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Segment Information and Major Customers | 12 Months Ended
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Sep. 30, 2021
Segment Reporting [Abstract] |
SEGMENT INFORMATION AND MAJOR CUSTOMERS | SEGMENT INFORMATION AND MAJOR CUSTOMERS We have two reportable operating segments: (i) IoT Products & Services and (ii) IoT Solutions. This determination was made by considering both qualitative and quantitative information. The qualitative information included, but was not limited to, the following: the nature of the products and services and customers differ between the two segments, discrete financial information is available through operating income for both segments and the Chief Operating Decision Maker is reviewing both segments’ financial information separately to make decisions about the allocation of resources. Effective with the reorganization announcement on October 7, 2020 (see Note 1 0), our IoT Products & Services business is now structured to include four operating segments, each with a segment manager. IoT Products & Services Our IoT Products & Services segment is composed of the following four operating segments: •Cellular Routers - box devices (fully enclosed) that provide connectivity typically in a place where the device can be plugged in exclusively using cellular communications. •Console Servers - similar to cellular routers except they are exclusively for edge computing installations and data center applications exclusively using cellular communications. •OEM Solutions - Original Equipment Manufacturers ("OEM") will be a chip, rather than a boxed device. This can come in the form of a stand-alone chip, or from a systems-on-module ("SOMs"). While cellular connectivity is used, other communication protocols can be used such as Zigbee, Bluetooth or Radio-Frequency ("RF") based on application. •Infrastructure Management - includes battery operated, cellular enabled connect sensors as well as other types of console server applications that are more Digi Accelerated Linux ("DAL") based than Console Servers. This operating segment has some products that do not use cellular communications, but a large part of this segment does use cellular communications. As the four operating segments have similar qualitative and quantitative factors, they are aggregated under the IoT Products & Services 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 income and gross profit. Our CODM reviews and makes business decisions which includes a primary review of operating income but also includes gross profit. Starting in the quarter ended December 31, 2020, the shared general and administrative costs are now allocated to each operating segment. Thus, our measure of segment profit or loss used by our CODM changed. As a result, our disclosed measure of segment operating income (loss) has been updated for all periods presented. The change to the business segment operating income aligns with the update to how the CODM assesses performance and allocates resources for our business segments. 4. SEGMENT INFORMATION AND MAJOR CUSTOMERS (CONTINUED) IoT Solutions Our IoT Solutions segment offers wireless temperature and other condition-based monitoring services as well as employee task management services. These solutions are focused on these vertical markets: food service, healthcare (primarily pharmacies and hospitals) and supply chain. The solutions are marketed as SmartSense by Digi®. We initially formed, expanded and enhanced our IoT Solutions segment through four acquisitions, the last of which was completed in October 2017. We measure our segment results primarily by reference to revenue and gross profit. IoT Solutions revenue includes product, service and subscription revenue. Summary operating results for each of our segments were as follows (in thousands):
|  |  |  | Year ended September 30,
|  |  |  |  |  | 2021 |  | 2020 |  | 2019
Revenue |  |  |  |  |  |  |  |  |  |
IoT Products & Services |  |  |  |  |  | $ | 264,173 |  |  | $ | 249,530 |  |  | $ | 215,287 |
IoT Solutions |  |  |  |  |  | 44,459 |  |  | 29,741 |  |  | 38,916 |
Total revenue |  |  |  |  |  | $ | 308,632 |  |  | $ | 279,271 |  |  | $ | 254,203 |
Gross Profit |  |  |  |  |  |  |  |  |  |
IoT Products & Services |  |  |  |  |  | $ | 144,472 |  |  | $ | 129,349 |  |  | $ | 100,522 |
IoT Solutions |  |  |  |  |  | 22,185 |  |  | 14,623 |  |  | 18,513 |
Total gross profit |  |  |  |  |  | $ | 166,657 |  |  | $ | 143,972 |  |  | $ | 119,035 |
Operating Income (loss) |  |  |  |  |  |  |  |  |  |
IoT Products & Services |  |  |  |  |  | $ | 18,212 |  |  | $ | 27,216 |  |  | $ | 21,806 |
IoT Solutions |  |  |  |  |  | (7,684) |  |  | (15,899) |  |  | (11,734) |
Total operating income |  |  |  |  |  | $ | 10,528 |  |  | $ | 11,317 |  |  | $ | 10,072 |
Depreciation and Amortization |  |  |  |  |  |  |  |  |  |
IoT Products & Services |  |  |  |  |  | $ | 13,109 |  |  | $ | 11,521 |  |  | $ | 6,102 |
IoT Solutions |  |  |  |  |  | 7,768 |  |  | 7,778 |  |  | 7,294 |
Total depreciation and amortization |  |  |  |  |  | $ | 20,877 |  |  | $ | 19,299 |  |  | $ | 13,396 |
Total expended for property, plant and equipment was as follows (in thousands):
| Year ended September 30,
| 2021 |  | 2020 |  | 2019
IoT Products & Services | $ | 2,257 |  |  | $ | 878 |  |  | $ | 8,863 |
IoT Solutions* | — |  |  | 21 |  |  | 472 |
Total expended for property, plant and equipment | $ | 2,257 |  |  | $ | 899 |  |  | $ | 9,335 |
* Excluded from this amount is $1.8 million, $1.4 million and $1.1 million of transfers of inventory to property plant and equipment for subscriber assets for the year ended September 30, 2021, 2020 and 2019, respectively. Total assets for each of our segments were as follows (in thousands):
|  | As of September 30,
|  | 2021 |  | 2020
IoT Products & Services |  | $ | 386,934 |  |  | $ | 387,578 |
IoT Solutions |  | 80,165 |  |  | 86,975 |
Unallocated* |  | 152,432 |  |  | 54,129 |
Total assets |  | $ | 619,531 |  |  | $ | 528,682 |
*Unallocated consists of cash and cash equivalents. 4. SEGMENT INFORMATION AND MAJOR CUSTOMERS (CONTINUED) Net property, equipment and improvements by geographic location were as follows (in thousands):
|  | As of September 30,
|  | 2021 |  | 2020
United States |  | $ | 11,941 |  |  | $ | 11,297 |
International, primarily Europe |  | 191 |  |  | 210 |
Total net property, equipment and improvements |  | $ | 12,132 |  |  | $ | 11,507 |
Our U.S. export sales represented 26.2%, 25.1% and 28.5% of revenue for the fiscal years ended September 30, 2021, 2020 and 2019. No single customer exceeded 10% of revenue for any of the periods presented. At September 30, 2020, we had one customer whose accounts receivable balance represented 17.2% of total accounts receivable.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8924-108599 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8981-108599 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8721-108599 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9031-108599 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (f) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (e) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8844-108599 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9038-108599 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 22 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8736-108599 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9054-108599 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8657-108599 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8721-108599 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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