Daktronics ((DAKT)) has held its Q1 earnings call. Read on for the main highlights of the call.
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Daktronics’ recent earnings call revealed a generally positive sentiment, as the company reported a strong start to fiscal 2026. The growth in orders, particularly in the live events and high school park and recreation sectors, has contributed to improved financial performance and gross margins. Despite facing challenges in the commercial and transportation sectors and a decline in international orders from 2025 levels, the positive developments were deemed to outweigh these challenges.
Strong Start to Fiscal 2026
Daktronics kicked off fiscal 2026 on a high note, ending with a cash balance of $136.9 million and a backlog of $360 million. This positions the company well for future revenue generation, setting a solid foundation for the fiscal year.
Record Order Growth
The company experienced record order growth, particularly from the high school park and recreation business, which supported a 35% increase in orders year-over-year. This surge in orders has significantly strengthened Daktronics’ backlog.
Live Events Success
Daktronics achieved notable success in the live events sector, winning three major league sports projects in Q1, along with several college and university projects. This success drove orders up by 81% year-over-year and 10% sequentially.
Improved Gross Margins
The company reported improved gross margins, attributed to value-based pricing, fixed cost leveraging, and cost control. This improvement was supported by a diverse mix of revenues across different business sectors.
Financial Performance
Daktronics’ financial performance was strong, with net income rising to $16.5 million or $0.33 per fully diluted share. Operating cash flow also improved by 34% year-over-year, reflecting the company’s robust financial health.
Commercial Business Challenges
Despite a 5% increase in orders from the previous year, the commercial business faced challenges, with a 10% decline from 2025 levels. This indicates difficulties in the on-premise and out-of-home advertising markets.
Transportation Orders Decrease
The transportation business saw a decrease in orders by 4% from last year and 7% from 2025, attributed to large order variability, highlighting challenges in this sector.
International Order Decline from 2025
While international business orders grew by 22% from last year, they declined by 32% compared to a strong 2025 performance, indicating a mixed performance in international markets.
Forward-Looking Guidance
Daktronics’ forward-looking guidance remains optimistic, with a strong start to fiscal 2026 marked by a significant cash balance and backlog. The company highlighted a 35% year-over-year order growth, driven by key sectors such as live events and high school park and recreation. Efforts to preserve gross margins through improved pricing and cost control were successful, contributing to a 34% increase in cash flow from operations. Daktronics is confident in its ongoing business and digital transformation plans, which are on track to support long-term profitable growth.
In conclusion, Daktronics’ earnings call painted a positive picture for fiscal 2026, with strong order growth and improved financial metrics. While challenges exist in certain sectors, the company’s strategic initiatives and robust backlog position it well for continued success. Investors and stakeholders can remain optimistic about Daktronics’ future prospects.