Daktronics Reports Q3 Loss, Leadership Changes Amid Falling Sales And Orders

Daktronics, Inc. DAKT shares are trading lower following third-quarter FY25 results.

Sales fell 12.2% year over year to $149.5 million, missing the consensus of $170.6 million due to comparatively lower volumes in the Live Events and Transportation business units.

Orders fell 2.7% Y/Y due to lower orders in the Live Events, High School Park and Recreation, and Transportation business units.

The product order backlog was $273.2 million as of January 25, 2025. Product and service orders for the quarter totaled $186.9 million, down 2.7% Y/Y.

Gross margin rose slightly to 24.6% from 24.5% a year ago. Operating loss stood at $3.6 million vs. operating income of $8.0 million a year ago quarter, while adjusted operating income stood at $1.2 million.

Net loss stood at $17.2 million in the quarter, while adjusted net income was $0.5 million. Adjusted EPS of $0.01 missed the consensus of $0.08.

As of January 25, cash and marketable securities stood at $132.2 million. In the first nine months of fiscal 2025, Daktronics generated $74.8 million of cash from operations.

Leadership Transition: Daktronics announced Reece Kurtenbach stepped down as President, CEO, and Chairman of the Board, effective at the close of business on March 5, 2025.

Executive VP Brad Wiemann has been named interim president and CEO, while Howard Atkins has taken over as acting CFO and Chief Transformation Officer.

This transition allows Sheila Anderson to focus on her role as Chief Data and Analytics Officer, which she assumed in October 2024, while the company continues to search for a permanent CFO.

The company’s Board has also appointed Andrew Siegel, currently its lead independent director, to serve as the new independent Chair of the Board.

Outlook: The company noted that the recent U.S. government actions, including tariff policies and shifts in federal funding priorities, may impact near-term business conditions and order timelines.

The company says delays in U.S.-based project bookings have been observed across markets, and corporate governance and business transformation costs are expected to remain high in the fourth fiscal quarter.

Sheila Anderson, CFO and Chief Data and Analytics Officer, said, “The transformation, built upon our market leadership position, our technical and strengthening operating financial profile, and our capable employees, was designed and structured to support our ambitious targets to grow revenue faster than our addressable market, currently estimated in the 7-10 percent range, expand operating margins of a sustainable 10-12 percent, and achieve 17-20 percent return on capital by fiscal 2028.”

Investors can gain exposure to the stock via Invesco Dorsey Wright SmallCap Momentum ETF DWAS and First Trust Active Factor Small Cap ETF AFSM.

Price Action: DAKT shares are down 18.67% at $11.65 at the last check Wednesday.

Photo via Shutterstock.

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