DGII
A better mix, not just a bigger number
Digi International is having one of those “the spreadsheet finally looks like the plan” moments. The company said 3QFY26 was a record quarter, with revenue and earnings both coming in ahead of consensus. That’s the kind of report that makes investors lean in, because it suggests the business isn’t just growing — it’s growing in the parts that tend to make accountants smile.
Services are stealing the spotlight
The real plot twist here is the revenue mix. Digi says services now account for 36% of revenue, while product revenue is fading into the background a bit. In plain English: the company is moving from “sell hardware, hope for the best” toward more recurring, higher-margin, end-to-end solutions. That’s usually the nicer, stickier lane.
Why investors should care
This matters because Digi is leaning into IIOT — industrial internet of things — and the mission-critical stuff that companies don’t want to mess with. Add in strong demand from data center customers, and you’ve got a business that’s tapping into a few durable growth buckets at once.
Big picture
If Digi can keep converting its revenue mix toward services while still posting broad-based growth, the market may start valuing it less like a sleepy industrial vendor and more like a recurring-revenue story with some hardware seasoning. And Wall Street loves a makeover — especially when it comes with a beat.