Key Highlights

  • Digi International (NASDAQ:DGII) fell 12.72% on November 12, 2026, after trading as much as 17.38% lower earlier in the session.
  • Fiscal fourth-quarter Revenue was USD 143 million, up 25%, with Net Income of USD 15 million, up 50%, and diluted Earnings of USD 0.38 per share.
  • Annual Recurring Revenue reached USD 197 million, up 30%, and fiscal 2026 revenue was USD 535 million, up 24%.
  • Fiscal 2027 guidance calls for revenue growth of 10% to 15% and adjusted EBITDA growth of 12.5% to 17.5%, a sharp slowdown from the year just ended.

A Strong Quarter Meets a Slower Outlook

The reaction in Digi International (NASDAQ:DGII) shows how much the market had already paid for growth. The company reported on the afternoon of November 11, 2026, and the selling came in the next regular session. Fiscal fourth-quarter revenue of USD 143 million rose 25%, net income rose 50% to USD 15 million and Operating Cash Flow reached USD 42 million, against USD 28 million a year earlier. Annual recurring revenue climbed 30% to USD 197 million, which is the metric investors prize most because it signals durable software and services income. Gross Margin of 63.7% slipped by 20 basis points. None of those figures were weak, yet the stock fell 12.72% because the fiscal 2027 outlook implies growth of 10% to 15%, less than half of the 24% delivered in fiscal 2026. When a stock trades on acceleration, even a healthy deceleration can trigger a derating, and the intraday low near 17% down shows how quickly sellers moved.

What Drove Fiscal 2026 and What Is Priced In

Fiscal 2026 revenue of USD 535 million, up 24%, and net income of USD 54 million, or USD 1.38 per diluted share, mark a year of strong execution across connectivity products, remote management software and solutions for industrial, energy and public safety customers. Part of the growth came from acquisitions, so organic momentum matters more than the headline rate. The fiscal 2027 guide of 10% to 15% revenue growth and 12.5% to 17.5% adjusted EBITDA growth also reflects a tougher comparison base. A pending deal adds a further variable. Digi has agreed to buy Disruptive Technologies for USD 130 million in cash, with closing expected before November 30, 2026, subject to regulatory approval. Whether the guidance includes the full contribution is a question investors will want answered on the next call. The wider session did not help, because the Russell 2000 fell 1.66% as Treasury yields rose sharply and pressured growth multiples.

Risks and Catalysts Ahead

Execution risk centres on integrating acquisitions while holding gross margin near 64%. Customers in industrial and infrastructure markets can delay orders when rates rise, and a slower pace of new recurring revenue would challenge the premium valuation. Supporters will point to cash generation, a growing recurring base and a Balance Sheet that can fund further deals. Investors in Digi International (NASDAQ:DGII) will watch for the Disruptive Technologies closing, for quarterly annual recurring revenue growth that stays near 30% and for any change in the guidance range. A stock that falls more than 12% on a quarter with 25% growth often finds buyers once the numbers are digested, but the next catalysts will decide whether that happens or whether the lower growth rate reshapes how the company is valued.

Where Things Stand

Digi fell 12.72% on November 12, 2026 after reporting fiscal fourth-quarter revenue growth of 25% but guiding to 10% to 15% growth for fiscal 2027. Recurring revenue of USD 197 million and strong cash flow support the business, while the pending USD 130 million Disruptive Technologies deal and the pace of recurring revenue growth will shape sentiment from here.