<p>Whether and through what path digital innovation can be transformed into corporate financial performance is a key issue in digital transformation research. Most of the existing research has proved that there is a correlation between digitization and performance, but the explanation of “how digital innovation capability releases financial value layer by layer through organizational process and production efficiency" is still insufficient. Based on the dynamic capability theory, this paper divides digital innovation into three dimensions: perception, capture and transformation, and uses the balanced panel data of 418 Chinese listed private enterprises from 2014 to 2023 as samples to test the direct impact of digital innovation on financial performance and the sequential mechanism of 'process optimization-production efficiency'. The results show that digital innovation is generally positively correlated with gross profit margin. The role of R &amp; D intensity is the most stable, and the intensity of capital investment may decrease in the sequential path, indicating that excessive investment will squeeze financial returns; process optimization and production efficiency together constitute an important mechanism for the realization of digital innovation value. The contribution of this paper is to advance the relationship between digital innovation and financial performance from simple linear interpretation to the sequential framework of 'ability formation-process reconstruction-efficiency release-financial results', and at the same time, the variable measurement, sample boundary and causal interpretation are more carefully defined.</p>