10-Q

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, 2026

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 of incorporation or organization)	(I.R.S. Employer Identification Number)

9350 Excelsior Blvd.	Suite 700
Hopkins	Minnesota	55343
(Address of principal executive offices)		(Zip Code)

(952) 912-3444

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, par value $.01 per share	DGII	The Nasdaq Stock Market LLC

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act:

Large accelerated filer	☑	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

On April 30, 2026, there were 37,702,199 shares of the registrant's $.01 par value Common Stock outstanding.

INDEX

	Page
PART I. FINANCIAL INFORMATION
ITEM 1. Unaudited Financial Statements:
Condensed Consolidated Statements of Operations	1
Condensed Consolidated Statements of Comprehensive Income	2
Condensed Consolidated Balance Sheets	3
Condensed Consolidated Statements of Cash Flows	4
Condensed Consolidated Statements of Stockholders’ Equity	5
Notes to Condensed Consolidated Financial Statements	6
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk	29
ITEM 4. Controls and Procedures	30
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings	31
ITEM 1A. Risk Factors	31
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds	32
ITEM 3. Defaults Upon Senior Securities	32
ITEM 4. Mine Safety Disclosures	32
ITEM 5. Other Information	32
ITEM 6. Exhibits	33

i

PART I. FINANCIAL INFORMATION

ITEM 1. UNAUDITED FINANCIAL STATEMENTS

DIGI INTERNATIONAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

	Three months ended March 31,				Six months ended March 31,
	2026		2025		2026		2025
	(in thousands, except per share data)
Revenue:
Product	$	84,455	$	71,987	$	166,307	$	144,772
Service	46,288		32,516		86,898		63,597
Total revenue	130,743		104,503		253,205		208,369
Cost of sales:
Cost of product	37,765		31,758		74,946		63,731
Cost of service	7,782		6,859		15,355		13,401
Amortization	1,521		953		2,838		1,906
Total cost of sales	47,068		39,570		93,139		79,038
Gross profit	83,675		64,933		160,066		129,331
Operating expenses:
Sales and marketing	27,526		22,041		53,503		43,798
Research and development	19,280		15,325		36,434		30,352
General and administrative	19,796		13,840		36,730		28,095
Total operating expenses	66,602		51,206		126,667		102,245
Operating income	17,073		13,727		33,399		27,086
Other expense, net:
Interest expense, net	(2,220)		(1,336)		(4,523)		(3,630)
Other expense, net	(44)		(43)		(48)		(12)
Total other expense, net	(2,264)		(1,379)		(4,571)		(3,642)
Income before income taxes	14,809		12,348		28,828		23,444
Income tax provision	3,506		1,851		5,814		2,864
Net income	$	11,303	$	10,497	$	23,014	$	20,580
Net income per common share:
Basic	$	0.30	$	0.28	$	0.61	$	0.56
Diluted	$	0.29	$	0.28	$	0.60	$	0.55
Weighted average common shares:
Basic	37,640		36,956		37,494		36,816
Diluted	38,482		37,520		38,420		37,553

The accompanying notes are an integral part of the condensed consolidated financial statements.

1

DIGI INTERNATIONAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

	Three months ended March 31,				Six months ended March 31,
	2026		2025		2026		2025
	(in thousands)
Net income	$	11,303	$	10,497	$	23,014	$	20,580
Other comprehensive income (loss):
Foreign currency translation adjustment	(597)		597		(500)		(1,165)
Other comprehensive income (loss)	(597)		597		(500)		(1,165)
Comprehensive income	$	10,706	$	11,094	$	22,514	$	19,415

The accompanying notes are an integral part of the condensed consolidated financial statements.

2

DIGI INTERNATIONAL INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

	March 31, 2026		September 30, 2025
	(in thousands, except share data)
ASSETS
Current assets:
Cash and cash equivalents	$	31,741	$	21,902
Accounts receivable, net	61,160		63,453
Inventories	44,766		38,911
Income taxes receivable	1,853		1,875
Prepaid expenses and other current assets	7,125		4,558
Total current assets	146,645		130,699
Property, equipment and improvements, net	32,715		34,022
Intangible assets, net	374,579		350,688
Goodwill	411,357		392,872
Operating lease right-of-use assets	7,710		8,430
Deferred tax assets	456		5,131
Other non-current assets	765		804
Total assets	$	974,227	$	922,646
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	41,651		35,871
Accrued compensation	13,862		16,261
Unearned revenue	55,906		40,671
Current portion of operating lease liabilities	2,487		3,361
Income taxes payable	—		522
Other current liabilities	18,030		11,124
Total current liabilities	131,936		107,810
Income taxes payable	3,323		3,261
Deferred tax liabilities	3,275		164
Long-term debt	143,040		159,152
Operating lease liabilities	8,364		8,671
Other non-current liabilities	18,334		7,511
Total liabilities	308,272		286,569
Commitments and Contingencies (See Note 12)
Stockholders' equity:
Preferred stock, $.01 par value; 2,000,000 shares authorized; none issued and outstanding	—		—
Common stock, $.01 par value; 60,000,000 shares authorized; 44,290,887 and 43,641,997 shares issued	443		436
Additional paid-in capital	450,977		437,391
Retained earnings	311,168		288,154
Accumulated other comprehensive loss	(24,294)		(23,794)
Treasury stock, at cost, 6,596,161 and 6,471,074 shares	(72,339)		(66,110)
Total stockholders' equity	665,955		636,077
Total liabilities and stockholders' equity	$	974,227	$	922,646

The accompanying notes are an integral part of the condensed consolidated financial statements.

3

DIGI INTERNATIONAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Six months ended March 31,
	2026		2025
	(in thousands)
Operating activities:
Net income	$	23,014	$	20,580
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of property, equipment and improvements	6,450		5,662
Amortization	15,241		11,134
Stock-based compensation	8,494		7,504
Deferred income tax expense	4,894		(443)
Other	(290)		29
Changes in operating assets and liabilities	19,303		11,539
Net cash provided by operating activities	77,106		56,005
Investing activities:
Acquisition of businesses, net of cash acquired	(48,912)		—
Purchase of property, equipment, improvements and certain other intangible assets	(1,095)		(1,135)
Proceeds from sale of property, equipment, improvements and certain other intangible assets	300		—
Net cash (used in) provided by investing activities	(49,707)		(1,135)
Financing activities:
Proceeds from long-term debt	33,724		—
Payments on long-term debt	(50,000)		(53,300)
Proceeds from stock option plan transactions	4,255		2,731
Proceeds from employee stock purchase plan transactions	1,455		1,116
Taxes paid for net share settlement of share-based payment options and awards	(6,840)		(6,584)
Net cash used in financing activities	(17,406)		(56,037)
Effect of exchange rate changes on cash and cash equivalents	(154)		(47)
Net increase (decrease) in cash and cash equivalents	9,839		(1,214)
Cash and cash equivalents, beginning of period	21,902		27,510
Cash and cash equivalents, end of period	$	31,741	$	26,296
Supplemental disclosures of cash flow information:
Interest paid	$	4,328	$	3,556
Income taxes paid, net	1,448		7,315
Supplemental schedule of non-cash investing and financing activities:
Transfer of inventory to property, equipment and improvements	(3,701)		(5,131)
Accrual for purchase of property, equipment, improvements and certain other intangible assets	$	(528)	$	(168)

The accompanying notes are an integral part of the condensed consolidated financial statements.

4

DIGI INTERNATIONAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(UNAUDITED)

											Accumulated
							Additional				Other		Total
	Common Stock			Treasury Stock			Paid-In		Retained		Comprehensive		Stockholders'
(in thousands)	Shares	Par Value		Shares	Value		Capital		Earnings		(Loss) Income		Equity
Balances, December 31, 2024	43,416	$	434	6,527	$	(66,411)	$	424,725	$	257,433	$	(25,506)	$	590,675
Net income	—	—		—	—		—		10,497		—		10,497
Other comprehensive loss	—	—		—	—		—		—		597		597
Employee stock purchase plan issuances	—	—		(26)	273		326		—		—		599
Taxes paid for net share settlement of share-based payment awards	—	—		5	(142)		(1,902)		—		—		(2,044)
Issuance of stock under stock award plans	146	2		—	—		948		—		—		950
Stock-based compensation expense	—	—		—	—		3,944		—		—		3,944
Balances, March 31, 2025	43,562	$	436	6,506	$	(66,280)	$	428,041	$	267,930	$	(24,909)	$	605,218
Balance on September 30, 2024	42,997	$	430	6,449	$	(63,414)	$	420,413	$	247,350	$	(23,744)	$	581,035
Net income	—	—		—	—		—		20,580		—		20,580
Other comprehensive income	—	—		—	—		—		—		(1,165)		(1,165)
Employee stock purchase plan issuances	—	—		(48)	500		616		—		—		1,116
Taxes paid for net share settlement of share-based payment awards	—	—		105	(3,366)		(3,218)		—		—		(6,584)
Issuance of stock under stock award plans	565	6		—	—		2,726		—		—		2,732
Stock-based compensation expense	—	—		—	—		7,504		—		—		7,504
Balances, March 31, 2025	43,562	$	436	6,506	$	(66,280)	$	428,041	$	267,930	$	(24,909)	$	605,218
Balances, December 31, 2025	44,219	$	442	6,615	$	(72,394)	$	444,988	$	299,865	$	(23,697)	$	649,204
Net income	—	—		—	—		—		11,303		—		11,303
Other comprehensive income	—	—		—	—		—		—		(597)		(597)
Employee stock purchase plan issuances	—	—		(23)	250		595		—		—		845
Taxes paid for net share settlement of share-based payment options and awards	—	—		4	(195)		(57)		—		—		(252)
Issuance of stock under stock award plans	72	1		—	—		944		—		—		945
Stock-based compensation expense	—	—		—	—		4,507		—		—		4,507
Balances, March 31, 2026	44,291	$	443	6,596	$	(72,339)	$	450,977	$	311,168	$	(24,294)	$	665,955
Balances, September 30, 2025	43,642	$	436	6,471	$	(66,110)	$	437,391	$	288,154	$	(23,794)	$	636,077
Net income	—	—		—	—		—		23,014		—		23,014
Other comprehensive income	—	—		—	—		—		—		(500)		(500)
Employee stock purchase plan issuances	—	—		(43)	467		988		—		—		1,455
Taxes paid for net share settlement of share-based payment awards	—	—		168	(6,696)		(144)		—		—		(6,840)
Issuance of stock under stock award plans	649	7		—	—		4,248		—		—		4,255
Stock-based compensation expense	—	—		—	—		8,494		—		—		8,494
Balances, March 31, 2026	44,291	$	443	6,596	$	(72,339)	$	450,977	$	311,168	$	(24,294)	$	665,955

The accompanying notes are an integral part of the condensed consolidated financial statements.

5

DIGI INTERNATIONAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1. BASIS OF PRESENTATION OF UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The unaudited condensed consolidated financial statements of Digi International Inc. ("we," "us," "our," "Digi" or "the Company") have been prepared in accordance with the rules and regulations of the U.S. Securities and Exchange Commission applicable to interim financial statements. While these financial statements reflect all normal recurring adjustments that are, in the opinion of management, necessary for fair presentation of the results of the interim period, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles ("GAAP") for complete financial statements. These financial statements should be read in conjunction with the financial statement disclosures in Part I, Item 1 of our Annual Report on Form 10-K for the year ended September 30, 2025. We use the same accounting policies in preparing quarterly and annual financial statements. The quarterly results of operations are not necessarily indicative of the results to be expected for the full year.

Recently Issued Accounting Standards Not Yet Adopted

In November 2024, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40), “Disaggregation of Income Statement Expenses,” which requires improved disclosures about a company’s expenses and more detailed information about the types of expenses in commonly presented expense captions. This amendment is effective for our fiscal year ending September 30, 2028 and interim periods within our fiscal year ending September 30, 2029. We currently are assessing the impact of this guidance on our disclosures.

In December 2023, FASB issued ASU 2023-09, Income Taxes (Topic 740), “Improvements to Income Tax Disclosures,” which requires enhanced transparency and decision usefulness of income tax disclosures. This amendment is effective for our fiscal year ending September 30, 2026 and interim periods within our fiscal year ending September 30, 2027. We currently are assessing the impact of this guidance on our disclosures.

2. ACQUISITIONS

Acquisition of Jolt Software, Inc. ("Jolt")

On August 18, 2025, we acquired Jolt for an estimated $148.5 million in cash. In the first quarter of fiscal 2026, we made net working capital adjustments due to an underage in the net working capital assumed in the transaction. This resulted in a decrease in consideration of $1.1 million and a reduction to goodwill of $0.9 million. In the second quarter of fiscal 2026, we made additional purchase accounting adjustments, primarily related to a $5.0 million reserve for potential product replacement (See Note 10) and a corresponding $1.3 million deferred tax asset, resulting in an increase of $3.7 million in the fair value of net tangible liabilities acquired and an increase of $3.7 million in goodwill. These adjustments resulted in an estimated consideration of $147.3 million and goodwill of $53.0 million as of March 31, 2026.

The condensed consolidated balance sheet as of March 31, 2026 reflected the preliminary allocation of the purchase price to the assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition. Purchase price allocations may be subject to future adjustments for the net assets, including intangible assets, acquired working capital balances and income tax assets and liabilities within the one-year measurement period.

6

Acquisition of Particle Industries, Inc. ("Particle")

On January 27, 2026, we acquired Particle for approximately $50.4 million in cash. The acquisition was funded through a combination of cash on hand and a draw of $34.0 million from our existing senior secured credit facility committed by BMO Harris Bank N.A (See Note 6).

For tax purposes, this acquisition is treated as a stock acquisition. We believe this is a complementary acquisition for us as it significantly enhances our IoT Products & Services segment.

Costs directly related to the acquisition of $1.8 million incurred in fiscal 2026 were charged to operations and are included in general and administrative expense in our condensed consolidated statements of operations. These acquisition costs include legal, accounting, valuation and investment banking fees.

The following table summarizes the fair values of Particle assets acquired and liabilities assumed as of the acquisition date (in thousands):

Cash Paid	$	50,389
Fair value of net tangible liabilities acquired*	$	(207)
Identifiable intangible assets:
Customer relationships	16,000
Purchased and core technology	11,000
Trademarks	10,000
Noncompete Agreements	1,800
Deferred tax liability on identifiable intangible assets	(4,178)
Goodwill	15,974
Total	$	50,389

*Includes $0.9 million in cash assumed in acquisition.

The condensed consolidated balance sheet as of March 31, 2026 reflected a preliminary allocation of the purchase price to the assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition. Purchase price allocations may be subject to future adjustments for the net assets, including intangible assets, acquired working capital balances and income tax assets and liabilities within the one-year measurement period.

The fair value of customer relationships was calculated using the multi-period excess earnings method, while purchased and core technology and trademarks were valued using the relief from royalty method. These methodologies utilize forecasts of future revenues and earnings before income taxes, depreciation and amortization, attrition rates, tax rates, discount rates, royalty rates and obsolescence rates.

The goodwill of $16.0 million arising from the acquisition consists largely of the synergies and economies of scale expected from combining the operations of Particle and Digi. The goodwill from this transaction is all included in the IoT Products & Services segment.

The weighted average useful life for all the identifiable intangibles listed above is estimated to be 12 years. For purposes of determining fair value, the existing customer relationships identified above are assumed to have a useful life of 15 years, purchased and core technology is assumed to have a useful life of 9 years, trademarks are assumed to have a useful life of 12 years and noncompete agreements are assumed to have a useful life of 3 years. Useful lives for identifiable intangible assets are estimated at the time of acquisition based on the periods of time from which we expect to derive benefits from the identifiable intangible assets. The identifiable intangible assets are amortized using the straight-line method, which reflects the pattern in which the assets are expected to be consumed.

Particle's contribution to revenue and operating income during the quarter ended March 31, 2026 was not material. In addition, Digi’s net revenue and operating income for the three and six months ended March 31, 2026 and 2025 would not have been materially different from reported results had the acquisition occurred on October 1, 2024.

7

3. EARNINGS PER SHARE

The following table is a reconciliation of the numerators and denominators in the net income per common share calculations (in thousands, except per common share data):

	Three months ended March 31,				Six months ended March 31,
	2026		2025		2026		2025
Numerator:
Net income	$	11,303	$	10,497	$	23,014	$	20,580
Denominator:
Denominator for basic net income per common share — weighted average shares outstanding	37,640		36,956		37,494		36,816
Effect of dilutive securities:
Stock options and restricted stock units	842		564		926		737
Denominator for diluted net income per common share — adjusted weighted average shares	38,482		37,520		38,420		37,553
Net income per common share, basic	$	0.30	$	0.28	$	0.61	$	0.56
Net income per common share, diluted	$	0.29	$	0.28	$	0.60	$	0.55

Digi excludes certain stock options and restricted stock unit awards that would have an anti-dilutive effect on our diluted net income per share calculation. For the three months ended March 31, 2026 and 2025, 70,156 and 348,553 shares outstanding were excluded, respectively. For the six months ended March 31, 2026 and 2025, 90,368 and 271,328 shares outstanding were excluded, respectively.

4. SELECTED BALANCE SHEET DATA

The following table shows selected balance sheet data (in thousands):

	March 31, 2026		September 30, 2025
Accounts receivable, net:
Accounts receivable	$	76,053	$	78,150
Less allowance for credit losses	7,470		6,417
Less reserve for future credit returns and pricing adjustments	7,423		8,280
Accounts receivable, net	$	61,160	$	63,453
Inventories:
Raw materials	$	9,352	$	10,803
Work in process	932		7
Finished goods	34,482		28,101
Inventories	$	44,766	$	38,911

8

5. GOODWILL AND OTHER INTANGIBLE ASSETS, NET

Amortizable intangible assets were (in thousands):

	March 31, 2026						September 30, 2025
	Gross carrying amount		Accum. amort.		Net		Gross carrying amount		Accum. amort.		Net
Purchased and core technology	$	111,982	$	(70,367)	$	41,615	$	100,986	$	(67,533)	$	33,453
License agreements	112		(112)		—		112		(112)		—
Patents and trademarks	55,635		(26,459)		29,176		45,468		(24,870)		20,598
Customer relationships	424,197		(122,109)		302,088		408,198		(111,561)		296,637
Non-compete agreements	2,400		(700)		1,700		600		(600)		—
Order backlog	1,000		(1,000)		—		1,000		(1,000)		—
Total	$	595,326	$	(220,747)	$	374,579	$	556,364	$	(205,676)	$	350,688

Amortization expense for intangible assets was $7.8 million and $5.2 million for the three months ended March 31, 2026 and 2025, respectively. Amortization expense for intangible assets was $15.1 million and $11.0 million for the six months ended March 31, 2026 and 2025, respectively. Amortization expense is recorded on our condensed consolidated statements of operations within cost of sales and in general and administrative expense.

Estimated amortization expense related to intangible assets for the remainder of fiscal 2026 and the five succeeding fiscal years is (in thousands):

2026 (six months)	$	16,184
2027	32,312
2028	32,104
2029	29,901
2030	29,297
2031	29,245

The changes in the carrying amount of goodwill by reportable segments are (in thousands):

	Six months ended March 31, 2026
	IoT Products & Services		IoT Solutions		Total
Balance on September 30, 2025	$	175,266	$	217,606	$	392,872
Acquisitions (see Note 2)	15,974		2,810		18,784
Foreign currency translation adjustment	(278)		(21)		(299)
Balance on March 31, 2026	$	190,962	$	220,395	$	411,357

Goodwill represents the excess of cost over the fair value of net identifiable assets acquired. Goodwill is tested quantitatively for impairment on an annual basis as of June 30, or more frequently if events or circumstances occur which could indicate impairment. We have two reportable segments that are also reporting units, IoT Products & Services and IoT Solutions (see Note 7). Each of these reporting units was tested individually for impairment during our annual impairment test completed as of the end of the third fiscal quarter of fiscal 2025.

Results of our Fiscal 2025 Annual Impairment Test

As of June 30, 2025, we had a total of $175.5 million of goodwill for the IoT Products & Services reporting unit and $167.6 million of goodwill for the IoT Solutions reporting unit. At June 30, 2025, the fair value of goodwill exceeded the carrying value for each reporting unit and no impairment was recorded.

9

6. INDEBTEDNESS

On December 23, 2025, Digi entered into a First Amendment to Revolving Credit Agreement (the “Amendment”) with BMO Bank N.A. (“BMO”), as administrative and collateral agent, certain subsidiaries of Digi as guarantors (“Guarantors”) and the several banks and other financial institutions or entities party thereto as lenders (the “Lenders”). This amended our Revolving Credit Agreement, dated as of December 7, 2023 (as amended by the Amendment, the “Credit Agreement”) among Digi, BMO, the Guarantors party thereto and the Lenders from time to time party thereto.

The Credit Agreement provides Digi with a senior secured credit facility (the “Credit Facility”). The Credit Facility includes a $250 million senior secured revolving credit facility (the “Revolving Loan”), with an uncommitted accordion feature that provides for additional borrowing capacity of up to the greater of $105 million or one hundred percent of trailing twelve month adjusted earnings before interest, taxes, depreciation, and amortization ("EBITDA"). The Credit Facility also contains a $10 million letter of credit sublimit and $10 million swingline sub-facility. Digi may use the proceeds of the Credit Facility in the future for general corporate purposes.

Borrowings under the Credit Facility bear interest at a rate per annum equal to Term Secured Overnight Financing Rate ("SOFR") with a floor of 0.00% for an interest period of one, three, or six months as selected by Digi, reset at the end of the selected interest period (or a replacement benchmark rate if Term SOFR is no longer available) plus the applicable margin or a base rate plus the applicable margin. The base rate is determined by reference to the highest of BMO’s prime rate, the rate determined by BMO to be the average rate of Federal funds in the secondary market plus 0.50%, or one-month SOFR plus 1.00%. The applicable margin for loans under the Credit Facility is in a range of 1.35% to 3.10% for Term SOFR loans and 0.35% to 2.10% for base rate loans, depending on Digi’s total net leverage ratio. All borrowings in the period were made at Term SOFR for a one-month interest election period. Our weighted average Revolving Loan applicable margin was 1.35% as of March 31, 2026. Our weighted average interest rate for our Credit Facility was 4.95% as of March 31, 2026.

In addition to paying interest on the outstanding principal, Digi is required to pay a commitment fee on the unutilized commitments under the Credit Facility. The commitment fee is between 0.20% and 0.35% depending on Digi’s total net leverage ratio. Our weighted average Revolving Loan commitment fee was 0.20% as of March 31, 2026. The Credit Facility is secured by substantially all of the property of Digi and its domestic subsidiaries.

In the first quarter of fiscal 2024, Digi incurred $1.3 million in debt issuance costs upon entry into the Credit Agreement, with this amount amortized over the term of the Credit Agreement and reported in interest expense. In the first quarter of fiscal 2026, Digi incurred an additional $0.3 million in debt issuance costs upon entry into the Credit Agreement, with this amount amortized over the remaining term of the Credit Agreement and reported in interest expense.

The Revolving Loan is due in a lump sum payment at maturity December 7, 2028, if any amounts are drawn. The fair value of the Revolving Loan approximated carrying value at March 31, 2026.

The following table is a summary of our long-term indebtedness at March 31, 2026 and September 30, 2025 (in thousands):

	Balance on March 31, 2026		Balance on September 30, 2025
Revolving Loan	$	144,000	$	160,000
Less unamortized issuance costs	(960)		(848)
Total long-term debt, net of unamortized issuance costs	$	143,040	$	159,152

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6. INDEBTEDNESS (CONTINUED)

Covenants and Security Interest

The Credit Agreement requires Digi to maintain a minimum interest coverage ratio of 3.00 to 1.00 and a total net leverage ratio not to exceed 3.00 to 1.00, with certain exceptions for a covenant holiday of up to 3.50 to 1.00 after certain material acquisitions. The total net leverage ratio is defined as the ratio of Digi’s consolidated total funded indebtedness minus unrestricted cash as of such date up to a maximum amount not to exceed $50 million, to consolidated EBITDA for such period. The Credit Agreement also contains other customary affirmative and negative covenants, including covenants that restrict the ability of Digi and its subsidiaries to incur additional indebtedness, dispose of significant assets, make certain investments, (including, among other items) any acquisitions other than permitted acquisitions, make certain restricted payments, enter into sale and leaseback transactions or grant additional liens on its assets, subject to certain limitations. Amounts borrowed under the Credit Facility are secured by substantially all of our assets.

7. SEGMENT INFORMATION

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 (in thousands):

	Three months ended March 31,				Six months ended March 31,
	2026		2025		2026		2025
Revenue
IoT Products & Services	$	93,631	$	77,783	$	179,985	$	155,606
IoT Solutions	37,112		26,720		73,220		52,763
Total revenue	$	130,743	$	104,503	$	253,205	$	208,369
Depreciation and amortization
IoT Products & Services	$	3,574	$	2,919	$	6,508	$	6,346
IoT Solutions	7,497		5,243		15,016		10,316
Total depreciation and amortization	$	11,071	$	8,162	$	21,524	$	16,662
Other segment items*
IoT Products & Services	$	76,077	$	63,566	$	147,811	$	127,005
IoT Solutions	26,522		19,048		50,471		37,616
Total other segment items	$	102,599	$	82,614	$	198,282	$	164,621
Operating income
IoT Products & Services	$	13,980	$	11,298	$	25,666	$	22,255
IoT Solutions	3,093		2,429		7,733		4,831
Total operating income	$	17,073	$	13,727	$	33,399	$	27,086

*Other segment items for both IoT Products & Services and IoT Solutions include cost of sales and operating expenses.

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7. SEGMENT INFORMATION (CONTINUED)

The following table provides a reconciliation of segment operating income to consolidated income before taxes:

	Three months ended March 31,				Six months ended March 31,
	2026		2025		2026		2025
Total segment operating income	$	17,073	$	13,727	$	33,399	$	27,086
Total other expense, net	(2,264)		(1,379)		(4,571)		(3,642)
Income before income taxes	14,809		12,348		28,828		23,444

*Total other expense, net primarily includes interest expense, net in the three and six months ended March 31, 2026 and 2025, respectively.

Total expended for property, plant and equipment was (in thousands):

	Six months ended March 31,
	2026		2025
IoT Products & Services	$	639	$	597
IoT Solutions*	288		378
Total expended for property, plant and equipment	$	927	$	975

* Excluded from these amounts are $3,701 and $5,131 of transfers of inventory to property plant and equipment for subscriber assets for the six months ended March 31, 2026 and 2025, respectively.

Total assets for each of our segments were (in thousands):

	March 31, 2026		September 30, 2025
IoT Products & Services	$	388,548	$	338,454
IoT Solutions	553,938		562,290
Segment assets	942,486		900,744
Unallocated*	31,741		21,902
Total assets	$	974,227	$	922,646

*Unallocated consists of cash and cash equivalents.

8. REVENUE

Revenue Disaggregation

The following table summarizes our revenue by geographic location of our customers (in thousands):

	Three months ended March 31,				Six months ended March 31,
	2026		2025		2026		2025
North America, primarily the United States	$	111,284	$	83,542	$	212,545	$	162,554
Europe, Middle East & Africa	11,683		14,989		24,577		32,999
Rest of world	7,776		5,972		16,083		12,816
Total revenue	$	130,743	$	104,503	$	253,205	$	208,369

The following table summarizes our revenue by the timing of revenue recognition (in thousands):

	Three months ended March 31,				Six months ended March 31,
	2026		2025		2026		2025
Transferred at a point in time	$	86,661	$	73,802	$	170,012	$	148,405
Transferred over time	44,082		30,701		83,193		59,964
Total revenue	$	130,743	$	104,503	$	253,205	$	208,369

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8. REVENUE (CONTINUED)

We had two distributor customers of Digi's IoT Products & Services segment that represented over 10% of consolidated revenue in the three months ended March 31, 2026. Distributor A represented 12% of consolidated revenue for the three months ended March 31, 2026. Distributor B represented 10% of consolidated revenue for the three months ended March 31, 2026.

We had two distributor customers of Digi's IoT Products & Services segment that represented over 10% of consolidated revenue in the six months ended March 31, 2026. Distributor A represented 12% of consolidated revenue for the six months ended March 31, 2026. Distributor C represented 10% of consolidated revenue for the six months ended March 31, 2026, respectively.

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 $21.8 million and $22.9 million as of March 31, 2026 and September 30, 2025, respectively, are included in property, equipment and improvements, net. Depreciation expense for these subscriber assets, which is included in cost of sales, was $2.4 million and $2.1 million for the three months ended March 31, 2026 and 2025, respectively. Depreciation expense for these subscriber assets was $4.8 million and $4.0 million for the six months ended March 31, 2026 and 2025, respectively.

Contract Liabilities

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. 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.

Our contract liabilities were $71.3 million and $42.5 million at March 31, 2026 and 2025, respectively.

There were contract liability balances of $48.2 million and $36.8 million as of September 30, 2025 and 2024, respectively. Of these balances, Digi recognized $32.3 million and $16.4 million as revenue in the six months ended March 31, 2026 and 2025, respectively.

Remaining Performance Obligation

As of March 31, 2026, we had approximately $236.4 million of remaining performance obligations on contracts with an original duration of one year or more. We expect to recognize revenue on approximately $115.4 million of remaining performance obligations over the next 12 months. We expect to recognize revenue from the remaining performance obligations over a range of two to five years.

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9. INCOME TAXES

Our income tax expense was $5.8 million for the six months ended March 31, 2026. Included in this was a net tax benefit of $1.0 million discretely related to the six months ended March 31, 2026.

Our effective tax rate will vary based on a variety of factors. These factors include our overall profitability, the geographical mix of income before taxes and related statutory tax rate in each jurisdiction, and tax items discretely related to the period, such as tax impacts of stock compensation. We may record other benefits or expenses in the future that are specific to a particular quarter such as expiration of statutes of limitation, the completion of tax audits, or legislation that is enacted in both U.S. and foreign jurisdictions.

On July 4, 2025, the One Big Beautiful Bill Act was signed into law in the U.S., which contains a broad range of tax reform provisions affecting businesses such as the permanent extension of certain expiring provisions of the Tax Cuts and Job Act, restoration of favorable tax treatment for certain businesses provisions including the expensing of domestic research and development expenditures, and modifications to the international tax framework. The legislation has multiple effective dates, with certain provisions effective in fiscal year 2026 and others implemented through fiscal year 2027. We have incorporated the impact of the new legislation into the year-to-date effective tax rate and continue to assess the impact on the consolidated financial statements.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is (in thousands):

Unrecognized tax benefits as of September 30, 2025	$	4,312
Decreases related to:
Settlements	(32)
Expiration of statute of limitations	(143)
Unrecognized tax benefits as of March 31, 2026	$	4,137

The total amount of unrecognized tax benefits at March 31, 2026 that, if recognized, would affect our effective tax rate was $4.0 million, after considering the impact of interest and deferred benefit items. We expect that the total amount of unrecognized tax benefits will decrease by approximately $0.5 million over the next 12 months.

10. PRODUCT WARRANTY OBLIGATION

The following tables summarize the activity associated with the product warranty accrual (in thousands) and is included on our condensed consolidated balance sheets within other current liabilities and other noncurrent liabilities:

	Three months ended March 31,
	2026		2025
Balance at beginning of period	$	1,221	$	1,104
Warranties accrued*	5,124		180
Net settlements	(162)		(180)
Balance at end of period	$	6,183	$	1,104
	Six months ended March 31,
	2026		2025
Balance at beginning of period	$	1,247	$	933
Warranties accrued*	5,245		387
Settlement made	(309)		(216)
Balance at end of period	$	6,183	$	1,104

*Warranties accrued in the three and six months ended March 31, 2026 include $2.0 million and $3.0 million of current and noncurrent liabilities, respectively, relating to a purchase price adjustment for our Jolt acquisition (See Note 2).

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11. LEASES

All of our leases are operating leases and primarily consist of leases for office space. For any lease with an initial term in excess of 12 months, the related lease assets and lease liabilities are recognized on the condensed consolidated balance sheets as either operating or financing leases at the inception of an agreement where it is determined that a lease exists. We have lease agreements that contain both lease and non-lease components. We have elected to combine lease and non-lease components for all classes of assets. Leases with an expected term of 12 months or less are not recorded on the condensed consolidated balance sheets. Instead we recognize lease expense for these leases on a straight-line basis over the lease term.

Operating lease assets represent the right to use an underlying asset for the lease term and operating lease liabilities represent the obligation to make lease payments. These assets and liabilities are recognized based on the present value of future payments over the lease term at the commencement date. We generally use a collateralized incremental borrowing rate based on information available at the commencement date, including the lease term, in determining the present value of future payments. When determining our right-of-use assets, we generally do not include options to extend or terminate the lease unless it is reasonably certain that the option will be exercised. Our leases typically require payment of real estate taxes and common area maintenance and insurance. These components comprise the majority of our variable lease cost and are excluded from the present value of our lease obligations. Fixed payments may contain predetermined fixed rent escalations. We recognize the related rent expense on a straight-line basis from the commencement date to the end of the lease term.

The following table shows the supplemental balance sheet information related to our leases (in thousands):

	Balance Sheet Location	March 31, 2026		September 30, 2025
Assets
Operating leases	Operating lease right-of-use assets	$	7,710	$	8,430
Total lease assets		$	7,710	$	8,430
Liabilities
Operating leases	Current portion of operating lease liabilities	$	2,487	$	3,361
Operating leases	Operating lease liabilities	8,364		8,671
Total lease liabilities		$	10,851	$	12,032

The following were the components of our lease cost which is recorded in both cost of goods sold and selling, general and administrative expense (in thousands):

	Three months ended March 31,				Six months ended March 31,
	2026		2025		2026		2025
Operating lease cost	$	941	$	844	$	1,799	$	1,716
Variable lease cost	312		332		656		617
Short-term lease cost	42		29		127		58
Total lease cost	$	1,295	$	1,205	$	2,582	$	2,391

At March 31, 2026, the weighted average remaining lease term of our operating leases was 5.0 years and the weighted average discount rate for these leases was 4.6%.

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11. LEASES (CONTINUED)

The table below reconciles the undiscounted cash flows for each of the first five years as well as all the remaining years to the operating lease liabilities recorded on the condensed consolidated balance sheet as of March 31, 2026 (in thousands):

Fiscal year	Amount
2026 (six months)	$	1,811
2027	2,339
2028	2,105
2029	2,047
2030	1,880
2031	1,519
Thereafter	467
Total future undiscounted lease payments	12,168
Less imputed interest	(1,317)
Total reported lease liability	$	10,851

12. COMMITMENTS AND CONTINGENCIES

We lease certain of our buildings and equipment under non-cancelable lease agreements. Please refer to Note 11 to our condensed consolidated financial statements for additional information.

In the normal course of business, we presently are, and expect in the future to be, subject to various claims and litigation with third parties such as non-practicing intellectual property entities as well as customers, vendors and/or employees. There can be no assurance that any claims by third parties, if proven to have merit, will not materially adversely affect our business, liquidity or financial condition.

13. STOCK-BASED COMPENSATION

Stock-based awards granted in the six months ended March 31, 2026 and 2025 were granted under the Digi International Inc. 2021 Omnibus Incentive Plan (as amended and restated, the "2021 Plan"). Shares subject to awards under the 2021 Plan or any prior plans that are forfeited, canceled, returned to us for failure to satisfy vesting requirements, settled in cash or otherwise terminated without payment also will be available for grant under the 2021 Plan. The authority to grant options under the 2021 Plan and set other terms and conditions rests with the Compensation Committee of the Board of Directors.

As of March 31, 2026, there were approximately 2,669,646 shares available for future grants under the 2021 Plan.

Cash received from the exercise of stock options was $4.2 million and $2.7 million for the six months ended March 31, 2026 and 2025, respectively.

Our equity plans and corresponding forms of award agreements generally have provisions allowing employees to elect to satisfy tax withholding obligations through the delivery of shares. When employees make this election, we retain a portion of shares issuable under the award. Tax withholding obligations are otherwise fulfilled by the employee paying cash to us for the withholding. During the six months ended March 31, 2026 and 2025, our employees forfeited 167,685 shares and 104,086 shares, respectively, in order to satisfy withholding tax obligations of $6.8 million and $3.4 million, respectively. We sponsor an Employee Stock Purchase Plan as amended and restated as of December 10, 2019, October 29, 2013, December 4, 2009 and November 27, 2006 (the "ESPP"), covering all domestic employees with at least 90 days of continuous service and who are customarily employed at least 20 hours per week. The ESPP allows eligible participants the right to purchase common stock on a quarterly basis at the lower of 85% of the market price at the beginning or end of each three-month offering period. The most recent amendments to the ESPP, ratified by our stockholders on January 29, 2020, increased the total number of shares that may be purchased under the ESPP to 3,425,000. ESPP contributions by employees were $1.5 million and $1.1 million for the six months ended March 31, 2026 and 2025. Pursuant to the ESPP, 42,598 and 47,820 common shares were issued to employees during the six months ended March 31, 2026 and 2025, respectively. Shares are issued under the ESPP from treasury stock. As of March 31, 2026, 234,105 common shares were available for future issuances under the ESPP.

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13. STOCK-BASED COMPENSATION (CONTINUED)

The following table shows stock-based compensation expense that is included in the consolidated results of operations (in thousands):

	Three months ended March 31,				Six months ended March 31,
	2026		2025		2026		2025
Cost of sales	$	223	$	202	$	435	$	389
Sales and marketing	1,657		1,358		3,063		2,619
Research and development	578		611		1,206		1,157
General and administrative	2,049		1,773		3,790		3,339
Stock-based compensation before income taxes	4,507		3,944		8,494		7,504
Income tax benefit	(968)		(840)		(1,830)		(1,601)
Stock-based compensation after income taxes	$	3,539	$	3,104	$	6,664	$	5,903

Stock Options

The following table summarizes our stock option activity (in thousands, except per common share amounts):

	Options Outstanding	Weighted Average Exercise Price	Weighted Average Contractual Term (in years)	Aggregate Intrinsic Value (1)
Balance on September 30, 2025	857	$21.66
Granted	53	41.41
Exercised	(253)	21.56
Forfeited / Canceled	(9)	27.46
Balance on March 31, 2026	648	$23.23	2.8	$	16,176
Exercisable on March 31, 2026	518	$20.39	2.0	$	14,402

(1) The aggregate intrinsic value represents the total pre-tax intrinsic value, based on our closing stock price of $48.20 as of March 31, 2026, which would have been received by the option holders had all option holders exercised their options as of that date.

The intrinsic value of an option is the amount by which the fair value of the underlying stock exceeds its exercise price. The total intrinsic value of all options exercised during the six months ended March 31, 2026 and 2025 was $4.5 million and $17.4 million, respectively.

The following table shows the weighted average fair value, which was determined based upon the fair value of each option on the grant date utilizing the Black-Scholes option-pricing model and the related assumptions:

	Six months ended March 31,
	2026	2025
Weighted average per option grant date fair value	$21.12	$16.23
Assumptions used for option grants:
Risk free interest rate	3.62% - 3.86%	4.31% - 4.38%
Expected term	6.00 years	6.00 years
Expected volatility	49%	48%
Weighted average volatility	49%	48%
Expected dividend yield	—	—

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13. STOCK-BASED COMPENSATION (CONTINUED)

The fair value of each option award granted during the periods presented was estimated using the Black-Scholes option valuation model that uses the assumptions noted in the above table. Expected volatilities are based on the historical volatility of our stock. We use historical data to estimate option exercise and employee termination information within the valuation model. The expected term of options granted is derived from the vesting period and historical information and represents the period of time that options granted are expected to be outstanding. The risk-free rate used is the zero-coupon U.S. Treasury bond rate in effect at the time of the grant whose maturity equals the expected term of the option.

As of March 31, 2026, the total unrecognized compensation cost related to non-vested stock options was $2.2 million and the related weighted average period over which it is expected to be recognized is approximately 2.3 years.

Non-vested Stock Units

The following table presents a summary of our non-vested restricted stock units and performance stock units as of March 31, 2026 and changes during the six months then ended (in thousands, except per common share amounts):

	RSUs			PSUs
	Number of Awards	Weighted Average Grant Date Fair Value		Number of Awards	Weighted Average Grant Date Fair Value
Nonvested on September 30, 2025	966	$	31.99	324	$	31.71
Granted	444	41.12		269	40.90
Vested	(359)	32.88		(82)	32.02
Canceled	(26)	33.62		(40)	40.66
Nonvested on March 31, 2026	1,025	$	35.59	471	$	36.15

As of March 31, 2026, the total unrecognized compensation cost related to non-vested restricted stock units and performance stock units was $31.6 million and $2.6 million, respectively. The related weighted average period over which these costs are expected to be recognized was approximately 2.2 years and 0.6 years, respectively.

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Our management's discussion and analysis should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended September 30, 2025, as well as our subsequent reports on Form 10-Q and Form 8-K and any amendments to such reports.

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

This Quarterly Report on Form 10-Q contains certain statements that are "forward-looking statements" as that term is defined under the Private Securities Litigation Reform Act of 1995, and within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.

Forward-Looking Statements

This report contains forward-looking statements that are based on management’s current expectations and assumptions. These statements often can be identified by the use of forward-looking terminology such as "assume," "believe," "continue," "estimate," "expect," "intend," "may," "plan," "potential," "project," "should," or "will" or the negative thereof or other variations thereon or similar terminology. Among other items, these statements relate to expectations of the business environment in which Digi operates, projections of future performance, including but not limited to expectations regarding the Company’s profitability and net cash position, inventory levels, supply chain normalization, perceived marketplace opportunities, debt repayments, attributions of potential acquisitions and statements regarding our mission and vision. Such statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions. Among others, these include risks related to our ability to realize synergies and operating benefits from acquisitions, like our recent acquisitions of Jolt completed in August 2025, and Particle completed in January 2026, ongoing and varying inflationary and deflationary pressures around the world and the monetary and trade policies of governments globally as well as present and ongoing concerns about a potential recession, the potential for longer than expected sales cycles, the ability of companies like us to operate a global business in such conditions as well as negative effects on product demand and the financial solvency of customers and suppliers in such conditions, risks related to ongoing supply chain challenges that continue to impact businesses globally, regulatory risks that include, but are not limited to, the potential expansion of tariffs and potential changes to regulations impacting the functionality or compliance of our products, risks related to cybersecurity, data breaches and data privacy, risks arising from military conflicts such as those in Ukraine and the Middle East, the highly competitive market in which we operate, rapid changes in technologies that may displace products sold by us, declining prices of networking products, our reliance on distributors and other third parties to sell our products, the potential for significant purchase orders to be canceled or changed, delays in product development efforts, uncertainty in user acceptance of our products, the ability to integrate our products and services with those of other parties in a commercially accepted manner, potential liabilities that can arise if any of our products have design or manufacturing defects, our ability to defend or settle satisfactorily any litigation, the impact of natural disasters and other events beyond our control that could negatively impact our supply chain and customers, potential unintended consequences associated with restructuring, reorganizations or other similar business initiatives that may impact our ability to retain important employees or otherwise impact our operations in unintended and adverse ways, and changes in our level of revenue or profitability which can fluctuate for many reasons beyond our control.

These and other risks, uncertainties and assumptions identified from time to time in our filings with the United States Securities and Exchange Commission, including without limitation, those set forth in Item 1A, Risk Factors, of our Annual Report on Form 10-K for the year ended September 30, 2025, and any other subsequent filings, including, but not limited to, this filing, could cause our actual results to differ materially from those expressed in any forward-looking statements made by us or on our behalf. Many of such factors are beyond our ability to control or predict. These forward-looking statements speak only as of the date for which they are made. Except to the extent required by law, we do not undertake, and expressly disclaim, any intent or obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

CRITICAL ACCOUNTING ESTIMATES

Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, the disclosure of contingent assets and liabilities and the values of purchased assets and assumed liabilities in acquisitions. We base our estimates on historical experience and various other assumptions that we believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

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A description of our critical accounting estimates was provided in the Management's Discussion and Analysis of Financial Condition and Results of Operations section of our Annual Report on Form 10-K for the fiscal year ended September 30, 2025.

OVERVIEW

We are a leading global provider of business and mission-critical IoT connectivity products, services and solutions. Our business is comprised of two reporting segments: IoT Products & Services and IoT Solutions.

In fiscal 2026, our key operating objectives are to continue driving growth in Annualized Recurring Revenue ("ARR"), Adjusted Net Income, Adjusted EBITDA and cash flow generation.

We utilize many financial, operational, and other metrics to evaluate our financial condition and financial performance. Below we highlight the metrics for the second quarter of fiscal 2026 that we feel are most important in these evaluations, with comparisons to the second quarter of fiscal 2025:

•Revenue was $131 million, an increase of 25%.

•Gross profit margin was 64.0%, an increase of 190 basis points.

•Operating margin was 13.1% in both periods.

•Net income was $11 million, an increase of 8%.

•Net income per diluted share was $0.29, an increase of 4%.

•Adjusted net income was $24 million, an increase of 33%.

•Adjusted net income per diluted share was $0.62, an increase of 29%.

•Adjusted EBITDA was $34 million, an increase of 32%.

•Annualized Recurring Revenue ("ARR") was $184 million at quarter end, an increase of 50%.

(1) Fiscal 2026 results include the results of Jolt for the full six-month period and Particle following the January 2026 acquisition date.

Reconciliations of non-GAAP financial measures to their closest GAAP analogs appear in this document, as well as a discussion of recent changes to the method of calculating adjusted net income and adjusted net income per share.

Key trends regarding our existing business

We believe the following trends will continue to impact our business in fiscal 2026 and beyond:

•We believe the market for Industrial IoT products and services is in the midst of a long-term expansion across a broad range of industries and solutions.

•As recurring revenue from subscription and cloud monitoring services becomes a greater portion of our overall revenue, delivering at higher operating margins rates than one-time revenue, we expect operating margin rates to expand.

•Technology infrastructure necessary to support the deployment of artificial intelligence and other innovations has seen a significant increase in spending on datacenters and other related infrastructure and we have been and expect to be a beneficiary of this ongoing trend.

In addition to the above trends, there are a number of macro circumstances globally that we continue to monitor for potential impacts on our business. These include evolving international trade policies, global economic conditions, military conflicts and political tensions that may have the potential to disrupt our business or those of our vendors or customers.

Both tariffs imposed by various governments globally as well as extremely high demand for certain components associated with technology capital spending on AI and other global business initiatives have the potential to disrupt existing supply chains and impose additional costs on our business.

Monetary and fiscal policies continue to fluctuate globally in response to inflationary and deflationary pressures. These situations could all lead to potential adverse impacts on a wide range of businesses and could affect the businesses of our

20

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

vendors and customers in ways that could harm our business. Due to the war in Ukraine, sanctions remain imposed on trade with Russia and Belarus which has the potential to disrupt the supply of raw materials needed to make components. Political tensions between China and other nations have intensified, which could lead to similar issues. Additionally, the military conflict with Iran that began in late February has created volatility in both the price of oil and other commodities as well as shipping that has impacted our transportation costs.

CONSOLIDATED RESULTS OF OPERATIONS

The following table sets forth selected information derived from our interim condensed consolidated statements of operations:

	Three months ended March 31,								% incr.
($ in thousands)	2026				2025				(decr.)
Revenue	$	130,743	100.0	%	$	104,503	100.0	%	25.1	%
Cost of sales	47,068		36.0		39,570		37.9		18.9
Gross profit	83,675		64.0		64,933		62.1		28.9
Operating expenses	66,602		50.9		51,206		49.0		30.1
Operating income	17,073		13.1		13,727		13.1		24.4
Other expense, net	(2,264)		(1.8)		(1,379)		(1.3)		64.2
Income before income taxes	14,809		11.3		12,348		11.8		19.9
Income tax expense	3,506		2.7		1,851		1.8		89.4
Net income	$	11,303	8.6	%	$	10,497	10.0	%	7.7
	Six months ended March 31,								% incr.
($ in thousands)	2026				2025				(decr.)
Revenue	$	253,205	100.0	%	$	208,369	100.0	%	21.5	%
Cost of sales	93,139		36.8		79,038		37.9		17.8
Gross profit	160,066		63.2		129,331		62.1		23.8
Operating expenses	126,667		50.0		102,245		49.1		23.9
Operating income	33,399		13.2		27,086		13.0		23.3
Other expense, net	(4,571)		(1.8)		(3,642)		(1.7)		25.5	%
Income before income taxes	28,828		11.4		23,444		11.3		23.0
Income tax expense	5,814		2.3		2,864		1.4		103.0
Net income	$	23,014	9.1	%	$	20,580	9.9	%	11.8

NM means not meaningful

21

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

REVENUE BY SEGMENT

	Three months ended March 31,								% incr.
($ in thousands)	2026				2025				(decr.)
Revenue
IoT Products & Services	$	93,631	71.6	%	$	77,783	74.4	%	20.4	%
IoT Solutions	37,112		28.4		26,720		25.6		38.9
Total revenue	$	130,743	100.0	%	$	104,503	100.0	%	25.1	%
	Six months ended March 31,								% incr.
	2026				2025				(decr.)
Revenue
IoT Products & Services	$	179,985	71.1	%	$	155,606	74.7	%	15.7	%
IoT Solutions	73,220		28.9		52,763		25.3		38.8
Total revenue	$	253,205	100.0	%	$	208,369	100.0	%	21.5	%

IoT Products & Services

IoT Products & Services revenue increased $15.8 million for the three months ended March 31, 2026, as compared to the same period in the prior fiscal year. This was driven by increased customer demand and consisted of a $10.3 million increase in one-time sales and $5.5 million of recurring revenue growth, with no material impact from pricing. These increases were driven largely by organic growth, with a contribution from the Particle acquisition.

IoT Products & Services revenue increased $24.4 million for the six months ended March 31, 2026, as compared to the same period in the prior fiscal year. This was driven by increased customer demand and consisted of a $16.6 million increase in one-time sales and $7.8 million of recurring revenue growth, with no material impact from pricing. These increases were driven largely by organic growth, with a contribution from the Particle acquisition.

IoT Solutions

IoT Solutions revenue increased $10.4 million for the three months ended March 31, 2026, as compared to the same period in the prior fiscal year. The increase consisted of a $7.8 million increase in recurring revenue and a $2.6 million increase in one-time sales, with the majority of both driven by the Jolt acquisition.

IoT Solutions revenue increased $20.5 million for the six months ended March 31, 2026, as compared to the same period in the prior fiscal year. The increase consisted of a $15.5 million increase in recurring revenue and a $5.0 million increase in one-time sales, with the majority of both driven by the Jolt acquisition.

ARR

ARR was $184 million as of March 31, 2026, compared to $123 million as of March 31, 2025. IoT Products & Services ARR was $57 million as of March 31, 2026, compared to $28 million as of March 31, 2025. This increase was driven primarily by the acquisition of Particle and supported by growth in the subscription base across remote management platforms, extended warranty offerings and technical support. IoT Solutions ARR was $127 million as of March 31, 2026, compared to $95 million as of March 31, 2025, primarily driven by the acquisition of Jolt, as well as growth in our existing Solutions businesses.

22

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

COST OF GOODS SOLD AND GROSS PROFIT

Below are cost of goods sold and gross profit as a percentage of their respective total revenue:

	Three months ended March 31,								Basis point
($ in thousands)	2026				2025				inc. (decr.)
Cost of sales	$	47,068	36.0	%	$	39,570	37.9	%	(190)
Gross profit	$	83,675	64.0	%	$	64,933	62.1	%	190
	Six months ended March 31,								Basis point
($ in thousands)	2026				2025				inc. (decr.)
Cost of sales	$	93,139	36.8	%	$	79,038	37.9	%	(110)
Gross profit	$	160,066	63.2	%	$	129,331	62.1	%	110

Gross profit margin of 64.0% increased 190 basis points the second quarter of fiscal 2026 as compared to second quarter of the prior fiscal year. This increase was the result of lower manufacturing related costs.

Gross profit margin of 63.2% increased 110 basis points in the six months ended March 31, 2026, as compared to the same period in the prior fiscal year. This increase was the result of a higher proportion of volume from recurring revenue, which has a higher margin.

OPERATING EXPENSES

Below are our operating expenses and operating expenses as a percentage of total revenue:

	Three months ended March 31,								$		%
($ in thousands)	2026				2025				incr. (decr.)		incr. (decr.)
Operating Expenses
Sales and marketing	$	27,526	21.1	%	$	22,041	21.1	%	$	5,485	24.9	%
Research and development	19,280		14.7		15,325		14.7		3,955		25.8
General and administrative	19,796		15.1		13,840		13.2		5,956		43.0
Total operating expenses	$	66,602	50.9	%	$	51,206	49.0	%	$	15,396	30.1	%
	Six months ended March 31,								$		%
($ in thousands)	2026				2025				incr. (decr.)		incr. (decr.)
Operating Expenses
Sales and marketing	$	53,503	21.1	%	$	43,798	21.0	%	$	9,705	22.2	%
Research and development	36,434		14.4		30,352		14.6		6,082		20.0
General and administrative	36,730		14.5		28,095		13.5		8,635		30.7
Total operating expenses	$	126,667	50.0	%	$	102,245	49.1	%	$	24,422	23.9	%

The $15.4 million increase in operating expenses for the three months ended March 31, 2026, as compared to the same period in the prior fiscal year, was due to a $11.5 million increase in labor expense and a $4.0 million increase in non-labor expense. These increases were driven by incremental costs from Jolt and Particle, including an increase in amortization expense due to acquisition-related intangibles, and higher labor costs among existing employees.

23

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

The $24.4 million increase in operating expenses for the six months ended March 31, 2026, as compared to the same period in the prior fiscal year, was due to a $16.2 million increase in labor expense and a $8.5 million increase in non-labor expense, partially offset by a $0.2 million in net gains on intangible asset sales. These increases were driven by incremental costs from Jolt and Particle, including an increase in amortization expense due to acquisition-related intangibles, and higher labor costs among existing employees.

OPERATING INCOME

	Three months ended March 31,								Basis point increase (decrease)
($ in thousands)	2026				2025
Operating Income
IoT Products & Services	$	13,980	14.9	%	$	11,298	14.5	%	40
IoT Solutions	3,093		8.3	%	2,429		9.1	%	(80)
Total operating income	$	17,073	13.1	%	$	13,727	13.1	%	—
	Six months ended March 31,								Basis point increase (decrease)
($ in thousands)	2026				2025
Operating Income
IoT Products & Services	$	25,666	14.3	%	$	22,255	14.3	%	—
IoT Solutions	7,733		10.6	%	4,831		9.2	%	140
Total operating income	$	33,399	13.2	%	$	27,086	13.0	%	20

IoT Products & Services

IoT Products & Services operating income increased 40 basis points for the second quarter of fiscal 2026, as compared to the second quarter of fiscal 2025. This increase was due to lower manufacturing related costs, partially offset by an increase in amortization expense, due to the addition of acquisition-related intangibles.

IoT Products & Services operating income was flat for the six months ended March 31, 2026, as compared to the same period in the prior fiscal year. This was the result of a higher proportion of volume from recurring revenue, which has a higher margin, offset by an increase in amortization expense, due to the addition of acquisition-related intangibles.

IoT Solutions

IoT Solutions operating income decreased 80 basis points for the second quarter of fiscal 2026, as compared to the second quarter of fiscal 2025. This decrease was the result of an increase in amortization expense, due to the addition of acquisition-related intangibles.

IoT Solutions operating income increased 140 basis points for the six months ended March 31, 2026, as compared to the same period in the prior fiscal year. This increase was the result of a higher proportion of volume from recurring revenue, which has a higher margin, partially offset by an increase in amortization expense, due to the addition of acquisition-related intangibles.

24

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

OTHER EXPENSE, NET

Below are our other expenses, net, and other expenses, net as a percentage of total revenue:

	Three months ended March 31,								$		%
($ in thousands)	2026				2025				incr. (decr.)		incr. (decr.)
Other expense, net
Interest expense, net	$	(2,220)	(1.7)	%	$	(1,336)	(1.3)	%	$	(884)	66.2	%
Other expense, net	(44)		—		(43)		—		(1)		2.3	%
Total other expense, net	$	(2,264)	(1.7)	%	$	(1,379)	(1.3)	%	$	(885)	64.2	%
	Six months ended March 31,								$		%
($ in thousands)	2026				2025				incr. (decr.)		incr. (decr.)
Other expense, net
Interest expense, net	$	(4,523)	(1.8)	%	$	(3,630)	(1.7)	%	$	(893)	24.6	%
Other expense, net	(48)		—		(12)		—		(36)		300.0	%
Total other expense, net	$	(4,571)	(1.8)	%	$	(3,642)	(1.7)	%	$	(929)	25.5	%

Other expense, net, increased for the three and six months ended March 31, 2026, as compared to the same periods in the prior fiscal year due to increased interest expense, as the amount of outstanding debt increased due to the acquisition of Particle in the second quarter of fiscal 2026.

INCOME TAXES

See Note 9 to the condensed consolidated financial statements for discussion of income taxes.

KEY BUSINESS METRIC

ARR represents the annualized monthly value of all billable subscription contracts, measured at the end of any fiscal period. ARR should be viewed independently of revenue and deferred revenue and is not intended to replace or forecast either of these items. Digi management uses ARR to manage and assess the growth of our subscription revenue business. We believe ARR is an indicator of the scale of our subscription business.

25

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

GOODWILL

If our future operating results do not meet current forecasts or if we experience a sustained decline in our market capitalization that is determined to be indicative of a reduction in fair value of one or more of our reporting units within either of our segments, we may be required to record future impairment charges for goodwill.

See Note 5 to the condensed consolidated financial statements for additional discussion of goodwill.

NON-GAAP FINANCIAL INFORMATION

This report includes adjusted net income, adjusted net income per diluted share and adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA"), each of which is a non-GAAP financial measure.

During the first fiscal quarter of 2026, Digi modified its method of calculating adjusted net income and adjusted net income per share to include the impact of interest expense. This change was primarily driven by the continued use of financing by the Company to fund cash flow needs and therefore including the recurring nature of interest presents a better metric that management believes provides a more representative view of operating performance and cash-generating capability. Accordingly, we evaluated the impact of this change on prior-period disclosures and have recast adjusted net income and adjusted net income per share for all periods to conform to this presentation.

Non-GAAP measures are not substitutes for GAAP measures for the purpose of analyzing financial performance. The disclosure of these measures does not reflect all charges and gains that actually were recognized by Digi. These non-GAAP measures are not in accordance with, or, an alternative for measures prepared in accordance with GAAP and may be different from non-GAAP measures used by other companies or presented by us in prior reports. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. We believe that non-GAAP measures have limitations in that they do not reflect all of the amounts associated with our results of operations as determined in accordance with GAAP. We believe these measures should only be used to evaluate our results of operations in conjunction with the corresponding GAAP measures. Additionally, Adjusted EBITDA does not reflect our cash expenditures, the cash requirements for the replacement of depreciated and amortized assets, or changes in or cash requirements for our working capital needs. We believe that providing historical and adjusted net income and adjusted net income per diluted share, respectively, exclusive of such items as reversals of tax reserves, discrete tax benefits, restructuring charges and reversals, intangible amortization, stock-based compensation, other non-operating income/expense, adjustments to estimates of contingent consideration and acquisition-related expenses related to acquisition permits investors to compare results with prior periods that did not include these items. Management uses the aforementioned non-GAAP measures to monitor and evaluate ongoing operating results and trends and to gain an understanding of our comparative operating performance. In addition, certain of our stockholders have expressed an interest in seeing financial performance measures exclusive of the impact of these matters, which while important, are not central to the core operations of our business. Management believes that Adjusted EBITDA, defined as EBITDA adjusted for stock-based compensation expense, acquisition-related expenses, restructuring charges and reversals and changes in fair value of contingent consideration, is useful to investors to evaluate our core operating results and financial performance because it excludes items that are significant non-cash or non-recurring expenses reflected in the consolidated statements of operations. We believe that the presentation of Adjusted EBITDA as a percentage of revenue is useful to investors because it provides a reliable and consistent approach to measuring our performance from year to year and in assessing our performance against that of other companies. We believe this information helps compare operating results and corporate performance exclusive of the impact of our capital structure and the method by which assets were acquired.

26

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

Below are reconciliations from GAAP to non-GAAP information that we feel are important to our business:

Reconciliation of Net Income to Adjusted EBITDA

(In thousands)

	Three months ended March 31,								Six months ended March 31,
	2026				2025				2026				2025
			% of total revenue				% of total revenue				% of total revenue				% of total revenue
Total revenue	$	130,743	100.0	%	$	104,503	100.0	%	$	253,205	100.0	%	$	208,369	100.0	%
Net income	$	11,303			$	10,497			$	23,014			$	20,580
Interest expense, net	2,220				1,336				4,523				3,630
Income tax provision	3,506				1,851				5,814				2,864
Depreciation and amortization	11,071				8,162				21,526				16,662
Stock-based compensation	4,507				3,944				8,494				7,504
Gain on asset sale	—				—				(200)				—
Restructuring charge	41				225				498				384
Acquisition expense, net	1,763				—				2,306				—
Adjusted EBITDA	$	34,411	26.3	%	$	26,015	24.9	%	$	65,975	26.1	%	$	51,624	24.8	%

Reconciliation of Net Income and Net Income per Diluted Share to

Adjusted Net Income and Adjusted Net Income per Diluted Share

(In thousands, except per share amounts)

	Three months ended March 31,								Six months ended March 31,
	2026				2025				2026				2025
Net income and net income per diluted share	$	11,303	$	0.29	$	10,497	$	0.28	$	23,014	$	0.60	$	20,580	$	0.55
Amortization	7,821		0.20		5,235		0.14		15,077		0.39		11,000		0.29
Stock-based compensation expense	4,507		0.12		3,944		0.11		8,494		0.22		7,504		0.20
Other non-operating income	44		—		43		—		48		—		12		—
Acquisition expense, net	1,763		0.05		—		—		2,306		0.06		—		—
Gain on asset sale	—		—		—		—		(200)		(0.01)		—		—
Restructuring charge	41		—		225		0.01		498		0.01		384		0.01
Tax effect from the above adjustments (1)	(1,455)		(0.03)		(1,923)		(0.06)		(3,077)		(0.07)		(4,246)		(0.12)
Discrete tax benefits (2)	(256)		(0.01)		(149)		—		(1,018)		(0.03)		(511)		(0.01)
Adjusted net income and adjusted net income per diluted share (3)	$	23,768	$	0.62	$	17,872	$	0.48	$	45,142	$	1.17	$	34,723	$	0.92
Diluted weighted average common shares			38,482				37,520				38,420				37,553

(1)The tax effect from the above adjustments assumes an estimated effective tax rate of 18.0% for fiscal 2026 and fiscal 2025 based on adjusted net income.

(2)For the three and six months ended March 31, 2026 and 2025, discrete tax benefits are a result of changes in excess tax benefits recognized on stock compensation.

(3)Adjusted net income per diluted share may not add due to the use of rounded numbers.

27

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

LIQUIDITY AND CAPITAL RESOURCES

Historically we have financed our operations and capital expenditures principally with funds generated from operations. In fiscal 2022 we issued debt to fund our acquisition of Ventus and in fiscal 2023 we extinguished the debt, replacing it with a revolving credit facility. Our liquidity requirements arise from our working capital needs, and, to a lesser extent, from our need to fund capital expenditures to support our current operations and facilitate growth and expansion.

On December 23, 2025, we amended our Credit Agreement. The Credit Agreement provides Digi with a $250 million senior secured revolving credit facility, with an uncommitted accordion feature that provides additional borrowing capacity of up to the greater of $105 million or one hundred percent of trailing twelve month adjusted earnings before interest, taxes, depreciation, and amortization. The Credit Facility also contains a $10 million letter of credit sublimit and $10 million swingline sub-facility. For additional information regarding the terms of our Credit Facility, including the Revolving Loan and its sub-facilities, see Note 6 to our condensed consolidated financial statements.

We expect positive cash flows from operations for the foreseeable future. We believe that our current cash and cash equivalents balances, cash generated from operations and our ability to borrow under our credit facility will be sufficient to fund our business operations and capital expenditures for the next 12 months and beyond.

Below our condensed consolidated statements of cash flows for the six months ended March 31, 2026 and 2025 are summarized:

	Six months ended March 31,
($ in thousands)	2026		2025
Operating activities	$	77,106	$	56,005
Investing activities	(49,707)		(1,135)
Financing activities	(17,406)		(56,037)
Effect of exchange rate changes on cash and cash equivalents	(154)		(47)
Net decrease in cash and cash equivalents	$	9,839	$	(1,214)

Cash flows from operating activities increased $21.1 million. This was largely driven by a $19.3 million decrease in net operating assets for the first half of fiscal 2026 compared to a $11.5 million increase in the first half of fiscal 2025, as well as a $4.9 million decrease in deferred income tax benefit in the first half of fiscal 2026 compared to a small increase in the first half of fiscal 2025, a $4.9 million increase in depreciation, a $2.4 million increase in net income in the first half of fiscal 2026 and smaller increases in stock based compensation expense and gains on sales of intangible assets.

Cash flows used for investing activities increased $48.6 million almost entirely caused by the net cash paid for the acquisition of Particle.

Cash flows used in financing activities decreased $38.6 million. This was driven by a $34.0 million draw on our revolving credit agreement to fund the acquisition of Particle, a small decrease in debt payments in the first half of fiscal 2026 compared to the first half of fiscal 2025, and higher proceeds from stock option exercises and employee stock purchase plan transactions.

CONTRACTUAL OBLIGATIONS

The following table summarizes our contractual obligations at March 31, 2026:

	Payments due by fiscal period
($ in thousands)	Total		Less than 1 year		1-3 years		3-5 years		Thereafter
Operating leases	$	12,168	$	2,981	$	4,298	$	3,663	$	1,226
Revolving loan	144,000		—		144,000		—		—
Total	$	156,168	$	2,981	$	148,298	$	3,663	$	1,226

28

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

The operating leases included above primarily relate to office space. The table above does not include possible payments for uncertain tax positions. Our reserve for uncertain tax positions, including accrued interest and penalties, was $0.2 million as of March 31, 2026. Due to the nature of the underlying liabilities and the extended time often needed to resolve income tax uncertainties, we cannot make reliable estimates of the amount or timing of future cash payments that may be required to settle these liabilities. The table above also does not include those obligations for royalties under license agreements as these royalties are calculated based on future sales of licensed products and we cannot make reliable estimates of the amount of cash payments.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

See Note 1.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to ongoing market risk related to changes in interest rates and foreign currency exchange rates.

INTEREST RATE RISK

We are exposed to market risks related to fluctuations in interest rates on amounts borrowed under the Credit Facility. As of March 31, 2026, we had $144.0 million outstanding under our Revolving Loan. Borrowings under the Credit Facility bear interest at a rate per annum equal to Term SOFR with a floor of 0.00% for an interest period of one, three, or six months as selected by Digi, reset at the end of the selected interest period (or a replacement benchmark rate if Term SOFR is no longer available) plus the applicable margin or a base rate plus the applicable margin. The base rate is determined by reference to the highest of BMO’s prime rate, the rate determined by BMO to be the average rate of Federal funds in the secondary market plus 0.50%, or one-month SOFR plus 1.00%. The applicable margin for loans under the Credit Facility is in a range of 1.35% to 3.10% for Term SOFR loans and 0.35% to 2.10% for base rate loans, depending on Digi’s total net leverage ratio. All borrowings in the period were made at Term SOFR for a one-month interest election period. Our weighted average Revolving Loan applicable margin of 1.35% as of March 31, 2026. Our weighted average interest rate for our Credit Facility was 4.95% as of March 31, 2026.

Digi bases the interest period election described above on a monthly assessment of the interest rate environment. Based on the balance sheet position for the Revolving Loan at March 31, 2026, the annualized effect of a 25 basis point change in interest rates would increase or decrease our interest expense by $0.4 million. For additional information, see Note 6 to our condensed consolidated financial statements. For our Credit Facility, interest rate changes generally do not affect the fair value of the debt instruments, but do impact future earnings and cash flows, assuming other factors are held constant. If interest rates remain elevated, we will continue to see interest expenses that are higher than historical amounts.

FOREIGN CURRENCY RISK

We are not exposed to foreign currency transaction risk associated with sales transactions as the majority of our sales are denominated in U.S. Dollars. We are exposed to foreign currency translation risk as the financial position and operating results of our foreign subsidiaries are translated into U.S. Dollars for consolidation. We manage our net asset or net liability position for non-functional currency accounts, primarily the U.S. Dollar accounts in our foreign locations to reduce our foreign currency risk. We have not implemented a formal hedging strategy.

A 10% change in the average exchange rate for the Euro, British Pound, Australian Dollar and Canadian Dollar to the U.S. Dollar during the first six months of fiscal 2026 would have resulted in a 0.7% increase or decrease in stockholders' equity due to foreign currency translation.

CREDIT RISK

We have exposure to credit risk related to our accounts receivable portfolio. Exposure to credit risk is controlled through regular monitoring of customer financial status, credit limits and collaboration with sales management and customer contacts to facilitate payment.

29

ITEM 4. CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

As of the end of the period covered by this report, we conducted an evaluation, under the supervision and with the participation of the Chief Executive Officer and Chief Financial Officer, of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the "Exchange Act")). Based on this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act was recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and is accumulated and communicated to our management, including the principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

There were no changes in our internal control over financial reporting that occurred during the three months ended March 31, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

30

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The disclosure set forth in Note 12 to the condensed consolidated financial statements in Part I, Item 1 of this Form 10-Q is incorporated herein by reference.

ITEM 1A. RISK FACTORS

Except as set forth below, there have been no material changes in our risk factors from those previously disclosed in Item 1A of Part I of our Annual Report on Form 10-K for the year ended September 30, 2025.

We depend on manufacturing relationships and a broad set of suppliers, some of whom provide us with limited-source components and parts, and disruptions in these relationships may cause damage to our customer relationships or otherwise negatively impact our business.

We procure all parts and certain services involved in the production of our products and subcontract most of our product manufacturing to outside firms that specialize in such services. Although most of the components of our products are available from multiple vendors, we have several single-source supplier relationships, either because alternative sources are not available or because the relationship is advantageous to us. Further, in recent years global supply chains have experienced stress due to a range of factors. This has impacted our own ability to procure certain inventory and services. These disruptions also caused us to order significant amounts of inventory as we were uncertain whether we would otherwise be able to procure necessary parts and components to meet customer needs. As a result, at times we held elevated levels of inventory compared to historical norms. The impacts of these circumstances driven by supply chain stress were material in some instances and it is possible additional material impacts could occur in the future. There can be no assurance that our suppliers will be able to meet our future requirements for products and components in a timely fashion. In addition, the availability of many of the components we need is dependent in part on our ability to provide our suppliers with accurate forecasts of our future requirements. Delays or lost revenue could be caused by other factors beyond our control, including late deliveries by vendors of components, or force majeure events. As an example of force majeure, a fire many years ago disrupted the operations at one of our contract manufacturers in Thailand. If we are required to identify alternative suppliers for any of our required components, qualification and pre-production periods could be lengthy and may cause an increase in component costs and delays in providing products to customers. Any extended interruption in the supply of any of the key components or the availability of manufacturing services that currently are obtained from limited sources could disrupt our operations and have a material adverse effect on our customer relationships and profitability.

We are dependent on third parties to manufacture our products which could have adverse impacts on our business if such manufacturers encounter operating restraints or if we do not properly forecast customer demand.

We are reliant on third parties to manufacture our products in countries such as Mexico, Thailand, Taiwan, Cambodia and China. The ability of these manufacturers to provide us with the timely provision of finished products is subject to a number of disruptions beyond their control such as, among others: the availability of components from suppliers, labor shortages, energy shortages such as those from time to time encountered in China, changes in government regulations, tensions with foreign governments or other factors. If we do not properly forecast customer demands for products any lengthening in lead times or disruptions in service could result in lost revenues and adversely impact our business, results of operation, financial condition and prospects.

We face risks associated with our international operations that could impair our ability to grow our revenue abroad as well as our overall financial condition.

Our future growth may be dependent in part upon our ability to increase sales in international markets. These sales are subject to a variety of risks, including fluctuations in currency exchange rates, tariffs, import restrictions and other trade barriers, geopolitical tensions, unexpected or very burdensome changes in regulatory requirements, longer accounts receivable payment cycles, potentially adverse tax consequences, and export license requirements. The impact of these risks is not able to be estimated and the circumstances associated with these risks is extremely fluid in the current macro-economic environment. In addition, we are subject to the risks inherent in conducting business internationally, including political and economic instability, military conflicts and unexpected changes in diplomatic and trade relationships. In many markets where we operate business and cultural norms are different than those in the United States and practices that may violate laws and regulations applicable to us like the Foreign Corrupt Practices Act ("FCPA") and the UK Anti-Bribery Act ("UKBA") are more commonplace. Although we have implemented policies and procedures with the intention of ensuring compliance with these laws and regulations, our employees, contractors and agents, as well as channel partners involved in our international sales, may take actions in violation of our policies. Many of our vendors and strategic business allies also have international operations and are subject to the

31

above-described risks. Even if we are able to successfully manage the risks of international operations, our business may be adversely affected if one or more of our business relations are not able to successfully manage these risks. There can be no assurance that one or more of these factors will not have a material adverse effect on our business strategy and financial condition.

In addition to these risks, our offices and employees in foreign jurisdictions, including Australia, Belgium, Canada, China, France, Germany, Japan, Mexico, Poland, Spain, Singapore, Sweden and United Kingdom, create additional operational and compliance risks. Local labor, employment, tax and benefits laws may increase our operating costs, limit our ability to adjust staffing levels, or expose us to unexpected liabilities. Government inspections, audits, or investigations could disrupt operations or result in fines or penalties. Employees in these jurisdictions may also face heightened personal security, regulatory, or compliance risks. Evolving data‑security, cybersecurity, and data‑localization requirements in foreign jurisdictions may impose additional compliance obligations and operational constraints. Changes in U.S. relations with these foreign jurisdictions could also result in new restrictions that impair our ability to operate or support employees there.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table presents the information with respect to purchases made by or on behalf of Digi or any "affiliated purchaser" (as defined in Rule 10b-18(a)(3) under the Exchange Act), of our common stock during the second quarter of fiscal 2026:

Period	Total Number of Shares Purchased(1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of a Publicly Announced Program	Maximum Dollar Value of Shares that May Yet Be Purchased Under the Program
January 1, 2026 - January 31, 2026	—	$	—	—	$	—
February 1, 2026 - February 28, 2026	4,381	44.75		—	—
March 1, 2026 - March 31, 2026	—	—		—	—
	4,381	$	44.75	—	$	—

(1)    All shares reported were forfeited by employees in connection with the satisfaction of tax withholding obligations related to the vesting of restricted stock units.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

None.

ITEM 5. OTHER INFORMATION

During the three months ended March 31, 2026, none of our directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted, modified or terminated any contract, instruction, or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) of the Exchange Act or any non-Rule 10b5-1 trading arrangement (as defined in Item 408(c) of Regulation S-K).

32

ITEM 6. EXHIBITS

Exhibit No.		Description	Method of Filing
3	(a)	Restated Certificate of Incorporation of the Company, as amended (1)	Incorporated by Reference
3	(b)	Amended and Restated By-Laws of the Company (2)	Incorporated by Reference
31	(a)	Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer	Filed Electronically
31	(b)	Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer	Filed Electronically
32		Section 1350 Certification	Furnished Electronically
101		The following materials from Digi International Inc.'s Quarterly Report on Form 10-Q for the fiscal period ended March 31, 2026, as filed with the Security and Exchange Commission, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Condensed Consolidated Statements of Operations; (ii) Condensed Consolidated Statements of Comprehensive Income; (iii) Condensed Consolidated Balance Sheets; (iv) Condensed Consolidated Statements of Cash Flows; (v) Condensed Consolidated Statements of Stockholders' Equity; (vi) the Notes to the Condensed Consolidated Financial Statements; and (vii) the information set forth in Part II, Item 5.	Filed Electronically
104		The cover page from Digi International Inc.'s Quarterly Report on Form 10-Q for the period ended March 31, 2026 is formatted in iXBRL (included in Exhibit 101).

____________

(1)Incorporated by reference to Exhibit 3(a) to the Company's Annual Report on Form 10-K for the year ended September 30, 1993.

(2)Incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed on April 30, 2020.

33

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.

		DIGI INTERNATIONAL INC.
Date:	May 6, 2026	By:	/s/ James J. Loch
			James J. Loch
			Senior Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer and Authorized Officer)

34

EX-31.A

Exhibit No. 31(a)

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Ronald E. Konezny, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Digi International Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4. The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5. The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s Board of Directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

May 6, 2026	/s/ Ronald E. Konezny
	Ronald E. Konezny
	President and Chief Executive Officer

EX-31.B

Exhibit No. 31(b)

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, James J. Loch, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Digi International Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4. The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5. The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s Board of Directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

May 6, 2026	/s/ James J. Loch
	James J. Loch
	Senior Vice President, Chief Financial Officer and Treasurer

EX-32

Exhibit No. 32

CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Digi International Inc. (the Registrant) on Form 10-Q for the fiscal quarter ended March 31, 2026 as filed with the Securities and Exchange Commission on the date hereof, each of the undersigned certifies, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Quarterly Report on Form 10-Q complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Quarterly Report on Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

May 6, 2026
	/s/ Ronald E. Konezny
	Ronald E. Konezny
	President and Chief Executive Officer
	/s/ James J. Loch
	James J. Loch
	Senior Vice President, Chief Financial Officer and Treasurer

XML

Cover Page - shares	6 Months Ended
	Mar. 31, 2026	Apr. 30, 2026
Entity Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2026
Document Transition Report	false
Entity File Number	001-34033
Entity Registrant Name	DIGI INTERNATIONAL INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	41-1532464
Entity Address, Address Line One	9350 Excelsior Blvd.
Entity Address, Address Line Two	Suite 700
Entity Address, City or Town	Hopkins
Entity Address, State or Province	MN
Entity Address, Postal Zip Code	55343
City Area Code	952
Local Phone Number	912-3444
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		37,702,199
Entity Central Index Key	0000854775
Current Fiscal Year End Date	--09-30
Document Fiscal Year Focus	2026
Document Fiscal Period Focus	Q2
Amendment Flag	false
The Nasdaq Stock Market LLC
Entity Information [Line Items]
Title of 12(b) Security	Common Stock, par value $.01 per share
Trading Symbol	DGII
Security Exchange Name	NASDAQ

XML

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2026	Mar. 31, 2025	Mar. 31, 2026	Mar. 31, 2025
Revenue:
Total Revenue	$ 130,743	$ 104,503	$ 253,205	$ 208,369
Cost of sales:
Amortization of intangibles	1,521	953	2,838	1,906
Total cost of sales	47,068	39,570	93,139	79,038
Gross Profit	83,675	64,933	160,066	129,331
Operating expenses:
Sales and marketing	27,526	22,041	53,503	43,798
Research and development	19,280	15,325	36,434	30,352
General and administrative	19,796	13,840	36,730	28,095
Total operating expenses	66,602	51,206	126,667	102,245
Operating income	17,073	13,727	33,399	27,086
Other expense, net:
Interest expense, net	(2,220)	(1,336)	(4,523)	(3,630)
Other (expense) income, net	(44)	(43)	(48)	(12)
Total other expense, net	(2,264)	(1,379)	(4,571)	(3,642)
Income before income taxes	14,809	12,348	28,828	23,444
Income tax provision	3,506	1,851	5,814	2,864
Net income	$ 11,303	$ 10,497	$ 23,014	$ 20,580
Basic net income per common share:
Basic (USD per share)	$ 0.30	$ 0.28	$ 0.61	$ 0.56
Diluted net income per common share
Diluted (USD per share)	$ 0.29	$ 0.28	$ 0.60	$ 0.55
Weighted average common shares:
Basic (shares)	37,640	36,956	37,494	36,816
Diluted (shares)	38,482	37,520	38,420	37,553
Product
Revenue:
Revenue	$ 84,455	$ 71,987	$ 166,307	$ 144,772
Cost of sales:
Cost of sales excluding amortization	37,765	31,758	74,946	63,731
Service
Revenue:
Revenue	46,288	32,516	86,898	63,597
Cost of sales:
Cost of sales excluding amortization	$ 7,782	$ 6,859	$ 15,355	$ 13,401

XML

Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2026	Mar. 31, 2025	Mar. 31, 2026	Mar. 31, 2025
Statement of Comprehensive Income [Abstract]
Net income	$ 11,303	$ 10,497	$ 23,014	$ 20,580
Other comprehensive income (loss):
Foreign currency translation adjustment	(597)	597	(500)	(1,165)
Other comprehensive income (loss)	(597)	597	(500)	(1,165)
Comprehensive income	$ 10,706	$ 11,094	$ 22,514	$ 19,415

XML

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Mar. 31, 2026	Sep. 30, 2025
Current assets:
Cash and cash equivalents	$ 31,741	$ 21,902
Accounts receivable, net	61,160	63,453
Inventories	44,766	38,911
Income Taxes Receivable	1,853	1,875
Other current assets	7,125	4,558
Total current assets	146,645	130,699
Property, equipment and improvements, net	32,715	34,022
Intangible assets, net	374,579	350,688
Goodwill	411,357	392,872
Operating lease right-of-use assets	7,710	8,430
Deferred tax assets	456	5,131
Other non-current assets	765	804
Assets	974,227	922,646
Current liabilities:
Accounts payable	41,651	35,871
Accrued compensation	13,862	16,261
Unearned revenue	55,906	40,671
Current portion of operating lease liabilities	2,487	3,361
Income Taxes Payable	0	522
Other current liabilities	18,030	11,124
Total current liabilities	131,936	107,810
Income taxes payable	3,323	3,261
Deferred tax liabilities	3,275	164
Long-term debt	143,040	159,152
Operating lease liabilities	8,364	8,671
Other non-current liabilities	18,334	7,511
Total liabilities	308,272	286,569
Commitments and Contingencies (see Note 11)
Stockholders' equity:
Preferred stock, $.01 par value; 2,000,000 shares authorized; none issued and outstanding	0	0
Common stock, $.01 par value; 60,000,000 shares authorized; 44,290,887 and 43,641,997 shares issued	443	436
Additional paid-in capital	450,977	437,391
Retained earnings	311,168	288,154
Accumulated other comprehensive loss	(24,294)	(23,794)
Treasury stock, at cost, 6,596,161 and 6,471,074 shares	(72,339)	(66,110)
Total stockholders' equity	665,955	636,077
Total liabilities and stockholders' equity	$ 974,227	$ 922,646

XML

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Mar. 31, 2026	Sep. 30, 2025
Statement of Financial Position [Abstract]
Preferred stock, par value (USD per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized	2,000,000	2,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (USD per share)	$ 0.01	$ 0.01
Common stock, shares authorized	60,000,000	60,000,000
Common stock, shares issued	44,290,887	43,641,997
Treasury Stock, Common, Shares	6,596,161	6,471,074

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Mar. 31, 2026	Mar. 31, 2025
Operating activities:
Net income	$ 23,014	$ 20,580
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of property, equipment and improvements	6,450	5,662
Amortization	15,241	11,134
Stock-based compensation	8,494	7,504
Deferred income tax provision	4,894	(443)
Other	(290)	29
Changes in operating assets and liabilities (net of acquisitions)	19,303	11,539
Net cash provided by operating activities	77,106	56,005
Investing activities:
Acquisition of businesses, net of cash acquired	(48,912)	0
Purchase of property, equipment, improvements and certain other intangible assets	(1,095)	(1,135)
Proceeds from Sale of Intangible Assets	300	0
Net cash provide by (used in) investing activities	(49,707)	(1,135)
Financing activities:
Proceeds from Issuance of Long-Term Debt	33,724	0
Payments on long-term debt	(50,000)	(53,300)
Proceeds from stock option plan transactions	4,255	2,731
Proceeds from employee stock purchase plan transactions	1,455	1,116
Taxes paid for net share settlement of share-based payment options and awards	(6,840)	(6,584)
Net cash provided by financing activities	(17,406)	(56,037)
Effect of exchange rate changes on cash and cash equivalents	(154)	(47)
Net decrease in cash and cash equivalents	9,839	(1,214)
Cash and cash equivalents, beginning of period	21,902	27,510
Cash and cash equivalents, end of period	31,741	26,296
Supplemental schedule of non-cash investing and financing activities
Interest Paid	4,328	3,556
Income Taxes Paid, Net	1,448	7,315
Transfer of inventory to property, equipment and improvements	(3,701)	(5,131)
Accrual for purchase of property, equipment, improvements and certain other intangible assets	$ (528)	$ (168)

XML

Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands	Total	Common Stock	Treasury Stock, Common	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive (Loss) Income
Beginning balance (in shares) at Sep. 30, 2024		42,997,000
Beginning balance at Sep. 30, 2024	$ 581,035	$ 430	$ (63,414)	$ 420,413	$ 247,350	$ (23,744)
Treasury Stock, Common, Shares at Sep. 30, 2024			6,449,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	20,580				20,580
Other comprehensive (loss) income	(1,165)					(1,165)
Employee stock purchase plan issuances (in shares)			(48,000)
Employee stock purchase plan issuances	1,116		$ 500	616
Taxes paid for net share settlement of share-based payment awards (in shares)			105,000
Taxes paid for net share settlement of share-based payment awards	(6,584)		$ (3,366)	(3,218)
Issuance of stock under stock award plans (in shares)		565,000
Issuance of stock under stock award plans	2,732	$ 6		2,726
Stock-based compensation expense	7,504			7,504
Ending balance (in shares) at Mar. 31, 2025		43,562,000
Treasury Stock, Common, Shares at Mar. 31, 2025			6,506,000
Ending balance at Mar. 31, 2025	605,218	$ 436	$ (66,280)	428,041	267,930	(24,909)
Beginning balance (in shares) at Dec. 31, 2024		43,416,000
Beginning balance at Dec. 31, 2024	590,675	$ 434	$ (66,411)	424,725	257,433	(25,506)
Treasury Stock, Common, Shares at Dec. 31, 2024			6,527,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	10,497				10,497
Other comprehensive (loss) income	597					597
Employee stock purchase plan issuances (in shares)			(26,000)
Employee stock purchase plan issuances	599		$ 273	326
Taxes paid for net share settlement of share-based payment awards (in shares)			5,000
Taxes paid for net share settlement of share-based payment awards	(2,044)		$ (142)	(1,902)
Issuance of stock under stock award plans (in shares)		146,000
Issuance of stock under stock award plans	950	$ 2		948
Stock-based compensation expense	3,944			3,944
Ending balance (in shares) at Mar. 31, 2025		43,562,000
Treasury Stock, Common, Shares at Mar. 31, 2025			6,506,000
Ending balance at Mar. 31, 2025	605,218	$ 436	$ (66,280)	428,041	267,930	(24,909)
Beginning balance (in shares) at Sep. 30, 2025		43,642,000
Beginning balance at Sep. 30, 2025	$ 636,077	$ 436	$ (66,110)	437,391	288,154	(23,794)
Treasury Stock, Common, Shares at Sep. 30, 2025	6,471,074		6,471,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	$ 23,014				23,014
Other comprehensive (loss) income	(500)					(500)
Employee stock purchase plan issuances (in shares)			(43,000)
Employee stock purchase plan issuances	1,455		$ 467	988
Taxes paid for net share settlement of share-based payment awards (in shares)			168,000
Taxes paid for net share settlement of share-based payment awards	(6,840)		$ (6,696)	(144)
Issuance of stock under stock award plans (in shares)		649,000
Issuance of stock under stock award plans	4,255	$ 7		4,248
Stock-based compensation expense	$ 8,494			8,494
Ending balance (in shares) at Mar. 31, 2026		44,291,000
Treasury Stock, Common, Shares at Mar. 31, 2026	6,596,161		6,596,000
Ending balance at Mar. 31, 2026	$ 665,955	$ 443	$ (72,339)	450,977	311,168	(24,294)
Beginning balance (in shares) at Dec. 31, 2025		44,219,000
Beginning balance at Dec. 31, 2025	649,204	$ 442	$ (72,394)	444,988	299,865	(23,697)
Treasury Stock, Common, Shares at Dec. 31, 2025			6,615,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	11,303				11,303
Other comprehensive (loss) income	(597)					(597)
Employee stock purchase plan issuances (in shares)			(23,000)
Employee stock purchase plan issuances	845		$ 250	595
Taxes paid for net share settlement of share-based payment awards (in shares)			4,000
Taxes paid for net share settlement of share-based payment awards	(252)		$ (195)	(57)
Issuance of stock under stock award plans (in shares)		72,000
Issuance of stock under stock award plans	945	$ 1		944
Stock-based compensation expense	$ 4,507			4,507
Ending balance (in shares) at Mar. 31, 2026		44,291,000
Treasury Stock, Common, Shares at Mar. 31, 2026	6,596,161		6,596,000
Ending balance at Mar. 31, 2026	$ 665,955	$ 443	$ (72,339)	$ 450,977	$ 311,168	$ (24,294)

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Basis of Presentation of Unaudited Interim Condensed Consolidated Financial Statements and Significant Accounting Policies

6 Months Ended

Mar. 31, 2026

Accounting Policies [Abstract]

BASIS OF PRESENTATION OF UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND SIGNIFICANTACCOUNTING POLICIES

BASIS OF PRESENTATION OF UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The unaudited condensed consolidated financial statements of Digi International Inc. ("we," "us," "our," "Digi" or "the Company") have been prepared in accordance with the rules and regulations of the U.S. Securities and Exchange Commission applicable to interim financial statements. While these financial statements reflect all normal recurring adjustments that are, in the opinion of management, necessary for fair presentation of the results of the interim period, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles ("GAAP") for complete financial statements. These financial statements should be read in conjunction with the financial statement disclosures in Part I, Item 1 of our Annual Report on Form 10-K for the year ended September 30, 2025. We use the same accounting policies in preparing quarterly and annual financial statements. The quarterly results of operations are not necessarily indicative of the results to be expected for the full year.

Recently Issued Accounting Standards Not Yet Adopted

In November 2024, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40), “Disaggregation of Income Statement Expenses,” which requires improved disclosures about a company’s expenses and more detailed information about the types of expenses in commonly presented expense captions. This amendment is effective for our fiscal year ending September 30, 2028 and interim periods within our fiscal year ending September 30, 2029. We currently are assessing the impact of this guidance on our disclosures.

In December 2023, FASB issued ASU 2023-09, Income Taxes (Topic 740), “Improvements to Income Tax Disclosures,” which requires enhanced transparency and decision usefulness of income tax disclosures. This amendment is effective for our fiscal year ending September 30, 2026 and interim periods within our fiscal year ending September 30, 2027. We currently are assessing the impact of this guidance on our disclosures.

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Acquisitions

6 Months Ended

Mar. 31, 2026

Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]

ACQUISITIONS

ACQUISITIONS

Acquisition of Jolt Software, Inc. ("Jolt")

On August 18, 2025, we acquired Jolt for an estimated $148.5 million in cash. In the first quarter of fiscal 2026, we made net working capital adjustments due to an underage in the net working capital assumed in the transaction. This resulted in a decrease in consideration of $1.1 million and a reduction to goodwill of $0.9 million. In the second quarter of fiscal 2026, we made additional purchase accounting adjustments, primarily related to a $5.0 million reserve for potential product replacement (See Note 10) and a corresponding $1.3 million deferred tax asset, resulting in an increase of $3.7 million in the fair value of net tangible liabilities acquired and an increase of $3.7 million in goodwill. These adjustments resulted in an estimated consideration of $147.3 million and goodwill of $53.0 million as of March 31, 2026.

The condensed consolidated balance sheet as of March 31, 2026 reflected the preliminary allocation of the purchase price to the assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition. Purchase price allocations may be subject to future adjustments for the net assets, including intangible assets, acquired working capital balances and income tax assets and liabilities within the one-year measurement period.

Acquisition of Particle Industries, Inc. ("Particle")

On January 27, 2026, we acquired Particle for approximately $50.4 million in cash. The acquisition was funded through a combination of cash on hand and a draw of $34.0 million from our existing senior secured credit facility committed by BMO Harris Bank N.A (See Note 6).

For tax purposes, this acquisition is treated as a stock acquisition. We believe this is a complementary acquisition for us as it significantly enhances our IoT Products & Services segment.

Costs directly related to the acquisition of $1.8 million incurred in fiscal 2026 were charged to operations and are included in general and administrative expense in our condensed consolidated statements of operations. These acquisition costs include legal, accounting, valuation and investment banking fees.

The following table summarizes the fair values of Particle assets acquired and liabilities assumed as of the acquisition date (in thousands):

Cash Paid	$	50,389
Fair value of net tangible liabilities acquired*	$	(207)
Identifiable intangible assets:
Customer relationships	16,000
Purchased and core technology	11,000
Trademarks	10,000
Noncompete Agreements	1,800
Deferred tax liability on identifiable intangible assets	(4,178)
Goodwill	15,974
Total	$	50,389

*Includes $0.9 million in cash assumed in acquisition.

The condensed consolidated balance sheet as of March 31, 2026 reflected a preliminary allocation of the purchase price to the assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition. Purchase price allocations may be subject to future adjustments for the net assets, including intangible assets, acquired working capital balances and income tax assets and liabilities within the one-year measurement period.

The fair value of customer relationships was calculated using the multi-period excess earnings method, while purchased and core technology and trademarks were valued using the relief from royalty method. These methodologies utilize forecasts of future revenues and earnings before income taxes, depreciation and amortization, attrition rates, tax rates, discount rates, royalty rates and obsolescence rates.

The goodwill of $16.0 million arising from the acquisition consists largely of the synergies and economies of scale expected from combining the operations of Particle and Digi. The goodwill from this transaction is all included in the IoT Products & Services segment.

The weighted average useful life for all the identifiable intangibles listed above is estimated to be 12 years. For purposes of determining fair value, the existing customer relationships identified above are assumed to have a useful life of 15 years, purchased and core technology is assumed to have a useful life of 9 years, trademarks are assumed to have a useful life of 12 years and noncompete agreements are assumed to have a useful life of 3 years. Useful lives for identifiable intangible assets are estimated at the time of acquisition based on the periods of time from which we expect to derive benefits from the identifiable intangible assets. The identifiable intangible assets are amortized using the straight-line method, which reflects the pattern in which the assets are expected to be consumed.

Particle's contribution to revenue and operating income during the quarter ended March 31, 2026 was not material. In addition, Digi’s net revenue and operating income for the three and six months ended March 31, 2026 and 2025 would not have been materially different from reported results had the acquisition occurred on October 1, 2024.

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Earnings Per Share

6 Months Ended

Mar. 31, 2026

Earnings Per Share [Abstract]

EARNINGS PER SHARE

EARNINGS PER SHARE

The following table is a reconciliation of the numerators and denominators in the net income per common share calculations (in thousands, except per common share data):

	Three months ended March 31,				Six months ended March 31,
	2026		2025		2026		2025
Numerator:
Net income	$	11,303	$	10,497	$	23,014	$	20,580
Denominator:
Denominator for basic net income per common share — weighted average shares outstanding	37,640		36,956		37,494		36,816
Effect of dilutive securities:
Stock options and restricted stock units	842		564		926		737
Denominator for diluted net income per common share — adjusted weighted average shares	38,482		37,520		38,420		37,553
Net income per common share, basic	$	0.30	$	0.28	$	0.61	$	0.56
Net income per common share, diluted	$	0.29	$	0.28	$	0.60	$	0.55

Digi excludes certain stock options and restricted stock unit awards that would have an anti-dilutive effect on our diluted net income per share calculation. For the three months ended March 31, 2026 and 2025, 70,156 and 348,553 shares outstanding were excluded, respectively. For the six months ended March 31, 2026 and 2025, 90,368 and 271,328 shares outstanding were excluded, respectively.

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Selected Balance Sheet Data

6 Months Ended

Mar. 31, 2026

Selected Balance Sheet Data [Abstract]

SELECTED BALANCE SHEET DATA

SELECTED BALANCE SHEET DATA

The following table shows selected balance sheet data (in thousands):

	March 31, 2026		September 30, 2025
Accounts receivable, net:
Accounts receivable	$	76,053	$	78,150
Less allowance for credit losses	7,470		6,417
Less reserve for future credit returns and pricing adjustments	7,423		8,280
Accounts receivable, net	$	61,160	$	63,453
Inventories:
Raw materials	$	9,352	$	10,803
Work in process	932		7
Finished goods	34,482		28,101
Inventories	$	44,766	$	38,911

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Goodwill and Other Identifiable Intangible Assets, Net

6 Months Ended

Mar. 31, 2026

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND OTHER IDENTIFIABLE INTANGIBLE ASSETS, NET

GOODWILL AND OTHER INTANGIBLE ASSETS, NET

Amortizable intangible assets were (in thousands):

	March 31, 2026						September 30, 2025
	Gross carrying amount		Accum. amort.		Net		Gross carrying amount		Accum. amort.		Net
Purchased and core technology	$	111,982	$	(70,367)	$	41,615	$	100,986	$	(67,533)	$	33,453
License agreements	112		(112)		—		112		(112)		—
Patents and trademarks	55,635		(26,459)		29,176		45,468		(24,870)		20,598
Customer relationships	424,197		(122,109)		302,088		408,198		(111,561)		296,637
Non-compete agreements	2,400		(700)		1,700		600		(600)		—
Order backlog	1,000		(1,000)		—		1,000		(1,000)		—
Total	$	595,326	$	(220,747)	$	374,579	$	556,364	$	(205,676)	$	350,688

Amortization expense for intangible assets was $7.8 million and $5.2 million for the three months ended March 31, 2026 and 2025, respectively. Amortization expense for intangible assets was $15.1 million and $11.0 million for the six months ended March 31, 2026 and 2025, respectively. Amortization expense is recorded on our condensed consolidated statements of operations within cost of sales and in general and administrative expense.

Estimated amortization expense related to intangible assets for the remainder of fiscal 2026 and the five succeeding fiscal years is (in thousands):

2026 (six months)	$	16,184
2027	32,312
2028	32,104
2029	29,901
2030	29,297
2031	29,245

The changes in the carrying amount of goodwill by reportable segments are (in thousands):

	Six months ended March 31, 2026
	IoT Products & Services		IoT Solutions		Total
Balance on September 30, 2025	$	175,266	$	217,606	$	392,872
Acquisitions (see Note 2)	15,974		2,810		18,784
Foreign currency translation adjustment	(278)		(21)		(299)
Balance on March 31, 2026	$	190,962	$	220,395	$	411,357

Goodwill represents the excess of cost over the fair value of net identifiable assets acquired. Goodwill is tested quantitatively for impairment on an annual basis as of June 30, or more frequently if events or circumstances occur which could indicate impairment. We have two reportable segments that are also reporting units, IoT Products & Services and IoT Solutions (see Note 7). Each of these reporting units was tested individually for impairment during our annual impairment test completed as of the end of the third fiscal quarter of fiscal 2025.

Results of our Fiscal 2025 Annual Impairment Test

As of June 30, 2025, we had a total of $175.5 million of goodwill for the IoT Products & Services reporting unit and $167.6 million of goodwill for the IoT Solutions reporting unit. At June 30, 2025, the fair value of goodwill exceeded the carrying value for each reporting unit and no impairment was recorded.

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Indebtedness

6 Months Ended

Mar. 31, 2026

Debt Disclosure [Abstract]

INDEBTEDNESS

INDEBTEDNESS

On December 23, 2025, Digi entered into a First Amendment to Revolving Credit Agreement (the “Amendment”) with BMO Bank N.A. (“BMO”), as administrative and collateral agent, certain subsidiaries of Digi as guarantors (“Guarantors”) and the several banks and other financial institutions or entities party thereto as lenders (the “Lenders”). This amended our Revolving Credit Agreement, dated as of December 7, 2023 (as amended by the Amendment, the “Credit Agreement”) among Digi, BMO, the Guarantors party thereto and the Lenders from time to time party thereto.

The Credit Agreement provides Digi with a senior secured credit facility (the “Credit Facility”). The Credit Facility includes a $250 million senior secured revolving credit facility (the “Revolving Loan”), with an uncommitted accordion feature that provides for additional borrowing capacity of up to the greater of $105 million or one hundred percent of trailing twelve month adjusted earnings before interest, taxes, depreciation, and amortization ("EBITDA"). The Credit Facility also contains a $10 million letter of credit sublimit and $10 million swingline sub-facility. Digi may use the proceeds of the Credit Facility in the future for general corporate purposes.

Borrowings under the Credit Facility bear interest at a rate per annum equal to Term Secured Overnight Financing Rate ("SOFR") with a floor of 0.00% for an interest period of one, three, or six months as selected by Digi, reset at the end of the selected interest period (or a replacement benchmark rate if Term SOFR is no longer available) plus the applicable margin or a base rate plus the applicable margin. The base rate is determined by reference to the highest of BMO’s prime rate, the rate determined by BMO to be the average rate of Federal funds in the secondary market plus 0.50%, or one-month SOFR plus 1.00%. The applicable margin for loans under the Credit Facility is in a range of 1.35% to 3.10% for Term SOFR loans and 0.35% to 2.10% for base rate loans, depending on Digi’s total net leverage ratio. All borrowings in the period were made at Term SOFR for a one-month interest election period. Our weighted average Revolving Loan applicable margin was 1.35% as of March 31, 2026. Our weighted average interest rate for our Credit Facility was 4.95% as of March 31, 2026.

In addition to paying interest on the outstanding principal, Digi is required to pay a commitment fee on the unutilized commitments under the Credit Facility. The commitment fee is between 0.20% and 0.35% depending on Digi’s total net leverage ratio. Our weighted average Revolving Loan commitment fee was 0.20% as of March 31, 2026. The Credit Facility is secured by substantially all of the property of Digi and its domestic subsidiaries.

In the first quarter of fiscal 2024, Digi incurred $1.3 million in debt issuance costs upon entry into the Credit Agreement, with this amount amortized over the term of the Credit Agreement and reported in interest expense. In the first quarter of fiscal 2026, Digi incurred an additional $0.3 million in debt issuance costs upon entry into the Credit Agreement, with this amount amortized over the remaining term of the Credit Agreement and reported in interest expense.

The Revolving Loan is due in a lump sum payment at maturity December 7, 2028, if any amounts are drawn. The fair value of the Revolving Loan approximated carrying value at March 31, 2026.

The following table is a summary of our long-term indebtedness at March 31, 2026 and September 30, 2025 (in thousands):

	Balance on March 31, 2026		Balance on September 30, 2025
Revolving Loan	$	144,000	$	160,000
Less unamortized issuance costs	(960)		(848)
Total long-term debt, net of unamortized issuance costs	$	143,040	$	159,152

6. INDEBTEDNESS (CONTINUED)

Covenants and Security Interest

The Credit Agreement requires Digi to maintain a minimum interest coverage ratio of 3.00 to 1.00 and a total net leverage ratio not to exceed 3.00 to 1.00, with certain exceptions for a covenant holiday of up to 3.50 to 1.00 after certain material acquisitions. The total net leverage ratio is defined as the ratio of Digi’s consolidated total funded indebtedness minus unrestricted cash as of such date up to a maximum amount not to exceed $50 million, to consolidated EBITDA for such period. The Credit Agreement also contains other customary affirmative and negative covenants, including covenants that restrict the ability of Digi and its subsidiaries to incur additional indebtedness, dispose of significant assets, make certain investments, (including, among other items) any acquisitions other than permitted acquisitions, make certain restricted payments, enter into sale and leaseback transactions or grant additional liens on its assets, subject to certain limitations. Amounts borrowed under the Credit Facility are secured by substantially all of our assets.

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Segment Information

6 Months Ended

Mar. 31, 2026

Segment Reporting [Abstract]

SEGMENT INFORMATION

SEGMENT INFORMATION

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 (in thousands):

	Three months ended March 31,				Six months ended March 31,
	2026		2025		2026		2025
Revenue
IoT Products & Services	$	93,631	$	77,783	$	179,985	$	155,606
IoT Solutions	37,112		26,720		73,220		52,763
Total revenue	$	130,743	$	104,503	$	253,205	$	208,369
Depreciation and amortization
IoT Products & Services	$	3,574	$	2,919	$	6,508	$	6,346
IoT Solutions	7,497		5,243		15,016		10,316
Total depreciation and amortization	$	11,071	$	8,162	$	21,524	$	16,662
Other segment items*
IoT Products & Services	$	76,077	$	63,566	$	147,811	$	127,005
IoT Solutions	26,522		19,048		50,471		37,616
Total other segment items	$	102,599	$	82,614	$	198,282	$	164,621
Operating income
IoT Products & Services	$	13,980	$	11,298	$	25,666	$	22,255
IoT Solutions	3,093		2,429		7,733		4,831
Total operating income	$	17,073	$	13,727	$	33,399	$	27,086

*Other segment items for both IoT Products & Services and IoT Solutions include cost of sales and operating expenses.

7. SEGMENT INFORMATION (CONTINUED)

The following table provides a reconciliation of segment operating income to consolidated income before taxes:

	Three months ended March 31,				Six months ended March 31,
	2026		2025		2026		2025
Total segment operating income	$	17,073	$	13,727	$	33,399	$	27,086
Total other expense, net	(2,264)		(1,379)		(4,571)		(3,642)
Income before income taxes	14,809		12,348		28,828		23,444

*Total other expense, net primarily includes interest expense, net in the three and six months ended March 31, 2026 and 2025, respectively.

Total expended for property, plant and equipment was (in thousands):

	Six months ended March 31,
	2026		2025
IoT Products & Services	$	639	$	597
IoT Solutions*	288		378
Total expended for property, plant and equipment	$	927	$	975

* Excluded from these amounts are $3,701 and $5,131 of transfers of inventory to property plant and equipment for subscriber assets for the six months ended March 31, 2026 and 2025, respectively.

Total assets for each of our segments were (in thousands):

	March 31, 2026		September 30, 2025
IoT Products & Services	$	388,548	$	338,454
IoT Solutions	553,938		562,290
Segment assets	942,486		900,744
Unallocated*	31,741		21,902
Total assets	$	974,227	$	922,646

*Unallocated consists of cash and cash equivalents.

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Revenue

6 Months Ended

Mar. 31, 2026

Revenue from Contract with Customer [Abstract]

REVENUE

REVENUE

Revenue Disaggregation

The following table summarizes our revenue by geographic location of our customers (in thousands):

	Three months ended March 31,				Six months ended March 31,
	2026		2025		2026		2025
North America, primarily the United States	$	111,284	$	83,542	$	212,545	$	162,554
Europe, Middle East & Africa	11,683		14,989		24,577		32,999
Rest of world	7,776		5,972		16,083		12,816
Total revenue	$	130,743	$	104,503	$	253,205	$	208,369

The following table summarizes our revenue by the timing of revenue recognition (in thousands):

	Three months ended March 31,				Six months ended March 31,
	2026		2025		2026		2025
Transferred at a point in time	$	86,661	$	73,802	$	170,012	$	148,405
Transferred over time	44,082		30,701		83,193		59,964
Total revenue	$	130,743	$	104,503	$	253,205	$	208,369

8. REVENUE (CONTINUED)

We had two distributor customers of Digi's IoT Products & Services segment that represented over 10% of consolidated revenue in the three months ended March 31, 2026. Distributor A represented 12% of consolidated revenue for the three months ended March 31, 2026. Distributor B represented 10% of consolidated revenue for the three months ended March 31, 2026.

We had two distributor customers of Digi's IoT Products & Services segment that represented over 10% of consolidated revenue in the six months ended March 31, 2026. Distributor A represented 12% of consolidated revenue for the six months ended March 31, 2026. Distributor C represented 10% of consolidated revenue for the six months ended March 31, 2026, respectively.

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 $21.8 million and $22.9 million as of March 31, 2026 and September 30, 2025, respectively, are included in property, equipment and improvements, net. Depreciation expense for these subscriber assets, which is included in cost of sales, was $2.4 million and $2.1 million for the three months ended March 31, 2026 and 2025, respectively. Depreciation expense for these subscriber assets was $4.8 million and $4.0 million for the six months ended March 31, 2026 and 2025, respectively.

Contract Liabilities

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. 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.

Our contract liabilities were $71.3 million and $42.5 million at March 31, 2026 and 2025, respectively.

There were contract liability balances of $48.2 million and $36.8 million as of September 30, 2025 and 2024, respectively. Of these balances, Digi recognized $32.3 million and $16.4 million as revenue in the six months ended March 31, 2026 and 2025, respectively.

Remaining Performance Obligation

As of March 31, 2026, we had approximately $236.4 million of remaining performance obligations on contracts with an original duration of one year or more. We expect to recognize revenue on approximately $115.4 million of remaining performance obligations over the next 12 months. We expect to recognize revenue from the remaining performance obligations over a range of two to five years.

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Income Taxes

6 Months Ended

Mar. 31, 2026

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

Our income tax expense was $5.8 million for the six months ended March 31, 2026. Included in this was a net tax benefit of $1.0 million discretely related to the six months ended March 31, 2026.

Our effective tax rate will vary based on a variety of factors. These factors include our overall profitability, the geographical mix of income before taxes and related statutory tax rate in each jurisdiction, and tax items discretely related to the period, such as tax impacts of stock compensation. We may record other benefits or expenses in the future that are specific to a particular quarter such as expiration of statutes of limitation, the completion of tax audits, or legislation that is enacted in both U.S. and foreign jurisdictions.

On July 4, 2025, the One Big Beautiful Bill Act was signed into law in the U.S., which contains a broad range of tax reform provisions affecting businesses such as the permanent extension of certain expiring provisions of the Tax Cuts and Job Act, restoration of favorable tax treatment for certain businesses provisions including the expensing of domestic research and development expenditures, and modifications to the international tax framework. The legislation has multiple effective dates, with certain provisions effective in fiscal year 2026 and others implemented through fiscal year 2027. We have incorporated the impact of the new legislation into the year-to-date effective tax rate and continue to assess the impact on the consolidated financial statements.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is (in thousands):

Unrecognized tax benefits as of September 30, 2025	$	4,312
Decreases related to:
Settlements	(32)
Expiration of statute of limitations	(143)
Unrecognized tax benefits as of March 31, 2026	$	4,137

The total amount of unrecognized tax benefits at March 31, 2026 that, if recognized, would affect our effective tax rate was $4.0 million, after considering the impact of interest and deferred benefit items. We expect that the total amount of unrecognized tax benefits will decrease by approximately $0.5 million over the next 12 months.

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Product Warranty Obligation

6 Months Ended

Mar. 31, 2026

Product Warranties Disclosures [Abstract]

PRODUCT WARRANTY OBLIGATION

PRODUCT WARRANTY OBLIGATION

The following tables summarize the activity associated with the product warranty accrual (in thousands) and is included on our condensed consolidated balance sheets within other current liabilities and other noncurrent liabilities:

	Three months ended March 31,
	2026		2025
Balance at beginning of period	$	1,221	$	1,104
Warranties accrued*	5,124		180
Net settlements	(162)		(180)
Balance at end of period	$	6,183	$	1,104
	Six months ended March 31,
	2026		2025
Balance at beginning of period	$	1,247	$	933
Warranties accrued*	5,245		387
Settlement made	(309)		(216)
Balance at end of period	$	6,183	$	1,104

*Warranties accrued in the three and six months ended March 31, 2026 include $2.0 million and $3.0 million of current and noncurrent liabilities, respectively, relating to a purchase price adjustment for our Jolt acquisition (See Note 2).

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Leases

6 Months Ended

Mar. 31, 2026

Leases [Abstract]

LEASES

LEASES

All of our leases are operating leases and primarily consist of leases for office space. For any lease with an initial term in excess of 12 months, the related lease assets and lease liabilities are recognized on the condensed consolidated balance sheets as either operating or financing leases at the inception of an agreement where it is determined that a lease exists. We have lease agreements that contain both lease and non-lease components. We have elected to combine lease and non-lease components for all classes of assets. Leases with an expected term of 12 months or less are not recorded on the condensed consolidated balance sheets. Instead we recognize lease expense for these leases on a straight-line basis over the lease term.

Operating lease assets represent the right to use an underlying asset for the lease term and operating lease liabilities represent the obligation to make lease payments. These assets and liabilities are recognized based on the present value of future payments over the lease term at the commencement date. We generally use a collateralized incremental borrowing rate based on information available at the commencement date, including the lease term, in determining the present value of future payments. When determining our right-of-use assets, we generally do not include options to extend or terminate the lease unless it is reasonably certain that the option will be exercised. Our leases typically require payment of real estate taxes and common area maintenance and insurance. These components comprise the majority of our variable lease cost and are excluded from the present value of our lease obligations. Fixed payments may contain predetermined fixed rent escalations. We recognize the related rent expense on a straight-line basis from the commencement date to the end of the lease term.

The following table shows the supplemental balance sheet information related to our leases (in thousands):

	Balance Sheet Location	March 31, 2026		September 30, 2025
Assets
Operating leases	Operating lease right-of-use assets	$	7,710	$	8,430
Total lease assets		$	7,710	$	8,430
Liabilities
Operating leases	Current portion of operating lease liabilities	$	2,487	$	3,361
Operating leases	Operating lease liabilities	8,364		8,671
Total lease liabilities		$	10,851	$	12,032

The following were the components of our lease cost which is recorded in both cost of goods sold and selling, general and administrative expense (in thousands):

	Three months ended March 31,				Six months ended March 31,
	2026		2025		2026		2025
Operating lease cost	$	941	$	844	$	1,799	$	1,716
Variable lease cost	312		332		656		617
Short-term lease cost	42		29		127		58
Total lease cost	$	1,295	$	1,205	$	2,582	$	2,391

At March 31, 2026, the weighted average remaining lease term of our operating leases was 5.0 years and the weighted average discount rate for these leases was 4.6%.

11. LEASES (CONTINUED)

The table below reconciles the undiscounted cash flows for each of the first five years as well as all the remaining years to the operating lease liabilities recorded on the condensed consolidated balance sheet as of March 31, 2026 (in thousands):

Fiscal year	Amount
2026 (six months)	$	1,811
2027	2,339
2028	2,105
2029	2,047
2030	1,880
2031	1,519
Thereafter	467
Total future undiscounted lease payments	12,168
Less imputed interest	(1,317)
Total reported lease liability	$	10,851

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Commitments and Contingencies

6 Months Ended

Mar. 31, 2026

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

We lease certain of our buildings and equipment under non-cancelable lease agreements. Please refer to Note 11 to our condensed consolidated financial statements for additional information.

In the normal course of business, we presently are, and expect in the future to be, subject to various claims and litigation with third parties such as non-practicing intellectual property entities as well as customers, vendors and/or employees. There can be no assurance that any claims by third parties, if proven to have merit, will not materially adversely affect our business, liquidity or financial condition.

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Stock-Based Compensation

6 Months Ended

Mar. 31, 2026

Share-Based Payment Arrangement [Abstract]

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION

Stock-based awards granted in the six months ended March 31, 2026 and 2025 were granted under the Digi International Inc. 2021 Omnibus Incentive Plan (as amended and restated, the "2021 Plan"). Shares subject to awards under the 2021 Plan or any prior plans that are forfeited, canceled, returned to us for failure to satisfy vesting requirements, settled in cash or otherwise terminated without payment also will be available for grant under the 2021 Plan. The authority to grant options under the 2021 Plan and set other terms and conditions rests with the Compensation Committee of the Board of Directors.

As of March 31, 2026, there were approximately 2,669,646 shares available for future grants under the 2021 Plan.

Cash received from the exercise of stock options was $4.2 million and $2.7 million for the six months ended March 31, 2026 and 2025, respectively.

Our equity plans and corresponding forms of award agreements generally have provisions allowing employees to elect to satisfy tax withholding obligations through the delivery of shares. When employees make this election, we retain a portion of shares issuable under the award. Tax withholding obligations are otherwise fulfilled by the employee paying cash to us for the withholding. During the six months ended March 31, 2026 and 2025, our employees forfeited 167,685 shares and 104,086 shares, respectively, in order to satisfy withholding tax obligations of $6.8 million and $3.4 million, respectively. We sponsor an Employee Stock Purchase Plan as amended and restated as of December 10, 2019, October 29, 2013, December 4, 2009 and November 27, 2006 (the "ESPP"), covering all domestic employees with at least 90 days of continuous service and who are customarily employed at least 20 hours per week. The ESPP allows eligible participants the right to purchase common stock on a quarterly basis at the lower of 85% of the market price at the beginning or end of each three-month offering period. The most recent amendments to the ESPP, ratified by our stockholders on January 29, 2020, increased the total number of shares that may be purchased under the ESPP to 3,425,000. ESPP contributions by employees were $1.5 million and $1.1 million for the six months ended March 31, 2026 and 2025. Pursuant to the ESPP, 42,598 and 47,820 common shares were issued to employees during the six months ended March 31, 2026 and 2025, respectively. Shares are issued under the ESPP from treasury stock. As of March 31, 2026, 234,105 common shares were available for future issuances under the ESPP.

13. STOCK-BASED COMPENSATION (CONTINUED)

The following table shows stock-based compensation expense that is included in the consolidated results of operations (in thousands):

	Three months ended March 31,				Six months ended March 31,
	2026		2025		2026		2025
Cost of sales	$	223	$	202	$	435	$	389
Sales and marketing	1,657		1,358		3,063		2,619
Research and development	578		611		1,206		1,157
General and administrative	2,049		1,773		3,790		3,339
Stock-based compensation before income taxes	4,507		3,944		8,494		7,504
Income tax benefit	(968)		(840)		(1,830)		(1,601)
Stock-based compensation after income taxes	$	3,539	$	3,104	$	6,664	$	5,903

Stock Options

The following table summarizes our stock option activity (in thousands, except per common share amounts):

	Options Outstanding	Weighted Average Exercise Price	Weighted Average Contractual Term (in years)	Aggregate Intrinsic Value (1)
Balance on September 30, 2025	857	$21.66
Granted	53	41.41
Exercised	(253)	21.56
Forfeited / Canceled	(9)	27.46
Balance on March 31, 2026	648	$23.23	2.8	$	16,176
Exercisable on March 31, 2026	518	$20.39	2.0	$	14,402

(1) The aggregate intrinsic value represents the total pre-tax intrinsic value, based on our closing stock price of $48.20 as of March 31, 2026, which would have been received by the option holders had all option holders exercised their options as of that date.

The intrinsic value of an option is the amount by which the fair value of the underlying stock exceeds its exercise price. The total intrinsic value of all options exercised during the six months ended March 31, 2026 and 2025 was $4.5 million and $17.4 million, respectively.

The following table shows the weighted average fair value, which was determined based upon the fair value of each option on the grant date utilizing the Black-Scholes option-pricing model and the related assumptions:

	Six months ended March 31,
	2026	2025
Weighted average per option grant date fair value	$21.12	$16.23
Assumptions used for option grants:
Risk free interest rate	3.62% - 3.86%	4.31% - 4.38%
Expected term	6.00 years	6.00 years
Expected volatility	49%	48%
Weighted average volatility	49%	48%
Expected dividend yield	—	—

13. STOCK-BASED COMPENSATION (CONTINUED)

The fair value of each option award granted during the periods presented was estimated using the Black-Scholes option valuation model that uses the assumptions noted in the above table. Expected volatilities are based on the historical volatility of our stock. We use historical data to estimate option exercise and employee termination information within the valuation model. The expected term of options granted is derived from the vesting period and historical information and represents the period of time that options granted are expected to be outstanding. The risk-free rate used is the zero-coupon U.S. Treasury bond rate in effect at the time of the grant whose maturity equals the expected term of the option.

As of March 31, 2026, the total unrecognized compensation cost related to non-vested stock options was $2.2 million and the related weighted average period over which it is expected to be recognized is approximately 2.3 years.

Non-vested Stock Units

The following table presents a summary of our non-vested restricted stock units and performance stock units as of March 31, 2026 and changes during the six months then ended (in thousands, except per common share amounts):

	RSUs			PSUs
	Number of Awards	Weighted Average Grant Date Fair Value		Number of Awards	Weighted Average Grant Date Fair Value
Nonvested on September 30, 2025	966	$	31.99	324	$	31.71
Granted	444	41.12		269	40.90
Vested	(359)	32.88		(82)	32.02
Canceled	(26)	33.62		(40)	40.66
Nonvested on March 31, 2026	1,025	$	35.59	471	$	36.15

As of March 31, 2026, the total unrecognized compensation cost related to non-vested restricted stock units and performance stock units was $31.6 million and $2.6 million, respectively. The related weighted average period over which these costs are expected to be recognized was approximately 2.2 years and 0.6 years, respectively.

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Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2026	Mar. 31, 2025	Mar. 31, 2026	Mar. 31, 2025
Pay vs Performance Disclosure
Net income	$ 11,303	$ 10,497	$ 23,014	$ 20,580

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Insider Trading Arrangements	3 Months Ended
	Mar. 31, 2026
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

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Acquisitions (Tables)

6 Months Ended

Mar. 31, 2026

Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]

Schedule of Business Acquisitions, by Acquisition

The following table summarizes the fair values of Particle assets acquired and liabilities assumed as of the acquisition date (in thousands):

Cash Paid	$	50,389
Fair value of net tangible liabilities acquired*	$	(207)
Identifiable intangible assets:
Customer relationships	16,000
Purchased and core technology	11,000
Trademarks	10,000
Noncompete Agreements	1,800
Deferred tax liability on identifiable intangible assets	(4,178)
Goodwill	15,974
Total	$	50,389

*Includes $0.9 million in cash assumed in acquisition.

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Earnings Per Share (Tables)

6 Months Ended

Mar. 31, 2026

Earnings Per Share [Abstract]

Schedule of Calculation of Numerator and Denominator in Earnings Per Share

The following table is a reconciliation of the numerators and denominators in the net income per common share calculations (in thousands, except per common share data):

	Three months ended March 31,				Six months ended March 31,
	2026		2025		2026		2025
Numerator:
Net income	$	11,303	$	10,497	$	23,014	$	20,580
Denominator:
Denominator for basic net income per common share — weighted average shares outstanding	37,640		36,956		37,494		36,816
Effect of dilutive securities:
Stock options and restricted stock units	842		564		926		737
Denominator for diluted net income per common share — adjusted weighted average shares	38,482		37,520		38,420		37,553
Net income per common share, basic	$	0.30	$	0.28	$	0.61	$	0.56
Net income per common share, diluted	$	0.29	$	0.28	$	0.60	$	0.55

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Selected Balance Sheet Data (Tables)

6 Months Ended

Mar. 31, 2026

Selected Balance Sheet Data [Abstract]

Schedule of Selected Balance Sheet Data

The following table shows selected balance sheet data (in thousands):

	March 31, 2026		September 30, 2025
Accounts receivable, net:
Accounts receivable	$	76,053	$	78,150
Less allowance for credit losses	7,470		6,417
Less reserve for future credit returns and pricing adjustments	7,423		8,280
Accounts receivable, net	$	61,160	$	63,453
Inventories:
Raw materials	$	9,352	$	10,803
Work in process	932		7
Finished goods	34,482		28,101
Inventories	$	44,766	$	38,911

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Goodwill and Other Identifiable Intangible Assets, Net (Tables)

6 Months Ended

Mar. 31, 2026

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Amortizable Intangible Assets

Amortizable intangible assets were (in thousands):

	March 31, 2026						September 30, 2025
	Gross carrying amount		Accum. amort.		Net		Gross carrying amount		Accum. amort.		Net
Purchased and core technology	$	111,982	$	(70,367)	$	41,615	$	100,986	$	(67,533)	$	33,453
License agreements	112		(112)		—		112		(112)		—
Patents and trademarks	55,635		(26,459)		29,176		45,468		(24,870)		20,598
Customer relationships	424,197		(122,109)		302,088		408,198		(111,561)		296,637
Non-compete agreements	2,400		(700)		1,700		600		(600)		—
Order backlog	1,000		(1,000)		—		1,000		(1,000)		—
Total	$	595,326	$	(220,747)	$	374,579	$	556,364	$	(205,676)	$	350,688

Schedule of Estimated Future Amortization Expense Related to Intangible Assets

Estimated amortization expense related to intangible assets for the remainder of fiscal 2026 and the five succeeding fiscal years is (in thousands):

2026 (six months)	$	16,184
2027	32,312
2028	32,104
2029	29,901
2030	29,297
2031	29,245

Schedule of Changes in Carrying Amount of Goodwill

The changes in the carrying amount of goodwill by reportable segments are (in thousands):

	Six months ended March 31, 2026
	IoT Products & Services		IoT Solutions		Total
Balance on September 30, 2025	$	175,266	$	217,606	$	392,872
Acquisitions (see Note 2)	15,974		2,810		18,784
Foreign currency translation adjustment	(278)		(21)		(299)
Balance on March 31, 2026	$	190,962	$	220,395	$	411,357

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Indebtedness (Tables)

6 Months Ended

Mar. 31, 2026

Debt Disclosure [Abstract]

Schedule of Debt

The following table is a summary of our long-term indebtedness at March 31, 2026 and September 30, 2025 (in thousands):

	Balance on March 31, 2026		Balance on September 30, 2025
Revolving Loan	$	144,000	$	160,000
Less unamortized issuance costs	(960)		(848)
Total long-term debt, net of unamortized issuance costs	$	143,040	$	159,152

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Segment Information (Tables)

6 Months Ended

Mar. 31, 2026

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment

Summary operating results for each of our segments were (in thousands):

	Three months ended March 31,				Six months ended March 31,
	2026		2025		2026		2025
Revenue
IoT Products & Services	$	93,631	$	77,783	$	179,985	$	155,606
IoT Solutions	37,112		26,720		73,220		52,763
Total revenue	$	130,743	$	104,503	$	253,205	$	208,369
Depreciation and amortization
IoT Products & Services	$	3,574	$	2,919	$	6,508	$	6,346
IoT Solutions	7,497		5,243		15,016		10,316
Total depreciation and amortization	$	11,071	$	8,162	$	21,524	$	16,662
Other segment items*
IoT Products & Services	$	76,077	$	63,566	$	147,811	$	127,005
IoT Solutions	26,522		19,048		50,471		37,616
Total other segment items	$	102,599	$	82,614	$	198,282	$	164,621
Operating income
IoT Products & Services	$	13,980	$	11,298	$	25,666	$	22,255
IoT Solutions	3,093		2,429		7,733		4,831
Total operating income	$	17,073	$	13,727	$	33,399	$	27,086

*Other segment items for both IoT Products & Services and IoT Solutions include cost of sales and operating expenses.

7. SEGMENT INFORMATION (CONTINUED)

The following table provides a reconciliation of segment operating income to consolidated income before taxes:

	Three months ended March 31,				Six months ended March 31,
	2026		2025		2026		2025
Total segment operating income	$	17,073	$	13,727	$	33,399	$	27,086
Total other expense, net	(2,264)		(1,379)		(4,571)		(3,642)
Income before income taxes	14,809		12,348		28,828		23,444

*Total other expense, net primarily includes interest expense, net in the three and six months ended March 31, 2026 and 2025, respectively.

Payments to Acquire Property, Plant and Equipment by Segment

Total expended for property, plant and equipment was (in thousands):

	Six months ended March 31,
	2026		2025
IoT Products & Services	$	639	$	597
IoT Solutions*	288		378
Total expended for property, plant and equipment	$	927	$	975

* Excluded from these amounts are $3,701 and $5,131 of transfers of inventory to property plant and equipment for subscriber assets for the six months ended March 31, 2026 and 2025, respectively.

Reconciliation of Assets from Segment to Consolidated

Total assets for each of our segments were (in thousands):

	March 31, 2026		September 30, 2025
IoT Products & Services	$	388,548	$	338,454
IoT Solutions	553,938		562,290
Segment assets	942,486		900,744
Unallocated*	31,741		21,902
Total assets	$	974,227	$	922,646

*Unallocated consists of cash and cash equivalents.

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Revenue (Tables)

6 Months Ended

Mar. 31, 2026

Revenue from Contract with Customer [Abstract]

Disaggregation of Revenue

The following table summarizes our revenue by geographic location of our customers (in thousands):

	Three months ended March 31,				Six months ended March 31,
	2026		2025		2026		2025
North America, primarily the United States	$	111,284	$	83,542	$	212,545	$	162,554
Europe, Middle East & Africa	11,683		14,989		24,577		32,999
Rest of world	7,776		5,972		16,083		12,816
Total revenue	$	130,743	$	104,503	$	253,205	$	208,369

The following table summarizes our revenue by the timing of revenue recognition (in thousands):

	Three months ended March 31,				Six months ended March 31,
	2026		2025		2026		2025
Transferred at a point in time	$	86,661	$	73,802	$	170,012	$	148,405
Transferred over time	44,082		30,701		83,193		59,964
Total revenue	$	130,743	$	104,503	$	253,205	$	208,369

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Income Taxes (Tables)

6 Months Ended

Mar. 31, 2026

Income Tax Disclosure [Abstract]

Schedule of Unrecognized Tax Benefits Roll Forward

A reconciliation of the beginning and ending amount of unrecognized tax benefits is (in thousands):

Unrecognized tax benefits as of September 30, 2025	$	4,312
Decreases related to:
Settlements	(32)
Expiration of statute of limitations	(143)
Unrecognized tax benefits as of March 31, 2026	$	4,137

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Product Warranty Obligation (Tables)

6 Months Ended

Mar. 31, 2026

Product Warranties Disclosures [Abstract]

Schedule of Product Warranty Accrual

The following tables summarize the activity associated with the product warranty accrual (in thousands) and is included on our condensed consolidated balance sheets within other current liabilities and other noncurrent liabilities:

	Three months ended March 31,
	2026		2025
Balance at beginning of period	$	1,221	$	1,104
Warranties accrued*	5,124		180
Net settlements	(162)		(180)
Balance at end of period	$	6,183	$	1,104
	Six months ended March 31,
	2026		2025
Balance at beginning of period	$	1,247	$	933
Warranties accrued*	5,245		387
Settlement made	(309)		(216)
Balance at end of period	$	6,183	$	1,104

*Warranties accrued in the three and six months ended March 31, 2026 include $2.0 million and $3.0 million of current and noncurrent liabilities, respectively, relating to a purchase price adjustment for our Jolt acquisition (See Note 2).

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Leases (Tables)

6 Months Ended

Mar. 31, 2026

Leases [Abstract]

Supplemental Balance Sheet Information

The following table shows the supplemental balance sheet information related to our leases (in thousands):

	Balance Sheet Location	March 31, 2026		September 30, 2025
Assets
Operating leases	Operating lease right-of-use assets	$	7,710	$	8,430
Total lease assets		$	7,710	$	8,430
Liabilities
Operating leases	Current portion of operating lease liabilities	$	2,487	$	3,361
Operating leases	Operating lease liabilities	8,364		8,671
Total lease liabilities		$	10,851	$	12,032

Components of Lease Cost

The following were the components of our lease cost which is recorded in both cost of goods sold and selling, general and administrative expense (in thousands):

	Three months ended March 31,				Six months ended March 31,
	2026		2025		2026		2025
Operating lease cost	$	941	$	844	$	1,799	$	1,716
Variable lease cost	312		332		656		617
Short-term lease cost	42		29		127		58
Total lease cost	$	1,295	$	1,205	$	2,582	$	2,391

Operating Lease Liability Maturity

The table below reconciles the undiscounted cash flows for each of the first five years as well as all the remaining years to the operating lease liabilities recorded on the condensed consolidated balance sheet as of March 31, 2026 (in thousands):

Fiscal year	Amount
2026 (six months)	$	1,811
2027	2,339
2028	2,105
2029	2,047
2030	1,880
2031	1,519
Thereafter	467
Total future undiscounted lease payments	12,168
Less imputed interest	(1,317)
Total reported lease liability	$	10,851

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Stock-Based Compensation (Tables)

6 Months Ended

Mar. 31, 2026

Share-Based Payment Arrangement [Abstract]

Schedule of Stock-Based Compensation Expense

The following table shows stock-based compensation expense that is included in the consolidated results of operations (in thousands):

	Three months ended March 31,				Six months ended March 31,
	2026		2025		2026		2025
Cost of sales	$	223	$	202	$	435	$	389
Sales and marketing	1,657		1,358		3,063		2,619
Research and development	578		611		1,206		1,157
General and administrative	2,049		1,773		3,790		3,339
Stock-based compensation before income taxes	4,507		3,944		8,494		7,504
Income tax benefit	(968)		(840)		(1,830)		(1,601)
Stock-based compensation after income taxes	$	3,539	$	3,104	$	6,664	$	5,903

Schedule of Stock Option Activity

The following table summarizes our stock option activity (in thousands, except per common share amounts):

	Options Outstanding	Weighted Average Exercise Price	Weighted Average Contractual Term (in years)	Aggregate Intrinsic Value (1)
Balance on September 30, 2025	857	$21.66
Granted	53	41.41
Exercised	(253)	21.56
Forfeited / Canceled	(9)	27.46
Balance on March 31, 2026	648	$23.23	2.8	$	16,176
Exercisable on March 31, 2026	518	$20.39	2.0	$	14,402

(1) The aggregate intrinsic value represents the total pre-tax intrinsic value, based on our closing stock price of $48.20 as of March 31, 2026, which would have been received by the option holders had all option holders exercised their options as of that date.

Schedule of Valuation Assumptions

The following table shows the weighted average fair value, which was determined based upon the fair value of each option on the grant date utilizing the Black-Scholes option-pricing model and the related assumptions:

	Six months ended March 31,
	2026	2025
Weighted average per option grant date fair value	$21.12	$16.23
Assumptions used for option grants:
Risk free interest rate	3.62% - 3.86%	4.31% - 4.38%
Expected term	6.00 years	6.00 years
Expected volatility	49%	48%
Weighted average volatility	49%	48%
Expected dividend yield	—	—

Schedule of Nonvested Restricted Stock Units

The following table presents a summary of our non-vested restricted stock units and performance stock units as of March 31, 2026 and changes during the six months then ended (in thousands, except per common share amounts):

	RSUs			PSUs
	Number of Awards	Weighted Average Grant Date Fair Value		Number of Awards	Weighted Average Grant Date Fair Value
Nonvested on September 30, 2025	966	$	31.99	324	$	31.71
Granted	444	41.12		269	40.90
Vested	(359)	32.88		(82)	32.02
Canceled	(26)	33.62		(40)	40.66
Nonvested on March 31, 2026	1,025	$	35.59	471	$	36.15

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Acquisitions (Details) - USD ($) $ in Thousands				3 Months Ended		6 Months Ended
	Mar. 31, 2026	Jan. 27, 2026	Aug. 18, 2025	Mar. 31, 2026	Dec. 31, 2025	Mar. 31, 2026	Sep. 30, 2025
Business Acquisition [Line Items]
Adjustment						$ 18,784
Goodwill	$ 411,357			$ 411,357		411,357	$ 392,872
Line of Credit Facility, Increase (Decrease), Net						34,000
Jolt
Business Acquisition [Line Items]
Cash paid			$ 148,500
Consideration adjustment				3,700	$ (1,100)
Adjustment				3,700	$ (900)
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustment, Product Warranty Accrual				5,000
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustment, Deferred Tax Assets				1,300
Consideration transferred	147,300
Goodwill	$ 53,000			$ 53,000		53,000
Particle
Business Acquisition [Line Items]
Cash paid		$ 50,389
Goodwill		15,974
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net Tangible Assets Acquired (Liabilities) Assumed		(207)
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Deferred Tax Liabilities		(4,178)
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net		50,389
Business Combination, Acquisition Related Costs						$ 1,800
Acquired Finite-Lived Intangible Assets, Weighted Average Useful Life			12 years
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Cash and Equivalents		900
Particle | Customer Relationships
Business Acquisition [Line Items]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill		16,000
Acquired Finite-Lived Intangible Assets, Weighted Average Useful Life			15 years
Particle | Purchased and Core Technology
Business Acquisition [Line Items]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill		11,000
Particle | Trademarks
Business Acquisition [Line Items]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill		10,000
Acquired Finite-Lived Intangible Assets, Weighted Average Useful Life			12 years
Particle | Noncompete Agreements
Business Acquisition [Line Items]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill		$ 1,800
Acquired Finite-Lived Intangible Assets, Weighted Average Useful Life			3 years
Particle | Technology-Based Intangible Assets
Business Acquisition [Line Items]
Acquired Finite-Lived Intangible Assets, Weighted Average Useful Life			9 years

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Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2026	Mar. 31, 2025	Mar. 31, 2026	Mar. 31, 2025
Numerator:
Net income	$ 11,303	$ 10,497	$ 23,014	$ 20,580
Denominator:
Denominator for basic net income per common share — weighted average shares outstanding	37,640,000	36,956,000	37,494,000	36,816,000
Effect of dilutive securities:
Stock options and restricted stock units	842,000	564,000	926,000	737,000
Denominator for diluted net income per common share — adjusted weighted average shares	38,482,000	37,520,000	38,420,000	37,553,000
Basic net income per common share:
Basic (USD per share)	$ 0.30	$ 0.28	$ 0.61	$ 0.56
Diluted net income per common share
Diluted (USD per share)	$ 0.29	$ 0.28	$ 0.60	$ 0.55
Potentially dilutive securities excluded from computation of earnings per share	70,156	348,553	90,368	271,328

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Selected Balance Sheet Data (Details) - USD ($) $ in Thousands	Mar. 31, 2026	Sep. 30, 2025
Accounts receivable, net:
Accounts receivable	$ 76,053	$ 78,150
Less allowance for credit losses	7,470	6,417
Less reserve for future credit returns and pricing adjustments	7,423	8,280
Accounts receivable, net	61,160	63,453
Inventories:
Raw materials	9,352	10,803
Work in process	932	7
Finished goods	34,482	28,101
Inventories	$ 44,766	$ 38,911

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Goodwill and Other Identifiable Intangible Assets, Net (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2026	Mar. 31, 2025	Mar. 31, 2026	Mar. 31, 2025	Sep. 30, 2025
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	$ 595,326		$ 595,326		$ 556,364
Accumulated amortization	(220,747)		(220,747)		(205,676)
Net	374,579		374,579		350,688
Goodwill	411,357		411,357		392,872
Cost of Sales and General and Administrative Expense
Finite-Lived Intangible Assets [Line Items]
Amortization expense	7,800	$ 5,200	15,100	$ 11,000
Purchased and Core Technology
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	111,982		111,982		100,986
Accumulated amortization	(70,367)		(70,367)		(67,533)
Net	41,615		41,615		33,453
License Agreements
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	112		112		112
Accumulated amortization	(112)		(112)		(112)
Net	0		0		0
Patents and Trademarks
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	55,635		55,635		45,468
Accumulated amortization	(26,459)		(26,459)		(24,870)
Net	29,176		29,176		20,598
Customer Relationships
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	424,197		424,197		408,198
Accumulated amortization	(122,109)		(122,109)		(111,561)
Net	302,088		302,088		296,637
Non-compete Agreements
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	2,400		2,400		600
Accumulated amortization	(700)		(700)		(600)
Net	1,700		1,700		0
Order backlog
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	1,000		1,000		1,000
Accumulated amortization	(1,000)		(1,000)		(1,000)
Net	$ 0		$ 0		$ 0

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Goodwill and Other Identifiable Intangible Assets, Net (Additional Information) (Details) $ in Thousands	6 Months Ended
	Mar. 31, 2026 USD ($) segment	Sep. 30, 2025 USD ($)	Jun. 30, 2025 USD ($)
Goodwill [Line Items]
Number of Reportable Segments | segment	2
Goodwill	$ 411,357	$ 392,872
IoT Products & Services Segment
Goodwill [Line Items]
Goodwill	190,962	175,266	$ 175,500
IoT Solutions Segment
Goodwill [Line Items]
Goodwill	$ 220,395	$ 217,606	$ 167,600

XML

Goodwill and Other Identifiable Intangible Assets, Net (Amortization Expense) (Details) $ in Thousands	Mar. 31, 2026 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
2026 (six months)	$ 16,184
2027	32,312
2028	32,104
2029	29,901
2030	29,297
2031	$ 29,245

XML

Goodwill and Other Identifiable Intangible Assets, Net (Goodwill Rollforward) (Details) $ in Thousands	6 Months Ended
	Mar. 31, 2026 USD ($)
Goodwill [Roll Forward]
Beginning balance	$ 392,872
Adjustment	18,784
Foreign currency translation adjustment	(299)
Ending balance	411,357
IoT Products & Services Segment
Goodwill [Roll Forward]
Beginning balance	175,266
Adjustment	15,974
Foreign currency translation adjustment	(278)
Ending balance	190,962
IoT Solutions Segment
Goodwill [Roll Forward]
Beginning balance	217,606
Adjustment	2,810
Foreign currency translation adjustment	(21)
Ending balance	$ 220,395

XML

Indebtedness - Narrative (Details) - USD ($) $ in Millions	6 Months Ended
	Mar. 31, 2026	Dec. 23, 2025	Dec. 07, 2023
Line of Credit Facility [Line Items]
Debt instrument, margin spread on LIBOR Rate	1.35%
Credit Agreement | Line of Credit
Line of Credit Facility [Line Items]
Debt instrument, covenant, leverage ratio, minimum	3.00
Debt instrument, covenant, liquidity ratio, total net leverage ratio	3.00
Debt instrument, covenant, holiday, exception	3.50
Debt Instrument, Covenant, Total Net Leverage Ratio, Unrestricted Cash, Maximum	$ 50.0
December 7, 2023 Credit Agreement
Line of Credit Facility [Line Items]
Debt issuance costs			$ 1.3
December 23, 2025 Credit Agreement
Line of Credit Facility [Line Items]
Debt issuance costs		$ 0.3
Term loan
Line of Credit Facility [Line Items]
Weighted average interest rate on debt	4.95%
Term loan | Base Rate | Federal Funds Rate
Line of Credit Facility [Line Items]
Debt instrument, margin spread on LIBOR Rate	0.50%
Term loan | Base Rate | LIBOR
Line of Credit Facility [Line Items]
Debt instrument, margin spread on LIBOR Rate	1.00%
Revolving loan
Line of Credit Facility [Line Items]
Revolving loan maximum borrowing capacity		250.0
Line of credit facility, accordion feature, increase limit		105.0
Line of credit facility, unused capacity, commitment fee percentage	0.20%
Revolving loan | Minimum
Line of Credit Facility [Line Items]
Line of credit facility, unused capacity, commitment fee percentage	0.20%
Revolving loan | Maximum
Line of Credit Facility [Line Items]
Line of credit facility, unused capacity, commitment fee percentage	0.35%
Revolving loan | Benchmark Rate | Minimum
Line of Credit Facility [Line Items]
Debt instrument, margin spread on LIBOR Rate	1.35%
Revolving loan | Benchmark Rate | Maximum
Line of Credit Facility [Line Items]
Debt instrument, margin spread on LIBOR Rate	3.10%
Revolving loan | Base Rate | Minimum
Line of Credit Facility [Line Items]
Debt instrument, interest rate, effective percentage	0.00%
Debt instrument, margin spread on LIBOR Rate	0.35%
Revolving loan | Base Rate | Maximum
Line of Credit Facility [Line Items]
Debt instrument, margin spread on LIBOR Rate	2.10%
Letter of Credit
Line of Credit Facility [Line Items]
Revolving loan maximum borrowing capacity		10.0
Swingline Credit Facility
Line of Credit Facility [Line Items]
Revolving loan maximum borrowing capacity		$ 10.0

XML

Indebtedness - Schedule of Long-Term Debt (Details) - USD ($) $ in Thousands	Mar. 31, 2026	Sep. 30, 2025
Debt Instrument [Line Items]
Less unamortized issuance costs	$ (960)	$ (848)
Total long-term debt, net of current portion	143,040	159,152
Revolving loan
Debt Instrument [Line Items]
Total loans	$ 144,000	$ 160,000

XML

Segment Information (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2026 USD ($)	Mar. 31, 2025 USD ($)	Mar. 31, 2026 USD ($) segment numberOfOperatingSegments	Mar. 31, 2025 USD ($)
Segment Reporting Information [Line Items]
Number of Operating Segments | numberOfOperatingSegments			2
Number of Reportable Segments | segment			2
Total Revenue	$ 130,743	$ 104,503	$ 253,205	$ 208,369
Depreciation and amortization	11,071	8,162	21,524	16,662
Segment Reporting, Other Segment Item, Amount	102,599	82,614	198,282	164,621
Operating income (loss)	17,073	13,727	33,399	27,086
Other Income Net	(2,264)	(1,379)	(4,571)	(3,642)
Income before income taxes	14,809	12,348	28,828	23,444
IoT Products & Services Segment
Segment Reporting Information [Line Items]
Total Revenue	93,631	77,783	179,985	155,606
Depreciation and amortization	3,574	2,919	6,508	6,346
Segment Reporting, Other Segment Item, Amount	76,077	63,566	147,811	127,005
Operating income (loss)	13,980	11,298	25,666	22,255
IoT Solutions Segment
Segment Reporting Information [Line Items]
Total Revenue	37,112	26,720	73,220	52,763
Depreciation and amortization	7,497	5,243	15,016	10,316
Segment Reporting, Other Segment Item, Amount	26,522	19,048	50,471	37,616
Operating income (loss)	$ 3,093	$ 2,429	$ 7,733	$ 4,831

XML

Segment Information Depreciation and Amortization Expense By Segment (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2026	Mar. 31, 2025	Mar. 31, 2026	Mar. 31, 2025
Segment, Reconciliation of Other Items from Segments to Consolidated [Line Items]
Total Revenue	$ 130,743	$ 104,503	$ 253,205	$ 208,369
Gross Profit	83,675	64,933	160,066	129,331
Depreciation and amortization	11,071	8,162	21,524	16,662
IoT Products & Services Segment
Segment, Reconciliation of Other Items from Segments to Consolidated [Line Items]
Total Revenue	93,631	77,783	179,985	155,606
Depreciation and amortization	3,574	2,919	6,508	6,346
IoT Solutions Segment
Segment, Reconciliation of Other Items from Segments to Consolidated [Line Items]
Total Revenue	37,112	26,720	73,220	52,763
Depreciation and amortization	$ 7,497	$ 5,243	$ 15,016	$ 10,316

XML

Segment Information Expended for Property, Plant and Equipment (Details) - USD ($) $ in Thousands		6 Months Ended
		Mar. 31, 2026	Mar. 31, 2025
Segment Reporting Information [Line Items]
Property, Plant and Equipment, Additions		$ 927	$ 975
Inventory Transfer To Property, Plant And Equipment		3,701	5,131
IoT Products & Services Segment
Segment Reporting Information [Line Items]
Property, Plant and Equipment, Additions		639	597
IoT Solutions Segment
Segment Reporting Information [Line Items]
Property, Plant and Equipment, Additions	[1]	$ 288	$ 378

[1] * Excluded from these amounts are $3,701 and $5,131 of transfers of inventory to property plant and equipment for subscriber assets for the six months ended March 31, 2026 and 2025, respectively.

XML

Segment Information Total Assets (Details) - USD ($) $ in Thousands		Mar. 31, 2026	Sep. 30, 2025
Segment Reporting, Asset Reconciling Item [Line Items]
Assets		$ 974,227	$ 922,646
Segment assets		942,486	900,744
IoT Products & Services Segment
Segment Reporting, Asset Reconciling Item [Line Items]
Assets		388,548	338,454
IoT Solutions Segment
Segment Reporting, Asset Reconciling Item [Line Items]
Assets		553,938	562,290
Unallocated
Segment Reporting, Asset Reconciling Item [Line Items]
Assets	[1]	$ 31,741	$ 21,902

[1] Unallocated consists of cash and cash equivalents.

XML

Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2026	Mar. 31, 2025	Mar. 31, 2026	Mar. 31, 2025
Unearned Revenue (Details)
Total Revenue	$ 130,743	$ 104,503	$ 253,205	$ 208,369
Transferred at a point in time
Unearned Revenue (Details)
Total Revenue	86,661	73,802	170,012	148,405
Transferred over time
Unearned Revenue (Details)
Total Revenue	44,082	30,701	83,193	59,964
North America, primarily the United States
Unearned Revenue (Details)
Total Revenue	111,284	83,542	212,545	162,554
Europe, Middle East & Africa
Unearned Revenue (Details)
Total Revenue	11,683	14,989	24,577	32,999
Rest of world
Unearned Revenue (Details)
Total Revenue	$ 7,776	$ 5,972	$ 16,083	$ 12,816

XML

Revenue - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Mar. 31, 2026	Mar. 31, 2025	Mar. 31, 2026	Mar. 31, 2025	Sep. 30, 2025
Unearned Revenue (Details)
Amortization	$ 2.4	$ 2.1	$ 4.8	$ 4.0
Equipment
Unearned Revenue (Details)
Contract assets	$ 21.8		$ 21.8		$ 22.9
Revenue Benchmark | Customer Concentration Risk | Customer One
Unearned Revenue (Details)
Concentration risk threshold percentage	12.00%		12.00%
Revenue Benchmark | Customer Concentration Risk | Customer Two
Unearned Revenue (Details)
Concentration risk threshold percentage	10.00%
Revenue Benchmark | Customer Concentration Risk | Customer Three
Unearned Revenue (Details)
Concentration risk threshold percentage			10.00%

XML

Revenue - Unearned Revenue (Details) - USD ($) $ in Millions	6 Months Ended
	Mar. 31, 2026	Mar. 31, 2025	Sep. 30, 2025	Sep. 30, 2024
Revenue from Contract with Customer [Abstract]
Unearned Revenue	$ 71.3	$ 42.5	$ 48.2	$ 36.8
Contract with Customer, Liability, Revenue Recognized	$ 32.3	$ 16.4

XML

Revenue - Performance Obligations (Details) $ in Millions	Mar. 31, 2026 USD ($)
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation	$ 236.4
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-04-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation	$ 115.4
Remaining performance obligation, period	12 months
Minimum | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-04-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation, period	2 years
Maximum | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-04-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation, period	5 years

XML

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2026	Mar. 31, 2025	Mar. 31, 2026	Mar. 31, 2025
Income Tax Disclosure [Abstract]
Income tax benefit	$ 3,506	$ 1,851	$ 5,814	$ 2,864
Income tax provision specific to the period			$ 1,000

XML

Income Taxes (Unrecognized Tax Benefits) (Details) $ in Thousands	6 Months Ended
	Mar. 31, 2026 USD ($)
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items]
Unrecognized tax benefits that would impact effective tax rate	$ 4,000
Unrecognized Tax Benefits [Roll Forward]
Unrecognized tax benefits, beginning balance	4,312
Decreases related to settlements	(32)
Decreases related to expiration of statute of limitations	(143)
Unrecognized tax benefits, ending balance	4,137
Maximum
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items]
Unrecognized tax benefits that would decrease next twelve months	$ 500

XML

Product Warranty Obligation (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2026	Mar. 31, 2025	Mar. 31, 2026	Mar. 31, 2025
Standard Product Warranty Accrual [Roll Forward]
Beginning balance	$ 1,221	$ 1,104	$ 1,247	$ 933
Warranties accrued	5,124	180	5,245	387
Settlements made	(162)	(180)	(309)	(216)
Ending balance	6,183	$ 1,104	6,183	$ 1,104
Jolt | Other Current Liabilities
Product Warranty Liability [Line Items]
Standard and Extended Product Warranty Accrual, Additions from Business Acquisition	2,000		2,000
Jolt | Other Noncurrent Liabilities
Product Warranty Liability [Line Items]
Standard and Extended Product Warranty Accrual, Additions from Business Acquisition	$ 3,000		$ 3,000

XML

Leases - Supplemental Balance Sheet (Details) - USD ($) $ in Thousands	Mar. 31, 2026	Sep. 30, 2025
Assets and Liabilities, Lessee [Abstract]
Operating lease other non-current asset	$ 7,710	$ 8,430
Total lease assets	7,710	8,430
Operating lease other current liabilities	2,487	3,361
Operating lease other non-current liability	8,364	8,671
Total lease liabilities	$ 10,851	$ 12,032

XML

Leases - Lease Cost (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2026	Mar. 31, 2025	Mar. 31, 2026	Mar. 31, 2025
Lease, Cost [Abstract]
Operating lease cost	$ 941	$ 844	$ 1,799	$ 1,716
Variable lease cost	312	332	656	617
Short-term Lease, Cost	42	29	127	58
Total lease cost	$ 1,295	$ 1,205	$ 2,582	$ 2,391

XML

Leases - Other Information (Details)	Mar. 31, 2026
Weighted average remaining lease term [Abstract]
Weighted average remaining lease term- operating leases	5 years
Weighted Average Discount Rate Leases [Abstract]
Weighted average discount rate - operating leases	4.60%

XML

Leases - Maturity of Operating Lease Liability (Details) $ in Thousands	Mar. 31, 2026 USD ($)
Lessee, Operating Lease, Liability, to be Paid, Fiscal Year Maturity [Abstract]
2026 (six months)	$ 1,811
2027	2,339
2028	2,105
2029	2,047
2030	1,880
2031	1,519
Thereafter	467
Total future undiscounted lease payments	12,168
Less imputed interest	(1,317)
Total reported lease liability	$ 10,851

XML

Stock-Based Compensation (Details) - USD ($) $ in Thousands	6 Months Ended
	Mar. 31, 2026	Mar. 31, 2025	Jan. 29, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Proceeds from Stock Options Exercised	$ 4,255	$ 2,731
Share-based Payment Arrangement, Shares Withheld for Tax Withholding Obligation	167,685	104,086
Tax withholding for share-based compensation	$ 6,800	$ 3,400
Total intrinsic value of all options exercised	4,500	17,400
Proceeds from employee stock purchase plan transactions	1,455	1,116
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Proceeds from Stock Options Exercised	4,200	$ 2,700
Total unrecognized compensation cost nonvested awards	$ 2,200
Weighted average period, unrecognized compensation cost, nonvested awards	2 years 3 months 18 days
Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total unrecognized compensation cost nonvested restricted stock units	$ 31,600
Weighted average period, unrecognized compensation cost, nonvested awards	2 years 2 months 12 days
Performance Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total unrecognized compensation cost nonvested restricted stock units	$ 2,600
Weighted average period, unrecognized compensation cost, nonvested awards	7 months 6 days
The Purchase Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized			3,425,000
Share-based Compensation Arrangement by Share-based Payment Award, Number of Continuous Days of Service	90 days
Share-based Compensation Arrangement by Share-based Payment Award, Number of Hours Per Week Employed	20 hours
Share-based Compensation Arrangement by Share-based Payment Award, Purchase Price of Common Stock, Percent	85.00%
Common shares issued to employees	42,598	47,820
Shares available for future issuance	234,105
Proceeds from employee stock purchase plan transactions	$ 1,500	$ 1,100
The 2021 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares available for future grants	2,669,646

XML

Stock-Based Compensation (Stock-Based Compensation Expense) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2026	Mar. 31, 2025	Mar. 31, 2026	Mar. 31, 2025
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation before income taxes	$ 4,507	$ 3,944	$ 8,494	$ 7,504
Income tax benefit	(968)	(840)	(1,830)	(1,601)
Stock-based compensation after income taxes	3,539	3,104	6,664	5,903
Cost of Sales
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation before income taxes	223	202	435	389
Sales and Marketing
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation before income taxes	1,657	1,358	3,063	2,619
Research and Development
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation before income taxes	578	611	1,206	1,157
General and Administrative
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation before income taxes	$ 2,049	$ 1,773	$ 3,790	$ 3,339

XML

Stock-Based Compensation (Options and Common Shares Reserved for Grant) (Details) - Stock Options $ / shares in Units, shares in Thousands, $ in Thousands	6 Months Ended
	Mar. 31, 2026 USD ($) $ / shares shares
Options Outstanding [Roll Forward]
Options Outstanding, Beginning Balance (in shares) | shares	857
Options Outstanding, Granted (in shares) | shares	53
Options Outstanding, Exercised (in shares) | shares	(253)
Options Outstanding, Forfeited / Canceled (in shares) | shares	(9)
Options Outstanding, Ending Balance (in shares) | shares	648
Options Outstanding, Exercisable (in shares) | shares	518
Weighted Average Exercise Price [Roll Forward]
Weighted Average Exercise Price, Beginning Balance	$ 21.66
Weighted Average Exercise Price, Granted	41.41
Weighted Average Exercise Price, Exercised	21.56
Weighted Average Exercise Price, Forfeited / Canceled	27.46
Weighted Average Exercise Price, Ending Balance	23.23
Weighted Average Exercise Price, Exercisable	$ 20.39
Weighted Average Remaining Contractual Term [Abstract]
Weighted Average Remaining Contractual Term, Outstanding	2 years 9 months 18 days
Weighted Average Remaining Contractual Term, Exercisable	2 years
Aggregate Intrinsic Value, Outstanding | $	$ 16,176	[1]
Aggregate Intrinsic Value, Exercisable | $	$ 14,402	[1]
Closing Stock Price	$ 48.20

[1] The aggregate intrinsic value represents the total pre-tax intrinsic value, based on our closing stock price of $48.20 as of March 31, 2026, which would have been received by the option holders had all option holders exercised their options as of that date. The intrinsic value of an option is the amount by which the fair value of the underlying stock exceeds its exercise price.

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Stock-Based Compensation (Fair Value Assumptions) (Details) - Stock Options - $ / shares	6 Months Ended
	Mar. 31, 2026	Mar. 31, 2025
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average per option grant date fair value	$ 21.12	$ 16.23
Assumptions Used For Options Grants [Abstract]
Risk free interest rate, minimum	3.62%	4.31%
Risk free interest rate, maximum	3.86%	4.38%
Expected term	6 years	6 years
Weighted average volatility	49.00%	48.00%
Expected dividend yield	0.00%	0.00%
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Volatility Rate, Minimum		48.00%
Minimum
Assumptions Used For Options Grants [Abstract]
Expected volatility rate	49.00%

XML

Stock-Based Compensation (Non-Vested Options) (Details) shares in Thousands	6 Months Ended
	Mar. 31, 2026 $ / shares shares
Restricted Stock Units
Nonvested Number of Restricted Stock Units [Roll Forward]
Number of Restricted Stock Units, Beginning Balance | shares	966
Number of Restricted Stock Units, Granted | shares	444
Number of Restricted Stock Units, Vested | shares	(359)
Number of Restricted Stock Units, Canceled | shares	(26)
Number of Restricted Stock Units, Ending Balance | shares	1,025
Nonvested Restricted Stock Units, Weighted Average Grant Date Fair Value per Common Share [Roll Forward]
Restricted Stock Units, Weighted Average Grant Date Fair Value per Common Share, Beginning Balance | $ / shares	$ 31.99
Restricted Stock Units, Weighted Average Grant Date Fair Value per Common Share, Granted | $ / shares	41.12
Restricted Stock Units, Weighted Average Grant Date Fair Value per Common Share, Vested | $ / shares	32.88
Restricted Stock Units, Weighted Average Grant Date Fair Value per Common Share, Canceled | $ / shares	33.62
Restricted Stock Units, Weighted Average Grant Date Fair Value per Common Share, Ending Balance | $ / shares	$ 35.59
Performance Shares
Nonvested Number of Restricted Stock Units [Roll Forward]
Number of Restricted Stock Units, Beginning Balance | shares	324
Number of Restricted Stock Units, Granted | shares	269
Number of Restricted Stock Units, Vested | shares	(82)
Number of Restricted Stock Units, Canceled | shares	(40)
Number of Restricted Stock Units, Ending Balance | shares	471
Nonvested Restricted Stock Units, Weighted Average Grant Date Fair Value per Common Share [Roll Forward]
Restricted Stock Units, Weighted Average Grant Date Fair Value per Common Share, Beginning Balance | $ / shares	$ 31.71
Restricted Stock Units, Weighted Average Grant Date Fair Value per Common Share, Granted | $ / shares	40.90
Restricted Stock Units, Weighted Average Grant Date Fair Value per Common Share, Vested | $ / shares	32.02
Restricted Stock Units, Weighted Average Grant Date Fair Value per Common Share, Canceled | $ / shares	40.66
Restricted Stock Units, Weighted Average Grant Date Fair Value per Common Share, Ending Balance | $ / shares	$ 36.15