Daktronics Reports 12.2% Decline in Q3 Fiscal 2025 Revenue

Daktronics, Inc. reported a significant decline in financial performance for the third quarter of fiscal 2025, ending January 25, 2025. The company recorded net sales of $149.5 million, a decrease of 12.2% from $170.3 million in the same quarter of the previous year. Gross profit also fell to $36.8 million, down 11.8% from $41.7 million, resulting in a gross profit margin of 24.6%. The company experienced an operating loss of $3.6 million compared to an operating income of $8.0 million in the prior year, primarily due to increased operating expenses and a significant loss related to the change in fair value of a convertible note.

In the nine months ending January 25, 2025, Daktronics reported net sales of $583.9 million, down 3.0% from $602.2 million in the same period last year. The decline in sales was attributed to lower volumes in several business units, particularly Commercial and High School Parks and Recreation, although the Transportation segment saw an increase. The company’s operating income for the nine-month period also decreased significantly to $34.9 million from $67.7 million, reflecting a challenging market environment and increased costs associated with personnel and professional services.

Strategically, Daktronics has been focusing on digital transformation and enhancing its governance structure. The company formed a Business Transformation Office to oversee initiatives aimed at improving operational efficiency and market penetration. Additionally, Daktronics is in the process of changing its legal domicile from South Dakota to Delaware, a move intended to enhance corporate governance. This transition has been met with some opposition from shareholders, leading to legal proceedings that the company is currently navigating.

Operationally, Daktronics reported a backlog of $273.2 million as of January 25, 2025, down from $328.3 million a year earlier, indicating a normalization of order fulfillment rates as supply chain conditions stabilize. The company’s cash and cash equivalents increased to $132.2 million, up from $81.3 million at the end of the previous fiscal year, reflecting improved cash flow from operations. However, the company also repurchased $9.0 million worth of shares during the nine-month period, indicating a commitment to returning value to shareholders despite the operational challenges.

Looking ahead, Daktronics anticipates continued volatility in order volumes due to market conditions and geopolitical factors affecting customer investment in digital display systems. The company is focused on leveraging its leadership position in the audiovisual industry and expects to invest between $8.0 million and $10.0 million in transformation efforts during fiscal 2025 to drive future growth. Despite the current challenges, Daktronics remains committed to enhancing its product offerings and operational capabilities to meet evolving market demands.