Digi International Inc. (NASDAQ:DGII) Q2 2024 Earnings Call Transcript

Mike Walkley: And then just a follow-up question here on in the script again, on the press release you talked about your focus on M&A to grow the business over time and you guys have done a good job deleveraging with the strong cash flows. Can you just maybe update us on what you’re seeing in the M&A market and opportunities?

Ron Konezny: Yes, there still is a really good set out there. As you know interest rates have climbed a little bit of broader land. They’re not that high in the last 20 years. They’re high and that’s helped fuel a lot of financial buyers, we are seeing financial buyers maybe be more disciplined or less participatory but GDX [ph] are still are still pretty active and the good news on industrial IoT it’s a massive market. There are thousands, if not tens of thousands of IoT privately held companies out there. And so we think we have a good opportunity set. As you mentioned, we are very patient and disciplined. We want to find companies of scale that have good ARR attributes. We have a right to work with and alongside them and we want them to be growing and profitable.

And so in the meantime, we’re trending towards fewer larger opportunities and deleveragings an important part of that. We do our best to trying to really prevent dilution. So we use that as a way of helping clients the acquisitions and so delevering is very important for us to improve our ability to chase larger opportunities should it become available.

Mike Walkley: Makes sense. Thank you.

Operator: I’m showing no further questions at this time. I would now like to turn it back to Ron for closing remarks.

Ron Konezny: Thank you, and really appreciate everybody joining our earnings discussion today and for your continued support. Digi will be in attendance at the B. Riley Conference this quarter as well as Craig-Hallum. So if you are an investor, please contact those authorizations for meetings. A giant thank you to our customers, our distributors, suppliers and our incredible Digi team and have a great day.

Operator: Thank you for your participation in today’s conference. This does conclude the program. You may now disconnect.