XML 30 R19.htm IDEA: XBRL DOCUMENT
v3.25.2

Stock-Based Compensation | 9 Months Ended
--- | ---
Jun. 30, 2025
Share-Based Payment Arrangement [Abstract] |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION Stock-based awards granted in the first nine months of fiscal 2025 and 2024 were granted under the Digi International Inc. 2021 Omnibus Incentive Plan (as amended and restated, 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 June 30, 2025, there were approximately 3,371,138 shares available for future grants under the 2021 Plan. Cash received from the exercise of stock options was $3.1 million and $1.3 million for the nine months ended June 30, 2025 and 2024, 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 nine months ended June 30, 2025 and 2024, our employees forfeited 109,516 shares and 112,827 shares, respectively, in order to satisfy withholding tax obligations of $3.5 million and $2.8 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 $1.7 million for the nine months ended June 30, 2025 and 2024. Pursuant to the ESPP, 70,976 and 74,760 common shares were issued to employees during the nine months ended June 30, 2025 and 2024, respectively. Shares are issued under the ESPP from treasury stock. As of June 30, 2025, 297,521 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 June 30, |  | Nine months ended June 30,
| 2025 |  | 2024 |  | 2025 |  | 2024
Cost of sales | $ | 199 |  |  | $ | 173 |  |  | $ | 588 |  |  | $ | 529 |
Sales and marketing | 1,316 |  |  | 1,218 |  |  | 3,935 |  |  | 3,594 |
Research and development | 604 |  |  | 517 |  |  | 1,761 |  |  | 1,448 |
General and administrative | 1,755 |  |  | 1,606 |  |  | 5,094 |  |  | 4,522 |
Stock-based compensation before income taxes | 3,874 |  |  | 3,514 |  |  | 11,378 |  |  | 10,093 |
Income tax benefit | (836) |  |  | (724) |  |  | (2,437) |  |  | (2,138) |
Stock-based compensation after income taxes | $ | 3,038 |  |  | $ | 2,790 |  |  | $ | 8,941 |  |  | $ | 7,955 |
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, 2024 |  | 1,382 |  |  | $19.01 |  |  |  |
Granted |  | 63 |  |  | 31.56 |  |  |  |
Exercised |  | (537) |  |  | 16.01 |  |  |  |
Forfeited / Canceled |  | (18) |  |  | 30.81 |  |  |  |
Balance on June 30, 2025 |  | 890 |  |  | $21.45 |  | 3.1 |  | $ | 11,766 |
Exercisable on June 30, 2025 |  | 689 |  |  | $19.82 |  | 2.5 |  | $ | 10,540 |
(1) The aggregate intrinsic value represents the total pre-tax intrinsic value, based on our closing stock price of $34.86 as of June 30, 2025, which would have been received by the option holders had all option holders exercised their options as of that date. 12. STOCK-BASED COMPENSATION (CONTINUED) 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 nine months ended June 30, 2025 and 2024 was $9.6 million and $2.6 million, respectively. 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:
| Nine months ended June 30,
| 2025 |  | 2024
Weighted average per option grant date fair value | $16.23 |  | $12.44
Assumptions used for option grants: |  |  |
Risk free interest rate | 4.31% - 4.38% |  | 4.48% - 4.68%
Expected term | 6.00 years |  | 6.00 years
Expected volatility | 48% |  | 46% - 47%
Weighted average volatility | 48% |  | 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 June 30, 2025, the total unrecognized compensation cost related to non-vested stock options was $2.2 million and the related weighted average period over which it is expected to be recognized is approximately 1.7 years. Non-vested Stock Units The following table presents a summary of our non-vested restricted stock units and performance stock units as of June 30, 2025 and changes during the nine 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, 2024 | 846 |  |  | $ | 30.15 |  |  | 220 |  |  | $ | 30.55 |
Granted | 445 |  |  | 32.22 |  |  | 162 |  |  | 32.64 |
Vested | (265) |  |  | 27.13 |  |  | (54) |  |  | 30.57 |
Canceled | (56) |  |  | 30.43 |  |  | (4) |  |  | 19.78 |
Nonvested on June 30, 2025 | 970 |  |  | $ | 31.92 |  |  | 324 |  |  | $ | 31.71 |
As of June 30, 2025, the total unrecognized compensation cost related to non-vested restricted stock units and performance stock units was $22.7 million and $0.7 million, respectively. The related weighted average period over which these costs are expected to be recognized was approximately 2.0 years and 0.3 years, respectively.

X
- Definition The entire disclosure for share-based payment arrangement. + References Reference 1: http://www.xbrl.org/2003/role/exampleRef -Topic 718 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a)(1) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480429/718-10-50-2 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 718 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/718/tableOfContent Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 718 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480429/718-10-50-2 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 718 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (h)(2) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480429/718-10-50-2 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 718 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (h)(2)(i) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480429/718-10-50-2 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 718 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (l) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480429/718-10-50-2 + Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsSharebasedPaymentsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration