About Digi International

Digi International Inc. operates as a global provider of business and mission-critical Internet of Things (IoT) connectivity products, services, and solutions. The company helps its customers deploy, monitor, and manage critical communications infrastructures that deliver important information in demanding environments with high levels of security and reliability. Segments The company operates in two segments, IoT Products & Services and IoT Solutions. The company's IoT Products & Services segment offers products and services that help original equipment manufacturers ('OEMs'), as well as enterprise and government customers create and deploy secure IoT connectivity solutions. These include embedded and wireless modules, console servers, and enterprise and industrial routers, as well as other infrastructure management equipment to meet the company's customers' IoT communication requirements. In addition, this segment provides the company's customers with a device management platform, as well as other professional services to enable customers to capture and manage data from devices connected to networks. The company's IoT Solutions segment consists of its SmartSense by Digi business and its Managed Network-as-a-Service (MNaaS) business through Ventus Wireless, LLC and affiliated entities (Ventus). SmartSense by Digi offers wireless temperature and other condition-based monitoring services, as well as employee task management services. These solutions focus on the following vertical markets: food service, healthcare (primarily pharmacies and hospitals), and supply chain. Ventus is a leader in the provision of MNaaS solutions that simplify the complexity of enterprise wide area network (WAN) connectivity for customers. The Ventus portfolio includes cellular wireless and fixed line WAN solutions for an array of connectivity applications in banking, healthcare, retail, gaming, hospitality, and other sectors. Principal Products and Services The company's primary products and services for each reportable segment are: IoT Products & Services segment Hardware Products Cellular Products - The company provides a range of products that use cellular technology, such as Long Term Evolution (LTE), LTE Advance Pro and 5th Generation wireless protocols to communicate with networks. They are trusted by global leaders in agricultural, energy medical, lighting, digital signage, gaming, and electric charging and transportation, as well as other industrial and enterprise markets, including: Cellular routers that help enterprise, government, industrial, transportation and OEM customers with their mission-critical wireless connectivity needs in challenging, remote and mobile environments. Cellular modules that help OEM customers embed cellular communications abilities into their products so they can deploy and manage intelligent and secure cellular connected products. These modules help OEMs to get their products to market faster and with lower development costs and risks so they can focus on their core competencies instead of on wireless connectivity design. Console servers that can be managed by software to provide secure, remote access to network equipment in data centers and at edge locations. These products primarily are used by IT organizations in large enterprises to maximize the availability of services to their customers and employees, and provide business continuity in the event of a network failure. This technology improves efficiency and reduces the risk of costly outages. Radio-Frequency (RF) Products - These products, which are marketed primarily under the Digi XBee brand include embedded wireless modules, as well as off-the-shelf gateways, modems, and adapters. They are used by customers across a broad range of industries. These products offer a wide selection of both standards-based and proprietary wireless protocols, including Zigbee, Cellular, Sub-1 GHz, LPWA, WiFi, and Bluetooth to meet diverse application requirements of customers. Embedded System Products - Marketed under the Digi Connect, ConnectCore, and Rabbit brands these are embedded system on modules (SOMs) and single board computers that are embedded into customer products in a broad range of industries and applications. These products deliver highly integrated computer platforms with scalable performance, flexible wired and wireless connectivity and complete software platforms. These products are designed and developed with compact form-factors, low power consumption and long product lifecycles. The latest ConnectCore products support advanced multi-core processing, security, multimedia, human-machine interface (HMI) and other emerging technologies like machine learning. Infrastructure Management Products - These products include serial and Universal Serial Bus (USB) solutions. The company's serial servers (also known as device servers and terminal servers) provide secure and reliable serial port-to-Ethernet integration of most devices into wired Ethernet networks. This means that they are capable of converting data received over TCP/IP networks, such as the internet and back; thereby eliminating the need for each device to have a physical connection to a computer. The company also offers multiple USB solutions whose primary functions are to connect multiple USB devices, allowing them to work over a wired or wireless network without each device needing to plug into its own host computer. These products also include battery and hardwired options for the control and monitoring of critical infrastructure. Services Digi Remote Manager - Digi Remote Manager is a recurring revenue cloud-based service that provides a secure environment for customers to manage their connected device for the full deployment lifecycle. This service enables customers to activate, monitor, diagnose, reset, update and/or upgrade their entire network of mission-critical devices from a single point of command. Through a single pane of glass, network managers can manage configurations, update firmware, add features and schedule and automate tasks from their desktop, tablet or phone. Lighthouse Management Software - Lighthouse is a recurring revenue cloud-based service that provides a secure environment for customers to manage their network devices by providing secure access to remote networks regardless of how they are connected or how a user interacts with the system. Designed with security, scalability and automation in mind, Lighthouse allows engineers to control every aspect of their network through a central hub. Technical Services - The company's Technical Services provide professional services, data plan subscriptions and enhanced technical support to customers. Professional services include solution planning and implementation services to customers who purchase the company's products, such as site planning, implementation management, application development and customer training. Data plan subscriptions are offered to customers wishing to enable cellular connectivity on the company's products. Enhanced technical support provides priority, in-depth technical support consultations with its experienced support team. These services ensure customers get to market quickly, minimize risk, and ensure customer success with their Digi solution. IoT Solutions segment SmartSense by Digi - The company's SmartSense by Digi is an end-to-end, cost-effective system that uses sensors, gateways and cloud based applications to enable customers in food service (e.g. super markets, schools and restaurants), healthcare (primarily pharmacies and hospitals) and transportation/logistics to: monitor wirelessly the temperature of food and other perishable or sensitive goods; monitor facilities or pharmacies by tracking the completion of operating tasks by employees; and have visibility in the supply chain to product temperature through an end-to-end system for quality control and incident management. Historically, customers receive hardware up-front, including gateways and sensors, and pay for an annual subscription for monitoring sensor data. Ventus - Ventus is a leader in providing comprehensive MNaaS solutions that simplify the complexity of both wireless and fixed-line WAN connectivity. With comprehensive end-to-end security, the company's portfolio includes an array of connectivity applications in the banking, healthcare, retail, gaming, access control, EV charging, hospitality, and other sectors. Supporting ATMs, gaming, point-of-sale, kiosks, digital signage and retail applications, Ventus works closely with its customers to customize innovative long-term MNaaS solutions. Sales Channels A significant portion of the company's IoT Products & Services segment sales are made through a global network of distributors, systems integrators, and value added resellers (VARs). These third parties accounted for 59.9% of the company's total consolidated revenue in fiscal 2023. The remaining 40.1% of the company's total consolidated revenue in fiscal 2023 is sold through its dedicated sales organization. Distributors The company's larger distributors, by sales volume, include Arrow Electronics, Avnet, Bressner Technology GmbH, Digi-Key, Express Systems & Peripherals, Ingram Micro, Mouser Electronics, Solsta, Symmetry Electronics, Synnex, Tokyo Electron Device, and Venco Electrónica S.A. The company also maintains relationships with many other distributors both domestically and internationally. Strategic Sales Relationships The company maintains alliances with other industry leaders to develop and market technology solutions. These include many major communications hardware and software vendors, operating system suppliers, computer hardware manufacturers, enterprise application providers and cellular carriers. Among others, relationships include AT&T, NXP, Orange, Rogers, Silicon Laboratories, T-Mobile, Telus, Telit, Verizon, Vodafone and several other cellular carriers worldwide. The company has established relationships with equipment vendors in a range of industries, such as energy, industrial, retail, transportation, medical, and government that allow these partners to ship its products and services as component parts of their overall solutions. The company's products utilize many of the world's leading telecommunications companies and Internet service providers, including among others, AT&T, T-Mobile, and Verizon. Intellectual Property Rights The company's IoT Products & Services primarily are sold under the Digi, Rabbit, Digi XBee, and Opengear brands. The Digi and Rabbit brands have established strong identities with the company's targeted customer base and its customers associate the Digi brand with 'reliability' and the Rabbit brand with 'ease of integration.' The company's customers associate Digi XBee with 'ease of use.' The company's IoT Solutions are offered under the Ventus and SmartSense by Digi brands. Seasonality In general, the company's sales are not considered to be highly seasonal, although its first fiscal quarter (the year ended September 2023) revenue is often less than other quarters due to holidays and other business days. History Digi International Inc. was founded in 1985. The company was incorporated in 1985 as a Minnesota corporation. It was reorganized as a Delaware corporation in 1989.