Daktronics, Inc.

Daktronics reported record annual revenue of $839 million, up 10.9% year over year. Full-year operating income was $61 million versus $33.1 million in fiscal 2025, and adjusted operating margin was 7.3%, up 92 basis points. Full-year EPS was $0.92, or $1.05 adjusted, up 25% from adjusted fiscal 2025 EPS; fourth-quarter adjusted EPS was $0.27 versus $0.18 a year ago. Fourth-quarter gross profit margin was 28.0%, or 27.4% excluding a warranty provision recapture, compared with a prior four-quarter average of 26.4%. Full-year bookings averaged more than $215 million per quarter, and backlog ended at $356 million, up 4% from the prior year. Cash from operations was $49.2 million in fiscal 2026, and the company repurchased approximately $25.5 million of stock during the year at a VWAP of $17.8 per share. Looking ahead, management said about 52% of year-end backlog is expected to convert to revenue in the first quarter; they also noted Q1 fiscal 2027 will have 13 weeks versus 14 weeks in Q1 fiscal 2026.

Ramesh Jayaraman said fiscal 2026 showed record revenue, orders, and margin expansion, and that the company is on track toward its fiscal 2028 objectives. He emphasized that growth is being supported by secular demand for video displays, deeper penetration in core end markets, and expansion in software and services. He also framed Mexico capacity expansion, Camino 8, and the new services platform as key pieces of a broader transformation aimed at sustainable growth and better returns.

Howard Ian Atkins highlighted that the business delivered record annual revenue of $839 million, EBIT of $61 million, adjusted EPS of $1.05, and fourth-quarter adjusted EPS of $0.27. He said fourth-quarter gross margin improved to 28.0%, or 27.4% excluding a warranty provision recapture, driven by stronger revenue conversion, operating leverage, manufacturing discipline, and pricing actions. He also said cash from operations was $49.2 million, average quarter-end cash was $141 million, and the company returned about 56% of net income to shareholders through approximately $25.5 million of buybacks, while noting some increased D&A and startup costs tied to the Mexico facility.

Analysts pressed on where FY27 growth might come from, how sustainable current margins are, and what inning the company is in on lean, automation, and procurement initiatives. Management said the pipeline is strong across all verticals, but the key issue is conversion timing into bookings and revenue. On margins, management said competitive pressure and tariffs remain crosscurrents, but pricing, sourcing, automation, and manufacturing footprint optimization should support improvement over time. They also said the Mexico plant is primarily about adding capacity and improving supply-chain flexibility now, with margin benefit expected later as it ramps.