Revenue of $108M, Record End of Quarter ARR of $110M
Cash Flow From Operations was $13 Million
(Minneapolis, MN, May 1, 2024) - 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 second fiscal quarter ended March 31, 2024.
Second Fiscal Quarter 2024 Results Compared to Second Fiscal Quarter 2023 Results
- Revenue was $108 million, a decrease of 3%.
- Gross profit margin was 57.9%, an increase of 130 basis points.
- Net income was $4 million, compared to $6 million.
- Net income per diluted share was $0.11, compared to $0.16.
- Adjusted net income per diluted share was $0.49, flat year over year.
- Adjusted EBITDA was $24 million, flat year over year.
- Annualized Recurring Revenue (ARR) was $110 million at quarter end, an increase of 11%.
本新闻稿末尾载有 GAAP 和非 GAAP 财务指标的调节表。
“Value added solutions for our customers, which directly correlate to our growth in ARR, is evident in our results. The diversity of Digi’s customer base and solutions, combined with strong operating discipline, inventory optimization, and improved debt structure generated nearly twice the operating cash flow, and have cut our interest payments nearly in half from last year,” stated Ron Konezny, President and CEO. “We remain steadfast in our commitment to enabling our customers meet their critical objectives through our solutions and services.”
其他财务要点
- We made payments towards our new revolving credit facility, reducing our net outstanding debt to $172 million at quarter end and debt net of cash and cash equivalents to $148 million.
- We had $3.7 million of interest expense in the second quarter of fiscal 2024, compared to $6.4 million a year ago. The decrease was driven by decreased debt outstanding and a reduction of our effective interest rate.
- Cash flow from operations was $13 million in the second quarter of fiscal 2024, compared to $7 million a year ago, driven primarily by year over year changes in inventory.
- Net inventory ended the quarter at $62 million, compared to $74 million at September 30, 2023, reflecting continued efforts to manage inventory levels.
- We accrued an approximate $6 million liability in the quarter for pending litigation.
分部业绩
IoT 产品与服务
The segment's second fiscal quarter 2024 revenue of $83 million decreased $2.5 million for the three months ended March 31, 2024, as compared to the same period in the prior fiscal year. This decrease consisted of an approximate $4.6 million decrease in product sales volume, with no material impact from pricing, from our Console Server and Cellular product lines that was partially offset by growth in OEM and $2.1 million in service revenue growth. ARR as of the end of the second fiscal quarter was $23 million, an increase of 35% from the prior fiscal year. This increase primarily was due to growth in the subscription base for Console Server services, complemented by growth in other business lines. Gross profit margin decreased 90 basis points to 54.0% of revenue for the second fiscal quarter of 2024, driven primarily by decreased volume as well as mix of lower gross profit products across Console Server and Cellular products. Operating income was $13 million, a decrease of 1%, primarily due to the decrease in revenue.
IoT 解决方案
The segment's second fiscal quarter 2024 revenue of $24 million decreased $0.9 million for the three months ended March 31, 2024, as compared to the same period in the prior fiscal year, consisting of a $0.9 million increase in recurring revenue offset by a $1.0 million decrease in one time services volume and a $0.8 million decrease in hardware sales. ARR as of the end of the second fiscal quarter was $87 million, an increase of 6% from the prior fiscal year primarily driven by growth in SmartSense. Gross profit margins increased 860 basis points to 71.0% in the second fiscal quarter of 2024. This increase was the result of growth in higher margin ARR subscription revenues. Operating loss was $4.7 million, compared to an operating loss of $0.8 million a year ago driven by the above referenced litigation reserve.
资本分配战略
We intend to deleverage the company while seeking optimal inventory levels as our supply chain continues to normalize. Our inventory position has declined but remains elevated. We believe this investment will deliver working capital benefits for Digi in future quarters.
Acquisitions remain a top capital priority for Digi. We will be disciplined in our approach and act when we believe an opportunity is appropriate to execute in the context of prevailing market conditions. We are evolving and monitoring our acquisition pipeline, and we intend to focus more on scale and ARR.
Third Fiscal Quarter 2024 and Full-Year 2024 Guidance
Digi remains steadfast in achieving our new long term strategic goals of doubling ARR and Adjusted EBITDA to $200 million within the next five years. Digi’s resilient execution in a large and growing Industrial Internet of Things market has stayed consistent. Our outlook on ARR growth for fiscal 2024 remains unchanged at 5%. While pleased with our first half results, we find our customers are more cautious on second half demand than we previously expected. This is demonstrated through longer than expected sales cycles which lowers our top line expectations. The softer top line expectations combined with tight expense controls slightly lowers our Adjusted EBITDA ranges to 0 to 5%, with revenue projection to be down 5% year over year. The macroeconomic conditions have us uncertain as to when, and to what degree, sales cycles will return to more normal conditions.
For the third fiscal quarter, revenues are estimated to be $103 million to $107 million. Adjusted EBITDA is estimated to be between $24.0 million and $25.5 million. Adjusted net income per share is anticipated to be between $0.47 and $0.51 per diluted share, assuming a weighted average diluted share count of 37.5 million shares.
We provide guidance or longer-term targets for Adjusted net income per share as well as Adjusted EBITDA targets on a non-GAAP basis. We do not reconcile these items to their most similar U.S. GAAP measure as it is difficult to predict without unreasonable efforts numerous items that include but are not limited to the impact of foreign exchange translation, restructuring, interest and certain tax related events. Given the uncertainty, any of these items could have a significant impact on U.S. GAAP results.
Second Fiscal Quarter 2024 Conference Call Details
As announced on April 8, 2024, Digi will discuss its second fiscal quarter results on a conference call on Thursday, May 2, 2024 at 10:00 a.m. ET (9:00 a.m. CT). The call will be hosted by Ron Konezny, President and Chief Executive Officer and Jamie Loch, Chief Financial Officer.
Participants may register for the conference call at: https://register.vevent.com/register/BI2bbfe01f2107469d85ced9c48f92b3e4. Once registration is completed, participants will be provided a dial-in number and passcode to access the call. All participants are asked to dial-in 15 minutes prior to the start time.
Participants may access a live webcast of the conference call through the investor relations section of Digi’s website, https://digi.gcs-web.com/ or the hosting website at: https://edge.media-server.com/mmc/p/9x9odirn/.
重播将在电话会议结束后约两小时内提供，为期约一年。您可以通过 Digi 网站的 "投资者关系 "版块访问网络广播重播。
您可以通过 Digi 网站 www.digi.com 的 "投资者关系 "部分的 "财务新闻稿 "页面查阅本财报。
有关我们的更多新闻和信息，请访问www.digi.com/aboutus/investorrelations。
关于 Digi International
Digi International（纳斯达克股票代码：DGII）是全球领先的IoT 连接产品、服务和解决方案提供商。我们帮助客户创造下一代连接产品，在高要求环境中部署和管理关键通信基础设施，并提供高水平的安全性和可靠性。公司成立于 1985 年，目前已帮助客户连接了 1 亿多个设备，并且还在不断增长。欲了解更多信息，请访问 Digi 网站 www.digi.com。
前瞻性陈述
This press release contains forward-looking statements that are based on management’s current expectations and assumptions. These statements often can be identified by the use of forward-looking terminology such as "assume," "believe," "continue," "estimate," "expect," "intend," "may," "plan," "potential," "project," "should," or "will" or the negative thereof or other variations thereon or similar terminology. Among other items, these statements relate to expectations of the business environment in which Digi operates, projections of future performance, inventory levels, perceived marketplace opportunities, interest expense savings and statements regarding our mission and vision. Such statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions. Among others, these include risks related to ongoing and varying inflationary and deflationary pressures around the world and the monetary policies of governments globally as well as present concerns about a potential recession, the ability of companies like us to operate a global business in such conditions as well as negative effects on product demand and the financial solvency of customers and suppliers in such conditions, risks related to ongoing supply chain challenges that continue to impact businesses globally, risks related to cybersecurity, risks arising from the present wars in Ukraine and the Middle East, the highly competitive market in which our company operates, rapid changes in technologies that may displace products sold by us, declining prices of networking products, our reliance on distributors and other third parties to sell our products, the potential for significant purchase orders to be canceled or changed, delays in product development efforts, uncertainty in user acceptance of our products, the ability to integrate our products and services with those of other parties in a commercially accepted manner, potential liabilities that can arise if any of our products have design or manufacturing defects, our ability to integrate and realize the expected benefits of acquisitions, our ability to defend or settle satisfactorily any litigation, the impact of natural disasters and other events beyond our control that could negatively impact our supply chain and customers, potential unintended consequences associated with restructuring, reorganizations or other similar business initiatives that may impact our ability to retain important employees or otherwise impact our operations in unintended and adverse ways, and changes in our level of revenue or profitability which can fluctuate for many reasons beyond our control. These and other risks, uncertainties and assumptions identified from time to time in our filings with the United States Securities and Exchange Commission, including without limitation, those set forth in Item 1A, Risk Factors, of our Annual Report on Form 10-K for the year ended September 30, 2023, subsequent filings on Form 10-Q and other filings, could cause our actual results to differ materially from those expressed in any forward-looking statements made by us or on our behalf. Many of such factors are beyond our ability to control or predict. These forward-looking statements speak only as of the date for which they are made. We disclaim any intent or obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.
非美国通用会计准则财务指标的列报
本新闻稿包括调整后净收入、调整后摊薄后每股净收入和调整后息税折旧摊销前利润（EBITDA），其中每项均为非美国通用会计准则（Non-GAAP）指标。
我们知道，非美国通用会计准则的使用存在重大限制。在分析财务业绩时，非美国通用会计准则（Non-GAAP）指标不能替代净收入等美国通用会计准则（GAAP）指标。这些指标的披露并不反映 Digi 实际确认的所有费用和收益。这些非美国通用会计准则（Non-GAAP）衡量标准不符合公认会计原则，也不能替代按照公认会计原则编制的衡量标准，可能与其他公司使用的非美国通用会计准则（Non-GAAP）衡量标准或我们在以前的报告中提出的衡量标准不同。此外，这些非美国通用会计准则衡量标准并非基于任何一套全面的会计规则或原则。我们认为，非美国通用会计准则衡量标准有其局限性，因为它们不能反映按照美国通用会计准则确定的与我们的运营结果相关的所有金额。我们认为，这些指标只能与相应的公认会计准则指标一起用于评估我们的运营结果。此外，调整后 EBITDA 并不反映我们的现金支出、更换折旧资产和摊销资产的现金需求，也不反映我们营运资金需求的变化或现金需求。
We believe that providing historical and adjusted net income and adjusted net income per diluted share, respectively, exclusive of such items as reversals of tax reserves, discrete tax benefits, restructuring charges and reversals, intangible amortization, stock-based compensation, other non-operating income/expense, changes in fair value of contingent consideration, acquisition-related expenses and interest expense related to acquisitions permits investors to compare results with prior periods that did not include these items. Management uses the aforementioned non-GAAP measures to monitor and evaluate ongoing operating results and trends and to gain an understanding of our comparative operating performance. In addition, certain of our stockholders have expressed an interest in seeing financial performance measures exclusive of the impact of these matters, which while important, are not central to the core operations of our business. Management believes that Adjusted EBITDA, defined as EBITDA adjusted for stock-based compensation expense, acquisition-related expenses, restructuring charges and reversals, and changes in fair value of contingent consideration, is useful to investors to evaluate our core operating results and financial performance because it excludes items that are significant non-cash or non-recurring items reflected in the Condensed Consolidated Statements of Operations. We believe that the presentation of Adjusted EBITDA as a percentage of revenue is useful because it provides a reliable and consistent approach to measuring our performance from year to year and in assessing our performance against that of other companies. We believe this information helps compare operating results and corporate performance exclusive of the impact of our capital structure and the method by which assets were acquired.
投资者联系方式：
罗布-贝内特
投资者关系
迪吉国际
952-912-3524
电子邮件: rob.bennett@digi.com
