Daktronics (DAKT) shares ticked up Wednesday after the company behind those giant scoreboards at stadiums and digital displays on highways reported fiscal fourth-quarter results that beat Wall Street's expectations. The headline numbers: net sales of $208.6 million, up nearly 21% from a year ago, and adjusted earnings of $0.27 per share, comfortably above the $0.20 analysts were looking for.
On a GAAP basis, the company earned $0.17 per share, a sharp turnaround from a loss of $0.19 per share in the same quarter last year. The improvement wasn't just about revenue — operating margin swung from negative 1.0% to positive 6.8%, and gross margin expanded to 28.0% from 25.0%. Management credited stronger revenue conversion, operating leverage, manufacturing discipline, and working capital efficiency, rather than any shift in business mix.
For the full fiscal year 2026, Daktronics posted record net sales of $838.7 million, up 10.9% from fiscal 2025. GAAP earnings came in at $0.92 per share versus a loss of $0.21 per share last year, while adjusted earnings rose to $1.05 per share from $0.84. Full-year operating margin improved to 7.3% from 4.4%, and adjusted operating income climbed to $64.6 million from $49.6 million.
Record Orders and a Fat Backlog
The real story might be the order book. Fiscal 2026 orders hit a record $860.8 million, up 10.2% from the prior year. Fourth-quarter orders dipped 7.7% to $222 million, but that's because the year-ago period saw customers rushing to buy ahead of price increases — a tough comparison. The year-end backlog stood at $356.2 million, up 4.3%, and about 52% of that is expected to convert into revenue during the first quarter of fiscal 2027.
Breaking it down by segment: Live Events, which includes stadium installations, saw annual sales rise 10.1% to $321.1 million, with orders jumping 18.4% to $336 million. Daktronics noted it has secured five Major League Baseball stadium installation projects since the third quarter of fiscal 2025. Commercial sales increased 15.7% to $180.8 million, transportation orders rose 23.7%, and international sales advanced 24.5%.
Cash, Buybacks, and Tariff Juggling
Daktronics generated $49.2 million in operating cash flow and $34.9 million in free cash flow during fiscal 2026. The company ended the year with $131.6 million in cash and cash equivalents and just $10.8 million in total debt. It also repurchased 1.4 million shares for $25.4 million during the year.
Tariffs remain a headache, as they are for many manufacturers. Management said no tariff refund amounts were recognized because of uncertainty around eligibility, timing, and potential recovery. The company is using pricing actions, supplier negotiations, sourcing initiatives, and manufacturing efficiencies to offset the impact. A key part of the strategy: a new manufacturing facility in Mexico, which is expected to begin production in July 2026, with initial shipments planned for the fiscal second quarter. Management said the facility should support margin expansion over time, though benefits won't show up immediately.
On the software side, Daktronics highlighted Camino 8 as a potential source of recurring revenue within its Live Events platform. And the company reiterated its fiscal 2028 targets: 7% to 10% annual revenue growth, operating margins of 10% to 12%, and return on invested capital of 17% to 20%.
At the time of publication Wednesday, Daktronics shares were up 1.91% at $20.49.
