Digi International: Record Quarterly Results From Accretive Acquistions

Digi International is capitalizing on IIOT growth, focusing on mission-critical industrial applications and higher-margin service offerings. DGII's revenue mix is shifting toward services, now 36%, as product revenue declines and end-to-end solutions gain traction. Strong 3QFY26 results beat consensus on both revenue and EPS, with broad-based growth and robust demand from data center clients. M&A remains a key growth lever, with recent software acquisitions performing to expectations and a pipeline of 10–20 potential targets under review.

Digi International Inc. (DGII) is rated a BUY. Despite the stock's +128% share price performance over the past year, the company is still trading at a discount compared to its closest peer, who has a weaker EBITDA.