US ▾
DAKT
Earnings call · Jul 2026 (Q1 FY27)

DAKTRONICS Q1 FY27 earnings call DAKT

Sep 2, 2026 Source

Executive summary

Daktronics Q1 FY27 — Strong Start with Sales Growth and Profit Expansion

Daktronics delivered a strong Q1 FY27, marked by solid sales growth and significant profit expansion, driven by robust demand and operational efficiencies. The company is executing on its strategic plan, including manufacturing optimization and capital deployment, while navigating increased operating expenses and an ongoing NBA/SEC inquiry. New product launches like Camino 8 and LiveWorks are expanding software and services offerings.

Highlights

5

  • Net sales grew 7.1% year-over-year, despite the quarter being one week shorter than the prior year.

  • Operating income expanded 7.2% to $24.9 million.

  • EPS grew to $0.40, marking the highest quarterly EPS in the past three years.

  • Generated $31.4 million in cash from operations during the quarter.

  • Gross profit margin rose to 30.5%, an increase of 80 basis points from last year.

Concerns

4

  • Orders booked in Q1 were down year-over-year, primarily due to timing of substantial projects expected to close in Q2.

  • Operating expenses increased, with selling expense up $2.2 million, product development up $1.4 million, and G&A up $1.3 million.

  • Raw material and sensitive input prices put upward pressure on cost of goods sold, largely offsetting tariff refunds received.

  • The company is cooperating with NBA and SEC requests for information regarding an investigation concerning Kawhi Leonard and the Clippers.

Guidance & targets

CategoryTargetConfidence
Revenue 3-year CAGR
7% to 10%
high materiality
High
Operating margin
10% to 12%
high materiality
High
Return on Invested Capital (ROIC)
17% to 20%
high materiality
High
Annual CapEx
$20 million range
medium materiality
Medium

DAKT operating KPIs by quarter

DAKT operating KPIs stated on its earnings calls, by fiscal quarter
KPI May 2026 Q4 FY26This call Jul 2026 Q1 FY27Change vs prior quarter
Backlog
$356M We enter fiscal 27 with a backlog of $356 million, up 4% over prior year. Source transcript
$311M Our backlog coming into the second quarter was $311 million. Source transcript
-12.6%
Employees
<2,700 Our nearly 2,700 employees make this happen and we stand extremely grateful for that. Source transcript
~2,700 We had a strong start to fiscal 2027, and I want to thank our approximately 2,700 employees across the globe for their execution and dedication. Source transcript
—

Operating figures the company states on every call, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Orderbook & backlog

Backlog $356 million Q4 FY26 end

Approximately 50% fulfilled in Q1 FY27.

Backlog $311 million Q1 FY27 end

Does not yet include substantial orders arranged in Q1, expected to be booked in Q2 and generate revenue mostly beginning in Q3.

Product announcements

ProductTypeDetails
Camino 8launch
LiveWorkslaunch

Capital programs

Mexico Manufacturing Plant underway

Benefit:First major production run of narrow pixel pitch product completed

Recently opened plant is ramping up and successfully completed its first major production run. Expected to ship product in late Q2. Part of optimizing the global manufacturing footprint.

US Transportation Facility Automation underway

Benefit:Increased efficiency, improved productivity, reduced production costs

Initial focus for increasing automation in manufacturing. Planning to install automated welding machinery to reduce motion, processing, and wait time for metal fabricated enclosure elements.

China Facility Planning underway

Benefit:Manufacturing optimization

Planning is underway as part of the manufacturing network optimization strategy.

Ennistymon Facility Restructuring announced

Daktronics is considering a proposal to exit the highly customized international transportation business, which would impact the long-term viability of its Ennistymon facility. A collective redundancy consultation process has been initiated.

Risks & headwinds

NBA/SEC Investigation Ongoing

Requests for information from NBA and SEC

Mitigation:Company is cooperating with requests; no further comment provided at this time.

Input Cost Inflation Q1 FY27, ongoing

Upward pressure on cost of goods sold

Mitigation:Began selectively raising product prices in Q2; implementing procurement and cost savings initiatives across the supply chain.

Order Timing Delays Q1 FY27

Q1 orders booked down YoY

Mitigation:Substantial projects negotiated in Q1 are expected to be booked in Q2, generating revenue from Q3.

Potential Ennistymon Facility Exit

Impact on long-term viability of Ennistymon facility

Mitigation:Considering proposal to exit highly customized international transportation business; initiated collective redundancy consultation process.

What to watch in Q2 FY27

Substantial orders booking

Q2 FY27
Current Negotiated in Q1, not yet booked
Target Booked in Q2

Why it matters

These orders are expected to generate revenue mostly beginning in Q3, impacting future financial performance.

orders actually booked in the first quarter were down from a year ago, we did arrange a few substantial orders, which we expect to be booked when we receive the regular purchase orders, forward.

Q&A highlights

Can you provide confidence in closing substantial Q2 orders for live events, and are you seeing changes in win rates or competitive performance?

Management confirmed that the Q1 order decline was due to timing of negotiations for substantial projects expected to close in Q2. They noted the pipeline remains robust across all businesses.

“So live events, we had, you know, as you know, it's timing-oriented business and really it's a timing of some of the negotiations that are in progress that we expect to be slightly delayed, you know, from Q1 into latter part of Q2.”

asked by Aaron Spychalla · answered by Ramesh Jayaraman

2 min read 5 chapters

Detailed narrative

Strategic Pillars and Execution

Daktronics' strategy is built on three pillars: accelerating organic growth, strengthening operational excellence, and disciplined capital deployment. Organic growth focuses on core businesses, selective expansion into new vertical markets in North America, growth through software and services, and international expansion. Operational excellence involves improving procurement, optimizing the global manufacturing footprint, investing in factory automation, and deploying lean principles. Capital deployment prioritizes high-return investments in organic growth and operational efficiency, evaluating M&A opportunities, and returning excess capital to shareholders.

Manufacturing Network Optimization and Automation

The new Mexico manufacturing plant is ramping up, successfully completing its first major production run of narrow pixel pitch products, with shipments expected in late Q2. The company is increasing automation, with an initial focus on the U.S. transportation facility, and China facility planning is underway. Plans include installing automated welding machinery to reduce production costs and improve efficiency. Daktronics is also considering exiting the highly customized international transportation business, which would impact its Ennistymon facility.

Product Innovation and Services Expansion

Camino 8, the next-generation real-time 2D/3D graphics rendering engine, debuted at Angel Stadium and is now in full deployment, with installations planned for over 10 venues across NHL, MLS, and NCAA programs starting this fall. The company also launched LiveWorks in late July, a mobile-based fan experience platform for high school sports, designed to expand recurring revenue opportunities and strengthen its SaaS portfolio ahead of the fall demand season.

Talent Augmentation and Leadership Focus

Daktronics continues to augment its management team with key leadership additions in procurement, marketing, and IT, and anticipates a new international leader joining in Q2. The company has aligned executive compensation with performance and long-term shareholder value, emphasizing the development of high-potential talent internally as an integral part of its growth and scaling strategy.

NBA/SEC Investigation Update

The company acknowledged requests for information from both the NBA and the Securities and Exchange Commission regarding an investigation concerning Kawhi Leonard and the Clippers. Daktronics stated it is cooperating with these requests but will not provide further comment at this time out of respect for the respective processes.

AI-generated summary of the company's earnings call. Not investment advice.