Core Insights - Daktronics (DAKT) reported second-quarter fiscal 2026 results with earnings of 35 cents per share, exceeding the Zacks Consensus Estimate by 29.63% and showing a year-over-year increase of 59.1% [1] - Revenues reached $229.3 million, a 10% increase year over year, surpassing the consensus mark by 9.09% [1] - Orders rose 12.1% year over year to $199.1 million, while product backlog increased 35.8% year over year to $320.6 million [1][8] Revenue Breakdown - Commercial revenues, accounting for 22.1% of total revenues, increased 16.8% year over year to $50.8 million [3] - Live Events revenues, making up 35.5% of total revenues, climbed 5.5% year over year to $81.5 million [3] - International revenues surged 64.2% year over year to $29.8 million, representing 13% of total revenues [3] - High School Park and Recreation revenues decreased 4.4% year over year to $46 million, while Transportation revenues fell 0.9% year over year to $21.3 million [3] Order Details - Commercial segment orders declined 5.1% year over year to $42.3 million [4] - High School Park and Recreation orders fell 0.4% year over year to $35.7 million [4] - Live Events orders increased significantly by 26.5% year over year to $89.2 million, bolstered by large orders from MLB and MLS stadiums [4] - Transportation orders rose 15.2% year over year to $14.1 million, driven by airport and Intelligent Transportation Systems projects [5] - International orders increased 23.6% year over year to $17.9 million, with notable projects in the Middle East, UK, and Ireland [5] Operating Highlights - Gross margin for the quarter was 27%, expanding by 20 basis points year over year [6] - Total operating expenses were $40.3 million, a slight increase of 0.4% year over year, primarily due to higher selling expenses [6] - Non-GAAP operating income rose 12.8% year over year to $21.6 million [6] Financial Position - As of October 31, 2025, Daktronics had cash and cash equivalents of $149.6 million [7] - Free cash flow was reported at $36.1 million, down from $52.5 million in the same quarter last year [7] Future Outlook - Daktronics anticipates year-over-year revenue growth for the third quarter of fiscal 2026, despite the seasonally slower holiday period [9] - The company aims for an operating margin of 10-12% and a return on invested capital target of 17-20% by fiscal 2028 [9] - Daktronics is expanding manufacturing capacity in Mexico and Ireland to enhance operational flexibility [9]

Daktronics ( DAKT ) reported impressive turnaround results, which saw its share price skyrocket by double digits at one point. I wanted to go through the numbers in more detail to see if it would be a good time now to startMSc in Finance. Long-term horizon investor mostly with 5-10 year horizon. I like to keep investing simple. I believe a portfolio should consist of a mix of growth, value, and dividend-paying stocks but usually end up looking for value more than anything. I also sell options from time to t ...

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Financial Performance - Net sales for the three months ended November 1, 2025, were $229.3 million, a 10.0% increase from $208.3 million for the same period in 2024 [147]. - Gross profit for the same period was $61.8 million, representing a gross margin of 27.0%, up from 26.8% in the prior year [147]. - Operating income increased by 36.7% to $21.6 million for the three months ended November 1, 2025, compared to $15.8 million in the same period last year [147]. - Net income decreased by 18.3% to $17.5 million, down from $21.4 million in the prior year [147]. - The company reported diluted earnings per share of $0.35, a 59.1% increase from $0.22 in the same period last year [147]. - Total net sales for Q2 fiscal 2026 were $229.253 million, compared to $208.331 million in Q2 fiscal 2025, reflecting a 10.0% increase [160]. - Net income for Q2 fiscal 2026 was $0.35 per diluted share, up from $0.22 in the same period last year [159]. - Net income for the first six months of fiscal 2026 was $33.951 million, a significant increase of 106.3% from $16.460 million in the same period of fiscal 2025 [169]. - Diluted earnings per share increased to $0.68, compared to $0.35 in the same period last year, marking a 94.3% rise [181]. Orders and Backlog - As of November 1, 2025, the product order backlog was $320.6 million, an increase from $236.0 million as of October 26, 2024, reflecting a higher volume of order bookings [145]. - Orders for the three months ended November 1, 2025, totaled $199.1 million, a 12.1% increase from $177.6 million in the same period in 2024 [147]. - Order volume increased in Q2 fiscal 2026 compared to Q2 fiscal 2025, driven by growth in Live Events, Transportation, and International business units, with notable orders from Major League Baseball and Major League Soccer venues [149]. - Orders for Q2 fiscal 2026 totaled $199.135 million, an increase from $177.590 million in Q2 fiscal 2025 [161]. - Orders increased to $437.678 million, reflecting a 23.7% growth compared to $353.760 million in the prior year [169]. Expenses and Costs - Selling expenses increased due to higher personnel-related wages and benefits in Q2 fiscal 2026 compared to Q2 fiscal 2025 [152]. - General and administrative expenses decreased due to one-time professional fees in Q2 fiscal 2025, aligning current expenses with normal operating levels [153]. - Product design and development expenses increased due to higher staffing costs and investments in advanced technologies in Q2 fiscal 2026 [154]. - Selling expenses rose to $32.890 million, an 8.4% increase from $30.340 million in the same period last year, primarily due to higher personnel costs [169]. - General and administrative expenses increased to $28.057 million, a 2.9% rise from $27.273 million, driven by higher technology resource expenses [175]. - Product design and development expenses grew to $21.115 million, an 8.5% increase from $19.462 million, reflecting investments in advanced technologies [176]. Profitability Metrics - Gross profit as a percentage of net sales rose to 27.0% in Q2 fiscal 2026 from 26.8% in Q2 fiscal 2025, attributed to strategic pricing and operational efficiencies [151]. - Gross profit as a percentage of net sales improved to 28.3% for the first six months of fiscal 2026, up from 26.6% in the prior year, driven by strategic pricing and operational efficiencies [173]. - Operating income rose to $44.835 million, representing a 16.5% increase compared to $38.486 million in the same period last year [169]. - Operating income for the first six months of fiscal 2026 was $44.8 million, representing 10.0% of total net sales [182]. Tax and Cash Flow - The effective tax rate increased to 20.0% in Q2 fiscal 2026 from 15.0% in Q2 fiscal 2025, influenced by the absence of fair value adjustments applicable in the current period [158]. - The effective tax rate decreased to 23.0% for the first six months of fiscal 2026, down from 35.2% in the same period last year [180]. - Net cash provided by operating activities decreased to $42.6 million from $62.8 million in the same period of fiscal 2025, largely due to an increase in accounts receivable [188]. - The company reported a net increase in cash and cash equivalents of $22.1 million, down from $52.7 million in the prior year [188]. - Net cash used in investing activities for the first six months of fiscal 2026 totaled $9.5 million, down from $10.5 million in the same period of fiscal 2025 [190]. - Financing activities resulted in a net cash outflow of $11.2 million in the first six months of fiscal 2026, compared to a net inflow of $2.0 million in the same period of fiscal 2025 [191]. Capital Expenditures and Financing - The company plans total capital expenditures of approximately $17.9 million for fiscal 2026 to support new product lines and increased production capacity [203]. - The company entered into a new $71.5 million senior credit facility on November 26, 2025, enhancing financial flexibility [197]. - The company had an outstanding principal balance of $11.5 million on the Delayed Draw Loan [194]. - The company had $64.1 million of bonded work outstanding as of November 1, 2025, under a $190.0 million bonding line available through surety companies [205]. Share Repurchase Program - During the first six months of fiscal 2026, the company repurchased 0.7 million shares of Common Stock at a total cost of $12.2 million [218]. - A total of 97,402 shares were repurchased between August 3, 2025, and November 1, 2025, with an average price of $15.98 per share for the first period and $18.53 per share for the last period [220]. - The approximate dollar value of shares that may yet be purchased under the repurchase program is $7,665,219 as of November 1, 2025 [220]. - The share repurchase program was authorized by the Board on June 17, 2016, and amended on March 4, 2025, and June 23, 2025 [220]. - No shares were repurchased during the period from August 31, 2025, to September 27, 2025 [220]. - Shares withheld for tax withholding requirements related to share-based awards are excluded from the repurchase program [221]. - There are restrictions on the company's ability to repurchase shares under the Credit Facility and the New Credit Facility [222]. - The company has not adopted or terminated any "Rule 10b5-1 trading arrangement" during the three months ended November 1, 2025 [225]. Business Transformation and Expansion - The business transformation program aims for revenue growth outpacing the addressable market, operating margins of 10-12%, and returns on capital of 17-20% [138]. - The company is expanding its global manufacturing network into Mexico, with the new facility expected to be operational by the end of fiscal 2026 [139].

Financial Data and Key Metrics Changes - Daktronics reported a net income of $17.5 million or $0.35 per fully diluted share for the second quarter of FY26, a 25.4% increase on a fully adjusted basis compared to the previous year [24][25][26] - Operating income for the quarter was $21.6 million, up from $15.8 million in the same quarter last year, with a gross profit margin of 27% and an operating margin of 9.4%, both improved from the previous year [25][26][27] - The company incurred $8.8 million in tariff expenses during the second quarter, compared to $1.5 million in the same quarter of the previous year [26][27] Business Line Data and Key Metrics Changes - The Live Events segment saw a 26.5% order growth year-over-year, driven by major projects in Major League Baseball and Major League Soccer [9][10] - The Transportation segment experienced a 15% growth in orders, attributed to increased demand for intelligent transportation systems and aviation projects [12] - The International segment orders increased by 23.6% year-over-year, with strong demand in the Middle East and Europe [13] Market Data and Key Metrics Changes - The company completed several large-scale installations, including projects in Miami, Baltimore, Saudi Arabia, and Abu Dhabi, contributing to a 12% growth in orders across all business segments [8][9] - The product backlog stood at $321 million, a 36% increase year-over-year, providing a multi-quarter revenue runway [9][30] Company Strategy and Development Direction - Daktronics is enhancing its global manufacturing footprint with a new facility in Saltillo, Mexico, aimed at increasing production capacity and flexibility [15][39] - The company is focused on innovation, with plans for significant product launches, including next-generation LED street furniture and advanced indoor video displays [16][18] - The strategic price adjustments and value-based pricing initiatives are designed to maintain premium positioning while protecting margins [19][26] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the typical seasonal slowdown in the third quarter due to holidays but expressed confidence in the strong backlog and ongoing growth initiatives [35][63] - The company is committed to executing its transformation plan, which is expected to deliver sustainable growth and improved profitability [37][39] Other Important Information - The company announced the appointment of Ramesh Jayaraman as the new President and CEO, effective February 1, 2026, emphasizing his transformational leadership experience [41][42][43] - Daktronics plans to hold an investor day in early April to provide further insights into its strategy and performance [36] Q&A Session Summary Question: Can you discuss the expected revenue conversion from backlog and margin profile? - Management highlighted that a higher percentage of the backlog is in the Live Events segment, which typically has longer conversion times due to customized orders [49][50] Question: Can you provide a breakdown of margin improvements? - The operating margin improvements are primarily attributed to value-added pricing and operational efficiencies, despite the impact of increased tariff expenses [55][56] Question: How does the new Mexico plant affect capacity and investment? - The Mexico facility is a small operation that complements existing U.S. production, with plans for growth based on demand [58][59] Question: How do you see working capital management trending? - Management indicated that while improvements have been made, further significant enhancements in working capital efficiency may be limited [60] Question: How should we think about the third quarter softening given the backlog? - The softening is primarily due to fewer available workdays during the holiday season, but the strong backlog will support future revenue [63]

Financial Data and Key Metrics Changes - Daktronics reported a net income of $17.5 million or $0.35 per fully diluted share for the second quarter of FY26, a 25.4% increase on a fully adjusted basis compared to the previous year [24][25] - Operating income for the quarter was $21.6 million, up from $15.8 million in the same quarter last year, with a gross profit margin of 27% and an operating margin of 9.4%, both improved from the previous year [25][26] - The company incurred $8.8 million in tariff expenses during the second quarter, compared to $1.5 million in the same quarter last year, impacting margins [26][27] Business Line Data and Key Metrics Changes - The live events segment saw a 26.5% order growth year-over-year, contributing significantly to the overall order growth of 12% across all business segments [8][9] - The transportation business orders grew by 15% year-over-year, driven by increased demand in intelligent transportation systems and aviation [12] - The international business experienced a 23.6% increase in orders, particularly in the Middle East and Europe [13] Market Data and Key Metrics Changes - The company completed several large-scale installations, including projects for Major League Soccer and Major League Baseball, enhancing its market presence [8] - The commercial business continued to show strong growth, particularly in on-premise advertising, which remained up double digits year-over-year [10] - The out-of-home advertising segment saw a 5% decrease in orders year-over-year, primarily due to fewer large projects awarded [11] Company Strategy and Development Direction - Daktronics is enhancing its global manufacturing footprint with a new facility in Saltillo, Mexico, aimed at increasing production capacity and flexibility [15] - The company is focused on innovation, with several new product launches planned, including next-generation LED street furniture and advanced indoor video displays [17][18] - The strategic price adjustments and value-based pricing initiatives are designed to maintain premium positioning while protecting margins [19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong backlog of $321 million, which is expected to provide a multi-quarter revenue runway [9][35] - The company anticipates a seasonally slower third quarter due to holidays but remains focused on year-over-year revenue growth [35] - The transformation plan is on track, with ongoing improvements in operational efficiencies and customer engagement [20][21] Other Important Information - The company has increased its share repurchase capacity to $25.7 million, reflecting a strong cash position of $138.3 million, up 20% year-over-year [33][34] - A new CEO, Ramesh Jayaraman, will officially start in February, bringing a focus on transformation and growth [41][43] Q&A Session Summary Question: How do you expect the backlog to convert to revenue over the fiscal year? - Management highlighted that a higher percentage of the backlog is in the live events segment, which typically has longer conversion times due to customized orders [49][50] Question: Can you quantify the margin improvements and their breakdown? - The operating margin improvements are attributed to value-added pricing and operational efficiencies, despite the impact of increased tariff expenses [54][55] Question: What is the expected capacity expansion from the new Mexico plant? - The Mexico facility is a small operation that complements existing U.S. production, with no plans to move work from the U.S. [58][64] Question: How do you see working capital management trending moving forward? - Management indicated that while improvements have been made, further significant enhancements may be limited, but revenue growth will positively impact working capital [60]

Financial Data and Key Metrics Changes - Daktronics reported a net income of $17.5 million or $0.35 per fully diluted share for Q2 FY26, a 25.4% increase on a fully adjusted basis compared to last year's adjusted net income of $13.9 million [22][23] - Operating income for the quarter was $21.6 million, up from $15.8 million in Q2 FY25, driven by revenue growth and structural cost savings [23][24] - Gross profit margin improved to 27% and operating margin reached 9.4%, both showing improvement from the previous year [23][24] Business Line Data and Key Metrics Changes - The live events segment saw a 26.5% order growth year-over-year, contributing significantly to overall performance [8][9] - The transportation segment experienced a 15% increase in orders, driven by demand for intelligent transportation systems and aviation projects [11] - The international segment orders increased by 23.6%, with strong demand from the Middle East and Europe [12] Market Data and Key Metrics Changes - Overall, Daktronics achieved a 12% growth in orders across all business segments compared to the previous year [7] - The product backlog grew to $321 million, a 36% increase year-over-year, providing a multi-quarter revenue runway [8][27] Company Strategy and Development Direction - The company is enhancing its global manufacturing footprint with a new facility in Saltillo, Mexico, aimed at increasing production capacity and flexibility [13][36] - Daktronics is focused on innovation, with several new product launches planned, including advanced indoor video displays and next-generation digital billboards [15][17] - The company aims to achieve a compound annual growth rate of 7%-10% by FY28, with a target operating margin of 10%-12.5% [34] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the impact of tariff expenses, which increased to $8.8 million in Q2 FY26 from $1.5 million in the same quarter last year, but emphasized the company's ability to maintain profitability [24][25] - The third quarter is expected to be seasonally slower due to holidays, but management remains optimistic about year-over-year revenue growth [33][50] Other Important Information - The company is implementing a transformation plan that is on track to deliver tangible benefits, including improved operational efficiencies and customer engagement [19][20] - Daktronics has increased its share repurchase capacity to $25.7 million, reflecting a strong cash position of $138.3 million, up 20% from the previous year [31][32] Q&A Session Summary Question: How do you expect the backlog to convert to revenue over the fiscal year? - Management highlighted that a higher percentage of the backlog is in the live events segment, which typically has longer conversion times due to customized orders [41][42] Question: Can you quantify the margin improvements and their breakdown? - The improvements in operating margin are attributed to value-added pricing and structural cost efficiencies, despite the impact of increased tariff expenses [45][46] Question: What is the expected capacity expansion from the new Mexico plant? - The Mexico facility is a small operation that complements existing U.S. production, with no plans to move work from the U.S. to Mexico [47][51]

NASDAQ: DAKT DYNAMIC MESSAGE SIGNS Fiscal Second Quarter 2026 Results Call December 10, 2025 CONTROL SYSTEMS SAFE HARBOR STATEMENT Forward-Looking Statements: In addition to statements of historical fact, this presentation contains forward-looking statements within the meaning of the federal securities laws and is intended to receive the protections of such laws. All statements, other than historical facts, included or incorporated in this release could be deemed forward-looking statements, particularly sta ...

Core Insights - U.S. stocks exhibited mixed performance, with the Nasdaq Composite declining by over 100 points on Wednesday [1] - Daktronics, Inc. reported quarterly earnings of 35 cents per share, surpassing the analyst consensus estimate of 27 cents per share, and quarterly sales of $229.253 million, exceeding the consensus estimate of $214.077 million [1] Company Performance - Daktronics shares surged by 15.7% to $20.80 following the positive earnings report [2] - Photronics, Inc. saw its shares increase by 44% to $37.00 after reporting better-than-expected fourth-quarter results and issuing optimistic first-quarter guidance [3] - Nextdoor Holdings, Inc. gained 24.6% to $2.5050 after a positive social media mention regarding its valuation [3] - Braze, Inc. rose by 17.5% to $36.00 after raising its FY2026 adjusted EPS and sales guidance [3] - Dave & Buster's Entertainment, Inc. jumped 14% to $20.50 following its third-quarter results [3] - SuperX AI Technology Limited's shares increased by 13.8% to $19.63 [3] - GE Vernova Inc. rose by 11.8% to $699.59 after raising its FY28 outlook and dividend, along with expanding its buyback authorization [3] - DBV Technologies S.A. gained 11.2% to $19.09 [3] - Warby Parker Inc. rose by 11% to $25.77 [3] - Dyne Therapeutics, Inc. increased by 10.5% to $20.38 after announcing a $350 million public offering [3] - ABIVAX Société Anonyme rose by 8.6% to $133.24 [3] - Olema Pharmaceuticals, Inc. gained 8.1% to $28.67 [3] - The Middleby Corporation rose by 6.3% to $137.15 after an upgrade from Jefferies [3] - EchoStar Corporation increased by 5.6% to $98.80 following an upgrade from Morgan Stanley [3]

分组1 - Daktronics reported quarterly earnings of $0.35 per share, exceeding the Zacks Consensus Estimate of $0.27 per share, and showing a significant increase from $0.08 per share a year ago, resulting in an earnings surprise of +29.63% [1] - The company achieved revenues of $229.25 million for the quarter ended October 2025, surpassing the Zacks Consensus Estimate by 9.09% and increasing from $208.33 million year-over-year [2] - Over the last four quarters, Daktronics has surpassed consensus EPS estimates two times and topped consensus revenue estimates twice [2] 分组2 - The stock has underperformed the market with a gain of about 6.6% since the beginning of the year, compared to the S&P 500's gain of 16.3% [3] - The current consensus EPS estimate for the upcoming quarter is $0.22 on revenues of $191 million, and for the current fiscal year, it is $1.09 on revenues of $831.13 million [7] - The Zacks Industry Rank for Electronics - Miscellaneous Products is in the top 21% of over 250 Zacks industries, indicating a favorable outlook for the industry [8]