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Acquisitions | 12 Months Ended
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Sep. 30, 2025
Business Combinations [Abstract] |
ACQUISITIONS | ACQUISITIONS Fiscal 2025 Acquisition On August 18, 2025, we acquired Jolt for approximately $148.5 million in cash. The acquisition was funded through a combination of cash on hand and debt financing under a draw of $150 million from our existing credit facility committed by BMO Harris Bank N.A. For tax purposes, this acquisition is treated as a stock acquisition. The goodwill therefore is not deductible except for the $11.0 million in carryover tax basis goodwill. We believe this is a complementary acquisition for us as it significantly enhances our IoT Solutions segment by enhancing Digi's SmartSense service portfolio. Costs directly related to the acquisition of $1.9 million incurred in fiscal 2025 were charged to operations and are included in general and administrative expense in our consolidated statements of operations. These acquisition costs include legal, accounting, valuation and investment banking fees. The following table summarizes the fair values of Jolt assets acquired and liabilities assumed as of the acquisition date (in thousands):
Cash |  | $ | 148,487 |
Fair value of net tangible liabilities acquired* |  | $ | (4,694) |
Deferred tax assets from net operating loss carryforwards and other tax attributes |  | 13,798 |
Identifiable intangible assets: |  |
Customer relationships |  | 99,000 |
Purchased and core technology |  | 16,000 |
Trademarks |  | 4,500 |
Deferred tax liability on identifiable intangible assets |  | (30,326) |
Goodwill |  | 50,209 |
Total |  | $ | 148,487 |
*Includes $2.8 million in cash assumed in acquisition. The consolidated balance sheet as of September 30, 2025 reflected the preliminary allocation of the purchase price to the assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition. Purchase price allocations may be subject to future adjustments for the net assets, including intangible assets, acquired working capital balances and income tax assets and liabilities within the one-year measurement period. The fair value of customer relationships was calculated using the multi-period excess earnings method, while purchased and core technology and trademarks were valued using the relief from royalty method. These methodologies utilize forecasts of future revenues and earnings before income taxes, depreciation and amortization, attrition rates, tax rates, discount rates, royalty rates and obsolescence rates. The goodwill of $50.2 million arising from the acquisition consists largely of the synergies and economies of scale expected from combining the operations of Jolt and Digi. The goodwill from this transaction is all included in the IoT Solutions segment. The weighted average useful life for all the identifiable intangibles listed above is estimated to be 15.8 years. For purposes of determining fair value, the existing customer relationships identified above are assumed to have a useful life of 17.0 years, purchased and core technology is assumed to have useful life of 11 years and trademarks are assumed a useful life of 7.5 years. Useful lives for identifiable intangible assets are estimated at the time of acquisition based on the periods of time from which we expect to derive benefits from the identifiable intangible assets. The identifiable intangible assets are amortized using the straight-line method which reflects the pattern in which the assets are expected to be consumed. Jolt's contribution to revenue and operating income during the fiscal year ending September 30, 2025 was not material. In addition, Digi’s net revenue and operating income for the years ended September 30, 2025 and 2024 would not have been materially different from reported results had the acquisition occurred on October 1, 2023.

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