Daktronics, Inc. Announces 2026 Fiscal Second Quarter Results (Form 8-K)

Daktronics, Inc. Announces 2026 Fiscal Second Quarter Results

Operating Profit of $22 million, up 36.7% YoY, Operating Margin of 9.4%

Double-digit growth in orders and sales

Entering Second Half with $321 million of Product Backlog, up 36% from second quarter fiscal 2025

Ending Net Cash Balance of $138 million

Business and Digital Transformation on Track; Reiterating Three Year Forward Objectives of 7-10% Sales Growth, 10-12% operating margin, 17-20% ROIC

BROOKINGS, S.D., December 10, 2025 - Daktronics, Inc. (NASDAQ-DAKT) (the "Company", "Daktronics", "we", or "us"), a recognized industry leader in the design and manufacturing of best-in-class dynamic video communication displays and control systems for customers worldwide, today reported results for its fiscal 2026 second quarter which ended November 1, 2025.

Fiscal 2026 is a 53-week year and fiscal 2025 was a 52-week year. As a result, the six months ended November 1, 2025, includes 27 weeks of operating results, whereas the six months ended October 26, 2024, includes 26 weeks of operating results.

Fiscal Q2 2026 financial highlights include:

•Operating income increased to $21.6 million, compared to $15.8 million for the second quarter of fiscal 2025; the year-ago quarter included $3.3 million of consulting expenses associated with business transformation

•Operating margin as a percentage of net sales rose to 9.4%, compared to 7.6% for the second quarter of fiscal 2025

•Sales of $229.3 million, compared to $208.3 million for the second quarter of fiscal 2025, reflecting the third consecutive quarter of sequential revenue growth

•New orders for product and service rose to $199.1 million(1) for the quarter, compared to $177.6 million from the second quarter of fiscal 2025

•Product backlog increased to $320.6 million(1) for the quarter, up from $236.0 million for the second quarter of fiscal 2025

Brad Wiemann, Daktronicsʹ Interim President and Chief Executive Officer, commented, "We delivered another solid quarter of revenue and profit expansion, representing our third consecutive quarter of top-line growth and our second quarter of driving operating income over $20 million. Our teams provided exemplary performance in manufacturing, installation and service execution throughout the first half, and our results reflect continued profitability improvement through value-based pricing and operational efficiencies. Orders grew 12.1 percent from last year, with Live Events booking large orders related to three more Major League Baseball stadiums and three Major League Soccer stadiums in the second quarter. We plan to install five MLB stadium projects this coming spring. We are five-for-five on large-scale MLB projects in the first half of fiscal 2026. Additionally, we saw order growth in our Transportation segment, with an uptake of

airport and Intelligent Transportation Systems projects domestically, and our International segment won additional orders in the Middle East stadium, United Kingdom advertising and Ireland transportation markets."

Outlook

Daktronics is expanding its pipeline of market opportunities to support its growth objectives while continuing to pursue new market applications to expand its indoor video product offerings. This includes continued expansion of its product offerings for both indoor and outdoor products, software services, and control systems to provide industry leading solutions for its customers. Daktronics continues to execute on its business and digital transformation to drive profitable growth, reduce costs, and streamline its operations to better serve customers through enhanced sales and fulfillment capabilities, corporate and performance management, and data and artificial intelligence tools.

Daktronics remains agile and ready to implement measures to mitigate future tariff impacts and has taken action to reduce cost pressure by increasing its diversified global manufacturing footprint to support its growing worldwide opportunity pipeline. We have built-in protection clauses into contracts and are keeping the Company's supply chain for components flexible. The Company continues to focus on proactively managing the business to generate profitable growth over the long term.

Mr. Wiemann added, "Our product backlog position of $320.6 million provides us with a multi-quarter revenue runway, and our pipeline of potential new projects over the next year reflects sustained strong customer demand. Our three-year transformation initiatives are supporting greater efficiencies and higher profitability, and we continue to extend our leadership in product innovation and design and to advance the sophistication of the buying tools we offer customers to enhance our strong service levels and our value proposition. To facilitate our growing business and optimize our manufacturing network, we are opening a facility in Mexico that we expect to be in production by the end of fiscal 2026, to complement our U.S. manufacturing operations. We are highly energized and remain on track to achieve our three-year plan objectives of a 7-10% CAGR in revenue growth, 10-12% operating margin and 17-20% ROIC."

Daktronics Appoints New CEO

On December 3, 2025, Daktronics announced that it appointed Ramesh Jayaraman as President and Chief Executive Officer, effective February 1, 2026. Brad Wiemann will continue to serve as Interim President and CEO through the Company's third fiscal quarter, which ends January 31, 2026.

Upon approval by the Board of Directors, Ramesh will also become a director of the Company, at which time Director and former Chairman, President and CEO Reece Kurtenbach will step down from the Board of Directors. Andrew D. Siegel, who was appointed Chair of the Board in March 2025, will remain Chairman. Howard Atkins will remain Acting Chief Financial Officer until a permanent CFO is appointed.

Second Quarter Results

Howard Atkins, Daktronicsʹ Acting CFO, noted, "Q2 was a solid quarter with double-digit, year-over-year growth in new orders, revenue, and operating profit." Orders for the second quarter of fiscal 2026 increased by 12.1 percent compared to the second quarter of fiscal 2025, with strong order demand across business units. Order volume for the quarter increased primarily due to order growth in the Live Events, Transportation and International business units, partially offset by lower order volume in the Spectaculars niche of the Commercial business unit. Live Events had large order bookings related to six professional sports stadiums. Transportation has seen order growth in airports and ITS projects. International continued to grow primarily due to increases in orders in the Middle East, United Kingdom and Ireland. After record first quarter of fiscal 2026, order bookings in the High School Park and Recreation business unit were comparable to a year ago.

Net sales for the second quarter of fiscal 2026 increased by 10.0 percent as compared to the second quarter of fiscal 2025 and increased 4.7 percent from the first quarter of fiscal 2026, with growth generated by order growth and backlog fulfillment. The increase is primarily the result of higher volumes in the Commercial, Live Events and International

business units, partially offset by decreased sales in the High School Park and Recreation business unit. Sales in our Transportation business unit were relatively flat.

Gross profit as a percentage of net sales was 27.0 percent for the second quarter of fiscal 2026 as compared to 26.8 percent a year earlier. Factors driving gross profit margin include order growth, backlog fulfillment, value-based pricing, structural cost reduction and fixed cost operating leverage offset in part by higher tariff expense.

Operating expenses increased slightly to $40.3 million in the second quarter of fiscal 2026 as compared to $40.1 million for the second quarter of fiscal 2025. During the second quarter of fiscal 2025, the Company incurred $3.3 million of consultant related expenses associated with the previously announced business and digital transformation initiatives. Excluding these year-ago expenses, operating expenses primarily increased due to increased tariffs and investments to support information technology and innovative product development.

Operating margin for the second quarter of fiscal 2026 of 9.4 percent as compared to an operating margin of 7.6 percent for the second quarter of fiscal 2025. Excluding the above-mentioned $3.3 million of consultant related expenses, operating margin for the second quarter of fiscal 2026 was 9.4 percent as compared to an operating margin of 9.2 percent for the second quarter of fiscal 2025. The increase is driven by higher sales, fixed cost operating leverage, business transformation cost reduction, net of higher tariff expense.

The increase in interest income (expense), net for the second quarter of fiscal 2026 compared to the same period one year ago is primarily due to higher cash levels invested in interest-bearing accounts. During the second quarter of fiscal 2025, the interest expense included interest on the convertible note, which was settled during fiscal 2025.

For the three months ended November 1, 2025, the effective tax rate was 20.0 percent compared to an effective tax rate of 15.0 percent for the three months ended October 26, 2024. The lower tax rate in the second quarter of fiscal 2025 is due to the reduction of the Convertible Note fair value adjustment to expense in proportion to the period's increase in pre-tax income, whereas there are no fair value adjustments applicable in the second quarter of fiscal 2026.

Net income for the second quarter of fiscal 2026 was $17.5 million, compared to a net income of $21.4 million for the second quarter of fiscal 2025. Excluding the non-operating non-cash debt fair value adjustment and operating adjustment for consultant related expenses associated with business and digital transformation initiatives, adjusted net income(2) was $13.9 million for the second quarter of fiscal 2025.

For the three months ended November 1, 2025, earnings per diluted share was $0.35 compared to $0.22 in the same period last year.

Balance Sheet and Cash Flow

Cash, restricted cash and marketable securities totaled $149.6 million at November 1, 2025, and $11.3 million of total current and long-term debt was outstanding as of that date, which included $11.5 million of face value and is net of $0.2 million of debt issuance costs. There were no draw-downs on the asset-based revolving credit facility during the first six months of fiscal 2026, and $41.7 million was available to draw on November 1, 2025.

In the first six months of fiscal 2026, Daktronics generated $42.6 million of cash from operations and used $6.8 million for purchases of property and equipment. We repurchased 0.7 million shares of common stock in the first six months of fiscal 2026 at the volume-weighted average price of $16.38, equaling $12.2 million of share repurchases.

We achieved leaner inventory management this quarter, reducing inventory to $101.1 million from $121.6 million in the second quarter of fiscal 2025 and $105.8 million at the end of fiscal 2025, while supporting revenue growth of 10.0 percent year-over-year and 32.9 percent compared to the fourth quarter of fiscal 2025.

At the end of the fiscal 2026 second quarter, we had a strong balance sheet and a working capital ratio of 2.2 to 1. This ratio is primarily impacted by changes in cash and cash equivalents, accounts receivable, inventory, accounts payable, and

contract assets and liabilities, which are impacted by the sports market and construction seasonality. Management's focus remains on managing working capital through expected growth of the company and through the dynamic business cycles.

Webcast Information

The Company will host a conference call and webcast to discuss its financial results today at 10:00 a.m. (Central Time). This call will be broadcast live at http://investor.daktronics.com where related presentation materials will also be posted prior to the conference call. A webcast will be available for replay shortly after the event.

About Daktronics

Daktronics has strong leadership positions in, and is the world's largest supplier of, large-screen video displays, electronic scoreboards, LED text and graphics displays, and related control systems. The Company excels in the control of display systems, including those that require integration of multiple complex displays showing real-time information, graphics, animation, and video. Daktronics designs, manufactures, markets and services display systems for customers around the world in four domestic business units: Live Events, Commercial, High School Park and Recreation, and Transportation, and one International business unit. For more information, visit the Company's website at: www.daktronics.com.