UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: March 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . Commission file number: 001-34033 DIGI INTERNATIONAL INC. (Exact name of registrant as specified in its charter) Delaware 41-1532464 (State or other jurisdiction ...

Digi International Inc. (NASDAQ:DGII) Q1 2023 Earnings Conference Call February 2, 2023 10:00 AM ET Company Participants Ron Konezny - President and Chief Executive Officer Jamie Loch - Chief Financial Officer Conference Call Participants Tommy Moll - Stephens Harsh Kumar - Piper Sandler Mike Walkley - Canaccord Genuity Anthony Stoss - Craig-Hallum Scott Searle - ROTH Derek Soderberg - Cantor Fitzgerald Operator Good day, ladies and gentlemen and thank you for standing by. Welcome to the First Fiscal Quarte ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: December 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . Commission file number: 001-34033 DIGI INTERNATIONAL INC. (Exact name of registrant as specified in its charter) Delaware 41-1532464 (State or other jurisdict ...

Financial Performance - Consolidated revenue for fiscal 2022 was $388 million, an increase of 26% compared to fiscal 2021[184] - Net income for fiscal 2022 was $19 million, an increase of 87% from $10 million in fiscal 2021[184] - Annualized Recurring Revenue (ARR) exceeded $94 million at year-end, representing a 149% increase[185] - Consolidated operating income rose to $38 million, a 263% increase from $11 million in the previous year[184] - Diluted earnings per share increased to $0.54, up 74% from $0.31 in fiscal 2021[184] - Adjusted EBITDA for fiscal 2022 was $79.4 million, representing 20.5% of total revenue, compared to $48.3 million or 15.6% in fiscal 2021[209] - Net income for fiscal 2022 was $19.4 million, or $0.54 per diluted share, compared to $10.4 million, or $0.31 per diluted share in fiscal 2021[212] - Total revenue for fiscal 2022 was $388.2 million, up from $308.6 million in fiscal 2021[209] Revenue Growth - The acquisition of Ventus was completed for approximately $350 million, contributing significantly to revenue growth in the IoT Solutions segment[186] - IoT Solutions revenue increased by 103.7% for fiscal 2022, primarily due to additional recurring revenue from the Ventus acquisition[193] - IoT Products & Services revenue grew by 12.7%, attributed to increased sales of console server and cellular products[191] - The company anticipates continued growth in the IoT market, with a focus on expanding subscription and cloud monitoring services[187] Expenses and Costs - Total operating expenses increased by $21.9 million to $178.1 million in fiscal 2022, representing a 14.1% increase from fiscal 2021[199] - Sales and marketing expenses rose to $70.4 million, accounting for 18.1% of total revenue, up from 20.1% in the previous year[199] - Research and development expenses increased by 18.2% to $55.1 million, while general and administrative expenses surged by 43.3% to $58.5 million[199] - Interest expense increased significantly by 1,312.3% to $(19.7) million due to refinancing of the revolving loan[201] Cash Flow and Investments - Cash flows from operating activities decreased by $20.0 million, while cash flows used in investing activities decreased by $328.2 million[218] - Operating activities generated $37,740 in fiscal 2022, a decrease of 34.7% from $57,723 in fiscal 2021[219] - Investing activities resulted in a net outflow of $(349,528) in fiscal 2022, compared to $(21,365) in fiscal 2021[219] - Financing activities provided $192,782 in fiscal 2022, a significant increase from $62,242 in fiscal 2021[219] - The net increase in cash and cash equivalents was $(117,532) in fiscal 2022, contrasting with an increase of $98,303 in fiscal 2021[219] - There was a $41.4 million increase in inventory during the period, compared to a decrease of $13.6 million in fiscal 2021[219] - The company recorded an increase of $328.4 million used for acquisitions, primarily related to the acquisition of Ventus in November 2021[222] Foreign Operations and Currency Risk - The company had approximately $85.8 million in revenue related to foreign customers in fiscal 2022, with $0.8 million denominated in foreign currencies[228] - A 10.0% change in average exchange rates for the Euro, British Pound, Canadian Dollar, Indian Rupee, and Australian Dollar would have resulted in a 1.2% increase or decrease in stockholders' equity at September 30, 2022[258] - The average exchange rate for the Euro decreased by 7.5% from 1.1951 in 2021 to 1.1057 in 2022[260] - The average exchange rate for the British Pound decreased by 10.5% from 1.2718 in 2021 to 1.1377 in 2022[260] - The average exchange rate for the Canadian Dollar decreased by 1.8% from 0.7911 in 2021 to 0.7768 in 2022[260] - The company has not implemented a formal hedging strategy to manage foreign currency risk[257] Tax and Audit Matters - The effective income tax benefit rates were (4.1)% for fiscal 2022, compared to (15.2)% in fiscal 2021[202] - The company believes that liabilities for uncertain tax positions are properly stated and routinely monitors potential impacts[253] - No critical audit matters were identified during the current period audit of the financial statements[268] - The audit firm has served as the Company's auditor since 2016[269] - The accompanying notes are integral to the consolidated financial statements[271] Liabilities and Obligations - The total contractual obligations as of September 30, 2022, amounted to $355,149, with $38,113 due within one year[233] - As of September 30, 2022, the company had $250.0 million outstanding under its Term Loan and $0.0 million under its Revolving Loan[256] - Borrowings under the Term Loan Facility bear interest at a rate equal to LIBOR plus 5.00% or a base rate plus 4.00%, with a floor of 0.50%[256] - A 25 basis point change in interest rates would increase or decrease the company's interest expense by $0.6 million[256] - Goodwill for the SmartSense reporting unit was $49.5 million, with fair values exceeding carrying values by less than 10% as of June 30, 2022[249] - The total market capitalization was $852.0 million as of June 30, 2022, indicating a range of control premiums of (5.6)% to 7.9%[251]

Digi International Inc. (NASDAQ:DGII) Q4 2022 Earnings Conference Call November 10, 2022 10:00 AM ET Company Participants Ron Konezny - President and Chief Executive Officer Jamie Loch - Chief Financial Officer Conference Call Participants Harsh Kumar - Piper Sandler Tommy Moll - Stephens Anthony Stoss - Craig-Hallum Derek Soderberg - Cantor Operator Good day and thank you for standing by. Welcome to Digi International’s Fourth Fiscal Quarter 2022 Conference Call. [Operator Instructions] Please be advised t ...

Digi International Inc. (NASDAQ:DGII) Q3 2022 Earnings Conference Call August 4, 2022 10:00 AM ET Company Participants Ron Konezny - President and Chief Executive Officer Jamie Loch - Chief Financial Officer Conference Call Participants Harsh Kumar - Piper Sandler Tommy Moll - Stephens Mike Walkley - Canaccord Genuity Anthony Stoss - Craig-Hallum Scott Searle - ROTH Capital Partners Operator Hello. Thank you for standing by and welcome to the Fiscal Third Quarter 2022 Digi International Earnings Conference ...

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1: Unaudited Financial Statements](index=3&type=section&id=ITEM%201.%20Unaudited%20Financial%20Statements) The unaudited condensed consolidated financial statements for the period ended June 30, 2022, show significant year-over-year growth in revenue and net income, largely driven by the acquisition of Ventus Networks. Total assets increased substantially due to added goodwill and intangible assets, financed by new long-term debt. Cash flow from operations decreased due to working capital changes, while investing cash flow was primarily used for the acquisition. Stockholders' equity saw a modest increase Condensed Consolidated Statements of Operations Highlights (in thousands) | Metric | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Nine Months Ended June 30, 2022 | Nine Months Ended June 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenue** | $103,517 | $79,079 | $282,487 | $229,526 | | **Gross Profit** | $57,426 | $42,556 | $157,291 | $124,031 | | **Operating Income** | $9,974 | $4,018 | $21,337 | $7,242 | | **Net Income** | $4,126 | $3,157 | $8,160 | $5,778 | | **Diluted EPS** | $0.12 | $0.09 | $0.23 | $0.18 | Condensed Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2022 | September 30, 2021 | | :--- | :--- | :--- | | **Total Assets** | $863,639 | $619,531 | | Goodwill | $341,708 | $225,522 | | **Total Liabilities** | $376,717 | $147,014 | | Long-Term Debt | $240,702 | $45,799 | | **Total Stockholders' Equity** | $486,922 | $472,517 | Condensed Consolidated Statements of Cash Flows Highlights (Nine Months Ended, in thousands) | Activity | June 30, 2022 | June 30, 2021 | | :--- | :--- | :--- | | **Net Cash from Operating Activities** | $15,454 | $42,084 | | **Net Cash used in Investing Activities** | ($351,771) | ($7,957) | | **Net Cash from Financing Activities** | $224,313 | $60,579 | | **Net (Decrease) Increase in Cash** | ($110,917) | $92,813 | - On November 1, 2021, the company acquired Ventus Networks, LLC for approximately **$350 million** in cash, funded by cash on hand and debt financing. This acquisition significantly enhances the IoT Solutions segment[23](index=23&type=chunk) - Goodwill increased to **$341.7 million** as of June 30, 2022, primarily due to the **$118.3 million** of goodwill from the Ventus acquisition. The annual impairment test indicated no impairment, but the fair values for the SmartSense and Ventus reporting units exceeded carrying values by less than 10%[38](index=38&type=chunk)[42](index=42&type=chunk) [Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=ITEM%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's performance, highlighting strong revenue growth driven by both the IoT Products & Services segment and the newly acquired Ventus business in the IoT Solutions segment. The acquisition led to higher gross margins in IoT Solutions but also increased operating expenses and debt. Despite supply chain challenges, demand remains strong. The company believes its liquidity is sufficient for future operations [Overview and Key Objectives](index=24&type=section&id=Overview%20and%20Key%20Objectives) Digi is a global provider of IoT connectivity solutions with two segments: IoT Products & Services and IoT Solutions. The IoT Solutions segment has been significantly expanded with the acquisition of Ventus. Key objectives for fiscal 2022 include growing the IoT Solutions segment, introducing new products in the IoT Products & Services segment, and integrating the Ventus acquisition. The company faces supply chain constraints but has strong demand and record backlogs - The business operates through two segments: IoT Products & Services (embedded modules, routers, console servers) and IoT Solutions (SmartSense® monitoring and Ventus MNaaS)[106](index=106&type=chunk)[107](index=107&type=chunk)[109](index=109&type=chunk) - Key operating objectives for fiscal 2022 are: continued growth of SmartSense® and Ventus, growth in IoT Products & Services via new products, and integration of the Ventus business[112](index=112&type=chunk) Q3 2022 Key Performance Metrics vs. Q3 2021 | Metric | Q3 2022 | Q3 2021 | % Change | | :--- | :--- | :--- | :--- | | Consolidated Revenue | $104M | - | +31% | | Consolidated Operating Income | $10.0M | - | +148% | | Diluted EPS | $0.12 | $0.09 | +33% | | Adjusted EBITDA | $21M | - | +82% | | Adjusted Net Income per Share | $0.45 | $0.25 | +80% | [Results of Operations](index=25&type=section&id=Results%20of%20Operations) For Q3 2022, total revenue increased **30.9%** YoY to **$103.5 million**. IoT Solutions revenue surged **93.7%** due to the Ventus acquisition, while IoT Products & Services grew **19.4%** on strong demand. Overall gross margin improved to **55.5%** from **53.8%**, driven by high-margin recurring revenue from Ventus, which offset margin pressure in the products segment from supply chain costs. Operating expenses rose **23.1%** due to the acquisition, leading to a **148.2%** increase in operating income to **$10.0 million** Revenue by Segment (Three Months Ended June 30) | Segment | 2022 Revenue | 2021 Revenue | % Change | | :--- | :--- | :--- | :--- | | IoT Products & Services | $79,758K | $66,812K | +19.4% | | IoT Solutions | $23,759K | $12,267K | +93.7% | | **Total Revenue** | **$103,517K** | **$79,079K** | **+30.9%** | Gross Profit by Segment (Three Months Ended June 30) | Segment | 2022 Gross Profit | 2022 Gross Margin | 2021 Gross Profit | 2021 Gross Margin | | :--- | :--- | :--- | :--- | :--- | | IoT Products & Services | $42,643K | 53.5% | $36,806K | 55.1% | | IoT Solutions | $14,783K | 62.2% | $5,750K | 46.9% | | **Total Gross Profit** | **$57,426K** | **55.5%** | **$42,556K** | **53.8%** | - The gross margin for IoT Products & Services decreased due to increased production and distribution costs from supply chain challenges and changes in product/customer mix[122](index=122&type=chunk)[125](index=125&type=chunk) - The gross margin for IoT Solutions increased significantly due to high-margin recurring subscription revenue from the Ventus acquisition[126](index=126&type=chunk)[127](index=127&type=chunk) - Operating expenses increased by **$8.9 million (23.1%)** in Q3 2022 compared to Q3 2021, primarily due to incremental operating expenses from the Ventus acquisition[128](index=128&type=chunk) [Non-GAAP Financial Measures](index=28&type=section&id=Non-GAAP%20Financial%20Measures) The company uses non-GAAP measures like Adjusted EBITDA and Adjusted Net Income to provide investors with a view of core operating performance, excluding items like amortization, stock-based compensation, and acquisition-related expenses. For Q3 2022, Adjusted EBITDA was **$21.0 million (20.3% of revenue)**, an **82%** increase from **$11.6 million (14.6% of revenue)** in Q3 2021. Adjusted net income per diluted share was **$0.45**, up from **$0.25** in the prior-year quarter Reconciliation of Net Income to Adjusted EBITDA (in thousands) | | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | | :--- | :--- | :--- | | Net Income | $4,126 | $3,157 | | Adjustments (Interest, Taxes, D&A, etc.) | $16,922 | $8,419 | | **Adjusted EBITDA** | **$21,048** | **$11,576** | | **Adjusted EBITDA Margin** | **20.3%** | **14.6%** | Reconciliation of GAAP to Non-GAAP Net Income (in thousands, except per share) | | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | | :--- | :--- | :--- | | GAAP Net Income | $4,126 | $3,157 | | GAAP Diluted EPS | $0.12 | $0.09 | | **Adjusted Net Income** | **$15,934** | **$8,736** | | **Adjusted Diluted EPS** | **$0.45** | **$0.25** | [Liquidity and Capital Resources](index=31&type=section&id=Liquidity%20and%20Capital%20Resources) For the nine months ended June 30, 2022, operating cash flow decreased to **$15.5 million** from **$42.1 million** in the prior year, mainly due to a **$34.6 million** increase in operating assets and liabilities. The company funded the **$350 million** Ventus acquisition with a new **$350 million** term loan and cash on hand. As of June 30, 2022, the company had **$41.5 million** in cash and believes its liquidity is sufficient for the next twelve months and beyond - Cash flows from operating activities decreased by **$26.6 million** for the nine months ended June 30, 2022, primarily due to an increase in operating assets and liabilities (net of acquisitions)[146](index=146&type=chunk) - Cash used in investing activities increased by **$343.8 million**, almost entirely due to the Ventus acquisition[148](index=148&type=chunk) - Cash from financing activities increased by **$163.7 million**, driven by proceeds from a new **$350 million** term loan, partially offset by repayment of a prior facility and early payments on the new loan[149](index=149&type=chunk)[150](index=150&type=chunk)[151](index=151&type=chunk) Contractual Obligations Summary (as of June 30, 2022, in thousands) | Obligation | Total | Less than 1 year | 1-3 years | 3-5 years | Thereafter | | :--- | :--- | :--- | :--- | :--- | :--- | | Operating leases | $22,220 | $3,802 | $7,646 | $4,153 | $6,619 | | Term Loan | $268,748 | $17,500 | $35,000 | $35,000 | $181,248 | | Interest on long-term debt | $93,503 | $18,012 | $32,640 | $27,293 | $15,558 | | **Total** | **$390,671** | **$45,414** | **$75,386** | **$66,446** | **$203,425** | [Item 3: Quantitative and Qualitative Disclosures About Market Risk](index=33&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to market risks primarily from interest rate fluctuations on its variable-rate debt, foreign currency translation risk, and credit risk. A **25 basis point** change in interest rates would impact annual interest expense by **$0.7 million**. Foreign currency risk is mainly from translating foreign subsidiary results into U.S. Dollars. Credit risk is managed through customer monitoring - The company has **$268.7 million** in outstanding variable-rate debt. A **25 basis point** change in interest rates would increase or decrease annual interest expense by approximately **$0.7 million**[156](index=156&type=chunk) - The company is exposed to foreign currency translation risk. A **10%** change in the exchange rates for the Euro, British Pound, Japanese Yen, and Canadian Dollar would impact stockholders' equity by **0.6%**[158](index=158&type=chunk) - Credit risk from accounts receivable is controlled through regular monitoring of customer financial status and credit limits[159](index=159&type=chunk) [Item 4: Controls and Procedures](index=33&type=section&id=ITEM%204.%20Controls%20and%20Procedures) Based on an evaluation conducted by management, including the CEO and CFO, the company's disclosure controls and procedures were deemed effective as of June 30, 2022. There were no material changes in internal control over financial reporting during the quarter - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of the end of the period[160](index=160&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[161](index=161&type=chunk) [PART II. OTHER INFORMATION](index=34&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1 & 1A: Legal Proceedings & Risk Factors](index=34&type=section&id=ITEM%201.%20Legal%20Proceedings%20%26%20ITEM%201A.%20Risk%20Factors) The company is subject to various claims and litigation in the normal course of business, with no specific material proceedings detailed. There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K - The company is subject to various claims and litigation in the normal course of business, as disclosed in Note 13 to the financial statements[163](index=163&type=chunk)[82](index=82&type=chunk) - There have been no material changes in risk factors from those previously disclosed in the Annual Report on Form 10-K[164](index=164&type=chunk) [Item 2: Unregistered Sales of Equity Securities and Use of Proceeds](index=34&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During the third quarter of fiscal 2022, the company repurchased **3,354** shares of its common stock. These shares were forfeited by employees to satisfy tax withholding obligations related to the vesting of restricted stock units - A total of **3,354** shares were repurchased during the quarter at an average price of **$20.20** per share. These were shares forfeited by employees to satisfy tax withholding obligations on vested restricted stock units[165](index=165&type=chunk) [Items 3, 4, 5, 6: Other Disclosures and Exhibits](index=34&type=section&id=Items%203%2C%204%2C%205%2C%206) The company reported no defaults upon senior securities, no mine safety disclosures, and no other material information under Item 5. Item 6 lists the exhibits filed with the Form 10-Q - No defaults upon senior securities were reported[166](index=166&type=chunk) - No mine safety disclosures were required[167](index=167&type=chunk) - No other information was reported under Item 5[168](index=168&type=chunk)

Financial Data and Key Metrics Changes - The company achieved record revenue of nearly $95 million for the quarter, representing a 23% increase year-over-year [9][20] - Annualized recurring revenue reached an all-time high of nearly $90 million, up approximately 165% year-over-year [20] - Gross margins were reported at 54.9%, with adjusted EBITDA of $19.5 million, equating to 20.6% of revenue [21][22] Business Segment Data and Key Metrics Changes - IoT products and services revenue increased by 9% year-over-year to $71.4 million, with gross margins rising by 140 basis points to 53.9% [26] - IoT solutions revenue doubled year-over-year to $23.3 million, with gross margins increasing nearly 650 basis points to 57.9% [28] Market Data and Key Metrics Changes - Demand for industrial IoT remains strong, with record bookings leading to a record backlog, although specific backlog figures were not disclosed [14][41] - The company noted that millions of dollars in potential revenue were left unrecognized due to supply chain constraints [39] Company Strategy and Development Direction - The company is focused on enhancing customer value through hardware-enabled software services and subscription offerings [9] - There is a targeted investment strategy in the IoT solutions segment to accelerate growth, particularly following the acquisition of Ventus [13][18] - The company aims to achieve $100 million in quarterly revenue, annualized recurring revenue, and adjusted EBITDA [19] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges from the ongoing COVID pandemic, inflation, and supply chain issues but expressed optimism about future growth [8][39] - The company expects revenue growth of 19% to 24% for the next quarter, with annual recurring revenues projected to exceed $90 million by the fiscal year-end [30][31] Other Important Information - The company returned to generating positive cash flow from operations, with $5.9 million generated in the quarter [24] - Operating expenses increased by approximately 20% year-over-year, largely due to the Ventus acquisition and strategic investments [42][44] Q&A Session Summary Question: How is the integration with Ventus going? - The integration is progressing well, with strong collaboration and growth synergies anticipated, particularly in the Cellular Solutions business [35] Question: What does organic growth look like excluding Ventus and Ctek? - The company cannot back out Ventus for SEC reporting but reports year-over-year growth in the product and services segment [36] Question: What is the current state of the supply chain? - The supply chain remains challenging, with some easing expected but still significant difficulties due to geopolitical issues and COVID lockdowns [38] Question: What potential growth exists as the supply chain improves? - There is a backlog of $10 million to $20 million in revenue that could be recognized as supply chain issues are resolved [40] Question: What areas is the company investing in regarding OpEx? - The increase in OpEx is driven by the acquisition and strategic investments in personnel and sales activities [42][44]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: March 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . Commission file number: 001-34033 DIGI INTERNATIONAL INC. (Exact name of registrant as specified in its charter) Delaware 41-1532464 | --- | --- | |------------- ...

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Unaudited Financial Statements](index=3&type=section&id=ITEM%201.%20Unaudited%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for Q1 FY2022, detailing operations, balance sheet, cash flows, and notes on the Ventus acquisition and segment performance [Condensed Consolidated Statements of Operations](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For Q1 FY2022, total revenue increased **15.2%** to **$84.3 million**, with operating income of **$3.8 million** and net income of **$1.2 million**, a turnaround from prior year's loss Consolidated Statements of Operations Highlights (in thousands, except per share data) | Metric | Three months ended Dec 31, 2021 (in thousands) | Three months ended Dec 31, 2020 (in thousands) | | :--- | :--- | :--- | | **Total Revenue** | **$84,257** | **$73,146** | | Gross Profit | $47,881 | $41,019 | | Operating Income (Loss) | $3,799 | $(146) | | **Net Income (Loss)** | **$1,187** | **$(307)** | | Diluted EPS | $0.03 | $(0.01) | [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of December 31, 2021, total assets significantly increased to **$866.2 million** due to the Ventus acquisition, with total liabilities rising to **$392.2 million** primarily from increased long-term debt Balance Sheet Highlights (in thousands) | Account | Dec 31, 2021 (in thousands) | Sep 30, 2021 (in thousands) | | :--- | :--- | :--- | | Cash and cash equivalents | $47,188 | $152,432 | | Goodwill | $342,498 | $225,522 | | Intangible assets, net | $322,794 | $118,029 | | **Total Assets** | **$866,230** | **$619,531** | | Long-term debt | $275,340 | $45,799 | | **Total Liabilities** | **$392,198** | **$147,014** | | **Total Stockholders' Equity** | **$474,032** | **$472,517** | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For Q1 FY2022, net cash used in operations was **$9.9 million**, investing activities used **$348.0 million** for the Ventus acquisition, and financing provided **$252.7 million**, leading to a **$105.2 million** net cash decrease Cash Flow Summary (in thousands) | Activity | Three months ended Dec 31, 2021 (in thousands) | Three months ended Dec 31, 2020 (in thousands) | | :--- | :--- | :--- | | Net cash (used for) provided by operating activities | $(9,885) | $8,312 | | Net cash used in investing activities | $(348,047) | $(777) | | Net cash provided by (used for) financing activities | $252,724 | $(12,793) | | **Net decrease in cash and cash equivalents** | **$(105,244)** | **$(4,866)** | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes detail the Ventus acquisition for approximately **$350 million**, financed by a new term loan, and highlight strong revenue growth in IoT Solutions driven by the acquisition, alongside other financial disclosures - On November 1, 2021, the company acquired Ventus Networks, LLC for approximately **$350 million** in cash, funded by cash on hand and a new **$350 million** credit facility[24](index=24&type=chunk) - The preliminary purchase price allocation for Ventus resulted in **$116.9 million** of goodwill and **$211.0 million** of identifiable intangible assets, primarily customer relationships[27](index=27&type=chunk) - The company entered into a new credit agreement providing a **$350 million** term loan and a **$35 million** revolving credit facility to finance the Ventus acquisition and for general corporate purposes[43](index=43&type=chunk) Segment Revenue (in thousands) | Segment | Q1 2022 Revenue (in thousands) | Q1 2021 Revenue (in thousands) | | :--- | :--- | :--- | | IoT Products & Services | $65,744 | $61,780 | | IoT Solutions | $18,513 | $11,366 | | **Total Revenue** | **$84,257** | **$73,146** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=ITEM%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 FY2022 financial results, highlighting a **15%** revenue increase to **$84.3 million** driven by IoT Solutions and the Ventus acquisition, alongside changes in operating expenses and Adjusted EBITDA growth to **$17.0 million** - Consolidated revenue for Q1 fiscal 2022 was **$84.3 million**, a **15%** increase over the prior year, with operating income of **$3.8 million** compared to a loss of **$0.1 million**[110](index=110&type=chunk) - The IoT Solutions segment revenue grew **62.9%** year-over-year, largely due to the acquisition of Ventus in November 2021[118](index=118&type=chunk) - The IoT Products & Services segment gross profit margin decreased by **349 basis points** due to product mix and increased supply chain costs[121](index=121&type=chunk) Reconciliation of Net Income to Adjusted EBITDA (in thousands) | Metric | Q1 2022 (in thousands) | Q1 2021 (in thousands) | | :--- | :--- | :--- | | Net Income (Loss) | $1,187 | $(307) | | Adjustments | $15,783 | $13,284 | | **Adjusted EBITDA** | **$16,970** | **$12,977** | | Adjusted EBITDA Margin | 20.1% | 17.7% | [Quantitative and Qualitative Disclosures About Market Risk](index=32&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces market risks from interest rate fluctuations, notably from its **$300.0 million** variable-rate term loan, and foreign currency translation risk, with a **25 basis point** rate change impacting annual interest expense by **$0.8 million** - The company has significant interest rate risk due to its **$300.0 million** variable-rate Term Loan; a **25 basis point** change in interest rates would affect annualized interest expense by **$0.8 million**[155](index=155&type=chunk) - Foreign currency risk is primarily related to the translation of foreign subsidiary results into U.S. Dollars; a **10%** change in key exchange rates would impact stockholders' equity by **0.8%**[157](index=157&type=chunk) [Controls and Procedures](index=32&type=section&id=ITEM%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2021, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report[159](index=159&type=chunk) - No changes occurred during the quarter that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[160](index=160&type=chunk) [PART II. OTHER INFORMATION](index=33&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=33&type=section&id=ITEM%201.%20Legal%20Proceedings) The company is subject to various claims and litigation in the normal course of business, with further details provided in Note 13 of the financial statements - In the normal course of business, the company is subject to various claims and litigation with third parties[80](index=80&type=chunk)[162](index=162&type=chunk) [Risk Factors](index=30&type=section&id=ITEM%201A.%20Risk%20Factors) This section refers readers to the comprehensive risk factors disclosed in the Annual Report on Form 10-K, as no new information is presented here [Unregistered Sales of Equity Securities and Use of Proceeds](index=33&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q1 FY2022, **605,847** shares were repurchased at **$22.46** per share, primarily from employee forfeitures for tax withholding, not a public buyback program - A total of **605,847** shares were repurchased during the quarter at a weighted average price of **$22.46** per share[163](index=163&type=chunk) - All repurchased shares were forfeited by employees to satisfy tax withholding obligations and were not part of a publicly announced repurchase program[163](index=163&type=chunk) [Defaults Upon Senior Securities](index=33&type=section&id=ITEM%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities - None[164](index=164&type=chunk) [Mine Safety Disclosures](index=33&type=section&id=ITEM%204.%20Mine%20Safety%20Disclosures) The company reported no mine safety disclosures - None[165](index=165&type=chunk) [Other Information](index=33&type=section&id=ITEM%205.%20Other%20Information) The company reported no other information - None[165](index=165&type=chunk) [Exhibits](index=34&type=section&id=ITEM%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including corporate documents, credit agreements for the Ventus acquisition, incentive plans, and officer certifications