debt repayment or refinancing at lower rates improving earnings quality.

Operating Cash Flow
Cash Flow
+29.9%
$83.1M→$108.0M

Operating cash flow grew 29.9% — strong conversion of earnings to cash, healthy business fundamentals.

Total Debt
Balance Sheet
+29.2%
$123.2M→$159.2M

Debt rose 29.2% — additional borrowing for investment or operations; monitor coverage ratios.

Inventory
Balance Sheet
-27.1%
$53.4M→$38.9M

Inventory reduced 27.1% — lean inventory management or demand outpacing supply.

Total Liabilities
Balance Sheet
+22.4%
$234.0M→$286.6M

Liabilities increased 22.4% — monitor debt-to-equity ratio and interest coverage.

Current Liabilities
Balance Sheet
+20.7%
$89.3M→$107.8M

Current liabilities rose 20.7% — increased short-term obligations, watch current ratio.

Cash & Equivalents
Balance Sheet
-20.4%
$27.5M→$21.9M

Cash decreased 20.4% — monitor burn rate and upcoming capital needs.

Operating Income
P&L
+17.1%
$48.1M→$56.3M

Operating income improving — cost discipline or growing revenue base absorbing fixed costs.

LANGUAGE CHANGES
NEW — 2025-11-21
PRIOR — 2024-11-22
ADDED
SmartSense by Digi offers wireless temperature and other condition-based monitoring services as well as employee task management, label printing and other services.
During the fourth quarter of fiscal 2025 we completed the acquisition of Jolt Software, Inc.
SmartSense by Digi and Jolt collectively focus on the following vertical markets: food service, healthcare (primarily pharmacies and hospitals) and supply chain.
Among others, IoT use cases include providing and maintaining secure connectivity and monitoring of operating assets in a wide-range of different businesses, condition-based monitoring of perishable goods, enabling remote work by employees and automating workflows and operations.
Our IoT Solutions segment is comprised primarily of our SmartSense by Digi and Jolt, as well as Ventus offerings.
Given the current uncertainty in macro-economic conditions, including, but not limited to, potential recessionary conditions, the implementation of tariffs by governments around the world, changing global geopolitical conditions, supply chain disruptions globally and the uncertain status of large project-based customer deployment opportunities, our results during fiscal 2026 may be inconsistent quarter to quarter or with historical results.
In the fourth quarter of fiscal 2025 we completed the acquisition of Jolt Software Inc., a Utah based provider of task management, workforce management and labeling solutions used by food retailers, restaurants and other businesses that might also use our SmartSense by Digi condition monitoring solutions.
We also continue to drive efforts to pair our hardware offerings with our remote manager device management platforms as well as other support services.
These bundled offerings are sold on a subscription basis and allow customers to monitor and manage the performance of hardware they purchase from us remotely.
As of September 30, 2025 the (Annualized Recurring Revenue ("ARR") of this segment was $32 million.
REMOVED
SmartSense by Digi offers wireless temperature and other condition-based monitoring services as well as employee task management services.
These solutions focus on the following vertical markets: food service, healthcare (primarily pharmacies and hospitals) and supply chain.
Among others, IoT use cases include providing and maintaining secure connectivity and monitoring of operating assets, condition-based monitoring of perishable goods, enabling remote work by employees and automating workflows and operations.
For example, during fiscal 2024 we launched the Digi LifeCycle Assurance subscription solution, and we recently announced the launch of the Digi 360 subscription solution.
Our IoT Solutions segment is comprised primarily of our SmartSense by Digi and Ventus offerings.
While we expect an ongoing long-term trend of marketplace growth, each of our business segments is susceptible to downturns either because of general macro-economic conditions, the continued development of technology that can make products less competitive or even obsolete and uncertainty or changes in regulatory environments.
While our last acquisition was completed in fiscal 2022, we do expect to continue to be active in making further acquisitions.
We also continue to drive efforts to pair our hardware offerings with our Digi Remote Manager device management platform as well as other support services, as shown by the launch of the Digi LifeCycle Assurance subscription solution and the recently announced launch of the Digi 360 subscription solution.
These bundled offerings are sold on a subscription basis and allow customers to monitor and manage the performance of our hardware remotely.
As of September 30, 2024 the (Annualized Recurring Revenue ("ARR") of this segment was $24 million.
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