Daktronics Q4 2025 slides: Strong orders offset by revenue decline, transformation continues

Introduction & Market Context Daktronics Inc. (NASDAQ:DAKT) presented its fiscal fourth quarter 2025 results on June 25, 2025, revealing a mixed performance characterized by strong order growth but declining revenue. The company’s stock dropped 4.93% following the earnings release, closing at $14.45, as investors reacted to an earnings miss that saw the company report an EPS of -$0.19 against expectations of $0.15. The presentation highlighted what management described as a "solid finish to a transformational year," despite financial results falling short of analyst forecasts. Daktronics, a global provider of video display systems and digital billboards, emphasized its ongoing business and digital transformation initiatives as key drivers for future growth.

Quarterly Performance Highlights Daktronics reported Q4 orders of $241 million, representing a 29% increase from Q3 and a 17% year-over-year growth. This order momentum was broad-based across market segments, with particularly strong performance in Commercial and International markets. As shown in the following breakdown of market verticals performance: Commercial segment orders surged 44% year-over-year in Q4, while International orders more than doubled with a remarkable 112% increase. The High School Park and Recreation segment also showed strong growth with orders up 33% compared to the previous year. However, Live Events orders declined by 11% year-over-year.

Despite the robust order book, Q4 net sales fell to $173 million from $216 million in the same period last year. This divergence between orders and revenue is illustrated in the following chart: The company highlighted several significant project wins, including installations at the University of Illinois, Charles Schwab (NYSE:SCHW) Field, Miami Freedom Park, and a large stadium project in Saudi Arabia (Aramco (TADAWUL:2222) Stadium), which are expected to contribute to future revenue. Financial Analysis Daktronics reported an operating loss of $1.7 million for Q4 2025, compared to operating income of $19.4 million in Q4 2024. However, after adjusting for non-recurring expenses of $7.5 million, the company posted an adjusted operating income of $5.8 million for the quarter. The following table details the reconciliation of operating income: For the full fiscal year 2025, Daktronics recorded operating income of $33.1 million (4.4% margin), or $49.6 million (6.6% margin) on an adjusted basis.

This represents a decline from the 10.6% operating margin achieved in fiscal 2024, as noted in the earnings report. The company’s cash position strengthened significantly, with year-end cash balance reaching $128 million compared to $82 million at the end of fiscal 2024. Operating cash flow more than doubled year-over-year, and the company reported substantial inventory efficiency improvements with a $32 million (23%) reduction compared to the previous year. Strategic Initiatives Daktronics outlined its transformation initiatives, which are focused on driving profitable growth and reducing costs. The company introduced several new products in Q4, including next-generation digital billboards and outdoor configurable video systems, as well as enhanced control capabilities.

As illustrated in the company’s transformation roadmap: The FY26-28 transformation plan targets ambitious financial goals, including operating margins of 10-12%, revenue growth of 7-10% CAGR, and return on invested capital of 17-20%. These targets represent a significant improvement from current performance levels. The company is also advancing its digital transformation, with initiatives spanning demand creation, fulfillment and support, corporate performance management, and data and artificial intelligence capabilities. Forward-Looking Statements While maintaining an optimistic outlook on future growth, Daktronics acknowledged several challenges, particularly the potential impact of tariffs. Management noted that the ultimate cost of tariffs is "currently indeterminable" and creates uncertainty in planning and forecasting.

The company emphasized its flexibility to navigate these challenges through selective price adjustments, supply chain flexibility, global manufacturing capabilities, and international growth opportunities. As stated in the presentation, Daktronics is "remaining agile, focusing on what can be controlled." The detailed breakdown of orders and sales by business unit provides insight into the company’s diverse revenue streams: Executive Commentary "We had a strong finish to a transformational year," remarked Brad Wiemann, Interim CEO, highlighting the company’s strategic advancements despite the financial challenges. Howard Atkins, Acting CFO, emphasized the strengthened financial position, stating, "Our balance sheet today is stronger than ever." Wiemann further positioned Daktronics as "the global industry leader in best-in-class video communication displays and control systems," underscoring the company’s competitive advantages even as it navigates current headwinds. Despite the earnings miss and stock price decline, management remains confident in the company’s transformation strategy and long-term growth prospects. The strong order book and improved cash position provide some foundation for this optimism, though investors will be watching closely to see if the company can translate order growth into improved financial performance in the coming quarters.

Full presentation:

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