Daktronics, Inc. (NASDAQ:DAKT) shares surged after the company reported fiscal first-quarter 2026 net income of $16.5 million, or $0.33 per diluted share, compared with a net loss of $4.9 million, or $0.11 per share, in the prior-year period.
Adjusted earnings of $0.33 per share topped the $0.25 consensus estimate. Revenue was $218.972 million, down 3.1% from last year but above the $213.412 million estimate.
Adjusted net income was $16.5 million, up from $16.6 million a year earlier. Gross margin improved to 29.7% from 26.4%, supported by manufacturing efficiencies, value-based pricing, and a favorable product mix.
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Operating profit rose to $23.3 million, with an operating margin of 10.6%, up from 10.0% in the prior year. Operating expenses increased to $41.8 million from $37.0 million, reflecting higher investments in IT, product efficiency, and growth initiatives.
Orders climbed 35.4% year over year to $238.5 million, the third-highest quarterly total in company history. Backlog expanded to $360.3 million from $267.2 million a year ago.
By business line, Commercial sales rose 35% to $46.2 million, while Live Events fell 26.5% to $79.8 million. High School Park and Recreation sales increased 23.6% to $59.3 million, Transportation dropped 26.3% to $16.6 million, and International grew 33.6% to $17.1 million.
Order activity was strongest in Live Events, which surged 81.2% on major league stadium projects, and in High School Park and Recreation, which had a record quarter. International orders rose 21.5% on strength in the Middle East and Australia.
Operating cash flow increased 34% year over year to $26.1 million, while free cash flow totaled $22.0 million. Daktronics ended the quarter with $136.9 million in cash and $11.6 million in total debt. The company repurchased 0.6 million shares during the period for $10.7 million.
The company reiterated its three-year objectives of 7% to 10% annual sales growth, 10% to 12% operating margin, and 17% to 20% return on invested capital.
Daktronics said it remains prepared to mitigate tariff impacts through contract protections and flexible sourcing, while continuing its digital transformation, product enhancements, and international expansion.
Interim President and CEO Brad Wiemann stated, "We enter the second quarter with robust backlog, strong customer demand, and improved efficiency. We are continuing to execute our three-year transformation plan with momentum and a clear path forward, all designed to enhance customer experience and drive long-term profitability."
Price Action: At last check Wednesday, DAKT shares were trading 22.81% higher at $21.41.
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