Digi International Inc. (DGII) stock soared 5.64% in the pre-market trading session on Thursday, following the release of its strong Q1 2025 earnings report.
The company achieved a record annual recurring revenue (ARR) of $120 million, marking an 11% increase over the previous year. ARR now constitutes a record 28% of Digi's quarterly revenues, highlighting a successful transition to a recurring revenue model.
Other highlights from the Q1 report include:
However, the company also faced some challenges, such as a $4.7 million decline in one-time revenues, potentially affecting overall revenue growth. Additionally, guidance for the second fiscal quarter projects flat revenue and a slight decline in EBITDA, suggesting potential margin pressures due to less favorable product mix and uncertainty regarding tariff impacts on the supply chain.
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