Digi International Reports First Fiscal Quarter 2021 Results

Rhea-AI Summary

Digi International (Nasdaq: DGII) reported strong financial results for Q1 FY2021, with revenue rising to $73.1 million, a 17.4% increase from $62.3 million in Q1 FY2020. Adjusted EPS improved by 113.3% to $0.32 per diluted share. However, net loss per diluted share was ($0.01), down from a net income of $0.01 due to a $5.8 million earn-out adjustment. The IoT Solutions segment saw a 47.5% revenue increase, while IoT Products & Services increased by 13.1%, but operating income fell significantly in this segment.

Positive

• Revenue increased by 17.4% to $73.1 million.
• Adjusted EPS rose 113.3% to $0.32 per diluted share.
• Adjusted EBITDA increased by 94.8% to $13.0 million.
• IoT Solutions segment revenues increased by 47.5%.

Negative

• Net loss per diluted share was ($0.01), compared to net income of $0.01 in the previous year.
• Operating income in the IoT Product & Services segment decreased by 71.1% to $1.3 million.

Digi International^® Inc. (Nasdaq: DGII), a leading global provider of business and mission critical Internet of Things ("IoT") products, services and solutions, today announced its financial results for its first fiscal quarter ended December 31, 2020.

First Fiscal Quarter 2021 Results Compared to First Fiscal Quarter 2020 Results

• Revenue increased to $73.1 million compared to $62.3 million, an increase of $10.8 million, or 17.4%.
• Net loss per diluted share decreased to ($0.01) compared to net income per diluted share of $0.01. Net loss for the first quarter of fiscal 2021 includes an earn-out adjustment of $5.8 million, or $0.19 per fully diluted common share.
• Adjusted EPS increased to $0.32 per diluted share compared to $0.15 per diluted share, or 113.3%.
• Adjusted EBITDA increased to $13.0 million compared to $6.7 million, an increase of $6.3 million, or 94.8%.

Reconciliations of GAAP and non-GAAP financial measures appear at the end of this release.

"Our fiscal 2021 is off to a strong start, highlighting our model of recurring revenue, growth and profitability," said Ron Konezny, President and Chief Executive Officer. "Our recent organizational change has driven alignment, focus, and sharpened our dedication to our customers. We are excited to see our IoT Solutions business help ensure the safe distribution of leading vaccines. Digi’s core value proposition of enabling secure, automated, and zero touch applications has never been more relevant."

Segment Results

IoT Product & Services

The segment's first fiscal quarter 2021 revenues of $61.8 million increased 13.1% from the same period in the prior fiscal year. This increase is attributed primarily to the increased sales of console servers, partially offset by decreased sales of cellular routers. Gross profit margin increased 900 basis points to 57.8% of revenues for the first fiscal quarter of 2021. Products acquired through the acquisition of Opengear were the primary driver of the margin rate increase. Operating income of $1.3 million decreased $3.1 million, or 71.1% from the same period in the prior fiscal year. Included in the first quarter of fiscal 2021 was an earn-out adjustment of $5.8 million.

IoT Solutions

The segment's first fiscal quarter 2021 revenues of $11.3 million increased 47.5% from the same period in the prior fiscal year. New and existing customer deployments and equipment upgrades drove the increase. We now service over 75,000 sites as of December 31, 2020, compared to nearly 67,000 sites as of December 31, 2019. Gross profit margin decreased 250 basis points compared to the prior year first fiscal quarter, as revenue from hardware product sales were significantly higher and have lower gross margins than our recurring revenue. Operating loss of $1.4 million in the first quarter of fiscal 2021 improved $3.5 million, or 71.0%.

First Fiscal Quarter 2021 Conference Call Details

As announced on January 7, 2021, Digi will discuss its first fiscal quarter 2021 results on a conference call on Wednesday, February 3, 2021 after market close at 5:00 p.m. ET (4:00 p.m. CT). The call will be hosted by Ron Konezny, President and Chief Executive Officer and Jamie Loch, Chief Financial Officer.

Digi invites all those interested in hearing management's discussion of its quarter to access a live webcast of the conference call through the investor relations section of Digi's website at www.digi.com. Participants may also join the call directly by dialing (855) 638-5675 and entering passcode 3469742. International participants may access the call by dialing (262) 912-4765 and entering passcode 3469742. A replay will be available within approximately three hours after the completion of the call, and for one week following the call, by dialing (855) 859-2056 for domestic participants or (404) 537-3406 for international participants and entering access code 3469742 when prompted.

A copy of this earnings release can be accessed through the financial releases page of the investor relations section of Digi's website at www.digi.com.

For more news and information on us, please visit www.digi.com/aboutus/investorrelations.

About Digi International

Digi International (Nasdaq: DGII) is a leading global provider of IoT connectivity products, services and solutions. We help our customers create next-generation connected products and deploy and manage critical communications infrastructures in demanding environments with high levels of security and reliability. Founded in 1985, we’ve helped our customers connect over 100 million things and growing. For more information, visit Digi's website at www.digi

FAQ

What was Digi International's revenue for Q1 FY2021?

Digi International reported revenue of $73.1 million for Q1 FY2021, a 17.4% increase from the previous year.

How much did Digi's adjusted EPS increase in Q1 FY2021?

Digi's adjusted EPS increased by 113.3% to $0.32 per diluted share in Q1 FY2021.

What were the key financial metrics for Digi's IoT Solutions segment in Q1 FY2021?

The IoT Solutions segment generated $11.3 million in revenue, a 47.5% increase compared to the previous year.

Why did Digi report a net loss for Q1 FY2021?

Digi reported a net loss per diluted share of ($0.01) due to a $5.8 million earn-out adjustment.

When will Digi International discuss its Q1 FY2021 results?

Digi International will discuss its Q1 FY2021 results on February 3, 2021, after market close.