Daktronics (DAKT) Q3 2026 earnings summary

Executive summary

• Achieved 21.6% year-over-year revenue growth in Q3/FQ3 2026, reaching $181.9 million, with net income of $3.0 million, reversing a prior year loss.

• Orders increased 7.6% year-over-year to $201.1 million, with backlog up 25% to $342.3 million, providing multi-quarter revenue visibility.

• Completed acquisition of XDC's intellectual property and engineering teams to enhance Micro LED capabilities and technical expertise.

• Transformation initiatives focused on profitable growth, operational efficiency, and technology alignment are progressing as planned.

• Leadership transition completed, with new CEO in place as of February 1 and ongoing strategic planning.

Financial highlights

• Q3/FQ3 revenue was $181.9 million, up 21.6% year-over-year; gross profit margin was 24.0%, flat year-over-year but down from 27% sequentially.

• Net income after tax was $3.0 million ($0.06 per diluted share); adjusted net income was $4.6 million, excluding non-recurring expenses.

• Operating income was $1.9 million (1.1% margin), compared to a $3.6 million loss in Q3 FY2025; adjusted operating income was $4.0 million.

• Cash and cash equivalents ended at $144.4 million, up 13% from Q4 FY2025.

• Free cash flow for the first nine months was $44.5 million.

Outlook and guidance

• Entering Q4/FQ4 with a record backlog and strong pipeline, providing momentum for FY2026 and early FY2027.

• Management expects to fulfill the current backlog within 24 months, with most revenue recognized in the next 12 months.

• Focus remains on efficient revenue conversion, expense management, productivity, and cash generation.

• Mexico facility on track to be operational in Q1 FY2027, with no significant margin impact expected.

• Strategic transformation and growth plans to be outlined at Investor Day in April.