Digi International announced on February 25, 2026 that it has launched a Model Context Protocol (MCP) server that plugs directly into its Digi Remote Manager and Genesis platforms. The new server lets customers connect large‑language‑model products such as Claude and other enterprise AI assistants to Digi’s device‑management ecosystem, enabling natural‑language queries, automated workflows, and configuration insights for connected device fleets.
The MCP server is a key extension of Digi’s subscription‑first strategy. By embedding AI capabilities into its core management software, Digi aims to increase attach rates and deepen customer engagement across its hardware‑software stack. The ability to query devices in plain language and trigger automated actions is expected to drive higher recurring‑revenue volumes and improve customer retention, supporting the company’s transition from a hardware vendor to an integrated IoT operating system provider.
Digi’s Q1 2026 earnings, released on February 4, 2026, provide context for the launch. Revenue rose 18% year‑over‑year to $122 million, while Annual Recurring Revenue (ARR) grew 31% to $157 million. Operating margin slipped slightly due to higher inventory‑related expenses, but the favorable product‑margin mix and operating‑expense leverage helped maintain profitability. The MCP server launch aligns with this momentum, positioning Digi to capture additional recurring revenue from its growing subscription base.
Segment data from the same earnings report shows that “IoT Product & Services” generated $86 million, up 11% YoY, and “IoT Solutions” produced $36 million, up 39% YoY. The MCP server falls under the IoT Solutions umbrella, and its AI‑enabled capabilities are expected to accelerate the adoption of Digi’s managed‑services offerings, further boosting the high‑margin recurring‑revenue segment.
CEO Ron Konezny highlighted the strategic value of the new server, saying, “With the launch of our MCP server for Digi Remote Manager and Genesis, we are giving customers a powerful new way to interact with their connected environments using the AI tools they already trust, unlocking faster decisions, streamlined operations, and new levels of automation across the enterprise.” The announcement follows other recent milestones, including SOC 2 Type 2 compliance certification and the rollout of a new eSIM‑enabled cellular router solution.
While the MCP server launch itself did not trigger an immediate market reaction, Digi’s overall positive trajectory—strong Q1 earnings, a 31% jump in ARR, and the acquisition of Particle for approximately $20 million in ARR—has reinforced investor confidence in the company’s subscription‑first strategy. The launch is seen as a natural extension of that strategy, further differentiating Digi’s platform in the competitive industrial IoT market.
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