Daktronics 2026 Q2 Earnings Revenue Beats Estimates but Net Income Drops 18.3%

Daktronics (DAKT) reported Q2 2026 earnings on Dec 10, 2025, with revenue rising 10.0% year-over-year to $229.25 million, surpassing the $217.43 million consensus. The company maintained guidance for continued growth despite seasonal Q3 slowdowns.

Revenue

Revenue growth was driven by strong performance across key segments. Commercial revenue stood at $50.75 million, while the Live Events segment contributed the largest share with $81.48 million. High School Park and Recreation added $45.97 million, and Transportation revenue totaled $21.27 million. International markets saw a 64% year-over-year increase, contributing $29.78 million.

Earnings/Net Income

Despite the revenue beat, earnings declined. EPS fell 21.7% to $0.36, and net income dropped 18.3% to $17.48 million. The EPS decline reflects ongoing profitability challenges despite top-line growth.

Post-Earnings Price Action Review

The strategy of buying Daktronics when revenue beats expectations and holding for 30 days shows potential. Q2 results exceeded forecasts, triggering a 10.63% stock surge. A $321 million backlog (up 36% YoY) and long-term targets of 10-12% operating margins by 2028 support optimism. While backtest data for this exact strategy is unavailable, the combination of a revenue beat, strong backlog, and positive market reaction suggests a viable short-term approach. Investors should monitor market conditions and risk tolerance.

CEO Commentary

Interim CEO Brad Wiemann highlighted "solid results" driven by 12% order growth and a $321 million backlog. He emphasized expansion in Live Events (six Major League projects), Transportation (15% order growth), and International (23.6% growth), while noting tariff cost challenges. Strategic priorities include innovation, Mexico facility expansion, and digital transformation to achieve 10%-12.5% operating margins and 7%-10% CAGR by 2028.

Guidance

Daktronics expects continued growth despite Q3 seasonality. A $321 million backlog provides a multi-quarter revenue runway. CFO Howard Atkins noted $8.8 million in Q2 tariff costs but reiterated confidence in margin expansion via pricing discipline and cost efficiencies.

Additional News

1. Leadership Transition: Ramesh Jayaraman was appointed CEO, reinforcing long-term growth ambitions.

2. Mexico Facility Expansion: A new plant in Saltillo, Mexico, opened to optimize production and mitigate tariffs, supporting a 7-10% CAGR target.

3. Product Innovations: Launched a 2.5mm pixel pitch display, next-gen digital billboards, and the Venus Control Suite, aligning with a $321 million backlog-driven growth strategy.