DAKT - Earnings call transcript Q1 2025

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Operator

Thank you for standing by, and welcome to Daktronics First Quarter Fiscal Year 2025 Financial Results Conference Call. [Operator Instructions] As a reminder, today's program is being recorded.

And now I'd like to introduce your host for today's program, Carla Gatzke, the Company's Secretary for Daktronics, for some introductory remarks. Please go ahead.

Carla Gatzke

Thank you, Jonathan. everyone. morning, Good participating for first earnings quarter Thank in call. you our will to I statements cautioning we future statements financial review opportunities. about investors future and like our of discussing expectations reflecting and facts, performance to disclosure our addition our would plans forward-looking in participants historical business and be that These forward-looking expectations company's concerning beliefs statements or reflect the future events. from involve and actual differ materially cause uncertainties results could All expectations. which risks forward-looking statements to

conditions, management Such These fluctuations in XXXX annual market report services components and risks of call in cause factors include, economic recent of this could to quarterly technologies, its magnitude materials, limited the are in most XX-K. and those Form shipping of availability introduction orders, growth, changes factors. to, of future actual first company's earnings discussed but not other in the new and release quarter identify and and differ products and raw timing and important on results contracts materially from margins,

first Commission Our the and release Securities financial non-GAAP X-K the SEC, furnished certain Exchange and contain was a morning. measures to Form this XXXX on quarter earnings

We also all on these website, and Investors today's made for available Daktronics are www.daktronics.com. available section at call the documents of slides

our I'll CEO, turn over the call to Kurtenbach. Reece

Reece Kurtenbach

Good returns growth to year Carla. quarter, driving our cost us a Thank demonstrating year towards joining morning. a our off Thanks, and prior record you strong of great We're the today. for all against start to above continued capital. execution

efficient well and profit last our installs our deliveries continued sequential HSPR earned highlights, growth delivered well production and first fiscal the Live financial large served a through XXXX orchestration High teams. quarter School fulfillment of were for product This year, see gross basis. Rec, new we sports can which X, and in Parks and especially and operating primarily on customers as with growth between results projects on-time first orders, our completion you throughout and increased presentation slide in planning execution on These teams our Page XX% on As steady expansion revenue several quarter from as our Events business.

environment schedules. supply with adding our stable operating chain greater predictability production to Our remains reliability

business solid performance more last comparison. of year's $XX.X very Our generated cash a operating model million, flow against profitable strong record

quarter, the have along quarters, During strategies a ability executed profitable our of and objectives throughout our enhancing the future digital efficiency long-term growth transformation, as making past maps we several to number road toward drive also our and growth. progress on

planned next XXXX roadmap this track and I We our for call. and further will later on have this milestones fiscal XXXX in specific are for these along steps, which discuss

year-over-year challenges. as reflects trends of backlog chain our we resolution more return of to our order past $XXX Our supply normal continue and continued million anniversary to seasonal growth

drive with quarter fiscal to expect second our momentum, enter growth We and in good order fiscal XXXX. we

as Our mission entertain inform, their is to support persuade our and they customers audiences.

areas Let's Slide look our review. market FQX vertical specifically into more X, business on

strong installation debuted our technology we and University a customers. extend last and new to LA also reception of demonstration college and which building during Events, University. installing halo the innovation our systems, is of projects for State, and continuous football, including and over years. Intuit revenue progress been AV from our double-sided home have Live fall university made X Texas, number on The their the recognized of the In we This leadership at other large Dome its Clippers Penn and quarter, LSU Colorado a

for Connecticut, projects also we Auburn. ahead, booked of University Alabama great and some Looking

similar Our our call. last outlook remains to

adjacent like and more expect ball the outside this and athletes. in placed and attract to trend -- experiences entertainment venues Events to the facilities We and see as continuing concourses areas on areas. Live demand enhanced remain being places fans focus strong entertainment entryways, We atriums, entertain

narrow matches pitch line be products and in demand. pixel places for continues to needs Our customers of the these of

signed retailors, types retailers ships, resellers, building business shopping through of advertising restaurants, companies to and sales centers, segment transportation customers. many are and included national quick-serve Our petroleum of commercial consists including casinos, out-of-home other owners, customers primarily cruise Also in commercial primarily on-premise military, and utilities, companies. this applications,

economic well. market is at commercial dependencies owners, to first out-of-home and to with as resellers strength to compared market And As is referred last commercial of displays, time, on-premise building flow overall quarter we doing conditions and spend. advertising up, sensitive often companies from quarter, fourth picked as This for continue order users year's these this spectaculars. gaining orders to even and this see

Our strategy is comparative also driving to continued increased periods, and sales forward. Spectacular going see increase. this promote we these also independent out-of-home interest operators is in

for continue and transportation grow is market focus especially pitch areas to our network this market by our agencies. product Our build and to out room military, applications AV to our utility used control pixel lines continue core to narrow in integrator

and systems awarded this quarter in year, were Rapid Area Transit Dallas their pleased are transportation focused using with Orders for a We winning and last contract projects have projects. displays teams mass last across from both other our to grew transit segment airport on systems. for Transportation. intelligent projects rollouts our and systems, been

is compared and as years, International economic uncertainty. prior to to to which geopolitical believe continues due be slow we

for some as demonstrate result to sequentially continue of out-of-home However, been rollouts. projects, in have of decisions. companies cases, buying bookings interest delaying billboard Customers but it digital increased a our XX% in

an are a continue responsive are signs more marquee. Dubai see actively to here orders. and Our quoting advertising The customers in we of and quotes be converting into opportunities unique sales teams starting for to is to installation picture

digital fan continued systems, to this contribution University to showing as This of had technologies market projects, display higher-margin for student past customers order converted in X new launched larger support last usage full on the delivered and last we to not year and be to to our X a but quarter, Hawaii, to only usage. margin Texas video segment. in bolster and We compared successes continues product X advance quarter, further We Schools. our akin the experiences. High

On improved customers enhancements Show integrated workflow and Control applications. data software, solution live data through the to timing empower XD and These sport-specific presentation deliver visualizations, entertainment our front, control system experience dynamic using a advancements undergoing rendering real-time major efficiencies. to and the our is scoring cutting-edge enhance will

The equipment, addressable by solution for year-end. our for market new if is release entertainment anyone is including events, not even broad, Daktronics sports, slated fiscal and live using supporting they're and

and introducing are manage to allowing schedule, sources we content Additionally, anywhere. their access, store from data and cloud customers

turn milestones, Sheila. details results year, financial on focus over strategic We for continue additional which But for to it first, to I'll in the quarter on and I'll moment. our a cover the

Sheila Anderson

this XXXX, I April Slide to and XXXX are and XX, titled quarter's you follow to turn XX, invite quarter-over-quarter Reece. and QX you, to The first of Thank as Fiscal for discussion XX, comparisons April fiscal XXXX, stated. in the X outcomes. related XXXX, quarters unless the July Financial slide financial otherwise ended Highlights

operating year fiscal fiscal in results, quarter. As comparisons, more seasonal our than ago QX this we QX meaningful comparable results are are in the and more adding X environment 'XX 'XX was to sequential which

pent-up reflected As being a record 'XX fulfilled. backlog volumes still was fiscal reminder, as QX results

and revenue and reflection followed typical of for us the customers. especially generation continue profit higher Out-of-Home, areas Our On-Premise, our strong a first seasonal unit, the revenue Order was up our setting Spectacular quarter in commercial rebounded and the order, quarter, strong to seasonal billboard for business order generation in sequentially focus normalize. a QX of seasonality all operators, to our independent Demand of in business. these patterns

of $XXX down quarter more was trends, million of at sales year record of the the -- of fourth from seasonal product activity. backlog quoting and end QX, strong ago. return volumes level higher and from fiscal a to X X.X% rate on levels Based we seasonal $XXX to million, the In quarter, a growth seeing more the the generated we're quarter

Recreation production work units. increase and orders sequential ramped deliveries especially is High Park installs, our for through and Events The These of sports fulfillment generation ability attributable our revenue timely manufacturing School our to and demonstrate to up for other levels convert and streams. business into sales Live

financial The XX.X% levels gross Gross and volume sequentially level improvement. continue generate of a at solid profit is strong mix some price returns. margin to reflection increased that and

operating at single QX. We high income consistently the through the X and in continue of in quarters generate sales digits XX% to last

increased and levels. July working capital capital accelerate strengthened implement restricted this wage sales by transformation operations, followed increases ratio $XX.X has the quarter. the $XX.X securities hiring to cash digital to Operating XXXX, help and additional and was million, balance strategies at to XX, We grown due expenses million expansion, generated support and we million marketable and us to primarily consistent from our company's $XXX working and Cash, of totaled X.X:X. cash sheet services our to drive profitability sales and have and grow other consulting efficiencies further

Management's capital of focus company. remains on managing expected growth through working the

in year feel flow growth about our and and our flow, and order profitable remainder to start drive strong momentum the Given positioning beyond. generation this we XXXX of through fiscal good to the cash our

Excluding million. $XX.X convertible adjusted our value higher change was of price, in note to income relating fair net the our stock

you, turn I'll to it back Now Reece.

Reece Kurtenbach

Thank you, Sheila.

Strategic growing transportation business improve resilient X, have which we customers' position, sports, our our cost audience transformation, we capitalize focused in leadership Overall, and their to by environments. on and to demand improving growing are commercial desire Slide To our Turning further and digital and experience in this are on XXXX markets. driven structure titled Priorities. position unique our enjoy FY markets a large, target

transformation allocation most data performance systems the improve in digital focus in enterprise will segments. are the and front, to we strengthen guide management available decisions and tools On our foundational investments our investing business management profitable that capital

service which improve experiences. planning we're operations modernized to both During internal and fiscal tools, and also XXXX, systems launch customer management will

in beginning we and effort plan which will launch automation Another to processes, in XXXX. fiscal quoting focused our phases sales front-end planning in be

We overall are accelerate costs competitiveness. and and lowering also our product structural growth to improve the to of increase profitable market making investments

with lower efficiencies increase efforts see to expected transformation costs, we do only also in consultants the digital overall are and investing lowering capabilities costs people but working competitiveness. operational market structural accelerate strategies Not our to we foundational to and increase to is

in Finally, MRR, advancing their our SAM. a execute delivering mentioned, to adding of as our grow we investment of and control ensuring we services help in include drive and to and achieve offerings. enhanced we are continue share our I strategies customers both to previously the These system capture on returns our strategies other capabilities success greater content professional

accelerate resources, information To and capabilities. in plans transformation XXXX and support fiscal both beyond, are investing consulting we in strategic world-class these technology in in

$XX will excess margins and between investments structure impact XXXX generation our higher fiscal in of for business these on operating $X costs this we meaningfully of profit these While investment as million growth a million, we our returns expect expected year accelerate base. to

and highlighting investing year, high-touch we our and many sales will To titled service fiscal advance to transformation, elements FY fiscal our to unique visualize Priorities, the XXXX our U.S. product please launch our road business planned deliverables sales With during upgrades, of digitization. systems culture FY Slide leveraging quoting including investments. customers. and our and Strategic to This develop growth X, and our our of the in XXXX. XXXX our the existing This lifetime fulfillment plan investments Then development and services these for premium into shows differentiation, automated milestones tools map initiatives, timing front-end continue proposition, and of our we digital are XXXX. competitive in through strategy back-end we along turn and key design, value control roadmap, in our to

through our have seasonally this to seamless during place affect year-end. planned transitions, To and year's we quieter FQX implementations take

will the you year. move we keep as of We progress strategies apprised through and our implement our

on conclusion, our highlights. our recaps Slide In summary key X

Our are a increasing serves and growth of performance on sustainable we that consistent profitability. as evidence trajectory

consistently multiyear and our above and commitment Our of these to near-term improve demonstrates the goals earn strategies capital. cost progress on returns

are transformations and digital right on lower allocation in and focused initiatives product and We capturing additional growth in focused profitable areas. existing to on other of growth structural developing and SAM We're resources the costs. accelerating

and to leader We to value communication best-in-class systems our are on control a global industry and video focus bringing in customers. continue displays we

world-class technology leadership, U.S. and seen of geographic only solutions market a with and and manufacturer the service. high-quality are extending by footprint global scale We service

open questions. for line that, operator ask With to I please the would the

Operator

[Operator from from Sidoti. Instructions] comes Our Anja first the line question of Soderstrom

Anja Soderstrom

bit about the on little [indiscernible] When a backlog. execution the Congratulations quarter. that do you you expect in Can normalize? the to just talk

Reece Kurtenbach

be a start represented QX QX more QX seasonal and Good we QX see of starts to sales our we'll summer. lower, think cycle into build be question, higher revenue to results busier tend our Anja. Backlog, where and in tends months, to to

So we in to we our would months. to and as expect QX move backlog then grow trend summer through our down tend

were these FY or large into excuse been on of Most as continue to chain that new of maybe on XXXX. based 'XX their But year. backlog XXXX. just that the as FY that expect maybe far going or we through our that quarter really would fiscal a quarter into for a entered -- we backlog me, And unusually in backlog. on QX supply issues so -- last was and I And and resolved final as of markets things more, like few our whether into high comments that think high it's projects, X sits on business construction on The or project. lot backlog a depending last X has

some shorter time. our standard our commercial like of markets that on our high a much and But runs business, on-premise school lead

figures. and quarter And ship within never could seen a backlog in be so maybe order our a and XX-week book lead

Anja Soderstrom

second there Was the was Or second should how quarter? pulled the first we was revenue think the from strong sequentially. anything quite then in about that And the quarter? Okay. quarter in

Reece Kurtenbach

In of of lot projects the sports. in sports-driven many are getting our as ready fall months, summer for there's customers and flight a our

difficult So to predict sometimes at quarter a say, movement. it's there to wasn't, would of boundary. I what's amount happen unusual But right going

much don't from pulled QX. think QX And . in was so into I

Anja Soderstrom

terms room already. there operating would the Okay. to of you target think have And be there you're that your lot margin, transformation. of expand a -- you you're And maybe in or... digital targeted initiatives Do taking with

Reece Kurtenbach

balance operating team room or that room growth, for and Great question. is believe now. we there believe looking -- And is We margin our margin growth, really that's the us, front is is at there room those we of for there's for management today we we and X growth top opportunity -- believe do line in growth. how have growth margin but operating

Anja Soderstrom

how mentioned your a you environment also about margin and proposition pricing expansion. you you to and for competitors compared value win. Can as talk the And driver Okay. just competitive

Reece Kurtenbach

it's competition of -- product to Southeast closer user and Continues a our reseller end or X most an end X competitive Thank some the that in to sold between out be comes then Yes. with you. environment. of Asia And maybe product user. of kind there's maybe more or and

are of and in our proposition harder consistent competitors strong AV has capability value workflows we Our to strong can very have and have systems made how control displays those offer the that the and remains offer. for been that we features control and systems are strong maybe

well those overall and I the using a And a what customers its services balancing are equipment might working both call things made we technically, Daktronics organization, And full-service professional in the keeping objectives. helps equipment manner looking as is together all best as what's X our strong. that achieve their by

Operator

question line from Furst Mac of our And next Singular from the comes Research.

Mac Furst

Singular is Mac quarter. Congratulations This the Furst on Yes. with Research.

Reece Kurtenbach

to Welcome you. call. the Thank

Mac Furst

by? not comment to come last, and share. wanted X you is that data couple has I to hard do the the very Can follow that you How developed ask that years of market in Or last specifically in say, about X, closely? that? you Or quarters. on

Reece Kurtenbach

that We track more by. is data It's do our on opportunities. win-loss come of hard to

do share. overall time I current But in through much thing, that gone customers looking market want lowest They And price focus. that less at. our X as and would thing really priority track the our say are with we've highest really COVID we the times, is so dollar they're their we spend

interested are going like -- had value has suspect price-sensitive focused I are sensitivity the And a share that price customers so in and this in high we that market as we Daktronics into proposition And that. don't solution a COVID. market. see we as previously have on pursuing highly

Mac Furst

Understand.

Reece Kurtenbach

believe market I been . quite our we've able areas, other share In maintain to well.

Mac Furst

all last to in X of quarters, the of how And say, please? the has quarters, about you the let's developed company? comment credit couple that Can at X position Okay.

Reece Kurtenbach

credit balance question. line we a very that there are Or our Did have As position, cash hit credit. strong of there, today, not right the to your and a pulled point sheet spot was high on levels Mac? another of out

Mac Furst

kind this it. of What did. you you time, in if is disposal need Maybe but it your don't it, needed Yes, it. if at Yes. needed point you credit at

Sheila Anderson

on $XX roughly of line. around So lending we availability million runs an and asset-based line have that

Operator

the does to the back to of remarks. question-and-answer This for hand I'd Kurtenbach today's program. program Reece further conclude session any like

Reece Kurtenbach

us today's at QX earnings release. do our for have the you, Look seeing then, some now Thank between joining you forward everybody, investor planned, conference. including call. marketing on to we Sidoti and And activities September

we'll everyone. X Have see see maybe you months. those So great out in you we'll about activities. there fall season, Thanks, types . and of in a

Operator

ladies your you, gentlemen, conclude program. Thank and participation today's does conference. for in This the

disconnect. now may You

Daktronics (DAKT) 4 Sep 242025 Q1 Earnings call transcript