Digi International (NASDAQ:DGII) Issues Quarterly Earnings Results, Beats Expectations By $0.09 EPS

Digi International (NASDAQ:DGII) released its earnings results on Wednesday. The technology company reported $0.75 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $0.66 by $0.09, FiscalAI reports. The company had revenue of $138.67 million for the quarter, compared to the consensus estimate of $132.57 million. Digi International had a net margin of 9.10% and a return on equity of 11.28%. Digi International’s quarterly revenue was up 29.0% compared to the same quarter last year. During the same quarter in the previous year, the company earned $0.53 EPS. Digi International updated its Q4 2026 guidance to 0.750-0.780 EPS.

Here are the key takeaways from Digi International’s conference call:

• Record Q3 results: Revenue reached $139 million, up 29% year over year, while adjusted EBITDA rose to $40 million with a record 29.1% margin. Cash flow from operations increased 38% to $33 million.
• Full-year guidance was raised: Digi now expects fiscal 2026 revenue of $529 million to $533 million, adjusted EBITDA of $146 million to $147.5 million, adjusted EPS of $2.67 to $2.70, and ARR growth of at least 27%.
• Recurring revenue and balance-sheet trends remain strong: ARR reached a record $191 million, with management expecting to approach $193 million, while net debt declined to $81 million and leverage fell below one times.
• Management cited improving sales-cycle times, pipeline growth, AI-related infrastructure demand, and supply-chain urgency as business drivers, but said hyperscaler opportunities for Opengear remain difficult to predict and were excluded from guidance. Digi is also introducing its DANI AI tool within Digi Remote Manager, initially to improve customer adoption and support rather than generate separate revenue.

Digi International Stock Up 0.8%

Shares of Digi International stock traded up $0.61 during trading hours on Wednesday, reaching $72.75. The company’s stock had a trading volume of 335,909 shares, compared to its average volume of 358,850. The company has a market capitalization of $2.74 billion, a P/E ratio of 64.38 and a beta of 0.97. The stock’s fifty day simple moving average is $68.60 and its two-hundred day simple moving average is $57.86. Digi International has a one year low of $30.69 and a one year high of $76.41. The company has a debt-to-equity ratio of 0.21, a quick ratio of 0.77 and a current ratio of 1.11.

Digi International News Summary

Here are the key news stories impacting Digi International this week:

• Positive Sentiment: Digi reported fiscal Q3 2026 revenue of approximately $138.7 million, up 29% year over year and ahead of the $132.6 million consensus estimate. Adjusted earnings per share were $0.75, exceeding expectations of $0.66 and increasing from $0.53 in the prior-year quarter. Digi International Reports Third Fiscal Quarter 2026 Results
• Positive Sentiment: Profitability also improved, with gross margin rising 130 basis points to 64.8%. The combination of revenue growth, margin expansion and the earnings beat supports the positive reaction in DGII shares. Digi International Reports Third Fiscal Quarter 2026 Results
• Positive Sentiment: Digi raised or reaffirmed favorable expectations for fiscal Q4, forecasting EPS of $0.750–$0.780 versus the $0.610 analyst consensus and revenue of $138 million–$142 million versus $135.9 million expected. Full-year revenue guidance of $529 million–$533 million also exceeds the $521.6 million consensus, signaling management’s confidence in continued demand.
• Neutral Sentiment: Management discussed the quarterly performance and outlook during the earnings call, giving investors additional context on operating trends and guidance. Digi International Q3 2026 Earnings Call Transcript
• Negative Sentiment: Zacks Research downgraded Digi International from “strong buy” to “hold.” The downgrade could weigh on the stock, particularly because DGII trades at a relatively elevated valuation, with a price-to-earnings ratio above 64, leaving less room for execution disappointments.

Wall Street Analyst Weigh In

Several equities research analysts have weighed in on the stock. Roth Capital reaffirmed a “buy” rating and issued a $70.00 price target on shares of Digi International in a research note on Thursday, May 7th. Stephens raised their target price on Digi International from $65.00 to $75.00 and gave the company an “overweight” rating in a research note on Tuesday, May 12th. Zacks Research lowered Digi International from a “strong-buy” rating to a “hold” rating in a research report on Monday. Craig Hallum boosted their target price on Digi International from $50.00 to $75.00 and gave the company a “buy” rating in a research report on Thursday, May 7th. Finally, Piper Sandler increased their price target on Digi International from $46.00 to $63.00 and gave the stock a “neutral” rating in a report on Thursday, May 7th. Four equities research analysts have rated the stock with a Buy rating and three have assigned a Hold rating to the company’s stock. According to MarketBeat.com, the company has a consensus rating of “Moderate Buy” and an average target price of $66.20.

Insider Buying and Selling

In other news, CFO James J. Loch sold 100,000 shares of the company’s stock in a transaction on Tuesday, June 2nd. The shares were sold at an average price of $69.44, for a total value of $6,944,000.00. Following the completion of the sale, the chief financial officer owned 167,589 shares in the company, valued at $11,637,380.16. This represents a 37.37% decrease in their position. The transaction was disclosed in a legal filing with the SEC, which is available through this hyperlink. Also, VP David H. Sampsell sold 6,376 shares of the business’s stock in a transaction that occurred on Wednesday, May 13th. The stock was sold at an average price of $65.11, for a total value of $415,141.36. Following the completion of the transaction, the vice president owned 18,364 shares in the company, valued at $1,195,680.04. The trade was a 25.77% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Over the last three months, insiders have sold 121,008 shares of company stock worth $8,320,222. 3.40% of the stock is owned by corporate insiders.

Institutional Inflows and Outflows

Institutional investors have recently bought and sold shares of the business. GW&K Investment Management LLC bought a new position in Digi International during the fourth quarter valued at about $2,410,000. Ameriprise Financial Inc. lifted its stake in Digi International by 7.7% in the second quarter. Ameriprise Financial Inc. now owns 652,197 shares of the technology company’s stock valued at $22,736,000 after purchasing an additional 46,659 shares during the last quarter. Campbell & CO Investment Adviser LLC grew its holdings in Digi International by 65.0% during the fourth quarter. Campbell & CO Investment Adviser LLC now owns 47,468 shares of the technology company’s stock valued at $2,055,000 after purchasing an additional 18,706 shares during the period. Millennium Management LLC raised its stake in shares of Digi International by 138.3% in the fourth quarter. Millennium Management LLC now owns 19,055 shares of the technology company’s stock valued at $825,000 after buying an additional 11,059 shares during the period. Finally, Captrust Financial Advisors raised its stake in shares of Digi International by 15.2% in the fourth quarter. Captrust Financial Advisors now owns 18,204 shares of the technology company’s stock valued at $788,000 after buying an additional 2,396 shares during the period. Institutional investors own 95.90% of the company’s stock.

Digi International Company Profile

Digi International Inc is a provider of Internet of Things (IoT) connectivity products and services designed to link devices to networks and applications securely. The company develops a broad range of networking hardware, including cellular and Ethernet routers, gateways, embedded modules and adaptors, as well as accessories and antennas. Digi’s solutions enable businesses to deploy remote monitoring, control and automation systems across diverse industries such as transportation, utilities, healthcare, retail and industrial manufacturing.

In addition to its physical devices, Digi offers cloud-based management software and professional services that simplify device configuration, monitoring and over-the-air updates.