Abstract

Digi will release fiscal results on February 04, 2026 Post Market; this preview compiles consensus forecasts and recent company indicators to frame expectations for revenue, margins, net income, and adjusted EPS for the current quarter.

Market Forecast

The market’s current viewpoint implies Digi’s quarterly revenue around USD 116.13 million, adjusted EPS near USD 0.55, and EBIT around USD 20.84 million, with year-over-year growth of 11.58% for revenue and 10.60% for EPS. The company’s gross profit margin and net profit margin are expected to track near recent levels, with gross profit margin stability implied and net margin guided by operating leverage; year-over-year EBIT growth is projected at 26.78%.

The main business highlights center on hardware products and services, where hardware remains the larger revenue source and services provide recurring mix support. The most promising segment is services, given its contribution of USD 133.64 million last quarter and the sustained year-over-year momentum that supports margin durability.

Last Quarter Review

Digi’s prior quarter delivered revenue of USD 114.34 million, a gross profit margin of 64.85%, GAAP net profit attributable to the parent company of USD 9.98 million, a net profit margin of 8.73%, and adjusted EPS of USD 0.56, with year-over-year revenue growth of 8.84% and adjusted EPS growth of 7.69%.

A key highlight was revenue exceeding estimates by USD 4.09 million, supported by resilient gross margin at 64.85% despite mixed demand conditions. Main business performance reflected USD 296.58 million from hardware products and USD 133.64 million from services, with services maintaining healthier mix dynamics and likely stronger year-over-year growth than hardware.

Current Quarter Outlook

Core Connectivity Hardware

Digi’s core hardware portfolio continues to anchor revenue and scale, drawing from enterprise and industrial connectivity demand cycles. With last quarter’s hardware revenue base reported at USD 296.58 million, hardware remains critical to volume throughput, channel engagement, and installed base expansion. Pricing discipline and product mix will influence the gross profit margin profile; the company’s recent 64.85% gross margin suggests a constructive mix but leaves limited room for input cost volatility. The quarter-on-quarter net profit softness of -2.56% highlights the sensitivity of net margin to opex timing and inventory normalization in hardware-heavy periods. For this quarter, consensus revenue growth of 11.58% implies steady orders and backlog conversion, but hardware growth is likely moderated by product cycle timing and customers’ deployment pacing. Watch for commentary on design-win conversions, lead times, and backlog coverage into the next fiscal period, which can sustain revenue visibility without pressuring discounting or channel incentives.

Recurring Services and Software

Services demonstrated resilience and margin accretion, posting USD 133.64 million last quarter, and underpinning recurring revenue quality for the portfolio. This segment’s performance supports stability in gross margin and contributes to EBIT expansion through subscription and maintenance economics. The model benefits from installed base growth in hardware, as service attach rates and renewal retention drive predictable cash generation. For the current quarter, the EPS forecast of USD 0.55 with 10.60% year-over-year growth aligns with a scenario where services offset seasonal hardware fluctuations, stabilizing net margin near recent levels. Key levers include managed connectivity, device management platforms, and support offerings, which can limit volatility in unit-driven hardware quarters. If service mix expands sequentially, the company could maintain gross margin near last quarter’s 64.85% despite operational adjustments, and keep EBIT growth tracking the 26.78% year-over-year estimate.

Stock Price Drivers and Sensitivities

Investors are focusing on profitability cadence versus growth, with EBIT projected at USD 20.84 million and EPS at USD 0.55, anchoring expectations for margin consistency. The -2.56% quarter-on-quarter net profit change last quarter underscores sensitivity to operating expense phasing and the timing of revenue mix between hardware and services. For this quarter, revenue execution at USD 116.13 million and sustaining gross margin in the mid-60% range will be pivotal, while net margin will hinge on operating efficiency and service expansion. Upside could come from stronger-than-expected hardware shipments tied to enterprise deployments, while downside risk would stem from elongated customer decision cycles or higher cost of goods impacting gross margin. Management guidance on pipeline conversion and pricing discipline will be closely watched as the market calibrates EPS versus revenue growth.

Analyst Opinions

Institutional commentary skews cautiously positive, with a majority expecting in-line to slightly above consensus performance supported by service mix and stable gross margins. Views highlight the prospect of revenue around USD 116.13 million and EPS near USD 0.55, framed by EBIT year-over-year growth near 26.78%, suggesting operating leverage that depends on services retention and cost control. Analysts emphasize that maintaining gross margin around 64.85% would validate the recurring model’s contribution and give flexibility to navigate hardware cycle variability. A constructive stance rests on evidence of backlog conversion in enterprise and industrial accounts, plus clarity on mix shifts toward services; the market is prepared for modest upside if these drivers materialize with disciplined operating spend.