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Digi International: ARR Growth and Margin Pressures
Digi International hits record revenue and ARR targets but faces margin pressures from acquisitions and supply chains.
In brief
Digi International hits record revenue and ARR targets but faces margin pressures from acquisitions and supply chains. Digi International achieved $535 million revenue and $197 million ARR for Q4 FY2026, but near-term margin pressures from Disruptive Technologies integration and supply chain costs threaten…
Q4 FY2026 Results
Digi International reported $143 million revenue, a 25% year-over-year increase, and a new quarterly record.
Full-Year FY2026 Performance
Full-year revenue reached $535 million with 24% year-over-year growth and $197 million ARR on track for $200 million by fiscal 2027.
IoT Segment Growth
IoT products and services expanded nearly 30% year-over-year with a 320 basis-point margin improvement.
Acquisition Impact
Pending $130 million acquisition of Disruptive Technologies expected to close by November 30, 2026, targets wireless sensing and European building automation markets.
Margin Pressures
Supply chain pressures and elevated memory component costs threaten gross margins despite improved operating leverage.
FY2027 Guidance
Fiscal 2027 guidance calls for 10, 15% revenue growth and at least 15% ARR growth, a deceleration from FY2026’s 24% expansion.
The main idea
Digi International achieved $535 million revenue and $197 million ARR for Q4 FY2026, but near-term margin pressures from Disruptive Technologies integration and supply chain costs threaten profitability.
