Daktronics reported QQ2 2025 revenue of $208.33 million, up 4.5% year over year but down 7.85% versus the prior quarter. The company delivered a gross profit of $55.86 million with a gross margin of 26.8%, and operating income of $15.77 million (operating margin 7.57%), supported by a EBITDA of $20.67 million. Net income was $21.41 million for the quarter, translating to a net margin of 10.28% and diluted EPS of $0.22 (basic $0.25). A notable feature of the quarter was the contribution from non-operating income that helped lift the bottom line, as reflected in total other income of $9.41 million and a positive income before tax of $25.18 million.
Cash generation remained robust: net cash provided by operating activities was $43.34 million, with free cash flow of $37.95 million. Daktronics ended the period with $134.35 million in cash and cash equivalents and reported a net cash position (net debt negative) of about $(68.97) million. Balance sheet strength is evident: total assets of $551.89 million versus total liabilities of $290.96 million and stockholders’ equity of $260.93 million. Liquidity metrics remained healthy (current ratio 1.67, quick ratio 1.00, cash ratio 0.75), underscoring the ability to fund ongoing product development and selective capex without external financing.
Valuation appears conservative relative to earnings power: P/E around 7.1, P/B 2.32, price-to-sales 2.91, and EV/EBITDA implied around 25.96x. With cash generation strong and leverage modest, the company is positioned to pursue product line expansion (Commercial, Live Events, Transportation, International) and potential share repurchases if strategic opportunities arise. However, the QQ2 results also show a QoQ revenue pullback, signaling cyclicality tied to the live-events/OOH display cycles and industrial end-markets. Investors should monitor demand momentum across end-markets, backlog progression, and any margin-pressure from component costs as electronics pricing dynamics evolve.