Daktronics, Inc. Announces Fiscal Year and Fourth Quarter 2025 Results

Core Insights - Daktronics, Inc. reported a fiscal year 2025 operating profit of $33 million and an adjusted operating profit of $50 million, despite a fourth quarter operating loss of $2 million [1][5][11] - The company experienced a 29% sequential increase in orders and a 17% year-over-year increase, with a year-end product backlog of $342 million, up 8% [1][5][9] - Operating cash flow for FY2025 increased by 55% to $98 million, with a year-end cash balance of $128 million [1][5][20] Financial Performance - Fourth quarter sales were $172.6 million, down 20.1% compared to the same quarter in fiscal 2024, while full-year sales totaled $756.5 million, a decrease of 7.5% from the previous year [5][11] - Gross profit as a percentage of sales decreased to 25.0% in Q4 2025 from 25.7% in Q4 2024, and for the full year, it decreased to 25.8% from 27.2% [12][14] - Operating expenses increased by 24.8% in Q4 2025 to $44.9 million, and for the full year, they rose by 20.0% to $162.4 million, driven by investments in digital transformation and corporate governance [13][14] Business Transformation - The company initiated a business transformation program in fiscal 2025 aimed at achieving higher profit growth, with benefits starting to materialize in the last four months of the fiscal year [6][8] - Key initiatives included repricing products, improving inventory efficiency, and enhancing working capital management [6][10] - The rollout of a new service software system is expected to streamline processes and improve customer experiences [6] Market Outlook - Daktronics is positioned to capitalize on increasing market demand, with a focus on expanding its presence in indoor markets and enhancing service offerings [8][9] - The company is navigating a highly uncertain tariff environment, implementing measures to mitigate potential impacts [7][10] - The three-year transformation plan aims for 7-10% sales growth, 10-12% operating margin, and 17-20% return on invested capital (ROIC) [1][4][8]