Digi International Acquires Particle to Accelerate ARR Growth and Strengthen Digi’s Embedded-as-a-Service Offering

MINNEAPOLIS--(BUSINESS WIRE)--Digi International Inc. (“Digi”) (Nasdaq: DGII), a leading global provider of business and mission-critical Internet of Things (IoT) products, services and solutions, today announced its acquisition of Particle Industries, Inc. (“Particle”), a leading provider of edge-to-cloud application infrastructure for intelligent devices. Through their subscription model, Particle enables companies to deliver customer value with easy to deploy intelligent connected products at scale. The acquisition not only transforms the capabilities of Digi’s OEM Solution’s product offerings; it also greatly enhances the recurring revenue profile of Digi’s IoT Products and Services reporting segment.

Particle will be integrated with Digi’s OEM Solution’s offerings within Digi’s IoT Products and Services segment. Particle presently generates approximately $20 million in ARR via its subscription-based sales model and is growing ARR double-digits annually. This greatly advances Digi’s strategy to expand Annual Recurring Revenue (ARR). Digi’s IoT Products and Services segment reported $32 million in ARR as of the end of the fiscal quarter ended September 30, 2025.

"This acquisition positions us to lead the shift toward intelligent, connected product platforms and accelerates annual recurring revenue growth for Digi," said Ron Konezny, President and CEO of Digi International. “By combining Particle and Digi, we now deliver embedded-as-a-service for customers at scale. Together we remove the complexity businesses encounter when embedding connectivity and intelligence for actionable operational insights to drive better business outcomes and efficiencies from edge to cloud.”

"Joining Digi accelerates our mission to make IoT accessible and scalable for businesses of all sizes," said Zach Supalla, CEO of Particle. "Our customers gain the dependability and global scale Digi has been delivering for more than 40 years combined with the innovation, ease-of-use, and developer friendliness that has been Particle’s mainstay for the last decade. It’s a great match, and together we’re set up to accelerate growth and build the next generation of smart, connected products together with our customers."

Particle’s solution seamlessly integrates hardware, universal connectivity across a range of different protocols, application development tools, edge compute, over-the-air software, and artificial intelligence (AI)/machine learning (ML) model deployment as well as integration with existing cloud platforms, application software, and business intelligence systems. Developers write a single line of code to send data across any network, including cellular connectivity that automatically selects the best carrier across 350+ global cellular networks without requiring customers to manage contracts or SIMs separately. Since its initial launch in 2014, more than 250,000 developers have used Particle to design, develop, and deploy intelligent devices.

Some examples of how this highly flexible solution architecture drives meaningful business outcomes for customers across a wide range of industries include:

• An oil and gas customer monitors remote wells, delivering a 40% production increase and a 70% reduction in service trips through predictive maintenance.
• An energy company retrofits water heaters into grid-interactive storage with 40% ROI and 50% cost savings while providing virtual power plant capacity.
• An emissions monitoring provider delivers methane detection systems to reduce methane emissions by 80% versus conventional solutions.
• A spa manufacturer offers new connected spa products that offer customers better services and delivers a 6% retail margin lift.

"Combining Digi and Particle enables our customers to ship software to hardware at scale," said Steve Ericson, President of Digi's OEM Solutions Business Unit. "With Particle, we are bringing our Digi ConnectCore modules and Digi XBee wireless solutions and Particle's multi-radio capabilities, proven application infrastructure, and edge AI capabilities together. This combination delivers unique value in the industry, giving our customers everything they need to build, deploy, and manage connected products at scale, with better visibility into product performance and more efficient operations."

Strategic Highlights for Investors

The purchase price of the acquisition was $50 million and was paid in cash net of Particle’s cash and debt and is otherwise subject to customary adjustments. Digi funded the purchase price by utilizing its current credit facility. Moelis & Company LLC served as the exclusive financial advisor to Particle on the transaction.

• ARR Growth: Particle’s application infrastructure and subscription model, which is growing double-digits, increases ARR for Digi’s IoT Product and Solutions segment by over 60% and drives new solution-sell opportunities across industries.
• Cross-Sell Synergies: Combined capabilities complement each other and drive new opportunities as Particle’s solutions offerings can now leverage Digi’s global sales teams and channel relationships.
• Product Innovation: Particle strengthens and accelerates Digi’s global position in edge AI, edge compute, cellular IoT, and differentiated product solutions and services.

Updated Full-Year Fiscal 2026 Guidance to Come

We intend to provide updated annual guidance for our second fiscal quarter and updated annual fiscal 2026 guidance, which will include the impact of this acquisition when we announce first fiscal quarter earnings on February 4, 2026.

A copy of this release can be accessed through the financial releases page of the investor relations section of Digi's website at www.digi.com.

For more news and information on us, please visit www.digi.com/aboutus/investorrelations.

About Digi International

Digi International (NASDAQ: DGII) is a leading global provider of IoT connectivity products, services, and solutions. It helps companies create next generation connected products and deploy and manage critical communications infrastructures in demanding environments with high levels of security and reliability. Founded in 1985, Digi has helped customers connect more than 100 million things and counting. For more information, visit www.digi.com.

About Particle

Particle is the leading application infrastructure for intelligent devices, helping thousands of companies bring intelligence to the edge. Particle provides everything you need to deploy software and models to an Edge AI, edge computing, or IoT product in one tightly-integrated platform. As part of Digi International, Particle continues its mission to make IoT accessible and scalable for businesses of all sizes. For more information, visit www.particle.io.

Forward-Looking Statements

This press release contains forward-looking statements that are based on management’s current expectations and assumptions about the acquisition and its impact on Digi’s business and prospects. 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 how the acquisition is expected to impact Digi’s business and financial results, projections of future performance, including (but not limited to) expectations regarding the Digi's ARR, other financial performance measures, and perceived marketplace opportunities. 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 the acquisition, 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 the present military conflicts 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, , 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 other subsequent filings, 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 these 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.

Annualized Recurring Revenue (ARR)

Annualized Recurring Revenue (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.