On November 9, 2023, Digi International Inc (DGII, Financial), a leading global provider of Internet of Things (IoT) products and services, released its financial results for the fourth fiscal quarter and the full fiscal year ended September 30, 2023. The company reported a record annual revenue of $445 million, a 15% increase from the previous fiscal year, and an end-of-quarter ARR of $106 million. The full-year EPS was $0.67, with an adjusted EPS of $1.99.
Fiscal Performance Overview
Comparing the fourth fiscal quarter of 2023 to the same period in 2022, DGII saw a 6% increase in revenue, reaching $112 million. The gross profit margin improved by 130 basis points to 57.1%. However, net income per diluted share decreased by 45% to $0.17, while adjusted net income per diluted share grew by 16% to $0.52. Adjusted EBITDA for the quarter rose by 14% to $25 million. The full fiscal year painted a brighter picture with significant increases across the board, including a 24% increase in net income per diluted share and a 20% rise in adjusted net income per diluted share.
Segment Performance and Capital Allocation
The IoT Product & Services segment reported a 9% increase in fourth-quarter revenues to $88 million, while the IoT Solutions segment saw a slight 4% decrease to $24 million. Despite this, the IoT Solutions segment managed to turn a previous year's operating loss into a gain. Digi International Inc (DGII, Financial) also made substantial debt payments totaling $36 million in fiscal 2023, reducing its outstanding debt to $214 million.
Management Commentary
President and CEO Ron Konezny commented on the company's resilience and record performance, stating,
Digi overcame many challenges throughout fiscal 2023. Our team remained resilient and focused on strong execution delivering record performance,"and expressed confidence in the long-term potential of the IoT market.
Future Outlook and Guidance
Looking ahead, Digi International Inc (DGII, Financial) has set strategic goals to double ARR and Adjusted EBITDA to $200 million within the next five years. The company anticipates global macroeconomic headwinds to persist and expects ARR and Adjusted EBITDA to grow by 5% in fiscal 2024, with revenue projected to be flat year over year. For the first fiscal quarter, revenues are estimated to be between $103 million and $108 million, with Adjusted EBITDA between $21.0 million and $22.9 million.
For more detailed financial information and to view the full earnings release, please visit the investor relations section of Digi's website at www.digi.com/aboutus/investorrelations.
Digi International Inc (DGII, Financial) continues to navigate a challenging global business environment while achieving growth and setting ambitious targets for the future. With a focus on capital allocation and strategic acquisitions, the company is positioning itself for sustained success in the evolving IoT market.
Explore the complete 8-K earnings release (here) from Digi International Inc for further details.
