Digi International Inc (DGII) 2025 Q2 法說會逐字稿

Good day, and welcome to the Digi International Inc., second quarter fiscal 2025 earnings conference call. (Operator Instructions) Please be advised that today's conference is being recorded.

大家好，歡迎參加 Digi International Inc. 2025 財年第二季財報電話會議。（操作員指示）請注意，今天的會議正在錄音。

I would now like to hand the conference over to your speaker, Chief Financial Officer, Jamie Loch. Please go ahead.

現在，我想將會議交給發言人、財務長 Jamie Loch。請繼續。

Thank you. Good day, everyone. It's great to talk to you again, and thanks for joining us today to discuss the earnings results of Digi International. Joining me on today's call is Ron Konezny, our President and CEO.

謝謝。大家好。很高興再次與您交談，感謝您今天加入我們討論 Digi International 的盈利結果。參加今天電話會議的還有我們的總裁兼執行長 Ron Konezny。

We issued our earnings release after the market closed today. You may obtain a copy of the press release through the Financial Releases section of our Investor Relations website at digi.com. This afternoon, Ron will provide a comment on our performance, and then we'll take your questions.

我們在今天股市收盤後發布了收益報告。您可以透過我們投資者關係網站 digi.com 的「財務發布」版塊取得新聞稿副本。今天下午，Ron 將對我們的業績進行評論，然後我們將回答您的問題。

Some of the statements that we make during this call are considered forward-looking and are subject to significant risks and uncertainties. These statements reflect our expectations about future operating and financial performance and speak only as of today's date. We undertake no obligation to update publicly or revise these forward-looking statements.

我們在本次電話會議中所做的一些陳述被視為前瞻性的，並受到重大風險和不確定性的影響。這些聲明反映了我們對未來營運和財務表現的預期，並且僅代表截至今天的情況。我們不承擔公開更新或修改這些前瞻性聲明的義務。

While we believe the expectations reflected in our forward-looking statements are reasonable, we give no assurance such expectations will be met or that any of our forward-looking statements will prove to be correct. For additional information, please refer to the forward-looking statements section in our earnings release today and the Risk Factors section of our most recent Form 10-K and subsequent reports on file with the SEC.

雖然我們相信前瞻性聲明中反映的預期是合理的，但我們不保證這些預期將會實現，也不保證我們的任何前瞻性聲明將被證明是正確的。欲了解更多信息，請參閱我們今天發布的收益報告中的前瞻性陳述部分以及我們最新的 10-K 表格和向美國證券交易委員會提交的後續報告中的風險因素部分。

Finally, certain of the financial information disclosed on this call includes non-GAAP measures. The information required to be disclosed about these measures, including reconciliations to the most comparable GAAP measures are included in the earnings release. The earnings release is also furnished as an exhibit to Form 8-K that can be accessed through the SEC Filings sections of our Investor Relations website.

最後，本次電話會議所揭露的某些財務資訊包括非公認會計準則指標。這些指標需要揭露的資訊（包括與最具可比性的 GAAP 指標的調節）都包含在收益報告中。收益報告也作為 8-K 表格的附件提供，可透過我們投資者關係網站的 SEC 文件部分存取。

Now I'll turn the call over to Ron.

現在我將把電話轉給羅恩。

Thank you, Jamie. Good afternoon, everyone. Before we take questions, a few highlights from our second fiscal quarter of 2025. Digi's solution-oriented approach to the industrial IoT market continues to shine, with ARR growing 12% year over year to a record $123 million in the quarter. Both of our reporting segments contributed to ARR growth in the quarter.

謝謝你，傑米。大家下午好。在回答問題之前，我們先來介紹一下我們 2025 財年第二季的一些亮點。Digi 以解決方案為導向的工業物聯網市場方法繼續大放異彩，本季 ARR 年增 12%，達到創紀錄的 1.23 億美元。我們的兩個報告部門都為本季的 ARR 成長做出了貢獻。

Our solution focus enables customers to get quick ROI from remote monitoring, machine uptime and integration and analytics. ARR now represents a record 29% of our annualized quarterly revenues. Expanding ARR and favorable product mix helped improve our profitability. Our business model is demonstrating its scalability as ARR and profits grow faster than our top-line revenue.

我們的解決方案重點使客戶能夠從遠端監控、機器正常運行時間以及整合和分析中獲得快速的投資回報。ARR 目前占我們年度季度營收的 29%，創歷史新高。擴大 ARR 和有利的產品組合有助於提高我們的獲利能力。隨著 ARR 和利潤的成長速度快於我們的營業收入，我們的商業模式正在展示其可擴展性。

Free cash flow generation of $26 million in the quarter allowed us to reduce our net debt to $45 million after paying down $25 million of debt during the quarter. In addition, we improved our inventory position significantly, and we are approaching historical norms.

本季產生的 2,600 萬美元自由現金流使我們在償還 2,500 萬美元債務後，將淨債務減少至 4,500 萬美元。此外，我們的庫存狀況也得到了顯著改善，並且正在接近歷史正常水平。

Given our modest capital expenditures, less than 1% of total revenue, our current free cash flow yield sits at 9%. We now expect to be net cash positive by the end of our fiscal year, a one-quarter improvement from our initial goal at the end of the calendar year.

鑑於我們的資本支出適中（不到總收入的 1%），我們目前的自由現金流收益率為 9%。我們現在預計，到本財政年度結束時，淨現金將為正，比我們在本日曆年度結束時的初始目標提高一個季度。

As our balance sheet improves, we are even better positioned to pursue solution-oriented acquisitions of scale. Our outlook for the balance of our fiscal 2025 year assumes the current tariff rates and does not contemplate a drop-off in what we have seen to date as steady demand. We acknowledge the macro environment is fluid. However, Digi has a robust history of adaptability and resiliency, and we will adjust accordingly.

隨著資產負債表的改善，我們更有能力進行以解決方案為導向的規模收購。我們對 2025 財年餘額的展望假設當前的關稅稅率，並且不考慮迄今為止我們所看到的穩定需求的下降。我們承認宏觀環境是不斷變化的。然而，Digi 擁有強大的適應性和彈性歷史，我們將做出相應的調整。

Over the last several years, we have diversified and optimized our supply chain across geographies and suppliers. We plan to be diligent with our operating expense investments. As always, we remain steadfast in putting our customers' interest first just as we navigated the supply chain challenges coming out of the COVID pandemic.

在過去的幾年中，我們已經實現了跨地域和跨供應商的供應鏈多元化和優化。我們計劃認真對待我們的營運費用投資。與往常一樣，我們在應對新冠疫情帶來的供應鏈挑戰時，始終堅定不移地將客戶的利益放在第一位。

Operator, I will now hand the call back to you for Q&A.

接線員，我現在將電話交還給您進行問答。

(Operator Instructions) Tommy Moll, Stephens.

（操作員指示）湯米·莫爾，史蒂芬斯。

Ron, my first question is on the recurring revenue trends in P&S, up over 20% in the quarter. You've been accelerating there for some time now, but I feel like we need to ask again, what are some of the operational levers you're unlocking or you're using to unlock some of that growth?

羅恩，我的第一個問題是關於 P&S 的經常性收入趨勢，本季成長了 20% 以上。您已經在那裡加速了一段時間了，但我覺得我們需要再問一次，您正在解鎖哪些操作槓桿，或者您正在使用哪些操作槓桿來解鎖部分增長？

Yes. Thanks, Tommy. The two big levers that we're really emphasizing is one is certainly providing a solution and attaching software and services to that product to provide a more complete solution. And those attach rates continue to improve and we are -- when the opportunity presents itself, providing a Ventus type model to customers where it's zero down Xbox a year or a month instead of a onetime upfront to better match their ROI. So the combination of those two things are really helping ARR improve.

是的。謝謝，湯米。我們真正強調的兩個重要槓桿是，一是提供解決方案，二是將軟體和服務附加到該產品以提供更完整的解決方案。而且這些附加率還在不斷提高，當機會出現時，我們會向客戶提供 Ventus 類型的模型，即一年或一個月的 Xbox 零首付，而不是一次性預付，以更好地匹配他們的投資回報率。因此，這兩件事的結合確實有助於 ARR 的提升。

And is some of this, do you feel like just the channel becoming more accustomed to driving higher attach rates? Or is it not as much a channel dynamic and maybe something else?

您是否覺得其中的一些只是管道變得更加習慣於推動更高的附加率？或者它不是一個頻道動態，而是一個別的東西？

No, we're very channel-centric in products and services. In solutions, we're more direct. So we absolutely want to partner and go with and through our channel. And so they are reacting to this model in a real positive way. They realize it helps them build a recurring revenue business.

不，我們的產品和服務非常以通路為中心。在解決方案方面，我們更加直接。因此，我們絕對希望與我們的管道合作，並透過我們的管道開展業務。因此，他們對這種模式的反應非常積極。他們意識到這有助於他們建立經常性收入業務。

Yeah. Shifting gears to some of the onetime sales in the same segment. It sounds like you've got some customers continuing to bleed their own inventories lower. I'm just curious what anecdotes or visibility you can share as to how much longer that might persist?

是的。轉向同一細分市場中的一些一次性銷售。聽起來有些客戶的庫存正在持續減少。我只是好奇，您可以分享哪些軼事或見解，以了解這種情況還能持續多久？

It's a good question. I think it's becoming both a smaller set of customers, but also less inventory for them to worry about. I'd say the other factor, Tommy, is if you look at -- and you'll see this eventually in the Q, you'll see the split. Revenue has been a little bit weaker in the APAC region, and you can probably understand why. So there's a little bit of that dynamic going on as well.

這是個好問題。我認為，客戶群正在縮小，他們需要擔心的庫存也減少了。我想說的另一個因素是，湯米，如果你看一下 - 你最終會在 Q 中看到這一點，你會看到分裂。亞太地區的收入略微疲軟，您可能可以理解其中的原因。因此，這種動態也存在一些情況。

But I think the inventory situation is resolving itself. You'll see in our numbers that inventory has come down quite a bit, and we're getting back to normalized levels, and that's a real positive sign.

但我認為庫存問題正在自行解決。您將從我們的數據中看到庫存已下降了不少，並且正在恢復到正常水平，這是一個真正的積極信號。

James Fish, Piper Sandler.

詹姆斯·菲什、派珀·桑德勒。

This is Caden on for Jim. Just a quick one on macro volatility. How has this changed your customers' willingness to spend across your product portfolio?

這是凱登 (Caden) 為吉姆 (Jim) 表演的。我只想簡單談談宏觀波動。這如何改變您的客戶在您的產品組合上消費的意願？

Yes, it's a good question. To date, we see steady demand. Certainly, again, we acknowledge there's some fluidity out there. I'd say the exception is in the APAC region. But if you look at our sales ops statistics, our pipeline, days to close, average order size, those have stayed pretty stable.

是的，這是個好問題。到目前為止，我們看到需求穩定。當然，我們再次承認存在一些流動性。我想說亞太地區是個例外。但如果你看看我們的銷售營運統計數據、通路、成交天數、平均訂單規模，你會發現這些都保持相當穩定。

Again, there's a lot of change out there potentially, so we have to be prepared. But for now, it's holding firm.

再說一次，外面可能會發生很多變化，所以我們必須做好準備。但就目前而言，它仍保持堅挺。

And just another quick one. Any update on the software attach rates?

再簡單說一下。軟體附加率有任何更新嗎？

Yes. We're seeing a very good improvement. I'd say it's more of an evolution than a revolution. We've been getting higher and higher take rates across the portfolio. We're still, I'd say, under 50% across the portfolio, less the OEM solutions business, of course. So there's still room to improve.

是的。我們看到了非常好的改善。我想說，這更像是一種進化，而不是革命。我們整個投資組合的接受率越來越高。我想說，我們的整個投資組合仍佔 50% 以下，當然，OEM 解決方案業務除外。因此仍有改進的空間。

I'm showing no further questions in the queue at this time. I would now like to turn the call back over to Mr. Ron Konezny for any closing remarks.

目前隊列中沒有其他問題。現在我想將電話轉回給 Ron Konezny 先生，請他做最後發言。

Actually, we do have a question that just came in. Scott Searle, ROTH Capital.

實際上，我們確實剛剛收到一個問題。斯科特·塞爾（Scott Searle），羅仕資本（ROTH Capital）。

I apologize, Ron, I got on a couple of minutes late. But just wondering if you could give us a quick view in terms of time lines to close deals now are things starting to lag a little bit more? What are you seeing in terms of your supply chain?

羅恩，很抱歉，我遲到了幾分鐘。但我只是想知道您是否可以快速地讓我們了解現在達成交易的時間表，事情是否開始有點滯後了？就您的供應鏈而言，您看到了什麼？

And interestingly, your inventories, you guys have been working them down for a while where most companies have been patting their balance sheet with inventory ahead of tariffs. You guys continue to be pretty efficient on that front. So I'm wondering if you could give us some thoughts in terms of how you're approaching the current environment.

有趣的是，你們的庫存已經減少了一段時間，而大多數公司在關稅之前都在用庫存來充實自己的資產負債表。你們在這方面仍然非常有效率。所以我想知道您是否可以就您如何應對當前環境向我們提供一些想法。

Yeah, Scott, good questions. We monitor our opportunities very closely. We saw coming out of the COVID period, sales cycles lengthening, order sizes coming down, and it's really stabilized. So we haven't seen a deterioration with the only exception of the APAC region. And so we think that's steady so far.

是的，斯科特，這個問題問得很好。我們密切關注我們的機會。我們看到，走出 COVID 時期後，銷售週期延長，訂單規模下降，情況確實趨於穩定。因此，除了亞太地區以外，我們並沒有看到任何惡化的情況。因此我們認為到目前為止情況是穩定的。

Again, I think there's a lot of waiting on what's going to happen with tariffs on a more permanent basis. But for now, we're holding firm on our opportunities.

再次，我認為大家還在等待更持久的關稅政策的實施結果。但就目前而言，我們仍緊緊抓住機會。

The inventory, I think during COVID, we probably accumulated more inventory than many other peers and made sure that both the channel and customers didn't have too much that they couldn't digest. And so we've been able to slowly burn down that inventory, took a nice step here.

庫存方面，我認為在疫情期間，我們累積的庫存可能比許多其他同行都要多，並確保渠道和客戶都不會積壓太多無法消化的庫存。因此，我們能夠慢慢消耗掉這些庫存，並邁出了良好的一步。

We do think inventory has a chance to go up slightly in some future periods because we're at relative normalization now. And we're in a good shape from the diversity and optimization of our both suppliers and the locations. So we've got some flexibility to move products around to try to minimize tariff impact. So we're probably less subject to stockpiling that you might see at other companies and more willing to see how this evolves and then react accordingly.

我們確實認為庫存在未來的某些時期有機會略有上升，因為我們現在處於相對正常化狀態。我們的供應商和地點的多樣性和優化使我們處於良好的狀態。因此，我們可以靈活地調動產品，盡量減少關稅的影響。因此，我們可能不會像其他公司那樣囤積物資，而更願意觀察情勢如何發展，然後做出相應反應。

Got you. Very helpful. And Ron, maybe just to follow up on that. I'm not sure if you're willing to share, but in terms of looking at tariff exposures in terms of where they stand today, what's the range of outcomes in terms of gross margin impact as you look at the potential landscape, particularly as we get into the September quarter?

明白了。非常有幫助。榮恩，也許只是想跟進一下這一點。我不確定您是否願意分享，但就目前的關稅風險而言，當您考慮潛在情況時，特別是當我們進入九月季度時，對毛利率的影響範圍是怎樣的？

Yes. Our outlook really incorporates the current state of tariffs. So we feel like we've got a good handle on things. And let's kind of -- for this discussion, assume a 10% tariff rate is the most common tariff rate. We know China is higher and some other things like things that comply with USMCA are lower.

是的。我們的展望確實考慮到了當前的關稅狀況​​。因此我們感覺我們已經很好地掌握了情況。為了進行本次討論，我們假設 10% 的關稅稅率是最常見的關稅稅率。我們知道中國的情況比較高，而其他一些事情，例如符合 USMCA 的事情，情況比較低。

But we think we've got a good handle on that. I think the range of outcomes that become a little more interesting is if there's portions of the world that start enacting more reciprocal tariffs, that is going to require a little bit more agility.

但我們認為我們已經很好地掌握了這一點。我認為，如果世界上某些地區開始實施更多的互惠關稅，那麼一系列結果將會變得更加有趣，這將需要更多的靈活性。

About 70% of our business is in North America. So to the extent that we're importing things for our US and North American customers, that can require -- we do have quite a bit of product and facility that complies with USMCA. So as long as that stays in place, that's a good tool for us to leverage. So we think we're in good shape.

我們的業務約有 70% 在北美。因此，就我們為美國和北美客戶進口商品而言，這可能需要——我們確實有相當多符合 USMCA 的產品和設施。所以只要它保持不變，這對我們來說就是一個很好的工具。所以我們認為我們狀況良好。

The way things stand right now. I think we're all having a tough time predicting what might happen. But we do have some options in some of these maybe more extreme tariff situations where you might have reciprocal put in place. We're going to have to move our feet to juggle some things a bit.

就目前的情況而言。我認為我們都很難預測會發生什麼。但在某些可能更極端的關稅情況下，我們確實有一些選擇，可以採取互惠措施。我們必須稍微移動一下腳步來處理一些事情。

Got you. Very helpful. And lastly, if I could, just on the solutions front, you continue to see some pretty good demand there and growing your ARR. I'm wondering if you could go one layer down and give us a little bit of color in terms of Ventus, both higher-end solutions versus lower end. Is there any difference in terms of how things are performing there?

明白了。非常有幫助。最後，如果可以的話，僅從解決方案方面來說，您會繼續看到那裡有相當好的需求並且您的 ARR 正在增長。我想知道您是否可以更進一步，為我們提供一些 Ventus 方面的信息，包括高端解決方案和低端解決方案。那裡的情況表現有什麼不同嗎？

And I think SmartSense was going through a little bit of a refresh or upgrade cycle in terms of expanded capabilities. How is that being received in the marketplace right now?

我認為 SmartSense 在擴展功能方面正在經歷一些更新或升級週期。目前市場對此的接受程度如何？

Yes. We're really pleased with the additions we've had, both in Ventus and SmartSense. They have been offset to a lesser degree by what we would describe as some soft churn, where we have a larger customer that maybe closes a smaller percentage of their locations. We still retain the customer, but we have fewer locations, but they're being more than offset with growth. And we're really extending the Ventus model really into our cellular router business.

是的。我們對 Ventus 和 SmartSense 的新增功能感到非常滿意。我們所說的軟流失在較小程度上抵消了這些影響，即我們有一個較大的客戶，但可能關閉了較小比例的門市。我們仍然保留著客戶，但我們的門市數量較少，但成長足以彌補這些損失。我們確實將 Ventus 模型擴展到我們的蜂窩路由器業務。

And that has a tendency to tamp down top-line revenue, but of course, contribute to ARR. So we're excited about that initiative and really extending that core capability and business model into the channel.

這往往會抑制營業收入，但當然也會增加 ARR。因此，我們對這項舉措感到非常興奮，並真正將核心能力和商業模式擴展到通路中。

Ron, just to follow up on that last point, right? In terms of extending your existing router gateway business into the Ventus model, where are we in terms of that time line now? How long before we get through a majority of that conversion or attach process?

羅恩，只是想跟進最後一點，對嗎？就將現有的路由器閘道業務擴展到 Ventus 模型而言，我們現在的時間表進展到哪一步了？我們需要多長時間才能完成大部分轉換或附加過程？

Yes. I think it will be more of an evolution than a revolution. We work really closely with the channel. We're signing up our initial launch channel partners and getting them educated on the model and making sure that they know when that model applies and quite frankly, when it's a more traditional model. So it's not a light switch.

是的。我認為這更像是一場進化而不是革命。我們與該管道的合作非常密切。我們正在與最初的發布管道合作夥伴簽約，讓他們了解該模型，並確保他們知道何時適用該模型，坦白說，何時它是一種更傳統的模型。所以它不是一個電燈開關。

It's more like a dimmer switch that happens over time. So I expect it really to be a multi-quarter evolution.

它更像是一個隨著時間而發生的調光開關。所以我預計這確實會是一個跨多個季度的演變過程。

(Operator Instructions) I'm showing no questions at this time. So again, I'll turn the call back over to Mr. Ron Konezny for any closing remarks.

（操作員指示）我現在沒有任何問題。因此，我再次將電話轉回給 Ron Konezny 先生，請他做最後發言。

Thank you. We appreciate you joining Digi's earnings call and for your continued support. A huge thank you to our customers, distributors, suppliers and to our exceptional Digi team. Have a great day.

謝謝。感謝您參加 Digi 的收益電話會議並感謝您的持續支持。非常感謝我們的客戶、經銷商、供應商以及我們出色的 Digi 團隊。祝你有美好的一天。

This concludes today's program. Thank you all for participating. You may now disconnect.

今天的節目到此結束。感謝大家的參與。您現在可以斷開連線。