DAKT

On September 2, Daktronics (NASDAQ:DAKT) reported fiscal first-quarter results that included its highest quarterly earnings per share in three years. Diluted EPS jumped 21.2% year over year to $0.40, even though the quarter ran just 13 weeks against 14 a year earlier. Net sales still grew 7.1% to $234.6 million, and gross margin expanded 80 basis points to 30.5%. For a company that spent years grinding through thin margins, that combination is worth a closer look. The strongest growth came from outside Daktronics' traditional wheelhouse. International sales surged 66.1% to $28.4 million, fueled by a major football stadium order in Colombia and a 50-display rollout for a longtime out-of-home customer in Serbia. Transportation sales climbed 29% to $21.4 million, as airports in Los Angeles and Spokane ordered narrow pixel pitch displays and transit agencies in Florida and Houston signed on for new systems. Those two segments carry higher margins than the company's legacy scoreboard business, which helps explain why margins moved even as headline revenue growth looked modest. Daktronics is also layering recurring revenue on top of hardware sales. Camino 8, its real-time graphics engine, debuted at Angel Stadium in April and is set to land in more than 10 NHL, MLS, and NCAA venues this fall. In July, the company launched LiveWorx, a mobile fan engagement platform for high school sports that adds a subscription layer to a business that has historically sold a board once and moved on. The balance sheet backs up the story too: as of August 1, Daktronics held $154.6 million in cash against just $10.5 million in debt, generated $27.5 million in free cash flow for the quarter, and carried a backlog that has topped $300 million for six straight quarters. Management used some of that cash to repurchase 225,500 shares at $19.56 apiece, on top of $29.9 million in buybacks over the last five quarters. Not every line moved in the same direction. New orders fell 19.6% year over year to $191.8 million, which management attributed to large project negotiations still being finalized rather than lost business, with purchase orders expected in the second quarter. High school, park and recreation sales dropped 7.8% to $54.7 million and commercial sales fell 5.3% to $43.7 million, both tied to the timing of project completions. That leaves investors trusting that revenue currently sitting outside the backlog shows up on schedule. Input costs are also creeping higher. Rising RAM and other component prices pushed cost of goods sold up, largely canceling out $3 million in tariff refunds booked this quarter, and Daktronics has started raising prices to offset the pressure. Separately, the company disclosed that the Securities and Exchange Commission is seeking information about Daktronics and NBA player Kawhi Leonard as part of a league investigation into the Los Angeles Clippers, a matter management declined to detail further. Daktronics is also weighing an exit from its customized international transportation business, a move that could threaten its Ireland facility and has already triggered a collective redundancy consultation with employees there. Hedge fund ownership slipped from 25 funds to 21 in the most recent quarter, a modest pullback rather than an exodus. Short interest sits at just 5.12% of float, pointing to limited organized skepticism toward the stock. Shares trade at a forward P/E of 15.43 as of September 10, a multiple that does not obviously price in 21% EPS growth or the margin expansion already underway. That gap between a still-modest valuation and accelerating profitability is the tension worth watching. Daktronics enters its fiscal second quarter with record quarterly profitability, a backlog that has held above $300 million for a year and a half, and new growth engines in international and transportation sales. It also enters that quarter with an order book that shrank on paper, rising input costs, and two open-ended risks in the Kawhi Leonard inquiry and the potential Ireland restructuring. For the growth story to hold, the delayed orders need to convert into purchase orders as management expects in the second quarter. While we acknowledge the potential of DAKT as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: 10 Best Future Stocks to Buy Under $10 and 12 Best Performing Semiconductor Stocks to Invest In. Disclosure: None. Follow Insider Monkey on Google News.

Image source: The Motley Fool. Wednesday, Sept. 2, 2026 at 11:00 a.m. ET Investor Relations - Lindsey Vetter President and Chief Executive Officer - Ramesh Jayaraman Acting Chief Financial Officer - Howard Ian Atkins Operator: Good day, thank you for standing by. Welcome to the Daktronics first Quarter Fiscal Year 27 Financial Results Conference Call. At this time, participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. To ask a question during the session, need to press *11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press *11 again. Please be advised that this conference is being recorded. I would now like to turn the call over to your speaker today, Lindsey Vetter. Please go ahead. Lindsey Vetter: Good morning, everyone. Thank you for participating in our fiscal 27 first quarter earnings conference call. On today's call, we will have Ramesh Jayaraman, our President and Chief Executive Officer and Howard Ian Atkins, our Acting Chief Financial Officer. As a reminder, this presentation will contain forward looking statements under the Private Securities Litigation Reform Act reflecting our expectations and plans about future financial performance and future business opportunities. These forward looking statements reflect the company's expectations or beliefs about future events based on information currently available to us. Of course, actual results could differ. Please refer to Slide 2 of the presentation that accompanies today's call, our press release, and our SEC filings for information on risk factors, uncertainties and expectations that could cause actual results to differ materially from these expectations. We undertake no obligation to publicly update or revise any forward looking statement. During this presentation, we will also refer to non GAAP financial measures. You can find the reconciliation of each non GAAP measure to the directly comparable GAAP measure in the appendix to the accompanying presentation slides. Which may be found on the Investor Relations page of our website at www.daktronics.com. Our earnings release for the fiscal 27 first quarter, which was furnished to the SEC on a Form 8-Ks this morning, also contains certain non GAAP financial measures. Reconciliation of these non GAAP financial measures to the most directly comparable GAAP financial measures as well as a discussion of certain limitations when using non GAAP financial measures are included in the earnings release. Which has been posted separately to the Investor Relations page of our website I will now turn the call over to Ramesh. Ramesh Jayaraman: Thank you, Lindsey, and good morning, everyone. We had a strong start to fiscal 27. and I want to thank our approximately 2.7 thousand employees across the globe for their execution and dedication. Our strategic plan consisting of organic growth, operational excellence, and disciplined capital deployment is working. As reflected in Q1's results in sales, profit expansion, and EPS growth. In Q1, we delivered 7.1% net sales growth. Supported by strong demand across key end markets in the quarter that was 1 week shorter than last year's. We expanded operating income by 7.2% and grew EPS to $0.40 for the quarter. Our new business pipeline remains robust. The year over year bookings and backlog comparison mainly reflects order timing, as we negotiated substantial projects In Q1, that we expect to receive purchase orders for in Q2. Our focus on growth and operational efficiency generated $31.4 million in cash from operations during the quarter. We returned capital to shareholders through share repurchases, and our balance sheet liquidity remains strong. Of the various numerous highlights this quarter, I will talk about 3 today. 1, our recently opened Mexico manufacturing plant is ramping up. And successfully completed its first major production run of our narrow pixel pitch product. And we expect to ship This in late Q2. 2. Around 2,000 our next generation real time 2D/3D graphics rendering engine. That integrates with Daktronics show control debuted at the Angel Stadium for the Los Angeles Angels home opener in early April, is now in full deployment. Starting this fall, Camino 8 will be installed in more than 10 venues across the NHL. MLS, and NCAA football volleyball, and basketball programs. 3rd, and most importantly, we continue augmenting our strong management team with key leadership ads in marketing and procurement, and built muscle as we scale the business. Now let's turn to the next slide on our market verticals for an update in the first quarter. In live events, we actively installed college football and basketball projects ahead of the upcoming season. Including at the University of Illinois, Ohio State, Penn State, and North Carolina. New Camino 8 systems that I mentioned earlier are being installed across a variety of customers across the NHL, MLS, and NCAA volleyball, football, and basketball programs. Live Events remains a highly differentiated business for us. Well positioned to benefit from the shift towards real time graphics and video through Camino 8 and our pipeline continues to be robust in the live events business. Pictured here is the Wake Forest Elite Allegacy Stadium in Winston Salem, North Carolina. In our commercial business, our out of home segment booked a large billboard order along with an airport advertising refresh order from a national customer. Our on premise business is shipping a large fixed-digit replacement program order received in the prior year. Pictured here is the La Crosse Sign Group for QuikTrip. in Onalaska, Wisconsin. In transportation, Q1, we won large intelligent transportation systems or ITS projects, which helped to grow the backlog in the segment. Our airport business won additional narrow pitch orders from Los Angeles International and Spokane International Airports. Our transit business won large orders from regional transit for SunRail in Florida, and a project in Houston. We are seeing strong acceptance of new products and our backlog and pipeline remains solid. Picture here is the Union Station. In Los Angeles, California. In the high school, park and recreation business, we booked several large projects this quarter. Including Round Rock, and Northside Independent School Districts in Texas, Los Angeles Harbor College, and Harrisburg High School in South Dakota. We held our annual video summit for high school users of our control systems. An event built for the high school market that connects educators, with industry professionals and producers of Scholastic and professional life events. The event gives educators practical skills they can apply immediately. Youth sports and the shift to video remain strong secular drivers of demand. Further supported by a competitive differentiation through electronic sports marketing's school curriculum that classroom, and other paid professional services. Our pipeline in the high school parts and business continues to remain strong. Picture here is the Massillon City Schools in Massillon, Ohio. In the international segment, we won a large order in Colombia. For a major football stadium for an outdoor halo display. A long time out of home customer, in Serbia awarded us a large order for an additional 50-display rollout. And our international pipeline remains strong heading into Q2 as especially in stadiums. We continue expanding our presence in specific international markets with recently tailored solutions. Picture here is i-Media, The Metropolitan in Dubai, UAE. In our services business, our control upgrade orders grew. Driven by Camino 8 adoption across our installer customer base. We also launched LiveWorx in late July. A mobile based fan experience platform built for high school sports, that delivers a professional polished experience on the video board that can be run by 1 person. A QR code lets fans join and engage live in instantly. LiveWorx expands our recurring revenue and strengthens our SaaS portfolio ahead of the fall demand season. Our growth strategy remains underpinned by large, attractive end markets. Benefiting from long term secular demand increasing complexity, growing scale, the adoption of video, and fixed digit displays and increasing software and content requirements. And our results backlog, and pipeline reflect that. Let's move to the next slide to provide more specific about our forward looking strategy. Our strategy rests on 3 priorities. Accelerating organic growth, strengthening operational excellence, and deploying capital with discipline to expand profitability and improve returns. On organic growth, we are focused on our core businesses. Where we are uniquely positioned to benefit from the secular shift towards greater complexity scale, and video. We are also selectively expanding into new vertical markets in North America. Growing through software and services, and focusing on driving international growth. On operational excellence, we are getting leaner and sharper every quarter. Improving procurement through data driven strategic sourcing, optimizing our global manufacturing footprint, investing in factory automation, and deploying lean principles across the business. With proven leaders directing each effort. On capital deployment, we are making high return investments in our organic growth and operational efficiency, including our plant network improvements and automation, while sharpening our focus on the m and a pipeline to evaluate complementary products slash solutions vertical markets, and geographies. And we continue to return excess capital to shareholders while preserving flexibility to act when opportunities arise. Let's turn to the next slide for more detail. On these initiatives in the first quarter. We will talk to the strategic execution status under the 3 key pillars, growth, operational excellence, and capital deployment. In addition, we will provide an update on the talent augmentation to our strong management team. Starting with our growth initiatives. Our new order pipeline in our core markets remain strong. As our sales, marketing, and development teams capture customer demand. We are also recruiting to expand into new verticals and channels which allow us to enter the unserved addressable market in North America. And 3rd, as I mentioned, I Camino 8 expansion earlier we are continuing to make strong progress. LA Angels now using Camino advanced visualization in stadium. And starting this fall, Camino 8 will be installed at 10+ venues for the NHL, MLS, NCAA, football, volleyball, basketball. As we look at our operational initiatives, we hired a new global procurement leader and combined our direct and indirect procurement teams. We are leveraging AI to analyze our spend cube across product categories, business segments, and vendors. With results applied to optimize direct and indirect procurement starting in the second half of the year. We are optimizing our manufacturing network. Our Mexico ramp up is progressing per schedule. We are increasing automation and manufacturing with initial focus on The US transportation facility, and our China facility planning is underway. In addition, Daktronics is considering a proposal to exit the highly customized international transportation business. A decision to exit such business would impact the long term viability of our Ireland facility. So today, we inform employees our electronic sergeant facility that we are entering into a collective redundancy consultation process. Looking at the 3rd pillar on capital deployment, we are beginning to invest manufacturing automation to raise efficiency, improve productivity, and reduce production costs. We are planning to have automated vending machine being installed, intended to reduce motion, excess processing, and wait time for metal fabricated enclosure elements used across many of our products. This is a good example of the operational discipline underpinning our margin expansion. We are committed to testing expanding automation with a strong P1 business case and return on invested capital. We are increasing our focus on inorganic growth. At the board level, we have a strategic transactions committee that meets biweekly to review acquisition opportunities in complementary products slash solutions, verticals, and geographies. That can strengthen our organic growth strategy. We have a search underway for a corporate development leader to support this effort. We continue to return capital to investors. Of our $40 million stock buyback authorization we purchased $4.4 million in Q1. Lastly, but most importantly, building our talent is continued focus for our strategic execution. I am proud of our executive team and our employee base as we continue to build the business together. In Q1,, we further aligned key executive compensation tied to performance on long term shareholder value. We have strengthened capabilities with key additional leadership in procurement, marketing, and IT. And we anticipate having a new international leader to join us in Q2. Developing key talent is an integral part of our growth and scaling story. And the executive team and I are intent on identifying the highest potential talent within the company. Now I will turn it over to Howard Ian Atkins, our acting CFO, to take us through the financials. Howard Ian Atkins: Thank you, Ramesh, and good morning, everyone. I am pleased to say that the first quarter was another great quarter. Carrying forward the momentum we had at the end of fiscal 26 into the first quarter with a really good tailwind. The bottom line, if you will, the company earned earnings per share of $0.40 on the quarter. An increase of 21.2% from the first quarter a year ago and our highest quarterly earnings per share in the past 3 years. This result reflects solid operating earnings of $24.9 million up 7.2% from a year ago. Even with 1 less week this quarter than the year ago quarter. This also reflects the cumulative effect of having repurchased an additional 225 thousand shares equal to $4.4 million at economically attractive yields during this last quarter. Our net sales rose 7.1%. Revenue growth would have been well above that if we would have had the extra week this quarter like we had in the first quarter of last year. Remember, we came into this quarter with 1 of our highest quarterly backlogs, $356 million. Our manufacturing and fulfillment teams did a great job efficiently completing revenue over time project orders. And standard immediate revenue orders, approximately 50% of $356 million backlog was fulfilled in the first quarter. Gross profit rose 10% this quarter with gross profit margin rising to 30.5% up 80 basis points from last year. Several factors contributed to the higher gross profit margin. First, as you may remember, our gross profit margin does tend to rise when revenue rises due to some fixed cost operating leverage within gross profit. Second, we also had some mix lift this quarter from sales increases and higher margin transportation in the higher margin transportation and international businesses. Third, we began receiving tariff refunds during the quarter, and expect several more quarters of refunds. We will be recording refunds on a cash basis net of client payments going forward as well as we did in the first quarter. And fourth, rising RAM and sensitive input prices put some upward pressure on cost of goods sold, largely offsetting the tariff refunds in the quarter. We began selectively raising product prices early in the second quarter the quarter that we are in, and we expect to manage through a period of market driven input cost inflation by raising prices with the market and achieving cost savings from procurement and other cost savings initiatives across the supply chain. As mentioned by Ramesh earlier, while orders actually booked, in the first quarter were down from a year ago, we did arrange a few substantial orders which we expect to be booked when we receive the regular purchase orders. Going forward. Our backlog coming into the second quarter was $311 million This was the sixth consecutive quarter in which product backlog exceeded $300 million This amount does not yet include the substantial orders that I mentioned earlier, which should also generate revenue throughout the balance of the year mostly beginning in the third quarter. Our operating expense trends with respect to operating expenses, our selling expense rose $2.2 million in the quarter, in part due to the $2 million commission expense on a large international We expect to see some increase in selling costs as additional producers are onboarded for new market and sales channel rollouts during the course of the year. As a percentage of revenue, selling expenses remained at about 8%. Product development expenses increased $1.4 million from a year ago, in part due to having absorbed about $1 million per quarter of labor costs of XDC for the development of our micro LED CapEx depreciation and amortization at $4.7 million this quarter This will gradually increase as we invest more capital in automation during the course of the year. During the last 3 years, the company averaged about $14 million to $16 million of annual CapEx We expect that to be in the $20 million range over the next few years. Given the high expected returns on these investments. G&A expense increased $1.3 million in the first quarter in part due to consulting, additional management expenses associated with the execution of our business initiatives and our operational excellence programs, which are expected to yield solid results starting in the second half of this year more fully in fiscal 2028. In terms of our earnings overall growth trend in various earnings metrics, over the last 5 quarters show solid growth. Operating income at $24.9 million as I mentioned earlier, exceeding the lower end of our 10% to 12% margin, exceeding the lower end of 10% to 12% target range. EBITDA rising to $29.6 million as I mentioned earlier, in our earnings per share at $0.40 per share. Another key aspect of our first quarter Importantly, we continue to maintain a resilient balance sheet to profitably and flexibly manage growth and risk. Our operating cash flow in the quarter was $31.4 million with free cash flow at $27.5 million after CapEx cash spend. The result of the solid earnings I mentioned in the quarter and the continued efficient management of working capital. Working capital did increase approximately $16 million in the quarter compared to the last quarter of last year. I am sorry. The last quarter a year ago. But that was in line with the higher revenue, so the ratio remained basically constant. During the quarter, we purchased $4.4 million shares at a volume weighted average price of $19.56 per share. Roughly 23% of our net income in the quarter. In the last 5 quarters, the company repurchased $29.9 million worth of shares at a volume weighted average price of $18.04 per share. As a result, primarily of cash generation in excess of CapEx, our end of period cash balance reached $155 million after share repurchases with only $10 million in debt. Let me now briefly address a matter that has been in the media concerning the NBA's investigation of Kawhi Leonard and the Clippers in connection with the league's collective bargaining agreement that many of you may have heard about. As you might expect, we have received requests for information from the MBA Additionally, the Securities and Exchange Commission is seeking information from us concerning the company and Mr. Leonard. We take these requests seriously and are cooperating. At this point, out of respect for the respective processes, we will not be providing further comment. And now let me turn the floor back over to Ramesh. Ramesh Jayaraman: Thank you, Howard. We are off to a strong start for fiscal 27. With continued momentum in sales, operating margin, and EPS. Daktronics is the leading end to end solution provider and I am absolutely proud to serve the company. As outlined in our investor day, we are the market leader in the large format LED industry with a skilled and committed team. Our large end markets are driven by secular demand trends, all growing at 2x-3x GDP. We are executing well on our strategic growth and operational excellence plans towards a committed profitability goals. We are deploying capital responsibly and with discipline to achieve more profitable, sustainable growth with improved resiliency, reliability, and efficiency. And we are deploying this capital to maximize returns to our shareholders. Moving to the next slide. As we move deeper into fiscal 27, we continue to track toward our fiscal 28 targets which we affirm today. First, 7%-10% revenue 3 year CAGR. Second, operating margin in the 10%-12% range. And ensuring our ROIC is in the 17%-20% range. We are pleased with our progress. And really excited about our forward plan. We have a strong backlog. Continued demand across the major end markets, and a clear set of carefully considered execution priorities that support our path forward and our confidence. I will turn the call over to the operator to take your questions. Operator: Thank you. Question or a comment at this time, please press *11 on your telephone. If your question has been answered and you wish to move yourself from the queue, please press *11 again. Our first question comes from Aaron Spychalla with Craig Hallum Capital Group. Your line is open. Aaron Spychalla: Yeah. Good morning, Ramesh and Howard. Thanks for taking the questions. You know, first for us on live events, sounds like some order timing there. Can you just speak to the confidence in closing some of those here in the second quarter? And then, your performance has just been really solid there. You know, any changes you are seeing in win rates or competitive dynamics in that market? Ramesh Jayaraman: Aaron, good to have you on the call. So live events, we had you know, as you know, it is large timing oriented business, and really, it is a timing of the negotiations that are in progress that we expect to be slightly delayed. You know, from Q1 into latter part of Q2. So that is where we kind of stand. With regards to all the other businesses, you know, what we can say is our pipeline continues to be robust. Across the board, and, you know, we are beginning to see the pipeline being shaped up as the weeks and months take shape. So that is where we stand. Aaron Spychalla: Alright. Thanks. And then on, software and services, know, you talked about Camino 8. You know, maybe can you just talk a little bit about some of the goals there, you know, whether it is attach rates or just how, you know, you see margin impact, there as that business grows for you? Ramesh Jayaraman: Yeah. So, you know, I mean, I think for us, fundamentally, when you look at it, we have been, I would say, in the CapEx side of a stadium build or, you know, a new construction that kind of goes on. Really, what we see is, you know, as we look at our 10 year association with the customer from software It really gives us a unique opportunity to go and to start working with them on 2D, 3D graphics, integrating with our show control. And that is a unique opportunity that allows for customers to be able to deploy and use the solutions across the board. We are beginning to see this more and more from our customers. To be involved as a part of the operations, and that is where we are playing. And that is giving, you know, I would say, amplification to Camino 8 as we kind of spoke about. Aaron Spychalla: Brett. Thanks for that. And then maybe 1 last 1 on margins. Howard, how much was the tariff impact in the first quarter? Sounds like you expect some more there, and it does seem early in some of these operational excellence, initiatives. Sounds like some balance between, you know, ASPs and costs, but just how are you thinking about margins trending from here? Howard Ian Atkins: Yeah. So, Aaron, we did in our release and in our comments here, talk about the pluses and the minuses. To answer your question specifically, tariff refund on a cash basis in the first quarter was about $3 million And as we said, you know, we should-- again, that is going to change from 1 quarter to the next, but you know, we expect to get some more in coming quarters because we are you know, accounting for it on a cash basis. And when received, But as I say, there were pluses and minuses in the quarter, including you know, cost increases that we referred to which largely offset the $3 million Alright. Aaron Spychalla: Thanks for taking the questions. I will turn it over. Operator: 1 moment for our next question. Our next question comes from Tom Hayes with ROTH Capital Partners. Your line is open. Tom Hayes: Hey, good afternoon, my guys. Appreciate you guys taking the call, and congratulations on the nice start to the year. Ramesh, I was wondering if you could provide a little bit more color on the New facility, kind of your progress in Q1, your expectations as kind of we progress through the year and what market or opportunities that really kind provide you the you know, when it is fully up and running? Ramesh Jayaraman: Yeah. So, Tom, you know, we are being look at our manufacturing network just across the board. Right? So as we kind of start looking at geopolitical movements, commodity movements, supplier movements, we are looking at the entire stuff to say, you know, how do we basically keep the company rolling? 2, as we really look at our customer demand cycle, you know, build up. I think at the Investor Day, we spoke about some of the installations happening in 14 days. She know what we are also beginning to see is tighter schedules that are happening, for us to go cater. So a combination of our world footprint is a part, and Mexico will play a part. To start with Mexico, we will play a bigger part with the live events business, just in ensuring we are able to cater to the global timeline. So combination for US, China, Mexico, and, obviously, other facilities as we kind of come together go down with those projects will be the first priority. As we get started. So that is where Mexico will be leveraged. And I think as time kind of builds up and we kind of get comfortable with Mexico and the supply chain and, you know, how it builds out, you know, we will see the best use of the best plan to ensure we get best cost leverage to get it in terms of landed cost per square meter. Tom Hayes: Okay. Appreciate that. And then, Howard, on the margin, commentary you provided earlier, I just wanted to kind of dig into that a little bit. It sounds like you expect more tariff refunds this year You have put in some price increases that should offset some of the rising raw material prices So does that kind of equate to holding margin flat to maybe upward as you guys progress? Howard Ian Atkins: You know, again, margin depends on lots of other things. But in terms of those 2 impacts, I think messaging where talking about here is we do expect on a cash basis several more quarters worth of tariff refund And on the RAM and other input costs, you know, it is-- I am sure you understand that is happening now, and our expectation is that we will manage that in a variety of different ways, including some price increases with the market. As you know, we also have a major procurement effort going on right now. So it is, you know, something that we monitor on a day to day basis, frankly. With a view towards offsetting the offsetting the cost as much as we can. Okay. So that is where we are. Appreciate that. Maybe just 1 last 1. Just to mention again Tom. The price increases that I referred to started the second quarter, not in the first quarter. So there was no offset to the input cost inflation in the first quarter not managed yet by price increases. That will start coming through this quarter. Tom Hayes: Okay, great. And maybe just lastly, Ramesh, I think in the early part of the presentation, you discussed the strong order activity in transportation. Just kinda talk about some of the drivers of that Thank you. Ramesh Jayaraman: Yes. I mean, transportation overall as you see the ITS platform, which is the intelligent transport systems. it is the stuff on top of roadways. We, you know, we go through a cycle, and, you know, we have got a decent cycle with the ITS systems that is building up. I think on airports, which is where we kind of forayed into, You know, we have always done the outside of airports--you know, departure places, you know, as people come in. As we forwarded it to the inside, you know, what we are beginning to see is we are beginning to get new orders from more airports, 1. 2 also, you know, expansion orders from the same airports that we have spoken about before. So LAX is a great example. We went through that before. Now we are kind of in the Phase 2, Phase 3 of the build that is beginning to happen. So we feel pretty good about what is kind of building up. And clearly, from mass transit perspective, we are beginning to see some upgrades happening As I just spoke about Florida and other places, Houston, and that is beginning to come. And I think it is coming because of 2 elements. 1, you know, it is a proven fact that, you know, our stuff lasts for a very long time. that is a durability question that happens in transportation. That is evident. 2 is, you know, as some of the new product developments kind of come through, with a narrow pixel line and everything else, we are actually able to expand share with these customers, and that is where we are. Appreciate the color. Thank you. Operator: Again, ladies and gentlemen, if you have a question or a comment at this time, please press *11 on your telephone. 1 moment for our next question. Our next question comes from Anja Soderstrom with Sidoti. Your line is open. Anja Soderstrom: Hi. Thank you for taking my question. So Howard, I just want to-- you said you, the price increases came through in the second quarter, so there is a lag of that. In terms of the high input. Howard Ian Atkins: I am sorry, Anja. I did not get the second half of your question. Anja Soderstrom: No. So you are only increasing the prices in the second quarter to offset the higher input. So there is a lag of that. But is that going to be an ongoing thing? Continue to see a lag? Howard Ian Atkins: So price increases are getting impacted in second quarter. Set this second quarter the first I think the point I am trying to make is that the first quarter did not include any offset to the cost increases from new product increase price increases. We did start raising prices selectively in the so far this quarter, and you will see progressively as we go through the quarter the effect of that in the quarter. Okay. So that should help the margin further in the second quarter and throughout the year? Well, again, there are all kinds of other things going through the margin. As we mentioned, the refunds will go through if they continue. Cost increases will need to be managed properly. But yes, starting this quarter, we will start seeing some price increases impacting the margin. Anja Soderstrom: Okay. Thank you. And then in terms of just your longer term targets with all the moving parts, what gives you a con confidence in that you are gonna be able to achieve that longer term margin profile? Ramesh Jayaraman: Yeah. I think it is a few things. Right? 1, I think looking at, you know, going back to what we spoke about, Anja, you know, in the organic side, it is clearly driven by the growth as well as operational excellence. You know, we look at both sides of the coin. And building towards a growth but also an operational excellence part. So on the growth side, as you guys have seen, you know, things have been going pretty you know, pretty stable in terms of where we are. To what we have been kind of expecting. You know? And I think overall, the secular trends remain strong. We are expanding into new vertical markets that we alluded to the software services gives us stickiness. And, you know, clearly plan is also for more international growth. As we look at building that segment of the business. I think what also gives us confidence is the operational excellence side. Know? And, I mean, you know, as we start looking at procurement, and what we are beginning to do with the data cube and what it is beginning to show us, we have clear opportunities in direct and indirect spend. 2, with the manufacturing network optimization, we will see opportunities as we try to automate That clearly gives us really good returns on investments invested capital that we can see and the lean. So, you know, we are seeing both sides kind of working Down that execution line, and that is gonna be a critical focus for us as we build the business. Anja Soderstrom: Okay. Thank you. That was all for me. Operator: And I am not showing any further questions at this time. I will turn the call back over to Ramesh for any further remarks. Ramesh Jayaraman: Well, thank you, everyone, for joining our call today. We will be participating at the November Raymond James Symposium as well as other investor events coming up. Thank you again for your trust you have placed in us. We are excited about what is to come. Enjoy the last few days of summer and we will speak to you all again in the fall. Have a great day. Operator: Thank you, ladies and gentlemen. We thank you for your participation. This does conclude today's presentation. Today's presentation. You may now disconnect and have a wonderful day. Before you buy stock in Daktronics, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Daktronics wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $421,997!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,413,876!* That performance is why people listen. With a track record of beating the S&P 500 by nearly 5x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of September 9, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Daktronics (DAKT) Q1 2027 Earnings Call Transcript was originally published by The Motley Fool

This article first appeared on GuruFocus. Net Sales: Rose 7.1% in Q1 fiscal 2027, despite the quarter being one week shorter than the prior-year quarter. Earnings Per Share (EPS): Increased 21.2% year-over-year to $0.40, marking the highest quarterly EPS in three years. Operating Income: Expanded 7.2% to $24.9 million. Gross Profit: Rose 10%, with gross profit margin increasing 80 basis points to 30.5%. Operating Cash Flow: Generated $31.4 million in the quarter. Free Cash Flow: Reached $27.5 million after capital expenditures. Backlog: Ended the quarter at $311 million, marking the sixth consecutive quarter above $300 million. Share Repurchases: Purchased $4.4 million of shares (225,000 shares) at a volume-weighted average price of $19.56 per share. Cash and Debt: Ended the period with a cash balance of $155 million and only $10 million in debt. Selling Expenses: Rose $2.2 million, partly due to a $2 million commission expense on a large international order. Product Development Expenses: Increased $1.4 million from a year ago, partly due to absorbing about $1 million per quarter of labor costs for XDC micro-LED development. G&A Expense: Increased $1.3 million due to consulting and additional management expenses. EBITDA: Rose to $29.6 million. Is DAKT fairly valued? Test your thesis with our free DCF calculator. Release Date: September 02, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Daktronics Inc (NASDAQ:DAKT) delivered strong Q1 fiscal 2027 results with 7.1% net sales growth and EPS of $0.40, up 21.2% year-over-year, despite a shorter quarter. Gross profit margin expanded 80 basis points to 30.5%, driven by operational leverage, favorable product mix, and tariff refunds. The company generated robust operating cash flow of $31.4 million and free cash flow of $27.5 million, maintaining a strong balance sheet with $155 million in cash and only $10 million in debt. New product momentum is strong, with Camino 8 graphics engine deployed at Angel Stadium and planned installations at 10+ venues, while the Mexico plant completed its first major production run. The company continues to execute on its strategic plan, including share repurchases ($4.4 million in Q1) and investments in automation, while reaffirming its fiscal 2028 targets of 7-10% revenue CAGR and 10-12% operating margin. Bookings and backlog declined year-over-year due to order timing, with several substantial projects expected to be booked in Q2 rather than Q1. Raw material and input cost inflation largely offset tariff refunds in Q1, pressuring margins, with price increases only beginning in Q2. Operating expenses rose, including a $2 million commission expense on a large international order and increased product development costs, partly due to micro-LED development. The company is considering exiting its highly customized international transportation business, which would impact the long-term viability of its Ennistymon facility and trigger a collective redundancy consultation. The company is facing regulatory inquiries from the NBA and SEC regarding Kawhi Leonard and the Clippers, which could lead to legal or reputational risks. Q: Can you provide more color on the new Mexico facility's progress in Q1 and expectations as we progress through the year? What market opportunity does it provide when fully operational? A: Ramesh Jayaraman (President and CEO) explained that the Mexico facility will initially play a larger role in the live events business to cater to global timelines, working in combination with U.S., China, and other facilities. As the supply chain matures, the company will optimize the network to achieve cost leverage in terms of landed cost per square meter, responding to tighter customer schedules and geopolitical factors. Q: How much was the tariff impact in the first quarter, and how are you thinking about margins trending from here given the balance between ASPs and costs? A: Howard Atkins (Acting CFO) stated that the tariff refund on a cash basis in Q1 was approximately $3 million, with expectations for more refunds in coming quarters. However, raw material and input cost increases largely offset the refunds during the quarter. The company began selectively raising product prices early in Q2 to manage through the period of input cost inflation. Q: Regarding the live events segment, can you speak to the confidence in closing some substantial orders in the second quarter, and are you seeing any changes in win rates or competitive performance? A: Ramesh Jayaraman (President and CEO) noted that the live events business is timing-oriented, with some negotiations delayed from Q1 into the latter part of Q2. He emphasized that the pipeline remains robust across all businesses and is beginning to shape up favorably as the weeks and months progress. Q: Can you talk about the goals for Camino 8 and software/services, including attach rates and the margin impact as that business grows? A: Ramesh Jayaraman (President and CEO) explained that the 10-year customer association from software services provides a unique opportunity to work with customers on 2D/3D graphics integrated with show control. Customers are increasingly involving Daktronics in operations, which is amplifying the adoption of Camino 8 across the installed base. Q: With the price increases starting in Q2 to offset higher input costs, will there continue to be a lag, and should this help margins further in the second quarter? A: Howard Atkins (Acting CFO) clarified that Q1 did not include any offset from new price increases to the cost increases. The company started raising prices selectively in Q2, and the effect will progressively show through the quarter. While other factors affect margins, the price increases will begin impacting margins positively starting this quarter. Q: With all the moving parts, what gives you confidence in achieving the longer-term margin targets? A: Ramesh Jayaraman (President and CEO) cited confidence from both organic growth and operational excellence initiatives. On the growth side, secular trends remain strong with expansion into new vertical markets and international growth. On operational excellence, the company sees clear opportunities in procurement optimization, manufacturing network improvements, automation with strong ROI, and lean processes that support the path toward the fiscal 2028 targets. Q: Can you discuss the drivers behind the strong order activity in the transportation segment? A: Ramesh Jayaraman (President and CEO) highlighted that the ITS (intelligent transportation systems) platform is in a solid cycle. The airport business is winning new orders from additional airports and expansion orders from existing customers like LA airports (phase two and three builds). Mass transit upgrades are occurring in Florida and Houston, driven by the proven durability of Daktronics products and new product developments like the narrow pixel line that expand share with these customers. Q: Regarding the margin commentary, does the expectation of more tariff refunds and price increases equate to holding margins flat or moving upward as the year progresses? A: Howard Atkins (Acting CFO) indicated that margins depend on many factors, but the company expects several more quarters of tariff refunds on a cash basis. The company is managing raw material and input cost increases through a variety of ways, including selective price increases with the market and a major procurement effort, monitoring the situation on a day-to-day basis to offset costs as much as possible. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Interested in Daktronics, Inc.? Here are five stocks we like better. Daktronics delivered a strong fiscal Q1: Revenue rose 7.1% year over year, operating income increased 7.2% to $24.9 million, and EPS climbed 21.2% to $0.40, the company’s highest quarterly EPS in three years. Gross margin expanded 80 basis points to 30.5%. Demand remains solid despite lower bookings: Backlog stood at $311 million, exceeding $300 million for the sixth consecutive quarter. Management attributed weaker bookings primarily to project timing and expects several substantial purchase orders later in Q2, with revenue contributions beginning mostly in Q3. The company is investing while managing cost pressures: Daktronics plans to increase annual capital expenditures to about $20 million for automation and manufacturing capacity, while implementing price increases and procurement savings to offset rising input costs. It reaffirmed fiscal 2028 targets for 7%–10% revenue CAGR, 10%–12% operating margins and 17%–20% ROIC. This Is Why Daktronics Fell 40% In One Day Daktronics (NASDAQ:DAKT) reported fiscal 2027 first-quarter revenue growth, higher operating income and its highest quarterly earnings per share in three years, supported by demand across its major end markets and a backlog that remained above $300 million. President and Chief Executive Officer Ramesh Jayaraman said the company’s strategic plan—centered on organic growth, operational excellence and disciplined capital deployment—was reflected in the quarter’s sales growth, profit expansion and earnings per share performance. The quarter was one week shorter than the comparable period a year earlier. → AST SpaceMobile Is Down 54%—Can FCC Progress and BlueBirds Reverse the Slide? Net sales increased 7.1% year over year, while operating income rose 7.2% to $24.9 million. Earnings per share increased 21.2% to $0.40, which Acting Chief Financial Officer Howard Atkins said was the company’s highest quarterly EPS result in the past three years. Gross profit increased 10%, and gross margin expanded 80 basis points to 30.5%. Daktronics entered the quarter with a $356 million backlog and fulfilled approximately half of that amount during the period. Backlog entering the second quarter was $311 million, marking the sixth consecutive quarter in which product backlog exceeded $300 million. → Palo Alto’s Rally Has One Big Problem Ahead of Earnings While first-quarter bookings declined from a year earlier, management attributed the comparison largely to timing. Jayaraman said the company negotiated several substantial projects during the quarter and expects to receive purchase orders for them in the latter part of the second quarter. Atkins said those orders were not included in the $311 million backlog figure and are expected to generate revenue through the balance of the year, mostly beginning in the third quarter. In live events, Daktronics said it was installing college football and basketball projects for the University of Illinois, Ohio State, Penn State and North Carolina. Its Camino 8 graphics rendering platform debuted at Angel Stadium during the Los Angeles Angels’ home opener in April. The company said Camino 8, which integrates with Daktronics Show Control, is expected to be installed at more than 10 NHL, MLS and NCAA football, volleyball and basketball venues beginning this fall. → Securing AI: 5 Most-Upgraded Stocks From the Q2 Reporting Season Jayaraman characterized the live-events pipeline as robust and said the business is positioned to benefit from demand for real-time graphics and video. He also said the company sees an opportunity to expand its customer relationships beyond initial capital projects through software, graphics and services over what he described as a 10-year customer association. In transportation, the company said it won large intelligent transportation systems projects, helping increase segment backlog. It also cited narrow pixel pitch orders from Los Angeles International Airport and Spokane International Airport, along with transit orders from Sacramento Regional Transit, Florida’s SunRail and a Houston project. Jayaraman said transportation demand has been helped by an intelligent transportation systems cycle, airport expansion projects and upgrades in mass transit. Other first-quarter wins included a bulk billboard order and an airport advertising refresh order in the commercial business, high school and parks-and-recreation projects in Texas, California and South Dakota, and international projects including a football stadium halo display in Colombia and a 50-display rollout for an out-of-home customer in Serbia. The company’s recently opened Mexico manufacturing facility completed its first major production run of narrow pixel pitch products during the quarter, with shipment expected in late in the second quarter. Jayaraman said the plant initially will play a larger role in serving the live-events business and could help Daktronics manage global timelines and optimize landed costs across its U.S., China, Mexico and other facilities. Daktronics also said it is investing in automation, beginning with automated bending machinery for metal-fabricated enclosure components. The company expects capital expenditures to reach about $20 million annually over the next several years, compared with an average of roughly $14 million to $16 million over the past three years. Atkins said depreciation and amortization was $4.7 million in the quarter and should increase gradually as automation investments are made. Management hired a new global procurement leader and combined direct and indirect procurement teams. The company is using artificial intelligence to analyze spending across categories, segments and vendors, with procurement optimization efforts expected to begin in the second half of fiscal 2027. Atkins said consulting and additional management costs tied to business initiatives and operational-excellence programs contributed to higher general and administrative expense, but management expects the efforts to produce results starting in the second half of the year and more fully in fiscal 2028. Daktronics is also considering exiting its highly customized international transportation business. Jayaraman said such a decision would affect the long-term viability of the company’s Ireland facility. The company informed Ireland employees that it is entering a collective redundancy consultation process. Atkins said gross margin benefited from higher revenue, sales mix in higher-margin transportation and international businesses, and tariff refunds. The company received about $3 million of tariff refunds on a cash basis in the first quarter and expects additional refunds in future quarters. However, rising RAM and other input costs largely offset the tariff refund benefit during the period. Daktronics began selectively increasing product prices in the second quarter to address input-cost inflation. Atkins said the first quarter did not receive an offset from those price increases and that their effect should build through the second quarter, while procurement and supply-chain savings are also intended to help manage costs. Operating cash flow totaled $31.4 million, and free cash flow was $27.5 million after capital spending. The company ended the quarter with $155 million in cash and $10 million in debt. It repurchased $4.4 million of shares during the quarter at a volume-weighted average price of $19.56 per share. Over the last five quarters, Daktronics repurchased $29.9 million of shares at an average price of $18.04 per share. The company reaffirmed its fiscal 2028 targets of 7% to 10% three-year revenue compound annual growth, operating margin of 10% to 12%, and return on invested capital of 17% to 20%. Atkins also said Daktronics has received information requests from the NBA related to its investigation involving Kawhi Leonard and the Los Angeles Clippers, as well as a request from the Securities and Exchange Commission seeking information concerning the company and Leonard. He said Daktronics is cooperating and would not provide further comment. Daktronics, Inc (NASDAQ: DAKT) is a leading designer and manufacturer of electronic display systems, video boards, scoreboards and related control systems. Founded in 1968 in Brookings, South Dakota by Al Kurtenbach and Duane Sander, the company has built a reputation for delivering custom visual display solutions to a wide range of markets. Its product portfolio includes large-format LED video displays, programmable message centers, digital billboards, and audio-visual solutions tailored to sports venues, transportation authorities, retail environments and live event producers. The company's primary business activities encompass the engineering, fabrication and installation of display systems for customers around the world. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Daktronics Q1 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for September 2026.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Performance was driven by strong demand across core end markets, achieving 7.1% net sales growth despite the quarter being one week shorter than the prior year. The company is executing a three-pillar strategy focused on organic growth, operational excellence, and disciplined capital deployment to expand profitability. Operational efficiency is being bolstered by a new global procurement leader and the use of AI to analyze spend cubes for direct and indirect cost optimization. Manufacturing footprint optimization is underway, including the ramp-up of the Mexico plant for narrow pixel pitch products and a potential exit from the highly customized international transportation business in Ireland. Strategic positioning is shifting toward higher-margin software and services, highlighted by the full deployment of the Camino 8 real-time graphics engine and the launch of the LiveWorx mobile fan experience platform. Live Events remains a highly differentiated segment, benefiting from a secular shift toward real-time graphics and video complexity in professional and collegiate venues. The transportation segment is seeing strong acceptance of new products, particularly in airport interiors and regional transit upgrades, driven by product durability and narrow pixel pitch technology. Management reaffirmed fiscal 2028 targets, including a 7%-10% revenue 3-year CAGR, 10%-12% operating margins, and 17%-20% ROIC. Guidance assumes that substantial orders negotiated in Q1 will be officially booked in Q2, supporting revenue generation throughout the balance of the year. Capital expenditures are expected to increase to the $20 million range annually over the next few years to fund high-return automation projects in US and China facilities. Management expects to manage market-driven input cost inflation through selective price increases initiated in Q2 and ongoing procurement savings initiatives. The company is sharpening its focus on inorganic growth, with a dedicated board committee reviewing M&A opportunities in complementary products, verticals, and geographies. The company has entered a collective redundancy consultation process at its Ireland facility as it considers exiting the customized international transportation business. Daktronics is cooperating with information requests from the SEC and NBA regarding an investigation involving Kawhi Leonard and the Clippers; management declined further comment. Financial results included $3 million in tariff refunds on a cash basis, which were largely offset by rising RAM and other sensitive input prices during the quarter. Selling expenses included a $2 million commission for a large international order, with expectations for higher selling costs as new producers are onboarded for market expansions. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management attributed the year-over-year bookings decline to the timing of large negotiations rather than competitive loss. Expressed confidence that these substantial projects will convert to purchase orders in the latter part of Q2, maintaining a robust pipeline. Clarified that Q1 margins did not benefit from price increases, as those actions only began selectively in Q2 to offset input cost inflation. Expects several more quarters of cash-basis tariff refunds, though these will be monitored alongside fluctuating commodity costs. The Mexico plant is intended to improve global lead times and provide cost leverage, particularly for the Live Events business. Management is evaluating the entire manufacturing network to optimize landed cost per square meter and mitigate geopolitical and supply chain risks. Growth is being driven by the Intelligent Transportation Systems (ITS) cycle and a successful foray into airport interior displays. Repeat business from major hubs like LAX and new transit projects in Florida and Houston are fueled by demand for narrow pixel pitch technology and long-term product durability.

Daktronics (DAKT) came out with quarterly earnings of $0.4 per share, beating the Zacks Consensus Estimate of $0.35 per share. This compares to earnings of $0.33 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +14.29%. A quarter ago, it was expected that this video display maker would post earnings of $0.23 per share when it actually produced earnings of $0.27, delivering a surprise of +17.39%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. Daktronics, which belongs to the Zacks Electronics - Miscellaneous Products industry, posted revenues of $234.57 million for the quarter ended July 2026, surpassing the Zacks Consensus Estimate by 2.74%. This compares to year-ago revenues of $218.97 million. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Daktronics shares have lost about 2.1% since the beginning of the year versus the S&P 500's gain of 11.5%. While Daktronics has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Daktronics was favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.39 on $235.25 million in revenues for the coming quarter and $1.22 on $898.37 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Electronics - Miscellaneous Products is currently in the top 29% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. SailPoint, Inc. (SAIL), another stock in the broader Zacks Computer and Technology sector, has yet to report results for the quarter ended July 2026. The results are expected to be released on September 9. This company is expected to post quarterly earnings of $0.08 per share in its upcoming report, which represents a year-over-year change of +14.3%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. SailPoint, Inc. 's revenues are expected to be $310.4 million, up 17.4% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Daktronics, Inc. (DAKT) : Free Stock Analysis Report SailPoint, Inc. (SAIL) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Earnings per share of $0.40, up 21.2%, on 7.1% sales growth and 10.6% operating margin Product backlog entering Q2 of $311 million, 6th consecutive quarter backlog exceeded $300 million Quarter-end cash balance of $155 million BROOKINGS, S.D., Sept. 02, 2026 (GLOBE NEWSWIRE) -- Daktronics, Inc. (NASDAQ: DAKT) (“Daktronics” or the “Company”), a recognized industry leader in digital display and control system technology, today reported results for its fiscal 2027 first quarter, ended August 1, 2026. The first quarter of fiscal 2027 reflects a 13-week reporting period, compared with a 14-week reporting period in the prior-year first quarter. Fiscal 2027 Q1 Financial Highlights: Sales of $234.6 million, 7.1% growth from $219.0 million in the first quarter of fiscal 2026, despite one less week Operating income of $24.9 million, 7.2% growth from $23.3 million in the first quarter of fiscal 2026, operating margin of 10.6% Diluted earnings per share (“EPS”) of $0.40, up 21.2% from $0.33 in the first quarter of fiscal 2026, representing the highest quarterly diluted EPS in the past 12 quarters Operating cash flow of $31.4 million, compared to $26.1 million in the first quarter of fiscal 2026, resulting in period-end cash balance of $154.6 million net of $4.4 million share repurchases New orders(1) for products and services of $191.8 million, compared to $238.5 million in the first quarter of fiscal 2026, reflecting the timing of a few substantial orders expected to be booked in the second quarter of fiscal 2027 Product backlog(1) of $311.3 million for the quarter, compared to $360.3 million at the end of the first quarter of fiscal 2026, marking the sixth consecutive quarter-end with product backlog(1) exceeding $300 million Ramesh Jayaraman, Daktronics’ President and Chief Executive Officer, said, “Fiscal 2027 began on a strong note as we continued to drive momentum in sales, operating income, and EPS, maintaining our focus on executing the growth and operational excellence initiatives laid out in our long-term plan. During Q1, we continued to advance our strategic priorities, strengthen customer engagement across our core markets, and build upon a healthy sales pipeline. We delivered 21.2 percent year-over-year increase in EPS on 7.1 percent sales growth and operating margin of 10.6 percent, reflecting the ongoing, successful execution of our planned business growth and operational excellence initiatives.” Tracking to Three-Year PlanThe Company continued to execute across its growth, operational excellence, and capital deployment pillars in support of its fiscal 2028 targets. Progress during the quarter included the following strategic initiatives. Growth. Core markets and the sales pipeline remained strong during the quarter. The Company advanced targeted vertical market expansion initiatives and invested in software and service offerings that enhance customer value and support recurring revenue growth. A diversified product backlog(1) of $311.3 million reflects continued demand across key business segments. Operational Excellence. Manufacturing and supply chain initiatives improved efficiency, increased flexibility, and supported long-term margin expansion. Key initiatives included the ramp-up of manufacturing operations in Mexico, procurement optimization efforts, automation investments, and ongoing lean simplification initiatives across the supply chain. Capital Deployment. Capital allocation remained focused on long-term value creation through investments in plant network improvements and automation designed to enhance operational efficiency and support future growth. The Company also continued returning capital to shareholders through share repurchases, including $4.4 million executed during the first quarter. “Supported by the execution of our strategic initiatives, our pipeline remains robust. At the same time, our operational improvements are making us leaner and smarter every quarter,” said Mr. Jayaraman. “We also continue to evaluate acquisition and disciplined capital deployment opportunities in complementary products/solutions, verticals, and geographies that can enhance our organic growth strategy. We are tracking well toward our fiscal 2028 targets of 7-10% revenue CAGR, 10-12% operating margin, and 17-20% ROIC. None of this would be possible without the trust of our customers and the dedication of our team, and I am grateful for both.” First Quarter Results“Top line growth was solid again this quarter, with net sales increasing 7.1 percent compared to the first quarter of fiscal 2026, despite one less week this quarter,” said Acting Chief Financial Officer Howard Atkins. The increase was led by strong net sales in the Transportation, Live Events, and International business units. Gross profit rose to $71.6 million or 30.5 percent gross profit margin in the first quarter of fiscal 2027, compared with 29.7 percent gross profit margin a year earlier. The increase in gross profit margin included the receipt of tariff refunds in the first quarter, partially offset by higher memory and other price-sensitive input costs. Orders(1) for the first quarter of fiscal 2027 were $191.8 million compared to $238.5 million in the first quarter of fiscal 2026. Q1 orders(1) do not include a few substantial transactions negotiated in Q1, which are expected to book in Q2 as the final purchase orders are received. At $311.3 million, backlog(1) remained above $300 million for the sixth consecutive quarter. Operating expenses were $46.7 million in the first quarter of fiscal 2027, compared to $41.8 million for the first quarter of fiscal 2026. The first quarter of fiscal 2027 included $0.8 million of expenses associated with the acquired XDC display business and microLED development activities, $0.7 million in consulting expenses in support of the operational excellence initiatives, and a $2.0 million commission on a large International project completed during the quarter. Operating margin was 10.6 percent for the first quarter of both fiscal 2027 and fiscal 2026. Interest income (expense), net increased for the first quarter of fiscal 2027 compared to the same period a year ago on our higher-average cash balance, which reached $154.6 million as of August 1, 2026. For the three months ended August 1, 2026, the effective tax rate was 24.3 percent compared to an effective tax rate of 25.9 percent for the three months ended August 2, 2025. The decrease in the effective tax rate was primarily attributable to valuation allowances recorded in fiscal 2026 which did not recur in fiscal 2027. Net income for the first quarter of fiscal 2027 was $19.4 million, compared to a net income of $16.5 million for the first quarter of fiscal 2026. The increase reflects higher gross profit and operating income compared to the prior-year period. For the three months ended August 1, 2026, earnings per diluted share was $0.40 compared to $0.33 in the same period last year. Balance Sheet and Cash Flow Cash and cash equivalents totaled $154.6 million at August 1, 2026, and $10.5 million of total current and long-term debt was outstanding as of that date. The increase in cash compared to the prior year primarily reflected strong operating earnings and continued focus on working capital management efficiency. At the end of the fiscal 2027 first quarter, the Company’s working capital ratio was 2.2 to 1. Accounts receivable as of August 1, 2026 was $154.7 million compared to $118.6 million at the end of fiscal 2026, reflecting higher sales volume and timing of customer billings and collections. In the first three months of fiscal 2027, Daktronics generated $31.4 million of cash from operations and used $4.1 million for purchases of property and equipment. The Company repurchased 225.5 thousand shares of common stock in the first three months of fiscal 2027 at the volume-weighted average price of $19.56, equaling $4.4 million of share repurchases under the $40 million share repurchase authority approved by the Board of Directors in June 2026. The Company has a $71.5 million senior credit facility that includes a cash flow‑backed revolving line of credit. As of August 1, 2026, there were no advances under the loan portion of the line of credit, and the balance of letters of credit outstanding was $1.9 million. Webcast Information The Company will host a conference call and webcast to discuss its financial results today at 10:00 a.m. (Central Time). This call will be broadcast live at http://investor.daktronics.com where related presentation materials will also be posted prior to the conference call. A webcast will be available for replay shortly after the event. About Daktronics Daktronics has strong leadership positions in, and is the world’s largest supplier of large-screen video displays, electronic scoreboards, LED text and graphics displays, and related control systems. The Company excels in the control of display systems, including those that require integration of multiple complex displays showing real-time information, graphics, animation, and video. Daktronics designs, manufactures, markets and services display systems for customers around the world in four domestic business units: Live Events, Commercial, High School Park and Recreation, and Transportation, and one International business unit. For more information, visit the Company's website at: www.daktronics.com. Safe Harbor StatementCautionary Notice: This press release contains certain statements that may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and such statements are subject to the safe harbor created by those sections and the Private Securities Litigation Reform Act of 1995, as amended. All statements, other than historical facts, included or incorporated in this release could be deemed forward-looking statements, particularly statements that reflect our expectations or beliefs of Daktronics, Inc. (the “Company,” “Daktronics,” “we,” or “us”) concerning future events or our future financial performance. You are cautioned not to place undue reliance on forward-looking statements, which are often characterized by discussions of strategy, plans, or intentions or by the use of words such as “may,” “would,” “could,” “should,” “will,” “expect,” “estimate,” “anticipate,” “believe,” “plan,” “forecast,” “project,” “outlook,” “focus,” “goal,” “target,” “transform,” “expand,” “grow,” “predict,” “potential,” “continue,” or “intend,” the negative or other variants of such terms, or other comparable terminology. The Company cautions that these forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from our expectations as a result of various factors, including, but not limited to, changes in economic and market conditions, management of growth, timing and magnitude of future contracts, orders, and capital investment projects, fluctuations in margins, the introduction of new products and technology, the impact of adverse weather conditions, increased regulation, the imposition of tariffs or other trade restrictions, the availability and costs of raw materials, components, and shipping services, geopolitical and governmental actions, expansion into new geographical markets, the Company’s recent leadership transition, transformation initiatives, future strategy, and other risks, trends, and uncertainties described more fully in the Company’s Annual Report on Form 10-K for its 2026 fiscal year (the “Form 10-K”) and in other reports filed with or furnished to the U.S. Securities and Exchange Commission (the "SEC") by the Company. You should carefully consider the trends, risks, and uncertainties described in this press release, the Form 10-K, other reports filed with or furnished to the SEC by the Company, and other press releases and stockholders reports of the Company before making any investment decision with respect to our securities. If any of these trends, risks, or uncertainties continues or occurs, our business, financial condition, or operating results could be materially and adversely affected, the trading prices of our securities could decline, and you could lose part or all of your investment. Forward-looking statements are made in the context of information available as of the date of this press release and are based on our current expectations, forecasts, estimates, and assumptions. The Company disclaims any obligation to update or revise any forward-looking statements to reflect actual results or circumstances or events occurring after this release affecting the forward-looking statements except as may be required by applicable law. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by this cautionary statement. For more information contact:INVESTOR RELATIONS:Howard I. Atkins, Acting Chief Financial OfficerTel (605) [email protected] Alliance Advisors IRCarolyn Capaccio / Jody Burfening [email protected] MEDIA [email protected] Fiscal 2027 is a 52-week year and fiscal 2026 was a 53-week year. As a result, the three months ended August 1, 2026, includes 13 weeks of operating results, whereas the three months ended August 2, 2025, includes 14 weeks of operating results. * The term free cash flow is not defined under accounting principles generally accepted in the United States of America (“GAAP”). The table above reconciles free cash flow to the most directly comparable GAAP financial measure. In evaluating its business, Daktronics considers and uses free cash flow as a key measure of its operating performance. It is not a measure of operating income, cash flows from operating activities, or other GAAP figures and should not be considered alternatives to those computations. We define free cash flow as net cash provided by operating activities less payments for property, plant, and equipment, plus proceeds from the sale of, insurance recovery for and grants for property, plant and equipment, if applicable. Our definition of free cash flow may not be comparable to similarly titled definitions used by other companies. Free cash flow is intended to provide information that may be useful for investors when assessing period to period results because it provides them with additional information in assessing our liquidity, capital resources, and financial operating results. * EBITDA is not a measure defined by GAAP. The table above reconciles EBITDA to the most directly comparable GAAP financial measure. Daktronics calculates EBITDA as net income before interest (income) expense, income taxes, depreciation and amortization, and other nonoperating income and expense. EBITDA should not be considered an alternative to net income or any other measure of financial performance calculated in accordance with GAAP. Our definition of EBITDA may not be comparable to similarly titled measures used by other companies. Management believes EBITDA provides investors with useful supplemental information to evaluate operating performance and to facilitate comparisons of operating results between periods by excluding the effects of financing activities, income taxes, and non-cash depreciation and amortization expense. Reconciliation of Long-term Debt(in thousands)(unaudited) Long-term debt consists of the following: (1) Orders and backlog metrics are operating measures not defined by GAAP, and our methodology for determining orders and backlog may vary from the methodology used by other companies in determining their orders and backlog amounts. For more information related to backlog, see Part I, Item 1. “Business” of our Annual Report on Form 10-K for the fiscal year ended May 2, 2026.

BROOKINGS, S.D., Aug. 26, 2026 (GLOBE NEWSWIRE) -- Daktronics, Inc. (NASDAQ-DAKT), announced today that it will release its first quarter fiscal 2027 financial results on Wednesday, September 2, 2026, prior to the market opening. Ramesh Jayaraman, Chief Executive Officer and President, and Howard Atkins, Acting Chief Financial Officer, will host a conference call and webcast for interested participants at 10:00 a.m. CT that day. To listen to the earnings call, participants must pre-register via the Daktronics Earnings Call Registration. Upon registration, participants will receive dial-in details and a unique PIN to access the live call. Presentation materials will be available on Daktronics’ Investor Relations website prior to the call. A replay of the call will be archived and accessible on the same site following the event. The conference call may be accessed via telephone or webcast as follows: Date: Wednesday, September 2, 2026Time: 10:00 a.m. CTDial-In Registration: Register for Dial-In Webcast: Listen to Webcast ABOUT DAKTRONICS Daktronics has strong leadership positions in, and is the world's largest supplier of, large-screen video displays, electronic scoreboards, LED text and graphics displays, and related control systems. The Company excels in the control of display systems, including those that require integration of multiple complex displays showing real-time information, graphics, animation, and video. Daktronics designs, manufactures, markets and services display systems for customers around the world in four domestic business units: Live Events, Commercial, High School Park and Recreation, and Transportation, and one International business unit. For more information, visit the company's website at: www.daktronics.com. SAFE HARBOR STATEMENT Cautionary Notice: In addition to statements of historical fact, this news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and is intended to enjoy the protection of that Act. These forward-looking statements reflect the Company's expectations, assumptions, and beliefs concerning future events. The Company cautions that these and similar statements involve risk and are subject to known and unknown risks, uncertainties and other important factors which could cause actual results, performance, or achievements to differ materially from those expressed or implied by such statements, including, but not limited to, changes in economic and market conditions, management of growth, timing and magnitude of future contracts and orders, fluctuations in margins, the introduction of new products and technology, the impact of adverse weather conditions, increased regulation, the Company’s ability to execute its strategic initiatives, and other risks described in the Company's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and other filings with the U.S. Securities and Exchange Commission.. Forward-looking statements are made in the context of information available as of the date stated and readers should not place undue reliance on such statements. Except as required by applicable law, Company undertakes no obligation to update or revise any forward-looking statements to reflect new circumstances or subsequent events as they occur. For more information contact:INVESTOR RELATIONS:Howard I. Atkins, Acting Chief Financial OfficerTel (605) [email protected] Advisors IRCarolyn Capaccio / Jody [email protected]

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management attributed positive bottom-line results despite declining revenues to conscientious cost-reduction efforts and lean manufacturing techniques implemented over the last three years. The company is executing a strategic redesign of its entire outdoor display product family to increase manufacturing standardization while maintaining customer flexibility. Performance in the quarter was bolstered by a significant reduction in warranty costs, which decreased by approximately $2 million compared to both the prior quarter and the same period last year. International quoting activity has seen a significant increase over the last six to eight months, and the company recently secured notable orders for a shopping mall in Australia and a theater in Paris. Management noted extremely aggressive pricing from competitors across most business areas, which they believe is unsustainable but disruptive in the short term. Operational improvements in after-sales service were driven by consolidating field activities and implementing new software to streamline business processes. Management expects to begin shipping the newly redesigned outdoor display products in the fourth quarter of fiscal 2010. Product development spending is expected to rise and likely exceed 5% of sales in the short term as the company prioritizes strategic innovation despite revenue headwinds. Backlog is anticipated to decline in the near term, though potential large sports orders could lead to a rise in backlog by the end of the third quarter. Capital expenditures for the year are projected in the $15 million to $17 million range, primarily focused on maintenance, strategic purchases, and tooling for new product platforms. The company anticipates the effective tax rate will decrease over the fiscal year as international income improves, particularly in lower-tax jurisdictions like China. The billboard business is currently sustained by Tier 3 customers, with management explicitly stating they do not expect a major pickup in this area over the next 12 months. A finishing issue that impacted prior quarters was described as generally insignificant this quarter, though management requires a few more quarters to confirm it is fully under control. The company reduced its full-time manufacturing personnel by an additional 5% during the quarter as part of ongoing labor cost adjustments. Management identified a trend where some university customers are delaying or downsizing projects due to economic perceptions, even when funding is available. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management indicated that while $20 million plus deals are not currently on the horizon, there are several opportunities in the $10 million plus range. Some of these large sports projects, particularly in baseball, could be recognized as revenue as early as the fourth quarter. The overall win rate is down slightly due to aggressive pricing from both returning international players and existing competitors. Management believes some competitors in the commercial market are undergoing internal changes that may hinder their performance in the short term. Stimulus funding has freed up some activity in the transportation sector, though the long-term duration of this trend remains uncertain. The niche is also experiencing short-term disruption from new competitors entering with very low pricing. Management reported they have not seen significant cancellations out of the backlog. The company maintains a conservative backlog policy, only including orders once they are signed, sealed, and often accompanied by a down payment.