Daktronics reported QQ1 FY2025 revenue of $226.1 million, up 4.7% sequentially from Q4 2024, with a gross margin of 26.4% and an operating margin of 10.0%. Net income was negative (-$4.95 million) driven by a material negative total other income/expenses item (-$22.5 million) and modest taxes, despite positive operating performance. Management highlighted orderly seasonality normalization from a historically elevated backlog, with a year-over-year order growth of 11% and a quarter-end backlog of $267 million, signaling improving visibility and a path to seasonal revenue generation aligned with fall sports and large project executions.
The quarter benefited from notable project executions in Live Events and High School Park & Recreation (HSPR), including college football stadium installations and the LA Clippers Intuit Dome project, while international demand remained softer on year-over-year basis but improved sequentially. Management emphasized ongoing digital transformation and cost-structure improvements intended to lift profitability over the medium term, including investments in enterprise tools, service offerings, and automated front-end quoting. They guided that FY2025 operating margins would be temporarily pressured by transformation-related costs ($8–$10 million) but expected to drive higher returns as the clearer growth trajectory unfolds into FY2026 and beyond. The company remains focused on expanding its SAM, leveraging control systems leadership, and growing professional services to convert project activity into recurring revenue streams. The stock-of-backlog and cash-flow generation position provides optionality for value creation as the year unfolds.