Why Digi International Stock Crushed it With a 7% Gain Today
Key Points
It ended its fiscal 2025 with an estimates-beating quarter.
Its guidance for the first frame of the new fiscal year also topped analyst projections.
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Beating the consensus analyst estimates both for its trailing quarter and forward guidance, Digi International (NASDAQ: DGII) stock was a racehorse on Thursday. Its shares rose by a robust 7% the day after the company published its fiscal fourth-quarter 2025 figures. That rise looked particularly strong when compared to the 1.7% slide of the S&P 500 (SNPINDEX: ^GSPC) across the trading session.
Things that produce revenue and profit
Digi International, which focuses on Internet of Things (IoT) solutions, managed to increase its revenue by 9% year over year to $114 million, a new quarterly record. Also hitting an all-time high was annual recurring revenue (ARR), which totaled $152 million at quarter-end.
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Image source: Getty Images.
As for the bottom line, Digi International's net income not according to generally accepted accounting principles (GAAP) grew by 10% to $21 million, or $0.56 per share.
On average, analysts tracking the stock were expecting lower revenue of below $110 million, and a slightly more modest non-GAAP (adjusted) net income figure of $0.51.
CEO Ron Konezny was quoted as saying that the successful quarter came from the company "delivering reliable and secure value-added IoT solutions in the midst of material market challenges and rapid geopolitical changes."
A pair of forward beats
Digi International also beat pundit projections for its current (first) quarter guidance. The company expects to earn $114 million to $118 million on the top line, filtering down to per-share, adjusted profitability of $0.53 to $0.57. The average analyst estimates for the two line items are $113 million and $0.52, respectively.
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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