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- **Revenue Growth**: 12% order growth driven by 5/5 MLB projects and 15% transportation segment expansion.
- **Profitability**: 9.4% operating margin (near 10%-12% target) despite $8.8 million tariffs.
- **Backlog Strength**: $321 million backlog (+36% YoY), with 50% in high-margin Live Events.
- **Strategic Moves**: Mexico plant for global flexibility, Venus Control Suite for recurring revenue, and 25% share buyback authorization.
- **Tariff Impact**: $8.8 million tariff expense vs. $1.5 million last year, partially offset by cost savings.

**【Management Opening Remarks】**
- Daktronics delivered strong second-quarter results with 12% year-over-year order growth and a 36% increase in product backlog to $321 million.
- The company emphasized operational efficiency, value-based pricing, and cost control to drive profitability despite $8.8 million in tariffs.
- A new manufacturing facility in Mexico was announced to enhance global production flexibility and mitigate trade risks.

**【CEO Commentary】**
- **Revenue Growth**: 12% order growth across all segments, driven by wins in Major League Baseball (5/5 projects) and transportation systems.
- **Product Innovation**: Launch of narrow-pixel displays, billboard series, and cloud-based content management systems (Venus Control Suite Live).
- **Backlog Conversion**: 50% of backlog in high-margin Live Events segment, with projects like Miami Freedom Park and Aramco Stadium scheduled for Q3-Q4 delivery.
- **Transformation Plan**: 10%-12% operating margin target on track, with initiatives like SaaS trials and AI-driven service tools.

**【CFO Financial Commentary】**
- **Net Income**: $17.5 million ($0.35 EPS), up 25.4% year-over-year after adjusting for non-recurring expenses.
- **Margins**: 27% gross profit margin and 9.4% operating margin, near the 10%-12% target range.
- **Cash Position**: $138.3 million in net cash, with $25.7 million share buyback authorization.
- **Tariff Impact**: $8.8 million in tariffs vs. $1.5 million last year, partially offset by cost efficiencies.

**【Q&A Highlights】**
- **Backlog Conversion**: 36% of orders in Q2 were Live Events, which take 6-12 months to deliver, creating a multi-quarter revenue runway.
- **Mexico Plant**: Small-scale operation to complement U.S. production, with no immediate revenue contribution but long-term flexibility.
- **Margins Breakdown**: 400 basis points of margin improvement from value-based pricing and cost savings, offset by $8 million tariffs.
- **Working Capital**: Inventory-to-sales ratio optimized to 1.2x, supporting 7%-10% annual revenue growth target.

Daktronics, Inc. (DAKT) Q2 2026 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

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Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

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