Digi International(US:DGII)2025-02-05 21:08Revenue Performance - Consolidated revenue for the three months ended December 31, 2024, was $104 million, a decrease of 2% compared to $106 million in the same period of 2023[74] - Total revenue for the three months ended December 31, 2024, was $103.866 million, a decrease of 2.1% from $106.089 million in the same period of 2023[91] - Revenue from IoT Products & Services decreased by $4.2 million to $77.8 million, while IoT Solutions revenue increased by $2.0 million to $26.0 million[75] Profitability - Gross profit increased by 5% to $64 million, resulting in a gross profit margin of 62.0%, an increase of 440 basis points year-over-year[74] - The gross profit margin for IoT Products & Services improved by 510 basis points to 58.6%, while IoT Solutions margin increased by 60 basis points to 72.2%[79] - Net income for the quarter was $10 million, compared to a net loss of $3 million in the prior year, with net income per diluted share of $0.27[74] - Net income for the three months ended December 31, 2024, was $10.083 million, compared to a net loss of $3.054 million in the same period of 2023[91] - Adjusted EBITDA for the three months ended December 31, 2024, was $25.609 million, representing 24.7% of total revenue, compared to $23.306 million or 22.0% of total revenue in 2023[91] Operating Expenses - Operating expenses rose by 4.2% to $51.0 million, primarily due to a $2.9 million increase in labor expenses[82] - Other expense, net, decreased significantly by $13.1 million to $(2.3) million, driven by a reduction in interest expense and the absence of debt issuance cost write-off[84] Cash Flow and Debt - Cash flows from operating activities increased by $11.0 million to $29.719 million for the three months ended December 31, 2024, compared to $18.672 million in 2023[99] - The company entered into a $250 million senior secured revolving credit facility on December 7, 2023, with an additional borrowing capacity of up to $95 million[97] - As of December 31, 2024, the company had $96.0 million outstanding under its Revolving Loan, with a weighted average interest rate of 6.83%[104] - The company expects positive cash flows from operations for the foreseeable future, supported by current cash balances and the ability to borrow under the credit facility[99] Future Outlook - Longer than expected sales cycles are anticipated to adversely impact results for at least the remainder of fiscal 2025 due to macroeconomic conditions[73] - The company continues to focus on transitioning to complete solutions with software and service offerings to drive higher margin revenue[74] Contractual Obligations - The total contractual obligations as of December 31, 2024, amounted to $110.746 million, including $14.746 million in operating leases[101] Foreign Currency Impact - A 10% change in the average exchange rate for major currencies would have resulted in a 0.9% increase or decrease in stockholders' equity due to foreign currency translation[107] Debt Issuance Costs - The company reported a $9.7 million debt issuance cost write-off included in net income for the first quarter of fiscal 2024[100]