DIGI INTERNATIONAL INCDGII

DIGI INTERNATIONAL INC Revenue Disclosure

10-KFiled Nov 21, 20252 min read
REVENUE
Revenue Disaggregation
The following table summarizes our revenue by geographic location of our customers:
Year ended September 30,
($ in thousands)202520242023
North America, primarily the United States$341,904 $302,491 $323,714 
Europe, Middle East & Africa62,887 64,890 69,980 
Rest of world25,430 56,665 51,155 
Total revenue$430,221 $424,046 $444,849 

The following table summarizes our revenue by the timing of revenue recognition:
Year ended September 30,
($ in thousands)202520242023
Transferred at a point in time$303,470 $313,421 $345,119 
Transferred over time126,751 110,625 99,730 
Total revenue$430,221 $424,046 $444,849 
We had one distributor customer of Digi's IoT Products & Services segment that represented 13% of consolidated revenue for the twelve months ended September 30, 2025. No customers represented over 10% of consolidated revenue for the twelve months ended September 30, 2024 or 2023.
9. REVENUE (CONTINUED)
Contract Balances
Contract Related Assets
Our contract related assets consist of subscriber assets. Subscriber assets are equipment that we provide to customers pursuant to subscription-based contracts.  In these cases, we retain the ownership of the equipment a customer uses and charge the customer subscription fees to receive our end-to-end solutions. The total net book value of subscriber assets of $22.9 million and $23.6 million as of September 30, 2025 and September 30, 2024, respectively, are included in property, equipment and improvements, net. Depreciation expense for these subscriber assets was $8.6 million and $5.3 million for the twelve months ended September 30, 2025 and 2024, respectively. We depreciate the cost of this equipment over its useful life and include these expenses in cost of sales.
Contract Assets
Contract assets at Digi consist of products and services that have been fulfilled, but for which revenue has not yet been recognized. Our contract asset balances were immaterial as of September 30, 2025 and September 30, 2024.
Contract Liabilities
The timing of revenue recognition may differ from the timing of invoicing to customers. Customers are invoiced for subscription services on a monthly, quarterly or annual basis. Contract liabilities consist of unearned revenue related to annual or multi-year contracts for subscription services and related implementation fees, as well as product sales that have been invoiced, but not yet fulfilled.
Our contract liabilities were $48.2 million and $36.8 million at September 30, 2025 and 2024, respectively.
Of the $36.8 million and $27.9 million balances as of September 30, 2024 and 2023, Digi recognized $29.7 million and $20.0 million as revenue in the twelve months ended September 30, 2025 and 2024, respectively.
Remaining Performance Obligation
As of September 30, 2025, we had approximately $203.5 million of remaining performance obligations on contracts with an original duration of one year or more. We expect to recognize revenue on approximately $97.3 million of remaining performance obligations over the next 12 months. Revenue from the remaining performance obligations we expect to recognize over a range of two to five years.
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Historical Timeline

Fiscal YearFiled
2025Nov 21, 2025Showing above
2024Nov 22, 2024
2023Nov 22, 2023
2022Nov 23, 2022
2021Nov 24, 2021
2020Nov 25, 2020
2019Nov 27, 2019

About Revenue Disclosures

Revenue disclosures under ASC 606 explain how a company identifies performance obligations, allocates transaction prices, and determines when revenue is recognized. This section is essential for understanding whether reported revenue reflects genuine economic activity or aggressive accounting choices. Analysts examine the mix of point-in-time versus over-time recognition, which directly affects revenue timing and comparability.

Key signals: rising contract liabilities (deferred revenue) suggest strong future revenue visibility, while declining contract assets may indicate slowing project milestones. Watch for variable consideration estimates — rebates, returns, and performance bonuses that require management judgment. Significant changes in disaggregated revenue by geography or product line can reveal shifting business mix before it appears in headline numbers. Compare revenue growth against contract liability growth to assess sustainability, and scrutinize any changes in the timing of recognition that coincide with earnings pressure.

Other Available Disclosures

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