Key Highlights

  • Digi International (NASDAQ:DGII) shares fell about 13.5% to 15% in after-hours trading on November 11, 2026, after closing the regular session up 2.94% at USD 66.96.
  • Fiscal fourth-quarter Revenue reached a record USD 143.3 million, up 25%, beating forecasts of about USD 140.3 million, and adjusted Earnings of USD 0.78 per share beat a USD 0.76 consensus.
  • Annual Recurring Revenue reached a record USD 197 million, up 30%, and fiscal 2026 revenue rose 24% to USD 535 million.
  • Management guided first-quarter adjusted EBITDA lower than the fourth quarter, citing Supply chain and memory cost pressure and a slow start to the year.

A Record Quarter on Paper

Digi International (NASDAQ:DGII) sells hardware, software and services that connect machines to the internet, a market known as the Internet of Things. Its fiscal fourth quarter, reported after the close on November 11, 2026, looked strong. Revenue rose 25% to a record USD 143.3 million, adjusted EBITDA rose 43% to USD 41.7 million, a Margin of 29.1%, and adjusted earnings rose 47% to USD 0.78 per share. GAAP earnings were USD 0.38 per share. Annual recurring revenue, the measure investors watch most closely as the company shifts toward subscriptions, reached USD 197 million, up 30%. The IoT Products and Services segment grew 28% to USD 105 million, helped by the Particle acquisition, while IoT Solutions grew 20% to USD 38 million. Gross margin was 63.7%, and net Debt fell to about USD 39 million after strong Operating Cash Flow of around USD 153 million for the year.

Why the Stock Fell Anyway

The after-hours drop of about 15% was about the next few quarters, not the last one. Management said adjusted EBITDA in the first quarter of fiscal 2027 would decline from the fourth quarter, citing supply chain pressure including memory costs and longer lead times, seasonal expenses and a slow start to the year for its products business. First-quarter guidance calls for revenue of USD 140 million to USD 144 million, adjusted EBITDA of USD 39.5 million to USD 41.0 million and adjusted earnings of USD 0.71 to USD 0.75 per share, all below the fourth-quarter run rate. For the full fiscal year, the company expects revenue growth of 10% to 15%, adjusted EBITDA growth of 12.5% to 17.5% and recurring revenue growth of at least 15%. That is a deceleration from 24% revenue growth in fiscal 2026. After a strong run in the shares, the market reacted sharply to the slower trajectory.

Acquisition and What Comes Next

Digi also agreed on September 30 to buy Disruptive Technologies, a Norwegian wireless sensor company, for USD 130 million in cash funded from its Credit facility, with closing expected before November 30. Management describes fiscal 2027 as a transition year for that Business as it moves from one-time sensor sales to subscriptions. The company says its sales pipeline is at a record level and growing at a double-digit rate, and it reiterated long-term goals of about USD 200 million of recurring revenue and USD 200 million of adjusted EBITDA. Risks include component costs, industrial Demand that remains uneven, and integration of a new acquisition. Investors will watch whether first-quarter results land at the top of guidance and whether recurring revenue growth holds above 15%. For Digi International (NASDAQ:DGII), the reaction shows that a beat is not enough when the forward profit path flattens.

Where Things Stand

Digi International (NASDAQ:DGII) fell about 15% after hours on November 11, 2026 even though fiscal fourth-quarter revenue rose 25% to a record USD 143.3 million and recurring revenue grew 30% to USD 197 million. Investors focused on guidance for lower first-quarter EBITDA, memory and supply chain costs, and slower growth of 10% to 15% for fiscal 2027. Execution on the new Acquisition and recurring revenue will shape the recovery.