DIGI INTERNATIONAL INCDGII
DIGI INTERNATIONAL INC Segments Disclosure
SEGMENT INFORMATION AND MAJOR CUSTOMERS
We have two reportable segments that also serve as our operating segments: (i) IoT Products & Services and (ii) IoT Solutions. This determination was made by considering both qualitative and quantitative information. The qualitative information included, but was not limited to, the following: each segment is led by a single segment manager that reports to the Chief Operating Decision Maker (CODM), the nature of the products and services and customers differ between the two segments, discrete financial information is available including revenue and operating income for both segments and the CODM is reviewing both segments’ financial information separately to make decisions about the allocation of resources. IoT Products & Services derives revenue from the sale of products and services that help original equipment manufacturers ("OEMs"), enterprise and government customers create and deploy, secure IoT connectivity solutions. IoT Solutions derives revenue from the sale of software-based services that are enabled through the use of connected devices that utilize cellular communications. Our CEO is our CODM. In the fourth quarter of fiscal 2025, the metric he uses to measure profitability within each of our reportable segments was changed from segment gross profit to operating income.
Summary operating results for each of our segments were as follows (in thousands):
| Year ended September 30, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Revenue | ||||||||||||||||||||
| IoT Products & Services | $ | 317,883 | $ | 324,444 | $ | 345,680 | ||||||||||||||
| IoT Solutions | 112,338 | 99,602 | 99,169 | |||||||||||||||||
| Total revenue | $ | 430,221 | $ | 424,046 | $ | 444,849 | ||||||||||||||
| Depreciation and amortization | ||||||||||||||||||||
| IoT Products & Services | $ | 12,162 | $ | 12,446 | $ | 12,544 | ||||||||||||||
| IoT Solutions | 21,813 | 20,615 | 19,432 | |||||||||||||||||
| Total depreciation and amortization | $ | 33,975 | $ | 33,061 | $ | 31,976 | ||||||||||||||
| Other segment items* | ||||||||||||||||||||
| IoT Products & Services | $ | 258,803 | $ | 265,516 | $ | 281,979 | ||||||||||||||
| IoT Solutions | 81,153 | 77,380 | 80,799 | |||||||||||||||||
| Total other segment items | $ | 339,956 | $ | 342,896 | $ | 362,778 | ||||||||||||||
| Operating income (loss) | ||||||||||||||||||||
| IoT Products & Services | $ | 46,918 | $ | 46,482 | $ | 51,157 | ||||||||||||||
| IoT Solutions | 9,372 | 1,607 | (1,062) | |||||||||||||||||
| Total operating income | $ | 56,290 | $ | 48,089 | $ | 50,095 | ||||||||||||||
*IoT Products & Services other segment items include cost of sales and operating expenses. IoT Solutions other segment items include cost of sales and operating expenses.
The following table provides a reconciliation of segment operating income to consolidated income before taxes:
| Year ended September 30, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Total segment operating income | $ | 56,290 | $ | 48,089 | $ | 50,095 | |||||||||||
| Total other expense, net | (6,373) | (25,231) | (25,177) | ||||||||||||||
| Income before income taxes | $ | 49,917 | $ | 22,858 | $ | 24,918 | |||||||||||
*Total other expense, net primarily includes interest expense, net in the fiscal years ended September 30, 2025 and 2023 and interest expense, net and debt issuance cost write off in the fiscal year ended September 30, 2024.
4. SEGMENT INFORMATION AND MAJOR CUSTOMERS (CONTINUED)
Total expended for property, plant and equipment was as follows (in thousands):
| Year ended September 30, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| IoT Products & Services | $ | 1,485 | $ | 1,005 | $ | 588 | |||||||||||
| IoT Solutions* | 733 | 845 | 3,510 | ||||||||||||||
| Total expended for property, plant and equipment | $ | 2,218 | $ | 1,850 | $ | 4,098 | |||||||||||
* Excluded from this amount is $7.8 million, $12.3 million and $3.9 million of transfers of inventory to property plant and equipment for subscriber assets for the year ended September 30, 2025, 2024 and 2023, respectively.
Total assets for each of our segments were as follows (in thousands):
| As of September 30, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| IoT Products & Services | $ | 338,454 | $ | 376,998 | ||||||||||
| IoT Solutions | 562,290 | 410,567 | ||||||||||||
| Segment assets | $ | 900,744 | $ | 787,565 | ||||||||||
| Unallocated* | 21,902 | 27,510 | ||||||||||||
| Total assets | $ | 922,646 | $ | 815,075 | ||||||||||
*Unallocated consists of cash and cash equivalents.
Net property, equipment and improvements by geographic location were as follows (in thousands):
| As of September 30, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| United States | $ | 33,563 | $ | 34,416 | ||||||||||
| International | 459 | 499 | ||||||||||||
| Total net property, equipment and improvements | $ | 34,022 | $ | 34,915 | ||||||||||
Our U.S. export sales represented 20.5%, 28.7% and 27.2% of revenue for the fiscal years ended September 30, 2025, 2024 and 2023, respectively.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Nov 21, 2025 | Showing above |
| 2024 | Nov 22, 2024 | |
| 2023 | Nov 22, 2023 | |
| 2022 | Nov 23, 2022 | |
| 2021 | Nov 24, 2021 | |
| 2020 | Nov 25, 2020 | |
| 2019 | Nov 27, 2019 | |
| 2018 | Nov 21, 2018 | |
| 2017 | Nov 22, 2017 | |
| 2016 | Dec 13, 2016 | |
| 2015 | Nov 30, 2015 | |
About Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.