Digi International’s F’2Q 2025 earnings results underscored three key aspects to the story: (1.) The company continues a rather successful transition to an ARR-driven, subscription based business model; (2.) Digi’s operational leverage and EBITDA-generation continues to improve, and; (3.) The company’s revenue growth continues to stagnate in a market that we believe remains poised for continued innovation and growth. In the short term, this combination will continue to propel the story forward, we believe. However, a longer-term absence of meaningful revenue growth will eventually begin to weigh on Digi’s valuation and share price appreciation. That notwithstanding, DGII’s near-term fundamentals are pointing in the right direction, we believe.