Digi Expands Annual Recurring Revenue by 60% Through Strategic Particle Acquisition
Digi International has made a decisive move to reshape its competitive position in the Internet of Things market. The Hopkins, Minnesota-based provider of mission-critical IoT connectivity solutions announced its acquisition of Particle Industries for $50 million—a transaction that immediately increases the company’s Annual Recurring Revenue (ARR) by more than 60% and signals a fundamental shift toward subscription-based, embedded-as-a-service business models.
The acquisition addresses a persistent challenge facing enterprises deploying intelligent connected devices: the overwhelming complexity of integrating hardware, connectivity, application development, edge computing, and cloud infrastructure into a unified platform. For product managers and engineering teams, each of these layers typically requires separate vendor relationships, integration efforts, and ongoing management overhead—often derailing time-to-market objectives and inflating total cost of ownership.
What Particle Brings to the Digi Portfolio
Particle currently generates approximately $20 million in ARR through its subscription-based edge-to-cloud application infrastructure, growing at double-digit rates annually. This performance demonstrates validated product-market fit in a segment where recurring revenue models remain challenging to execute. For context, Digi’s IoT Products and Services segment reported $32 million in ARR as of September 30, 2025, meaning this single acquisition substantially transforms the segment’s revenue profile.
The Particle platform offers a differentiated approach to cellular IoT connectivity—developers can deploy devices that automatically select optimal carriers across 350+ global cellular networks with a single line of code, eliminating the traditional complexity of managing multiple carrier contracts and SIM provisioning. Since launching in 2014, more than 250,000 developers have used Particle’s infrastructure to build intelligent devices, creating a substantial developer ecosystem that Digi now inherits.
Quantified Business Outcomes Across Verticals
The acquisition announcement highlighted several customer deployments that illustrate the platform’s versatility and impact. An oil and gas operator achieved a 40% production increase and 70% reduction in service trips through predictive maintenance capabilities enabled by Particle’s edge-to-cloud infrastructure. An energy company realized 40% ROI retrofitting water heaters into grid-interactive storage assets while generating virtual power plant capacity. An emissions monitoring provider deployed methane detection systems delivering 80% reductions versus conventional solutions, and a spa manufacturer captured a 6% retail margin lift by offering connected product experiences.
These outcomes reflect the economic value proposition of embedded intelligence when deployment friction is removed—a core thesis behind the subscription model that Particle pioneered and Digi now scales.
Strategic Implications for the Combined Entity
“This acquisition positions us to lead the shift toward intelligent, connected product platforms and accelerates annual recurring revenue growth for Digi,” said Ron Konezny, President and CEO of Digi International. The integration strategy focuses on combining Particle’s multi-radio capabilities, application infrastructure, and edge AI functionality with Digi’s ConnectCore embedded modules and XBee wireless solutions.
Particle CEO Zach Supalla emphasized the complementary nature of the combination: “Our customers gain the dependability and global scale Digi has been delivering for more than 40 years combined with the innovation, ease-of-use, and developer friendliness that has been Particle’s mainstay for the last decade.”
The transaction, funded through Digi’s existing credit facility and advised by Moelis & Company, positions the combined organization to cross-sell comprehensive embedded-as-a-service offerings through Digi’s established global sales channels and partner ecosystem. Digi plans to provide updated fiscal 2026 guidance incorporating the acquisition impact when reporting first quarter earnings on February 4, 2026.
About Digi International
Digi International (NASDAQ: DGII) is a leading global provider of IoT connectivity products, services, and solutions. It helps companies create next generation connected products and deploy and manage critical communications infrastructures in demanding environments with high levels of security and reliability. Founded in 1985, Digi has helped customers connect more than 100 million things and counting. For more information, visit www.digi.com.
About Particle
Particle is the leading application infrastructure for intelligent devices, helping thousands of companies bring intelligence to the edge. Particle provides everything you need to deploy software and models to an Edge AI, edge computing, or IoT product in one tightly-integrated platform. As part of Digi International, Particle continues its mission to make IoT accessible and scalable for businesses of all sizes. For more information, visit www.particle.io.
