Daktronics (NasdaqGS:DAKT) Q2 2026 Earnings Call December 10, 2025 11:00 AM ET Company ParticipantsRamesh Jayaraman - President and CEOLindsey Vetter - Executive AssistantAndrew Siegel - Chairman of the BoardBrad Wiemann - Interim President and CEOHoward Atkins - CFO and Chief Transformation OfficerConference Call ParticipantsAaron Spychalla - Senior Research AnalystAnya Soderstrom - Senior Financial Analyst and Equity ResearchOperatorGood day, and thank you for standing by. Welcome to the Daktronics second ...

Daktronics (NasdaqGS:DAKT) Q2 2026 Earnings Call December 10, 2025 11:00 AM ET Company ParticipantsRamesh Jayaraman - President and CEOLindsey Vetter - Executive AssistantAndrew Siegel - Chairman of the BoardBrad Wiemann - Interim President and CEOHoward Atkins - CFO and Chief Transformation OfficerConference Call ParticipantsAnja Soderstrom - Senior Financial Analyst and Equity ResearchAaron Spychalla - Senior Research AnalystOperatorGood day, and thank you for standing by. Welcome to the Daktronics second ...

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 ...