Digi International shares fell about 15% in after-hours trading on Wednesday even though the maker of connected-device hardware and software reported record quarterly sales. The stock traded at about $57.15, down from its regular-session close of $66.96, according to publicly reported prices. It had risen 2.9% during the day from Tuesday’s close of $65.05.
Revenue in the fiscal fourth quarter, which ended Sept. 30, rose 25% to $143.3 million from $114.3 million a year earlier. Adjusted earnings rose to 78 cents a share from 53 cents, and earnings under standard accounting rules rose to 38 cents a share from 26 cents. Analysts had expected adjusted earnings of 76 cents a share on revenue of $140.3 million, according to Investing.com. Annualized recurring revenue rose 30% to $197 million.
Investors appeared disappointed by margin pressure and a softer near-term outlook, Investing.com reported. For the first quarter of fiscal 2027, Digi forecast revenue of $140 million to $144 million, adjusted EBITDA of $39.5 million to $41 million and adjusted earnings of 71 to 75 cents a share. Fourth-quarter adjusted EBITDA was $41.7 million. On the call, Chief Executive Ron Konezny said the build-out of AI data centers had put a lot of pressure on the supply chain, especially memory, according to an Investing.com transcript.
For the full 2027 fiscal year, Digi expects revenue growth of 10% to 15% and growth in annualized recurring revenue of at least 15%. It also expects to complete its $130 million cash purchase of Norway-based Disruptive Technologies before Nov. 30, subject to regulatory approval.
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