Segment Information

3 Months Ended

Dec. 31, 2022

Segment Reporting [Abstract]

SEGMENT INFORMATION

SEGMENT INFORMATION

We have two reportable segments: IoT Products & Services and IoT Solutions. Our IoT Products & Services business is structured to include four operating segments, each with a segment manager. These four operating segments are:

•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 (also 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 module, 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.

Following the acquisition of Ventus on November 1, 2021, IoT Solutions is now comprised of two operating segments:

•SmartSense - offers wireless temperature and other condition-based monitoring services for perishable goods such as food or medicine, as well as employee task management services.

•Ventus - provides managed network as a service ("MNaaS") solutions that simplify the complexity of enterprise wide area network ("WAN") connectivity via wireless and fixed line solutions.

The operating segments included in each reportable segment have similar qualitative and quantitative factors which allow us to aggregate them under each 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 margins. Our CEO is our Chief Operating Decision Maker and reviews and makes business decisions using consolidated information including operating income and gross profit.

8. SEGMENT INFORMATION (CONTINUED)

Summary operating results for each of our segments were (in thousands):

	Three months ended December 31,
	2022		2021
Revenue
IoT Products & Services	$	84,342	$	65,744
IoT Solutions	24,964		18,513
Total revenue	$	109,306	$	84,257
Gross Profit
IoT Products & Services	$	46,021	$	35,675
IoT Solutions	15,500		12,206
Total gross profit	$	61,521	$	47,881
Operating Income (Loss)
IoT Products & Services	$	12,683	$	4,116
IoT Solutions	(720)		(317)
Total operating income (loss)	$	11,963	$	3,799
Depreciation and Amortization
IoT Products & Services	$	3,292	$	3,629
IoT Solutions	4,820		4,233
Total depreciation and amortization	$	8,112	$	7,862

Total expended for property, plant and equipment was (in thousands):

	Three months ended December 31,
	2022		2021
IoT Products & Services	$	637	$	454
IoT Solutions*	326		—
Total expended for property, plant and equipment	$	963	$	454

* Excluded from this amount is $1,512 and $699 of transfers of inventory to property plant and equipment for subscriber assets for the three months ended December 31, 2022 and 2021, respectively.

Total assets for each of our segments were (in thousands):

	December 31, 2022		September 30, 2022
IoT Products & Services	$	397,108	$	390,128
IoT Solutions	426,553		428,867
Unallocated*	30,949		34,900
Total assets	$	854,610	$	853,895

*Unallocated consists of cash and cash equivalents.