Digi International (DGII) 10-Q 2 Feb 24 2024 Q1 Quarterly report Financial data

Cover Page

Cover Page - shares	3 Months Ended
	Dec. 31, 2023	Jan. 26, 2024
Entity Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Dec. 31, 2023
Document Transition Report	false
Entity File Number	001-34033
Entity Registrant Name	DIGI INTERNATIONAL INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	41-1532464
Entity Address, Address Line One	9350 Excelsior Blvd.
Entity Address, Address Line Two	Suite 700
Entity Address, City or Town	Hopkins
Entity Address, State or Province	MN
Entity Address, Postal Zip Code	55343
City Area Code	952
Local Phone Number	912-3444
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		36,256,612
Entity Central Index Key	0000854775
Current Fiscal Year End Date	--09-30
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q1
Amendment Flag	false
The Nasdaq Stock Market LLC
Entity Information [Line Items]
Title of 12(b) Security	Common Stock, par value $.01 per share
Trading Symbol	DGII
Security Exchange Name	NASDAQ

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Revenue:
Total Revenue	$ 106,089	$ 109,306
Cost of sales:
Amortization of intangibles	953	1,103
Total cost of sales	44,989	47,785
Gross Profit	61,100	61,521
Operating expenses:
Sales and marketing	19,647	19,106
Research and development	14,633	14,094
General and administrative	14,687	16,358
Total operating expenses	48,967	49,558
Operating income	12,133	11,963
Other expense, net:
Interest expense, net	(5,661)	(5,971)
Debt issuance cost write off	(9,722)	0
Other expense, net	(26)	17
Total other expense, net	(15,409)	(5,954)
Income before income taxes	(3,276)	6,009
Income tax provision (benefit)	(222)	230
Net income	$ (3,054)	$ 5,779
Basic net (loss) income per common share:
Basic (USD per share)	$ (0.08)	$ 0.16
Diluted net (loss) income per common share
Diluted (USD per share)	$ (0.08)	$ 0.16
Weighted average common shares:
Basic (shares)	36,129	35,608
Diluted (shares)	36,129	36,859
Product
Revenue:
Revenue	$ 77,250	$ 81,755
Cost of sales:
Cost of sales excluding amortization	37,766	39,612
Service
Revenue:
Revenue	28,839	27,551
Cost of sales:
Cost of sales excluding amortization	$ 6,270	$ 7,070

Condensed Consolidated Statem_2

Condensed Consolidated Statements of Comprehensive (Loss) Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Statement of Comprehensive Income [Abstract]
Net income	$ (3,054)	$ 5,779
Other comprehensive (loss) income:
Foreign currency translation adjustment	2,948	1,289
Other comprehensive income (loss)	2,948	1,289
Comprehensive income	$ (106)	$ 7,068

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Dec. 31, 2023	Sep. 30, 2023
Current assets:
Cash and cash equivalents	$ 31,548	$ 31,693
Accounts receivable, net	61,441	55,997
Inventories	67,590	74,396
Other current assets	4,799	4,112
Total current assets	165,378	166,198
Property, equipment and improvements, net	28,644	29,108
Intangible assets, net	270,921	277,084
Goodwill	342,424	341,593
Operating lease right-of-use assets	12,187	12,876
Deferred tax assets	5,192	4,884
Other non-current assets	3,916	3,788
Assets	828,662	835,531
Current liabilities:
Current portion of long-term debt	0	15,523
Accounts payable	16,679	17,148
Accrued compensation	9,382	16,427
Unearned revenue	31,235	25,274
Current portion of operating lease liabilities	3,216	3,352
Taxes Payable	1,179	1,116
Other current liabilities	8,754	7,138
Total current liabilities	70,445	85,978
Income taxes payable	2,304	2,308
Deferred tax liabilities	1,817	1,812
Long-term debt	194,684	188,051
Operating lease liabilities	13,333	13,989
Other non-current liabilities	4,004	2,905
Total liabilities	286,587	295,043
Commitments and Contingencies (see Note 13)
Preferred Stock, Shares Outstanding	0	0
Stockholders' equity:
Preferred stock, $.01 par value; 2,000,000 shares authorized; none issued and outstanding	$ 0	$ 0
Common stock, $.01 par value; 60,000,000 shares authorized; 42,748,931 and 42,501,150 shares issued	427	425
Additional paid-in capital	407,330	403,735
Retained earnings	221,791	224,845
Accumulated other comprehensive loss	(24,063)	(27,011)
Treasury stock, at cost, 6,500,331 and 6,436,204 shares	(63,410)	(61,506)
Total stockholders' equity	542,075	540,488
Total liabilities and stockholders' equity	$ 828,662	$ 835,531

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Dec. 31, 2023	Sep. 30, 2023
Statement of Financial Position [Abstract]
Preferred stock, par value (USD per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized	2,000,000	2,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (USD per share)	$ 0.01	$ 0.01
Common stock, shares authorized	60,000,000	60,000,000
Common stock, shares issued	42,748,931	42,501,150
Treasury Stock, Common, Shares	6,500,331	6,436,204

Condensed Consolidated Statem_3

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Operating activities:
Net income	$ (3,054)	$ 5,779
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of property, equipment and improvements	1,813	1,649
Amortization of intangible assets	6,591	6,957
Write-off of debt issuance costs	9,722	0
Stock-based compensation	3,106	2,868
Deferred income tax provision	(303)	905
Other	349	(29)
Changes in operating assets and liabilities (net of acquisitions)	448	(15,449)
Net cash provided by operating activities	18,672	2,680
Investing activities:
Purchase of property, equipment, improvements and certain other intangible assets	(292)	(963)
Net cash used in investing activities	(292)	(963)
Financing activities:
Proceeds from long-term debt	214,062	0
Payments on long-term debt	(233,025)	(4,375)
Proceeds from stock option plan transactions	225	872
Proceeds from employee stock purchase plan transactions	531	594
Taxes paid for net share settlement of share-based payment options and awards	(2,169)	(2,987)
Net cash provided by financing activities	(20,376)	(5,896)
Effect of exchange rate changes on cash and cash equivalents	1,851	228
Net (decrease) increase in cash and cash equivalents	(145)	(3,951)
Cash and cash equivalents, beginning of period	31,693	34,900
Cash and cash equivalents, end of period	31,548	30,949
Supplemental schedule of non-cash investing and financing activities
Interest Paid	4,309	8,466
Income Taxes Paid, Net	72	565
Transfer of inventory to property, equipment and improvements	(1,105)	(1,512)
Accrual for purchase of property, equipment, improvements and certain other intangible assets	$ (10)	$ (17)

Condensed Consolidated Statem_4

Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock	Treasury Stock, Common	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive (Loss) Income
Beginning balance (in shares) at Sep. 30, 2022		41,950	6,413
Beginning balance at Sep. 30, 2022	$ 501,513	$ 420	$ (58,172)	$ 385,244	$ 200,075	$ (26,054)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	5,779				5,779
Other comprehensive (loss) income	1,289					1,289
Employee stock purchase plan issuances (in shares)			(20)
Employee stock purchase plan issuances	594		$ 186	408
Taxes paid for net share settlement of share-based payment awards (in shares)			72
Taxes paid for net share settlement of share-based payment awards	(2,987)		$ (2,987)
Issuance of stock under stock award plans (in shares)		249
Issuance of stock under stock award plans	872	$ 2		870
Stock-based compensation expense	2,868			2,868
Ending balance (in shares) at Dec. 31, 2022		42,199	6,465
Ending balance at Dec. 31, 2022	509,928	$ 422	$ (60,973)	389,390	205,854	(24,765)
Beginning balance (in shares) at Sep. 30, 2023		42,501	6,436
Beginning balance at Sep. 30, 2023	540,488	$ 425	$ (61,506)	403,735	224,845	(27,011)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	(3,054)				(3,054)
Other comprehensive (loss) income	2,948					2,948
Employee stock purchase plan issuances (in shares)			(24)
Employee stock purchase plan issuances	531		$ 231	300
Taxes paid for net share settlement of share-based payment awards (in shares)			88
Taxes paid for net share settlement of share-based payment awards	(2,168)		$ (2,135)	(33)
Issuance of stock under stock award plans (in shares)		248
Issuance of stock under stock award plans	224	$ 2		222
Stock-based compensation expense	3,106			3,106
Ending balance (in shares) at Dec. 31, 2023		42,749	6,500
Ending balance at Dec. 31, 2023	$ 542,075	$ 427	$ (63,410)	$ 407,330	$ 221,791	$ (24,063)

Basis of Presentation of Unaudi

Basis of Presentation of Unaudited Interim Condensed Consolidated Financial Statements and Significant Accounting Policies	3 Months Ended
	Dec. 31, 2023
Accounting Policies [Abstract]
BASIS OF PRESENTATION OF UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND SIGNIFICANTACCOUNTING POLICIES	BASIS OF PRESENTATION OF UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The unaudited condensed consolidated financial statements of Digi International Inc. ("we", "us", "our", "Digi" or "the Company") have been prepared in accordance with the rules and regulations of the U.S. Securities and Exchange Commission applicable to interim financial statements. While these financial statements reflect all normal recurring adjustments that are, in the opinion of management, necessary for fair presentation of the results of the interim period, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles ("GAAP") for complete financial statements. These financial statements should be read in conjunction with the financial statement disclosures in Part I, Item 1 of our Annual Report on Form 10-K for the year ended September 30, 2023 (the "2023 Financial Statements"). We use the same accounting policies in preparing quarterly and annual financial statements. The quarterly results of operations are not necessarily indicative of the results to be expected for the full year.

Earnings (Loss) Per Share

Earnings (Loss) Per Share	3 Months Ended
	Dec. 31, 2023
Earnings Per Share [Abstract]
EARNINGS (LOSS) PER SHARE	EARNINGS (LOSS) PER SHARE The following table is a reconciliation of the numerators and denominators in the net income per common share calculations (in thousands, except per common share data): Three months ended December 31, 2023 2022 Numerator: Net (loss) income $ (3,054) $ 5,779 Denominator: Denominator for basic net income per common share — weighted average shares outstanding 36,129 35,608 Effect of dilutive securities: Stock options and restricted stock units — 1,251 Denominator for diluted net income per common share — adjusted weighted average shares 36,129 36,859 Net (loss) income per common share, basic $ (0.08) $ 0.16 Net (loss) income per common share, diluted $ (0.08) $ 0.16 Digi excludes certain stock options and restricted stock unit awards that would have an anti-dilutive effect on our diluted net (loss) income per share calculation. For the three months ended December 31, 2023 and 2022, 1,563,857 and 234,365 shares outstanding were excluded, respectively.

Selected Balance Sheet Data

Selected Balance Sheet Data	3 Months Ended
	Dec. 31, 2023
Selected Balance Sheet Data [Abstract]
SELECTED BALANCE SHEET DATA	SELECTED BALANCE SHEET DATA The following table shows selected balance sheet data (in thousands): December 31, September 30, Accounts receivable, net: Accounts receivable $ 66,873 $ 61,880 Less allowance for credit losses 1,407 1,693 Less reserve for future credit returns and pricing adjustments 4,025 4,190 Accounts receivable, net $ 61,441 $ 55,997 Inventories: Raw materials $ 28,649 $ 29,974 Work in process 130 66 Finished goods 38,811 44,356 Inventories $ 67,590 $ 74,396

Goodwill and Other Identifiable

Goodwill and Other Identifiable Intangible Assets, Net	3 Months Ended
	Dec. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract]
GOODWILL AND OTHER IDENTIFIABLE INTANGIBLE ASSETS, NET	GOODWILL AND OTHER INTANGIBLE ASSETS, NET Amortizable intangible assets were (in thousands): December 31, 2023 September 30, 2023 Gross Accum. Net Gross Accum. Net Purchased and core technology $ 85,080 $ (60,833) $ 24,247 $ 85,032 $ (59,833) $ 25,199 License agreements 112 (112) — 112 (112) — Patents and trademarks 40,035 (20,421) 19,614 39,957 (19,888) 20,069 Customer relationships 309,241 (82,181) 227,060 309,196 (77,380) 231,816 Non-compete agreements 600 (600) — 600 (600) — Order backlog 1,000 (1,000) — 1,000 (1,000) — Total $ 436,068 $ (165,147) $ 270,921 $ 435,897 $ (158,813) $ 277,084 Amortization expense for intangible assets was $6.2 million and $6.5 million for the three months ended December 31, 2023 and 2022, respectively. Amortization expense is recorded on our condensed consolidated statements of operations within cost of sales and in general and administrative expense. Estimated amortization expense related to intangible assets for the remainder of fiscal 2024 and the five succeeding fiscal years is (in thousands): 2024 (nine months) $ 19,058 2025 21,781 2026 21,549 2027 20,593 2028 20,411 2029 18,355 4. GOODWILL AND OTHER INTANGIBLE ASSETS, NET (CONTINUED) The changes in the carrying amount of goodwill by reportable segments are (in thousands): Three months ended December 31, 2023 IoT IoT Total Balance on September 30, 2023 $ 173,957 $ 167,636 $ 341,593 Foreign currency translation adjustment 567 264 831 Balance on December 31, 2023 $ 174,524 $ 167,900 $ 342,424 Goodwill represents the excess of cost over the fair value of net identifiable assets acquired. Goodwill is quantitatively tested for impairment on an annual basis as of June 30, or more frequently if events or circumstances occur which could indicate impairment. We continue to have two reportable segments, IoT Products & Services and IoT Solutions (see Note 6 ). Our IoT Products & Services segment is structured to include four reporting units, each with a reporting manager: Cellular Routers, Console Servers, OEM Solutions and Infrastructure Management. Following our acquisition of Ventus in November 2021, we have two reporting units within IoT Solutions: SmartSense and Ventus. Each of these segments was tested individually for impairment during our annual impairment test completed in the third fiscal quarter of fiscal 2023. Assumptions and estimates to determine fair values under the income and market approaches are complex and often subjective. They can be affected by a variety of factors. These include external factors such as industry and economic trends. They also include internal factors such as changes in our business strategy and our internal forecasts. Changes in circumstances or a potential event could affect the estimated fair values negatively. If our future operating results do not meet current forecasts or if we experience a sustained decline in our market capitalization that is determined to be indicative of a reduction in fair value of one or more of our reporting units within either of our segments, we may be required to record future impairment charges for goodwill. Digi conducted an analysis as of December 31, 2023 and concluded changes in market conditions from the time of the fiscal 2023 test, conducted as of June 30,2023, were not indicative of a reduction in fair value of any of our reporting units. Results of our Fiscal 2023 Annual Impairment Test

Indebtedness

Indebtedness	3 Months Ended
	Dec. 31, 2023
Debt Disclosure [Abstract]
INDEBTEDNESS	5. INDEBTEDNESS On December 7, 2023, Digi entered into a credit agreement (the “Credit Agreement”) with BMO Bank N.A. (“BMO”), as administrative and collateral agent, BMO Capital Markets Corp., BofA Securities, Inc. and MUFG Bank, Ltd., as joint lead arrangers and joint bookrunners, and the several banks and other financial institutions or entities from time to time party thereto as lenders (the “Lenders”). The Credit Agreement provides Digi with a senior secured credit facility (the “Credit Facility”). The Credit Facility includes a $250 million senior secured revolving credit facility (the “Revolving Loan Facility”), with an uncommitted accordion feature that provides for additional borrowing capacity of up to the greater of $95 million or one hundred percent of trailing twelve month adjusted earnings before interest, taxes, depreciation, and amortization ("EBITDA"). The Credit Facility also contains a $10 million letter of credit sublimit and $10 million swingline sub-facility. Digi may use the proceeds of the Credit Facility in the future for general corporate purposes. Digi borrowed a total of $215 million under the Credit Facility to repay all obligations and to pay related fees and expenses under the Third Amended and Restated Credit Agreement dated as of December 22, 2021 (the “Prior Credit Facility”), by and among Digi, as the borrower, BMO, as administrative agent and collateral agent, BMO Capital Markets Corp., as sole lead arranger and bookrunner, and the other lenders from time-to-time party thereto. The Prior Credit Facility consisted of a $350 million term loan B secured loan and a $35 million revolving credit facility that included a $10 million letter of credit subfacility and $10 million swingline subfacility. 5. INDEBTEDNESS (CONTINUED) Borrowings under the Credit Facility bear interest at a rate per annum equal to Term SOFR with a floor of 0.00% for an interest period of one, three, or six months as selected by Digi, reset at the end of the selected interest period (or a replacement benchmark rate if Term SOFR is no longer available) plus the applicable margin or a base rate plus the applicable margin. The base rate is determined by reference to the highest of BMO’s prime rate, the rate determined by BMO to be the average rate of Federal funds in the secondary market plus 0.50%, or one-month SOFR plus 1.00%. The applicable margin for loans under the Credit Facility is in a range of 1.75% to 2.75% for Term SOFR loans and 0.75% to 1.75% for base rate loans, depending on Digi’s total net leverage ratio. The initial borrowings were made at Term SOFR for a one-month interest period plus an applicable margin of 2.50%. Our weighted average interest rate for our Credit Facility was 7.96% as of December 31, 2023. In addition to paying interest on the outstanding principal, Digi is required to pay a commitment fee on the unutilized commitments under the Credit Facility. The commitment fee is between 0.20% and 0.35% depending on Digi’s total net leverage ratio. Our weighted average Revolving Loan Facility commitment fee was 0.30% as of December 31, 2023. The Credit Facility is secured by substantially all of the property of Digi and its domestic subsidiaries. The debt issuance costs and remaining balance under the Prior Credit Facility totaling $9.7 million at December 7, 2023 were written off and included in other expenses upon the entry into the Credit Agreement. Digi incurred an additional $1.3 million in debt issuance costs upon entry into the Credit Agreement, with this amount amortized over the term of the Credit Agreement and reported in interest expense. The Revolving Loan is due in a lump sum payment at maturity December 7, 2028, if any amounts are drawn. The fair value of the Revolving Loan approximated carrying value at December 31, 2023. The following table is a summary of our long-term indebtedness at December 31, 2023 and September 30, 2023 (in thousands): Balance on December 31, 2023 Balance on September 30, 2023 Revolving loan $ 196,000 $ — Term loan — 213,625 Total loans 196,000 213,625 Less unamortized issuance costs (1,316) (10,051) Less current maturities of long-term debt — (15,523) Total long-term debt, net of current portion $ 194,684 $ 188,051 Covenants and Security Interest

Segment Information

Segment Information	3 Months Ended
	Dec. 31, 2023
Segment Reporting [Abstract]
SEGMENT INFORMATION	SEGMENT INFORMATION We have two reportable segments: IoT Products & Services and IoT Solutions. IoT Products & Services is structured to include four operating segments, each with a segment manager. These four operating segments are Cellular Routers, Console Servers, OEM Solutions and Infrastructure Management. IoT Products & Services derives revenue from the sale of connectivity products and solutions. These products and solutions include enclosed router devices in Cellular Routers, enclosed devices for edge computing and data center applications in Console Servers, chip modules in OEM Solutions and sensors in Infrastructure Management, as well as our cloud based remote manager application and extended support and monitoring of devices sold. IoT Solutions is comprised of two operating segments. These operating segments are SmartSense and Ventus. IoT Solutions derives revenue from the sale of monitoring and networking service solutions. These solutions include wireless condition-based monitoring services in SmartSense and Managed Network-as-a-Service ("MNaaS") in Ventus. The operating segments included in each reportable segment have similar qualitative and quantitative factors, which allow us to aggregate them under each reportable segment. The qualitative factors include similar nature of products and services, production process, type or class of customers and methods used to distribute the products. The quantitative factors include similar operating margins. Our CEO is our Chief Operating Decision Maker and reviews and makes business decisions using consolidated information such as operating income and gross profit. Summary operating results for each of our segments were (in thousands): Three months ended December 31, 2023 2022 Revenue IoT Products & Services $ 82,023 $ 84,342 IoT Solutions 24,066 24,964 Total revenue $ 106,089 $ 109,306 Gross Profit IoT Products & Services $ 43,859 $ 46,021 IoT Solutions 17,241 15,500 Total gross profit $ 61,100 $ 61,521 Operating Income (Loss) IoT Products & Services $ 10,341 $ 12,683 IoT Solutions 1,792 (720) Total operating income $ 12,133 $ 11,963 Depreciation and Amortization IoT Products & Services $ 3,098 $ 3,292 IoT Solutions 4,953 4,820 Total depreciation and amortization $ 8,051 $ 8,112 Total expended for property, plant and equipment was (in thousands): Three months ended December 31, 2023 2022 IoT Products & Services $ 37 $ 637 IoT Solutions* 182 326 Total expended for property, plant and equipment $ 219 $ 963 * Excluded from these amounts are $1,105 and $1,512 of transfers of inventory to property plant and equipment for subscriber assets for the three months ended December 31, 2023 and 2022, respectively. 6. SEGMENT INFORMATION (CONTINUED) Total assets for each of our segments were (in thousands): December 31, September 30, IoT Products & Services $ 382,874 $ 384,018 IoT Solutions 414,240 419,820 Unallocated* 31,548 31,693 Total assets $ 828,662 $ 835,531 *Unallocated consists of cash and cash equivalents.

Revenue

Revenue	3 Months Ended
	Dec. 31, 2023
Revenue from Contract with Customer [Abstract]
REVENUE	REVENUE Revenue Disaggregation The following table summarizes our revenue by geographic location of our customers (in thousands): Three months ended December 31, 2023 2022 North America, primarily the United States $ 79,695 $ 83,465 Europe, Middle East & Africa 14,390 15,877 Rest of world 12,004 9,964 Total revenue $ 106,089 $ 109,306 The following table summarizes our revenue by the timing of revenue recognition (in thousands): Three months ended December 31, 2023 2022 Transferred at a point in time $ 79,394 $ 85,486 Transferred over time 26,695 23,820 Total revenue $ 106,089 $ 109,306 Contract Balances Contract Related Assets Our contract related assets consist of subscriber assets. Subscriber assets are equipment that we provide to customers pursuant to subscription-based contracts. In these cases, we retain the ownership of the equipment a customer uses and charge the customer subscription fees to receive our end-to-end solutions. The total net book value of subscriber assets of $16.7 million and $16.6 million as of December 31, 2023 and September 30, 2023, respectively, are included in property, equipment and improvements, net. Depreciation expense for these subscriber assets, which is included in cost of sales, was $1.0 million and $0.9 million for the three months ended December 31, 2023 and 2022, respectively. We depreciate the cost of this equipment over its useful life. Contract Assets Contract assets at Digi consist of products and services that have been fulfilled, but for which revenue has not yet been recognized. Our contract asset balances were immaterial as of December 31, 2023 and September 30, 2023. Contract Liabilities Contract liabilities consist of unearned revenue related to annual or multi-year contracts for subscription services and related implementation fees, as well as product sales that have been invoiced, but not yet fulfilled. The timing of revenue recognition may differ from the timing of invoicing to customers. Customers are invoiced for subscription services on a monthly, quarterly or annual basis. 7. REVENUE (CONTINUED) Our contract liabilities were $35.0 million and $23.0 million at December 31, 2023 and 2022, respectively. There were contract liability balances of $27.9 million and $21.6 million balances as of September 30, 2023 and 2022. Of these balances, Digi recognized $7.4 million and $6.1 million as revenue in the three months ended December 31, 2023 and 2022, respectively. Remaining Performance Obligation As of December 31, 2023, we had approximately $156.9 million of remaining performance obligations on contracts with an original duration of one year or more. We expect to recognize revenue on approximately $67.5 million of remaining performance obligations over the next 12 months. We expect to recognize revenue from the remaining performance obligations over a range of two

Income Taxes

Income Taxes	3 Months Ended
	Dec. 31, 2023
Income Tax Disclosure [Abstract]
Income Tax Disclosure [Text Block]	INCOME TAXES Our income tax benefit was $0.2 million for the three months ended December 31, 2023. Included in this was a net tax liability of $0.2 million discretely related to the three months ended December 31, 2023. This liability primarily was the result of book stock compensation in excess of recognized tax benefits. Our effective tax rate will vary based on a variety of factors. These factors include our overall profitability, the geographical mix of income before taxes and related statutory tax rate in each jurisdiction, and tax items discretely related to the period, such as tax impacts of stock compensation as there are no open audits during the period. We may record other benefits or expenses in the future that are specific to a particular quarter such as expiration of statutes of limitation, the completion of tax audits, or legislation that is enacted in both U.S. and foreign jurisdictions. A reconciliation of the beginning and ending amount of unrecognized tax benefits is (in thousands): Unrecognized tax benefits as of September 30, 2023 $ 3,162 Decreases related to: Expiration of statute of limitations (32) Unrecognized tax benefits as of December 31, 2023 $ 3,130 The total amount of unrecognized tax benefits at December 31, 2023 that, if recognized, would affect our effective tax rate was $3.0 million, after considering the impact of interest and deferred benefit items. We expect that the total amount of unrecognized tax benefits will decrease by approximately $0.4 million over the next 12 months.

Product Warranty Obligation

Product Warranty Obligation	3 Months Ended
	Dec. 31, 2023
Product Warranties Disclosures [Abstract]
PRODUCT WARRANTY OBLIGATION	PRODUCT WARRANTY OBLIGATION The following tables summarizes the activity associated with the product warranty accrual (in thousands) and is included on our condensed consolidated balance sheets within other current liabilities: Three months ended December 31, 2023 2022 Balance at beginning of period $ 772 $ 886 Warranties accrued 94 90 Settlement made (85) (54) Balance at end of period $ 781 $ 922

Leases

Leases	3 Months Ended
	Dec. 31, 2023
Leases [Abstract]
LEASES	LEASES All of our leases are operating leases and primarily consist of leases for office space. For any lease with an initial term in excess of 12 months, the related lease assets and lease liabilities are recognized on the condensed consolidated balance sheets as either operating or financing leases at the inception of an agreement where it is determined that a lease exists. We have lease agreements that contain both lease and non-lease components. We have elected to combine lease and non-lease components for all classes of assets. Leases with an expected term of 12 months or less are not recorded on the condensed consolidated balance sheets. Instead we recognize lease expense for these leases on a straight-line basis over the lease term. Operating lease assets represent the right to use an underlying asset for the lease term and operating lease liabilities represent the obligation to make lease payments. These assets and liabilities are recognized based on the present value of future payments over the lease term at the commencement date. We generally use a collateralized incremental borrowing rate based on information available at the commencement date, including the lease term, in determining the present value of future payments. When determining our right-of-use assets, we generally do not include options to extend or terminate the lease unless it is reasonably certain that the option will be exercised. Our leases typically require payment of real estate taxes and common area maintenance and insurance. These components comprise the majority of our variable lease cost and are excluded from the present value of our lease obligations. Fixed payments may contain predetermined fixed rent escalations. We recognize the related rent expense on a straight-line basis from the commencement date to the end of the lease term. The following table shows the supplemental balance sheet information related to our leases (in thousands): Balance Sheet Location December 31, 2023 September 30, 2023 Assets Operating leases Operating lease right-of-use assets $ 12,187 $ 12,876 Total lease assets $ 12,187 $ 12,876 Liabilities Operating leases Current portion of operating lease liabilities $ 3,216 $ 3,352 Operating leases Operating lease liabilities 13,333 13,989 Total lease liabilities $ 16,549 $ 17,341 The following were the components of our lease cost which is recorded in both cost of goods sold and selling, general and administrative expense (in thousands): Three months ended December 31, 2023 2022 Operating lease cost $ 891 $ 904 Variable lease cost 317 309 Short-term lease cost 27 25 Total lease cost $ 1,235 $ 1,238 At December 31, 2023, the weighted average remaining lease term of our operating leases was 6.3 years and the weighted average discount rate for these leases was 4.5%. 10. LEASES (CONTINUED) The table below reconciles the undiscounted cash flows for each of the first five years as well as all the remaining years to the operating lease liabilities recorded on the condensed consolidated balance sheet as of December 31, 2023 (in thousands): Fiscal year Amount 2024 (nine months) $ 3,197 2025 3,529 2026 3,139 2027 2,043 2028 1,897 2029 1,840 Thereafter 3,865 Total future undiscounted lease payments 19,510 Less imputed interest (2,961) Total reported lease liability $ 16,549

Contingencies

Contingencies	3 Months Ended
	Dec. 31, 2023
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	COMMITMENTS AND CONTINGENCIES We lease certain of our buildings and equipment under non-cancelable lease agreements. Please refer to Note 10 to our condensed consolidated financial statements for additional information. Data Logger Solutions, LLC ("Data Loggers") brought suit in Delaware Superior Court against us and our subsidiary Digi SmartSense, LLC in October, 2020. The suit alleges that Data Loggers has not been paid certain commissions it believes it is owed and will continue to be owed under a Reseller Agreement entered between Data Loggers and TempAlert. SmartSense is the successor of interest of TempAlert and terminated the Reseller Agreement in 2019. Data Loggers claims it is entitled to actual, speculative and punitive damages in connection with its allegations. A trial is scheduled to commence in February 2024. We intend to defend the matter vigorously; however, there can be no assurance that we will be successful in such defense. We are unable to estimate the total costs to defend the matter or the potential liability to us in the event that we are not successful in our defense. In addition to the matters discussed above, in the normal course of business, we are presently, and expect in the future to be, subject to various claims and litigation with third parties such as non-practicing intellectual property entities as well as customers, vendors and/or employees. There can be no assurance that any claims by third parties, if proven to have merit, will not materially adversely affect our business, liquidity or financial condition.

Stock-Based Compensation

Stock-Based Compensation	3 Months Ended
	Dec. 31, 2023
Share-Based Payment Arrangement [Abstract]
STOCK-BASED COMPENSATION	STOCK-BASED COMPENSATION Stock-based awards granted in the first fiscal quarter of 2024 and 2023 were granted under the amended and restated 2021 Omnibus Incentive Plan (the "2021 Plan"). Shares subject to awards under the 2021 Plan or any prior plans that are forfeited, canceled, returned to us for failure to satisfy vesting requirements, settled in cash or otherwise terminated without payment also will be available for grant under the 2021 Plan. The authority to grant options under the 2021 Plan and set other terms and conditions rests with the Compensation Committee of the Board of Directors. As of December 31, 2023, there were approximately 1,881,637 shares available for future grants under the 2021 Plan. Cash received from the exercise of stock options was $0.2 million and $0.9 million for the three months ended December 31, 2023 and 2022, respectively. 12. STOCK-BASED COMPENSATION (CONTINUED) Our equity plans and corresponding forms of award agreements generally have provisions allowing employees to elect to satisfy tax withholding obligations through the delivery of shares. When employees make this election, we retain a portion of shares issuable under the award. Tax withholding obligations are otherwise fulfilled by the employee paying cash to us for the withholding. During the three months ended December 31, 2023 and 2022, our employees forfeited 87,792 shares and 71,951 shares, respectively, in order to satisfy withholding tax obligations of $2.1 million and $3.0 million, respectively. We sponsor an Employee Stock Purchase Plan as amended and restated as of December 10, 2019, October 29, 2013, December 4, 2009 and November 27, 2006 (the "ESPP"), covering all domestic employees with at least 90 days of continuous service and who are customarily employed at least 20 hours per week. The ESPP allows eligible participants the right to purchase common stock on a quarterly basis at the lower of 85% of the market price at the beginning or end of each three-month offering period. The most recent amendments to the ESPP, ratified by our stockholders on January 29, 2020, increased the total number of shares that may be purchased under the ESPP to 3,425,000. ESPP contributions by employees were $0.5 million and $0.6 million for the three months ended December 31, 2023 and 2022, respectively. Pursuant to the ESPP, 23,665 and 19,683 common shares were issued to employees during the three months ended December 31, 2023 and 2022, respectively. Shares are issued under the ESPP from treasury stock. As of December 31, 2023, 446,562 common shares were available for future issuances under the ESPP. The following table shows stock-based compensation expense that is included in the consolidated results of operations (in thousands): Three months ended December 31, 2023 2022 Cost of sales $ 181 $ 142 Sales and marketing 1,168 851 Research and development 430 448 General and administrative 1,327 1,427 Stock-based compensation before income taxes 3,106 2,868 Income tax benefit (663) (599) Stock-based compensation after income taxes $ 2,443 $ 2,269 Stock Options The following table summarizes our stock option activity (in thousands, except per common share amounts): Options Outstanding Weighted Average Exercise Price Weighted Average Contractual Term (in years) Aggregate Intrinsic Value (1) Balance on September 30, 2023 1,553 $18.52 Granted 87 24.58 Exercised (19) 24.04 Forfeited / Canceled (10) 23.17 Balance on December 31, 2023 1,611 $18.89 3.8 $ 12,533 Exercisable on December 31, 2023 1,137 $16.89 3.3 $ 10,656 (1) The aggregate intrinsic value represents the total pre-tax intrinsic value, based on our closing stock price of $26.00 as of December 31, 2023, which would have been received by the option holders had all option holders exercised their options as of that date. The intrinsic value of an option is the amount by which the fair value of the underlying stock exceeds its exercise price. The total intrinsic value of all options exercised during the three months ended December 31, 2023 and 2023 was $0.4 million and $1.7 million, respectively. 12. STOCK-BASED COMPENSATION (CONTINUED) The following table shows the weighted average fair value, which was determined based upon the fair value of each option on the grant date utilizing the Black-Scholes option-pricing model and the related assumptions: Three months ended December 31, 2023 2022 Weighted average per option grant date fair value $12.44 $19.98 Assumptions used for option grants: Risk free interest rate 4.45% - 4.68% 3.89% - 3.98% Expected term 6.00 years 6.00 years Expected volatility 46% 46% Weighted average volatility 46% 46% Expected dividend yield — — The fair value of each option award granted during the periods presented was estimated using the Black-Scholes option valuation model that uses the assumptions noted in the above table. Expected volatilities are based on the historical volatility of our stock. We use historical data to estimate option exercise and employee termination information within the valuation model. The expected term of options granted is derived from the vesting period and historical information and represents the period of time that options granted are expected to be outstanding. The risk-free rate used is the zero-coupon U.S. Treasury bond rate in effect at the time of the grant whose maturity equals the expected term of the option. As of December 31, 2023, the total unrecognized compensation cost related to non-vested stock options was $4.1 million and the related weighted average period over which it is expected to be recognized is approximately 1.5 years. Non-vested Stock Units The following table presents a summary of our non-vested restricted stock units and performance stock units as of December 31, 2023 and changes during the three months then ended (in thousands, except per common share amounts): RSUs PSUs Number of Awards Weighted Average Grant Date Fair Value Number of Awards Weighted Average Grant Date Fair Value Nonvested on September 30, 2023 846 $ 30.56 135 $ 37.72 Granted 302 24.55 122 24.59 Vested (198) 26.87 (30) 37.11 Canceled (9) 32.07 (7) 25.15 Nonvested on December 31, 2023 941 $ 29.39 220 $ 30.92

Pay vs Performance Disclosure

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Pay vs Performance Disclosure
Net income	$ (3,054)	$ 5,779

Insider Trading Arrangements

Insider Trading Arrangements	3 Months Ended
	Dec. 31, 2023
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

Earnings (Loss) Per Share (Tabl

Earnings (Loss) Per Share (Tables)	3 Months Ended
	Dec. 31, 2023
Earnings Per Share [Abstract]
Schedule of Calculation of Numerator and Denominator in Earnings Per Share	The following table is a reconciliation of the numerators and denominators in the net income per common share calculations (in thousands, except per common share data): Three months ended December 31, 2023 2022 Numerator: Net (loss) income $ (3,054) $ 5,779 Denominator: Denominator for basic net income per common share — weighted average shares outstanding 36,129 35,608 Effect of dilutive securities: Stock options and restricted stock units — 1,251 Denominator for diluted net income per common share — adjusted weighted average shares 36,129 36,859 Net (loss) income per common share, basic $ (0.08) $ 0.16 Net (loss) income per common share, diluted $ (0.08) $ 0.16

Selected Balance Sheet Data (Ta

Selected Balance Sheet Data (Tables)	3 Months Ended
	Dec. 31, 2023
Selected Balance Sheet Data [Abstract]
Schedule of Selected Balance Sheet Data	The following table shows selected balance sheet data (in thousands): December 31, September 30, Accounts receivable, net: Accounts receivable $ 66,873 $ 61,880 Less allowance for credit losses 1,407 1,693 Less reserve for future credit returns and pricing adjustments 4,025 4,190 Accounts receivable, net $ 61,441 $ 55,997 Inventories: Raw materials $ 28,649 $ 29,974 Work in process 130 66 Finished goods 38,811 44,356 Inventories $ 67,590 $ 74,396

Goodwill and Other Identifiab_2

Goodwill and Other Identifiable Intangible Assets, Net (Tables)	3 Months Ended
	Dec. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract]
Schedule of Amortizable Intangible Assets	Amortizable intangible assets were (in thousands): December 31, 2023 September 30, 2023 Gross Accum. Net Gross Accum. Net Purchased and core technology $ 85,080 $ (60,833) $ 24,247 $ 85,032 $ (59,833) $ 25,199 License agreements 112 (112) — 112 (112) — Patents and trademarks 40,035 (20,421) 19,614 39,957 (19,888) 20,069 Customer relationships 309,241 (82,181) 227,060 309,196 (77,380) 231,816 Non-compete agreements 600 (600) — 600 (600) — Order backlog 1,000 (1,000) — 1,000 (1,000) — Total $ 436,068 $ (165,147) $ 270,921 $ 435,897 $ (158,813) $ 277,084
Schedule of Estimated Future Amortization Expense Related to Intangible Assets	Estimated amortization expense related to intangible assets for the remainder of fiscal 2024 and the five succeeding fiscal years is (in thousands): 2024 (nine months) $ 19,058 2025 21,781 2026 21,549 2027 20,593 2028 20,411 2029 18,355
Schedule of Changes in Carrying Amount of Goodwill	The changes in the carrying amount of goodwill by reportable segments are (in thousands): Three months ended December 31, 2023 IoT IoT Total Balance on September 30, 2023 $ 173,957 $ 167,636 $ 341,593 Foreign currency translation adjustment 567 264 831 Balance on December 31, 2023 $ 174,524 $ 167,900 $ 342,424

Debt (Tables)

Debt (Tables)	3 Months Ended
	Dec. 31, 2023
Debt Disclosure [Abstract]
Schedule of Debt	The following table is a summary of our long-term indebtedness at December 31, 2023 and September 30, 2023 (in thousands): Balance on December 31, 2023 Balance on September 30, 2023 Revolving loan $ 196,000 $ — Term loan — 213,625 Total loans 196,000 213,625 Less unamortized issuance costs (1,316) (10,051) Less current maturities of long-term debt — (15,523) Total long-term debt, net of current portion $ 194,684 $ 188,051

Segment Information (Tables)

Segment Information (Tables)	3 Months Ended
	Dec. 31, 2023
Segment Reporting [Abstract]
Schedule of Segment Reporting Information, by Segment	Summary operating results for each of our segments were (in thousands): Three months ended December 31, 2023 2022 Revenue IoT Products & Services $ 82,023 $ 84,342 IoT Solutions 24,066 24,964 Total revenue $ 106,089 $ 109,306 Gross Profit IoT Products & Services $ 43,859 $ 46,021 IoT Solutions 17,241 15,500 Total gross profit $ 61,100 $ 61,521 Operating Income (Loss) IoT Products & Services $ 10,341 $ 12,683 IoT Solutions 1,792 (720) Total operating income $ 12,133 $ 11,963 Depreciation and Amortization IoT Products & Services $ 3,098 $ 3,292 IoT Solutions 4,953 4,820 Total depreciation and amortization $ 8,051 $ 8,112
Payments to Acquire Property, Plant and Equipment by Segment	Total expended for property, plant and equipment was (in thousands): Three months ended December 31, 2023 2022 IoT Products & Services $ 37 $ 637 IoT Solutions* 182 326 Total expended for property, plant and equipment $ 219 $ 963 * Excluded from these amounts are $1,105 and $1,512 of transfers of inventory to property plant and equipment for subscriber assets for the three months ended December 31, 2023 and 2022, respectively.
Reconciliation of Assets from Segment to Consolidated	Total assets for each of our segments were (in thousands): December 31, September 30, IoT Products & Services $ 382,874 $ 384,018 IoT Solutions 414,240 419,820 Unallocated* 31,548 31,693 Total assets $ 828,662 $ 835,531 *Unallocated consists of cash and cash equivalents.

Revenue (Tables)

Revenue (Tables)	3 Months Ended
	Dec. 31, 2023
Revenue from Contract with Customer [Abstract]
Disaggregation of Revenue	The following table summarizes our revenue by geographic location of our customers (in thousands): Three months ended December 31, 2023 2022 North America, primarily the United States $ 79,695 $ 83,465 Europe, Middle East & Africa 14,390 15,877 Rest of world 12,004 9,964 Total revenue $ 106,089 $ 109,306 The following table summarizes our revenue by the timing of revenue recognition (in thousands): Three months ended December 31, 2023 2022 Transferred at a point in time $ 79,394 $ 85,486 Transferred over time 26,695 23,820 Total revenue $ 106,089 $ 109,306

Income Taxes (Tables)

Income Taxes (Tables)	3 Months Ended
	Dec. 31, 2023
Income Tax Disclosure [Abstract]
Schedule of Unrecognized Tax Benefits	A reconciliation of the beginning and ending amount of unrecognized tax benefits is (in thousands): Unrecognized tax benefits as of September 30, 2023 $ 3,162 Decreases related to: Expiration of statute of limitations (32) Unrecognized tax benefits as of December 31, 2023 $ 3,130

Product Warranty Obligation (Ta

Product Warranty Obligation (Tables)	3 Months Ended
	Dec. 31, 2023
Product Warranties Disclosures [Abstract]
Schedule of Product Warranty Accrual	The following tables summarizes the activity associated with the product warranty accrual (in thousands) and is included on our condensed consolidated balance sheets within other current liabilities: Three months ended December 31, 2023 2022 Balance at beginning of period $ 772 $ 886 Warranties accrued 94 90 Settlement made (85) (54) Balance at end of period $ 781 $ 922

Leases (Tables)

Leases (Tables)	3 Months Ended
	Dec. 31, 2023
Leases [Abstract]
Supplemental Balance Sheet Information	The following table shows the supplemental balance sheet information related to our leases (in thousands): Balance Sheet Location December 31, 2023 September 30, 2023 Assets Operating leases Operating lease right-of-use assets $ 12,187 $ 12,876 Total lease assets $ 12,187 $ 12,876 Liabilities Operating leases Current portion of operating lease liabilities $ 3,216 $ 3,352 Operating leases Operating lease liabilities 13,333 13,989 Total lease liabilities $ 16,549 $ 17,341
Components of Lease Cost	The following were the components of our lease cost which is recorded in both cost of goods sold and selling, general and administrative expense (in thousands): Three months ended December 31, 2023 2022 Operating lease cost $ 891 $ 904 Variable lease cost 317 309 Short-term lease cost 27 25 Total lease cost $ 1,235 $ 1,238
Operating Lease Liability Maturity	The table below reconciles the undiscounted cash flows for each of the first five years as well as all the remaining years to the operating lease liabilities recorded on the condensed consolidated balance sheet as of December 31, 2023 (in thousands): Fiscal year Amount 2024 (nine months) $ 3,197 2025 3,529 2026 3,139 2027 2,043 2028 1,897 2029 1,840 Thereafter 3,865 Total future undiscounted lease payments 19,510 Less imputed interest (2,961) Total reported lease liability $ 16,549

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	3 Months Ended
	Dec. 31, 2023
Share-Based Payment Arrangement [Abstract]
Schedule of Stock-Based Compensation Expense	The following table shows stock-based compensation expense that is included in the consolidated results of operations (in thousands): Three months ended December 31, 2023 2022 Cost of sales $ 181 $ 142 Sales and marketing 1,168 851 Research and development 430 448 General and administrative 1,327 1,427 Stock-based compensation before income taxes 3,106 2,868 Income tax benefit (663) (599) Stock-based compensation after income taxes $ 2,443 $ 2,269
Schedule of Stock Option Activity	The following table summarizes our stock option activity (in thousands, except per common share amounts): Options Outstanding Weighted Average Exercise Price Weighted Average Contractual Term (in years) Aggregate Intrinsic Value (1) Balance on September 30, 2023 1,553 $18.52 Granted 87 24.58 Exercised (19) 24.04 Forfeited / Canceled (10) 23.17 Balance on December 31, 2023 1,611 $18.89 3.8 $ 12,533 Exercisable on December 31, 2023 1,137 $16.89 3.3 $ 10,656 (1) The aggregate intrinsic value represents the total pre-tax intrinsic value, based on our closing stock price of $26.00 as of December 31, 2023, which would have been received by the option holders had all option holders exercised their options as of that date. The intrinsic value of an option is the amount by which the fair value of the underlying stock exceeds its exercise price. The total intrinsic value of all options exercised during the three months ended December 31, 2023 and 2023 was $0.4 million and $1.7 million, respectively.
Schedule of Valuation Assumptions	The following table shows the weighted average fair value, which was determined based upon the fair value of each option on the grant date utilizing the Black-Scholes option-pricing model and the related assumptions: Three months ended December 31, 2023 2022 Weighted average per option grant date fair value $12.44 $19.98 Assumptions used for option grants: Risk free interest rate 4.45% - 4.68% 3.89% - 3.98% Expected term 6.00 years 6.00 years Expected volatility 46% 46% Weighted average volatility 46% 46% Expected dividend yield — —
Schedule of Nonvested Restricted Stock Units	The following table presents a summary of our non-vested restricted stock units and performance stock units as of December 31, 2023 and changes during the three months then ended (in thousands, except per common share amounts): RSUs PSUs Number of Awards Weighted Average Grant Date Fair Value Number of Awards Weighted Average Grant Date Fair Value Nonvested on September 30, 2023 846 $ 30.56 135 $ 37.72 Granted 302 24.55 122 24.59 Vested (198) 26.87 (30) 37.11 Canceled (9) 32.07 (7) 25.15 Nonvested on December 31, 2023 941 $ 29.39 220 $ 30.92

Earnings (Loss) Per Share (Deta

Earnings (Loss) Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Numerator:
Net income	$ (3,054)	$ 5,779
Denominator:
Denominator for basic net income per common share — weighted average shares outstanding	36,129,000	35,608,000
Effect of dilutive securities:
Stock options and restricted stock units	0	1,251,000
Denominator for diluted net income per common share — adjusted weighted average shares	36,129,000	36,859,000
Basic net (loss) income per common share:
Earnings Per Share, Basic	$ (0.08)	$ 0.16
Diluted net (loss) income per common share
Diluted (USD per share)	$ (0.08)	$ 0.16
Potentially dilutive securities excluded from computation of earnings per share	1,563,857	234,365

Selected Balance Sheet Data (De

Selected Balance Sheet Data (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Sep. 30, 2023
Accounts receivable, net:
Accounts receivable	$ 66,873	$ 61,880
Less allowance for credit losses	1,407	1,693
Less reserve for future credit returns and pricing adjustments	4,025	4,190
Accounts receivable, net	61,441	55,997
Inventories:
Raw materials	28,649	29,974
Work in process	130	66
Finished goods	38,811	44,356
Inventories	$ 67,590	$ 74,396

Goodwill and Other Identifiab_3

Goodwill and Other Identifiable Intangible Assets, Net (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Sep. 30, 2023
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	$ 436,068		$ 435,897
Accumulated amortization	(165,147)		(158,813)
Net	270,921		277,084
Amortization expense	6,591	$ 6,957
Goodwill	342,424		341,593
Purchased and Core Technology
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	85,080		85,032
Accumulated amortization	(60,833)		(59,833)
Net	24,247		25,199
License Agreements
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	112		112
Accumulated amortization	(112)		(112)
Net	0		0
Patents and Trademarks
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	40,035		39,957
Accumulated amortization	(20,421)		(19,888)
Net	19,614		20,069
Customer Relationships
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	309,241		309,196
Accumulated amortization	(82,181)		(77,380)
Net	227,060		231,816
Non-compete Agreements
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	600		600
Accumulated amortization	(600)		(600)
Net	0		0
Order backlog
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	1,000		1,000
Accumulated amortization	(1,000)		(1,000)
Net	0		$ 0
Cost of Sales and General and Administrative Expense
Finite-Lived Intangible Assets [Line Items]
Amortization expense	$ 6,200	$ 6,500

Goodwill and Other Identifiab_4

Goodwill and Other Identifiable Intangible Assets, Net (Additional Information) (Details) $ in Thousands	3 Months Ended
	Dec. 31, 2023 USD ($) segment	Sep. 30, 2023 USD ($)
Goodwill [Line Items]
Number of Reportable Segments | segment	2
Goodwill	$ 342,424	$ 341,593
Enterprise Routers
Goodwill [Line Items]
Goodwill	32,700
Console Servers
Goodwill [Line Items]
Goodwill	57,100
OEM Solutions
Goodwill [Line Items]
Goodwill	64,600
Infrastructure Mgmt.
Goodwill [Line Items]
Goodwill	20,400
SmartSense
Goodwill [Line Items]
Goodwill	48,900
Ventus
Goodwill [Line Items]
Goodwill	118,600
IoT Products & Services Segment
Goodwill [Line Items]
Goodwill	174,524	173,957
IoT Solutions Segment
Goodwill [Line Items]
Goodwill	$ 167,900	$ 167,636

Goodwill and Other Identifiab_5

Goodwill and Other Identifiable Intangible Assets, Net (Amortization Expense) (Details) $ in Thousands	Dec. 31, 2023 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
2024 (nine months)	$ 19,058
2025	21,781
2026	21,549
2027	20,593
2028	20,411
2029	$ 18,355

Goodwill and Other Identifiab_6

Goodwill and Other Identifiable Intangible Assets, Net (Goodwill Rollforward) (Details) $ in Thousands	3 Months Ended
	Dec. 31, 2023 USD ($)
Goodwill [Roll Forward]
Beginning balance	$ 341,593
Foreign currency translation adjustment	831
Ending balance	342,424
IoT Products & Services Segment
Goodwill [Roll Forward]
Beginning balance	173,957
Foreign currency translation adjustment	567
Ending balance	174,524
IoT Solutions Segment
Goodwill [Roll Forward]
Beginning balance	167,636
Foreign currency translation adjustment	264
Ending balance	$ 167,900

Indebtedness - Narrative (Detai

Indebtedness - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 07, 2023	Dec. 22, 2021
Line of Credit Facility [Line Items]
Revolving loan maximum borrowing capacity			$ 215,000
Debt instrument, margin spread on LIBOR Rate	2.50%
Credit Facility [Domain] | Line of Credit
Line of Credit Facility [Line Items]
Debt instrument, covenant, leverage ratio, minimum	3
Debt instrument, covenant, liquidity ratio, total net leverage ratio	3
Debt instrument, covenant, holiday, exception	3.50
Prior Credit Facility
Line of Credit Facility [Line Items]
Debt issuance costs		$ 9,700
December 7, 2023 Credit Agreement
Line of Credit Facility [Line Items]
Debt issuance costs		1,300
Term loan
Line of Credit Facility [Line Items]
Revolving loan maximum borrowing capacity			350,000
Weighted average interest rate on debt	7.96%
Term loan | Base Rate | Federal Funds Rate
Line of Credit Facility [Line Items]
Debt instrument, margin spread on LIBOR Rate	0.50%
Term loan | Base Rate | LIBOR
Line of Credit Facility [Line Items]
Debt instrument, margin spread on LIBOR Rate	1%
Revolving loan
Line of Credit Facility [Line Items]
Revolving loan maximum borrowing capacity		250,000	35,000
Line of credit facility, accordion feature, increase limit		95,000
Line of credit facility, unused capacity, commitment fee percentage	0.30%
Revolving loan | Minimum
Line of Credit Facility [Line Items]
Line of credit facility, unused capacity, commitment fee percentage	0.20%
Revolving loan | Maximum
Line of Credit Facility [Line Items]
Line of credit facility, unused capacity, commitment fee percentage	0.35%
Revolving loan | Benchmark Rate | Minimum
Line of Credit Facility [Line Items]
Debt instrument, margin spread on LIBOR Rate	1.75%
Revolving loan | Benchmark Rate | Maximum
Line of Credit Facility [Line Items]
Debt instrument, margin spread on LIBOR Rate	2.75%
Revolving loan | Base Rate | Minimum
Line of Credit Facility [Line Items]
Debt instrument, interest rate, effective percentage	0%
Debt instrument, margin spread on LIBOR Rate	0.75%
Revolving loan | Base Rate | Maximum
Line of Credit Facility [Line Items]
Debt instrument, margin spread on LIBOR Rate	1.75%
Letter of Credit
Line of Credit Facility [Line Items]
Revolving loan maximum borrowing capacity		$ 10,000	10,000
Swingline Credit Facility
Line of Credit Facility [Line Items]
Revolving loan maximum borrowing capacity			$ 10,000

Indebtedness - Schedule of Long

Indebtedness - Schedule of Long-Term Debt (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 07, 2023	Sep. 30, 2023	Dec. 22, 2021
Debt Instrument [Line Items]
Total loans	$ 196,000		$ 213,625
Less unamortized issuance costs	(1,316)		(10,051)
Less current maturities of long-term debt	0		(15,523)
Total long-term debt, net of current portion	194,684		188,051
Revolving loan maximum borrowing capacity				$ 215,000
December 7, 2023 Credit Agreement
Debt Instrument [Line Items]
Debt issuance costs		$ 1,300
Prior Credit Facility
Debt Instrument [Line Items]
Debt issuance costs		9,700
Revolving loan
Debt Instrument [Line Items]
Total loans	196,000
Revolving loan maximum borrowing capacity		$ 250,000		35,000
Term loan
Debt Instrument [Line Items]
Total loans	$ 0		$ 213,625
Revolving loan maximum borrowing capacity				$ 350,000

Segment Information (Details)

Segment Information (Details) $ in Thousands	3 Months Ended
	Dec. 31, 2023 USD ($) numberOfOperatingSegments segment	Dec. 31, 2022 USD ($)
Segment Reporting Information [Line Items]
Number of Reportable Segments | segment	2
Total Revenue	$ 106,089	$ 109,306
Gross Profit	61,100	61,521
Operating income (loss)	12,133	11,963
Depreciation and amortization	$ 8,051	8,112
IoT Products & Services Segment
Segment Reporting Information [Line Items]
Number of Operating Segments | numberOfOperatingSegments	4
Total Revenue	$ 82,023	84,342
Gross Profit	43,859	46,021
Operating income (loss)	10,341	12,683
Depreciation and amortization	$ 3,098	3,292
IoT Solutions Segment
Segment Reporting Information [Line Items]
Number of Operating Segments | numberOfOperatingSegments	2
Total Revenue	$ 24,066	24,964
Gross Profit	17,241	15,500
Operating income (loss)	1,792	(720)
Depreciation and amortization	$ 4,953	$ 4,820

Segment Information Expended fo

Segment Information Expended for Property, Plant and Equipment (Details) - USD ($) $ in Thousands		3 Months Ended
		Dec. 31, 2023	Dec. 31, 2022
Segment Reporting Information [Line Items]
Inventory Transfer To Property, Plant And Equipment		$ 1,105	$ 1,512
Property, Plant and Equipment, Additions		219	963
IoT Products & Services Segment
Segment Reporting Information [Line Items]
Property, Plant and Equipment, Additions		37	637
IoT Solutions Segment
Segment Reporting Information [Line Items]
Property, Plant and Equipment, Additions	[1]	$ 182	$ 326
[1] * Excluded from these amounts are $1,105 and $1,512 of transfers of inventory to property plant and equipment for subscriber assets for the three months ended December 31, 2023 and 2022, respectively.

Segment Information Total Asset

Segment Information Total Assets (Details) - USD ($) $ in Thousands		Dec. 31, 2023	Sep. 30, 2023
Segment Reporting, Asset Reconciling Item [Line Items]
Assets		$ 828,662	$ 835,531
IoT Products & Services Segment
Segment Reporting, Asset Reconciling Item [Line Items]
Assets		382,874	384,018
IoT Solutions Segment
Segment Reporting, Asset Reconciling Item [Line Items]
Assets		414,240	419,820
Unallocated
Segment Reporting, Asset Reconciling Item [Line Items]
Assets	[1]	$ 31,548	$ 31,693
[1]Unallocated consists of cash and cash equivalents.

Revenue - Disaggregation of Rev

Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Unearned Revenue (Details)
Total Revenue	$ 106,089	$ 109,306
North America, primarily the United States
Unearned Revenue (Details)
Total Revenue	79,695	83,465
Europe, Middle East & Africa
Unearned Revenue (Details)
Total Revenue	14,390	15,877
Rest of world
Unearned Revenue (Details)
Total Revenue	12,004	9,964
Transferred at a point in time
Unearned Revenue (Details)
Total Revenue	79,394	85,486
Transferred over time
Unearned Revenue (Details)
Total Revenue	$ 26,695	$ 23,820

Revenue - Additional Informatio

Revenue - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Sep. 30, 2023
Unearned Revenue (Details)
Amortization	$ 1	$ 0.9
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-04-01
Unearned Revenue (Details)
Remaining performance obligation, period	12 months
Equipment
Unearned Revenue (Details)
Contract assets	$ 16.7		$ 16.6

Revenue - Unearned Revenue (Det

Revenue - Unearned Revenue (Details) - USD ($) $ in Millions	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Sep. 30, 2023	Sep. 30, 2022
Unearned Revenue (Details)
Unearned Revenue	$ 35	$ 23	$ 27.9	$ 21.6
Contract with Customer, Liability, Revenue Recognized	$ 7.4	$ 6.1

Revenue - Performance Obligatio

Revenue - Performance Obligations (Details) $ in Millions	Dec. 31, 2023 USD ($)
Revenue from Contract with Customer [Abstract]
Remaining performance obligation	$ 156.9
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation	156.9
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-04-01
Revenue from Contract with Customer [Abstract]
Remaining performance obligation	$ 67.5
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation, period	12 months
Remaining performance obligation	$ 67.5
Minimum | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-04-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation, period	2 years
Maximum | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-04-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation, period	5 years

Income Taxes (Details)

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Income Tax Disclosure [Abstract]
Income tax provision (benefit)	$ 222	$ (230)
Income tax benefit specific to the period	$ 200

Income Taxes (Unrecognized Tax

Income Taxes (Unrecognized Tax Benefits) (Details) $ in Thousands	3 Months Ended
	Dec. 31, 2023 USD ($)
Unrecognized tax benefits that would impact effective tax rate	$ 3,000
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]
Unrecognized tax benefits, beginning balance	3,162
Decreases related to expiration of statute of limitations	(32)
Unrecognized tax benefits, ending balance	3,130
Maximum
Unrecognized tax benefits that would decrease next twelve months	$ 400

Product Warranty Obligation (De

Product Warranty Obligation (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Standard Product Warranty Accrual [Roll Forward]
Beginning balance	$ 772	$ 886
Warranties accrued	94	90
Settlements made	(85)	(54)
Ending balance	$ 781	$ 922

Leases - Supplemental Balance S

Leases - Supplemental Balance Sheet (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Sep. 30, 2023
Assets and Liabilities, Lessee [Abstract]
Operating lease other non-current asset	$ 12,187	$ 12,876
Total lease assets	12,187	12,876
Operating lease other current liabilities	3,216	3,352
Operating lease other non-current liability	13,333	13,989
Total lease liabilities	$ 16,549	$ 17,341

Leases - Lease Cost (Details)

Leases - Lease Cost (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Lease, Cost [Abstract]
Operating lease cost	$ 891	$ 904
Variable lease cost	317	309
Short-term Lease, Cost	27	25
Total lease cost	$ 1,235	$ 1,238

Leases - Other Information (Det

Leases - Other Information (Details)	Dec. 31, 2023
Weighted average remaining lease term [Abstract]
Weighted average remaining lease term- operating leases	6 years 3 months 18 days
Weighted Average Discount Rate Leases [Abstract]
Weighted average discount rate - operating leases	4.50%

Leases - Maturity of Operating

Leases - Maturity of Operating Lease Liability (Details) $ in Thousands	Dec. 31, 2023 USD ($)
Lessee, Operating Lease, Liability, to be Paid, Fiscal Year Maturity [Abstract]
2024 (nine months)	$ 3,197
2025	3,529
2026	3,139
2027	2,043
2028	1,897
2029	1,840
Thereafter	3,865
Total future undiscounted lease payments	19,510
Less imputed interest	(2,961)
Total reported lease liability	$ 16,549

Stock-Based Compensation (Detai

Stock-Based Compensation (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Jan. 29, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Proceeds from Stock Options Exercised	$ 225	$ 872
Share-based Payment Arrangement, Shares Withheld for Tax Withholding Obligation	87,792	71,951
Tax withholding for share-based compensation	$ 2,100	$ 3,000
Total intrinsic value of all options exercised	400	1,700
Proceeds from employee stock purchase plan transactions	531	594
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Proceeds from Stock Options Exercised	200	$ 900
Total unrecognized compensation cost nonvested awards	$ 4,100
Weighted average period, unrecognized compensation cost, nonvested awards	1 year 6 months
Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total unrecognized compensation cost nonvested restricted stock units	$ 24,200
Weighted average period, unrecognized compensation cost, nonvested awards	2 years 7 months 6 days
Performance Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total unrecognized compensation cost nonvested restricted stock units	$ 1,400
Weighted average period, unrecognized compensation cost, nonvested awards	9 months 18 days
The Purchase Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized			3,425,000
Share-based Compensation Arrangement by Share-based Payment Award, Number of Continuous Days of Service	90 days
Share-based Compensation Arrangement by Share-based Payment Award, Number of Hours Per Week Employed	20 hours
Share-based Compensation Arrangement by Share-based Payment Award, Purchase Price of Common Stock, Percent	85%
Common shares issued to employees	23,665	19,683
Shares available for future issuance	446,562
Proceeds from employee stock purchase plan transactions	$ 500	$ 600
The 2021 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares available for future grants	1,881,637

Stock-Based Compensation (Stock

Stock-Based Compensation (Stock-Based Compensation Expense) (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation before income taxes	$ 3,106	$ 2,868
Income tax benefit	(663)	(599)
Stock-based compensation after income taxes	2,443	2,269
Cost of Sales
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation before income taxes	181	142
Sales and Marketing
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation before income taxes	1,168	851
Research and Development
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation before income taxes	430	448
General and Administrative
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation before income taxes	$ 1,327	$ 1,427

Stock-Based Compensation (Optio

Stock-Based Compensation (Options and Common Shares Reserved for Grant) (Details) - Stock Options $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Dec. 31, 2023 USD ($) $ / shares shares
Options Outstanding [Roll Forward]
Options Outstanding, Beginning Balance (in shares) | shares	1,553
Options Outstanding, Granted (in shares) | shares	87
Options Outstanding, Exercised (in shares) | shares	(19)
Options Outstanding, Forfeited / Canceled (in shares) | shares	(10)
Options Outstanding, Ending Balance (in shares) | shares	1,611
Options Outstanding, Exercisable (in shares) | shares	1,137
Weighted Average Exercise Price [Roll Forward]
Weighted Average Exercise Price, Beginning Balance	$ 18.52
Weighted Average Exercise Price, Granted	24.58
Weighted Average Exercise Price, Exercised	24.04
Weighted Average Exercise Price, Forfeited / Canceled	23.17
Weighted Average Exercise Price, Ending Balance	18.89
Weighted Average Exercise Price, Exercisable	$ 16.89
Weighted Average Remaining Contractual Term [Abstract]
Weighted Average Remaining Contractual Term, Outstanding	3 years 9 months 18 days
Weighted Average Remaining Contractual Term, Exercisable	3 years 3 months 18 days
Aggregate Intrinsic Value, Outstanding | $	$ 12,533	[1]
Aggregate Intrinsic Value, Exercisable | $	$ 10,656	[1]
Closing Stock Price	$ 26
[1]The aggregate intrinsic value represents the total pre-tax intrinsic value, based on our closing stock price of $26.00 as of December 31, 2023, which would have been received by the option holders had all option holders exercised their options as of that date. The intrinsic value of an option is the amount by which the fair value of the underlying stock exceeds its exercise price.

Stock-Based Compensation (Fair

Stock-Based Compensation (Fair Value Assumptions) (Details) - Stock Options - $ / shares	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average per option grant date fair value	$ 12.44	$ 19.98
Assumptions Used For Options Grants [Abstract]
Risk free interest rate, minimum	4.45%	3.89%
Risk free interest rate, maximum	4.68%	3.98%
Expected term	6 years	6 years
Expected volatility rate	46%
Weighted average volatility	46%	46%
Expected dividend yield	0%	0%
Minimum
Assumptions Used For Options Grants [Abstract]
Expected volatility rate		46%

Stock-Based Compensation (Non-V

Stock-Based Compensation (Non-Vested Options) (Details) shares in Thousands	3 Months Ended
	Dec. 31, 2023 $ / shares shares
Restricted Stock Units
Nonvested Number of Restricted Stock Units [Roll Forward]
Number of Restricted Stock Units, Beginning Balance | shares	846
Number of Restricted Stock Units, Granted | shares	302
Number of Restricted Stock Units, Vested | shares	(198)
Number of Restricted Stock Units, Canceled | shares	(9)
Number of Restricted Stock Units, Ending Balance | shares	941
Nonvested Restricted Stock Units, Weighted Average Grant Date Fair Value per Common Share [Roll Forward]
Restricted Stock Units, Weighted Average Grant Date Fair Value per Common Share, Beginning Balance | $ / shares	$ 30.56
Restricted Stock Units, Weighted Average Grant Date Fair Value per Common Share, Granted | $ / shares	24.55
Restricted Stock Units, Weighted Average Grant Date Fair Value per Common Share, Vested | $ / shares	26.87
Restricted Stock Units, Weighted Average Grant Date Fair Value per Common Share, Canceled | $ / shares	32.07
Restricted Stock Units, Weighted Average Grant Date Fair Value per Common Share, Ending Balance | $ / shares	$ 29.39
Performance Shares
Nonvested Number of Restricted Stock Units [Roll Forward]
Number of Restricted Stock Units, Beginning Balance | shares	135
Number of Restricted Stock Units, Granted | shares	122
Number of Restricted Stock Units, Vested | shares	(30)
Number of Restricted Stock Units, Canceled | shares	(7)
Number of Restricted Stock Units, Ending Balance | shares	220
Nonvested Restricted Stock Units, Weighted Average Grant Date Fair Value per Common Share [Roll Forward]
Restricted Stock Units, Weighted Average Grant Date Fair Value per Common Share, Beginning Balance | $ / shares	$ 37.72
Restricted Stock Units, Weighted Average Grant Date Fair Value per Common Share, Granted | $ / shares	24.59
Restricted Stock Units, Weighted Average Grant Date Fair Value per Common Share, Vested | $ / shares	37.11
Restricted Stock Units, Weighted Average Grant Date Fair Value per Common Share, Canceled | $ / shares	25.15
Restricted Stock Units, Weighted Average Grant Date Fair Value per Common Share, Ending Balance | $ / shares	$ 30.92