Digi International reported first fiscal quarter 2026 revenue of $122 million, up 18% from the prior-year period. Annualized Recurring Revenue (ARR) climbed 31% to $157 million, driven by strong subscription growth in remote management platforms and warranty offerings, as well as the contribution from the Jolt acquisition.

Gross profit margin expanded 40 basis points to 62.4%, while operating margin improved by the same amount to 13.3%. Net income rose 16% to $12 million, or $0.31 per diluted share. On a non-GAAP basis, adjusted net income increased 27% to $21 million, and adjusted EBITDA grew 23% to $32 million. Adjusted EPS was $0.56, up 24% after incorporating interest expense into the calculation for the first time.

Operating cash flow reached $36 million, compared with $30 million in Q1 2025, reflecting robust working capital management. The company paid down $24 million on its revolving credit facility, reducing net debt (debt less cash) to $104 million. Cash and cash equivalents stood at $31 million at quarter end.

For fiscal 2026, Digi expects ARR growth of 23%, revenue growth between 14% and 18%, and adjusted EBITDA growth of 17%–21%, including contributions from the January acquisition of Particle (approximately $20 million–$22 million in ARR and $13 million–$14 million in revenue). Second-quarter revenue is projected at $124 million–$128 million with adjusted EBITDA of $31.5 million–$33.0 million. Management emphasized disciplined capital allocation, continued deleveraging, and targeted IoT solutions acquisitions as key drivers of long-term value.