DAKTRONICS INC /SD/ Q4 FY2025 earnings call

• Senior management transition: Brad Wieman as Interim CEO, Howard Atkins as acting CFO, Andrew Siegel as Chairman. - Exec compensation review: Completed, making comp more competitive and aligned with transformation goals. - Business and digital transformation: Made strong progress, including price adjustments, SaaS trials, modernized service software, AI-guided troubleshooting, improved inventory turnover. - New products released: Digital billboard and outdoor video display system, control system solutions like LiveSwitch and cloud-based software solutions.

Live Events: In FY2025, orders decreased 12% year over year and 11% in Q4, but continued to enhance products/services with major new projects. Commercial: Orders increased 31% for the year and 44% in Q4, with strong demand in out-of-home and on-premise. Transportation: Orders decreased 10% year over year but increased 14% in Q4, driven by notable wins. International: Orders grew 32% year over year and more than doubled in Q4, with largest growth in advertising. Events: Won a large multimillion-dollar project in Saudi Arabia. High School Park and Recreation: Orders grew 19% year over year and 33% in Q4.

• Targeting 10%-12% operating margin, 17%-20% ROIC, and 7%-10% compound annual growth by FY2028. - Expecting revenue growth in FY2026 due to backlog from Q4 orders. - Margin improvement through value-based pricing, cost reduction, and new markets/services adding accretion.

• Tariff uncertainties: Unclear import codes, changing rates, and competitor reactions impacting costs and pricing.

Q: Talk about revenue growth for FY 2026 A: Backlog up 8% from year-end 2024, with Q4 orders up 17% year over year, setting stage for revenue growth in FY2026 Q: Thoughts on margins in FY 2026 A: Through value-based pricing, cost reduction, and new additive services, expecting higher operating margin Q: Update on commercial segment AV network expansion A: Active in expanding AV network, with room to grow in independent channel and retail, focusing on out-of-home and on-premise advertising Q: Business transformation expenses in FY 2026 A: Consulting fees for major 2025 projects are done, but possible additional initiatives may require some outside help, but major project is behind us