Revenue: As of FY2026 Q3, the actual value is USD 138.67 M, beating the estimate of USD 133.97 M.

EPS: As of FY2026 Q3, the actual value is USD 0.4, beating the estimate of USD 0.3825.

EBIT: As of FY2026 Q3, the actual value is USD 22.86 M.

Q3 FY2026 Financial Highlights

Digi International Inc. reported record quarterly revenue of $139 million for the third fiscal quarter ended June 30, 2026, marking a 29% increase compared to the third fiscal quarter of 2025. Net income for the quarter was $16 million, a 54% increase year-over-year. Adjusted EBITDA reached $40 million, representing a 47% increase from the prior year period, with the Adjusted EBITDA margin at a record 29.1%. Annualized Recurring Revenue (ARR) stood at a record $191 million at quarter end, an increase of 52% year-over-year.

Operational Metrics

• Gross Profit Margin: The gross profit margin for Q3 2026 was 64.8%, an increase of 130 basis points from Q3 2025.
• Operating Margin: The operating margin reached 16.5% for Q3 2026, up 260 basis points from Q3 2025.
• Net Income: Net income was $15,740 thousand for Q3 2026, compared to $10,243 thousand for Q3 2025.
• Adjusted EBITDA: Adjusted EBITDA was $40,388 thousand for Q3 2026, compared to $27,559 thousand for Q3 2025.
• Operating Costs (Operating Expenses): Operating costs were $67,031 thousand for Q3 2026, compared to $53,345 thousand for Q3 2025.

Cash Flow

• Cash Flow from Operations (Q3 2026): Cash flow from operations reached $33 million, representing a 38% increase year-over-year, compared to $24 million in Q3 2025.
• Net Cash Provided by Operating Activities (Nine months ended June 30, 2026): Net cash provided by operating activities was $110,419 thousand, compared to $79,958 thousand for the same period in 2025.
• Year-to-Date Operating Cash Flow (FY26): Year-to-date operating cash flow was $110 million.
• Net Cash Used in Investing Activities (Nine months ended June 30, 2026): Net cash used in investing activities was - $50,568 thousand, compared to - $2,148 thousand for the same period in 2025.
• Net Cash Used in Financing Activities (Nine months ended June 30, 2026): Net cash used in financing activities was - $53,553 thousand, compared to - $85,291 thousand for the same period in 2025.
• Cash and Cash Equivalents (End of Q3 2026): Cash and cash equivalents stood at $27,972 thousand.

Balance Sheet Metrics

• Outstanding Debt (End of Q3 2026): Outstanding debt was $109 million.
• Cash and Cash Equivalents (End of Q3 2026): Cash and cash equivalents were $28 million.
• Debt Net of Cash and Cash Equivalents (End of Q3 2026): Debt net of cash was approximately $81 million.

Segment Revenue and Operational Metrics

• IoT Product & Services Segment (Q3 2026): Revenue for this segment increased by 25% to $100 million, and ARR increased by 100% to $60 million. The operating margin for this segment increased by 160 basis points to 16.8% of revenue.
• IoT Solutions Segment (Q3 2026): Revenue for this segment increased by 41% to $39 million, with ARR increasing by 36% to $131 million. The operating margin for this segment increased by 570 basis points to 15.7%.

Outlook / Guidance

Digi International Inc. raised its outlook for fiscal year 2026, now anticipating ARR growth of at least 27% versus fiscal 2025, up from prior guidance of 25%. Fiscal 2026 revenue is estimated to be between $529 million and $533 million, with Adjusted EBITDA projected to be between $146.0 million and $147.5 million. For the fourth fiscal quarter, revenues are estimated to be $138 million to $142 million, and Adjusted EBITDA is projected to be between $40.0 million and $41.5 million. The company aims to achieve $200 million in Annualized Recurring Revenue and $200 million in Adjusted EBITDA within five years, based on goals set at the beginning of Fiscal 2024.