Daktronics at Small-Cap Virtual Conference: Strategic Growth Plans Unveiled

On Wednesday, 17 September 2025, Daktronics (NASDAQ:DAKT) participated in the Small-Cap Virtual Conference, where Interim CEO Brad Wiemann and Interim CFO Howard Atkins outlined the company’s strategic initiatives and future outlook. The conference highlighted Daktronics’ leading position in the LED video display market, its ambitious transformation plan, and the challenges posed by tariff uncertainties. Despite these challenges, the company remains optimistic about achieving significant financial goals by fiscal year 2028.

Key Takeaways

• Daktronics aims to achieve operating margins of 10-12% and a return on invested capital of 17-20% by FY28.
• The company is focusing on growth in high school parks, recreation, commercial sectors, and international markets.
• Daktronics is investing in digital transformation and technology advancements to enhance efficiency.
• A new CEO is expected to be appointed by the end of the year or shortly thereafter.
• The company is prioritizing capital allocation to maximize shareholder returns through reinvestment, acquisitions, and share repurchases.

Financial Results

• Trailing 12-month revenue stands at approximately $749 million.
• Targeted operating margin: 10-12% by FY28.
• Targeted return on invested capital: 17-20% by FY28.
• Targeted compound annual growth rate: 7-10% through FY28.
• Capital allocation priorities focus on maximizing return on investment for shareholders.

Operational Updates

• Manufacturing operations are primarily based in the U.S., with additional facilities in Ireland and Shanghai.
• Approximately 80% of revenue is generated from U.S. facilities.
• Daktronics has launched a modernized service software system and a corporate performance management tool.
• Efforts to streamline products aim to reduce complexity and improve inventory efficiency.
• SaaS trials have been launched to target new customers, with pricing adjustments made on some products and services.

Future Outlook

• Daktronics is targeting growth in high school parks, recreation, commercial, and international markets.
• International expansion is focused on the Middle East, Australia, and other regions.
• Technology investments include narrow pixel pitch, micro-LED, reflective low-power displays, and intelligent power management.
• The company is enhancing its digital transformation roadmap with quoting platform improvements and AI experimentation.

Q&A Highlights

• Daktronics has an active pipeline across Major League sports and college universities, with projects expected to start in late 2026 and into 2027.
• The high school park and recreation segment is a significant growth driver, with Daktronics offering differentiated services.
• International strategy represents approximately 9% of the overall business, with strong growth potential.
• Key competitors include Panasonic, Samsung, Fair-Play, and Nevco, varying by segment.
• The CEO search is ongoing, with an expected appointment by year-end.

For more detailed insights, readers are encouraged to refer to the full transcript below.

Full transcript - Small-Cap Virtual Conference:

Anja Soderström, Senior Equity Analyst, CIdoti: Everyone, and welcome to the CIdoti Virtual Small Cap Conference. Thank you for joining us today. As I mentioned, next up we have Daktronics, ticker DAKT. I’m Anja Soderström, a Senior Equity Analyst here at CIdoti, and I cover Daktronics. With us today, I have Brad Wiemann, the Interim CEO, and I also have Howard Atkins, the Interim CFO. This will be conducted as a presentation that will be followed by Q&A. If you would like to participate, you can do so by submitting your question in the Q&A function at the bottom of your screen. With that, I’m happy to hand it over to you, Brad. Welcome.

Brad Wiemann, Interim CEO, President, Daktronics: Okay, thank you, Anja. Welcome, everyone, to our investor presentation. As mentioned, my name is Brad Wiemann, Interim CEO, President, Daktronics. With me is Howard Atkins, our Acting CFO. I’m going to give you a presentation on Daktronics and talk about what’s happening here, then we’ll open it up for questions, as Anja said. To start out with, I hope you can all see my screen. About Daktronics, we help thousands of customers every year to achieve their vision, to entertain fans, reach new customers. What we do, as you can see on the screen here, is very visual. Behind the scenes, we have developed the best talent in the industry who help our customers achieve their vision using dynamic audio and visual communication systems. Some examples can be seen here.

Our displays and solutions are used by a variety of customer types and include sports venues, transportation, mass transit systems, indoor/outdoor applications used in corporate headquarters, retail stores, military applications, control centers, a wide variety of things. Of course, we’ll be talking today about past and the future, and that includes risks. Please read the safe harbor statement to take that into consideration in all that we plan to share with you today. Some highlights about our company: our trailing 12-month look backwards through Q1. We just finished up our Q1. Our fiscal year runs from May through April. Our trailing 12-month revenue is about $749 million. We are the number one American LED video display provider. We’re the third largest worldwide. We supply products to over 12,000 customers per year, and we have products installed in over 120 countries.

Taking a look at investment highlights, why should you consider investing in Daktronics? In a nutshell, Daktronics is a world-class business with an unmatched culture of excellence from the quality of our engineering, manufacturing, and installation expertise, our solution-oriented sales team, to commitment to customer service throughout the entire lifetime of display use. What differentiates Daktronics is, yeah, we’re the best in class in our industry. We’re the only U.S. manufacturer of scale with a global footprint. What I mean here is that we excel in providing world-class, customizable LED video solutions. We can do this turnkey, sales design, support, managed project management, installation, control system, and service. In addition to that, however, we also have a large set of standard solutions for many customers that we deploy through channel partners, including hundreds of sign companies and AV integrator partners.

We have an e-commerce system that you can buy the products online. We’ve developed new solutions that expand opportunities with our current customer base, as well as extending into new ones. An example here is shown as an indoor narrow pixel pitch product for We Got Talent game show. Our target markets are large and growing, with resilient demand driven by advertising, audience experience, and sports fan engagement. This slide articulates our business units, the end markets we serve, and control capabilities. In our live events segment, we sell to major arenas, Major League sports, like the Akron Rubber Ducks minor league baseball team that’s shown here. We also sell to college universities and other venues that showcase live performances. These sales are generally sold directly.

Down over the right-hand side, our high school park and recreation segment sells increasingly sophisticated traditional scoring and video displays for enhanced sporting applications and other curriculum usage that emulate those used by bigger sports teams. These projects often incorporate content sales, local advertising for funding sources. These relationships are maintained directly and through resellers, dealers, and AV channel partners. In our commercial segment over on the left-hand side, we serve large projects like you’ll see in Times Square or in Las Vegas. What is often overlooked is our out-of-home business, where we are the largest supplier of digital billboards along freeways or our extensive line of products for on-premise advertising. Here, we use an extensive sign company network for distribution. In our transportation business, we’re pre-qualified in all 50 states to offer displays to help manage traffic on roadways and visual communication systems at railways, stations, and airports.

Our international market segment is a growth area for us to mimic what we do in North America, but on an international basis. Our control capabilities enable our customers to operate their displays and show content that is inviting and engaging. In addition, it also provides us a subscription-based SaaS model for ongoing revenue generation. Our industry leadership and market share derives from the diversity of our customers and applications that we serve, along with our growing brand identification for both core and adjacent applications across our addressable market segments. Here are some HSPR examples, like Prosper Independent School District in Texas. Of course, their video displays are much more common, but it’s becoming more common everywhere. Commercial market solutions for companies such as Wawa, long-time customer of Daktronics for both menu boards, control solutions, as well as outdoor pricing and messaging displays.

Just one example of many customers we have like this. Live event customers such as the Seattle Kraken Arena in our transportation business with customer applications such as all the Minneapolis Airport displays inside and outside that whole campus. We have thousands of installations at high schools and businesses across local communities. Looking back at the past 12 months, this gives you an idea of revenue by segment. Today, we’re focused on further diversifying our businesses to drive long-term growth and profitability. We’ll see this mix change over time as we bring our focus into view even further and further in part of our three-year plan, which I’ll talk about later. Another differentiator for Daktronics is our global footprint. These are our manufacturing facilities highlighted in yellow, the yellow stars. Our largest factories are located in Brookings, South Dakota, where I’m based out of, along with Sioux Falls.

We also operate a facility about 90 minutes away over in Redwood Falls, Minnesota. These factories produce about 80% of our revenue. We also have a facility that serves our European markets very well that’s located in Ireland, as well as a plant in Shanghai, China, that helps us to support all the ASEAN countries and Southeast Asia. We have great customers that buy from us because we’re the best in class, and we support them throughout the life of their products. Not everyone does that well. Our delivery of innovation, collaboration, quality, and high-touch service solidifies our customer relationship around the world, many of whom come back to us time after time or return to us after having tried a lower-cost competitor.

Our customers use our displays for an average of 7 to 10 years, sometimes longer, but they often come back to us for upgrades or additional products during their current use. We continue to foster relationships with our repeat customers and resellers and are building out ways to engage them through automation and online solutions. Over time, we’ve been successful in driving growth through innovation and technology leadership, either ahead of or in lockstep with our addressable markets’ growth, as visual communication has permeated every aspect of the customer experience. Today, we are enjoying the growth and earning returns on our past investment in narrow pixel pitch line of products, as well as high-resolution outdoor solutions.

We are also investing in future potential technologies to position us for growth in the future, including narrow pixel pitch and micro-LED technologies, as well as reflective low-power displays, intelligent power management, and SaaS-based control solutions. With respect to business transformation, we made progress on these initiatives, and our implementation of the plan is on track and driving results. Actions we have taken today include price adjustments on some products and services aligned with value selling, allowing us to reserve our value-based products and services positioning. We have launched SaaS trials to target customers. We have a focused approach to prioritize growth areas, both in the business verticals and geographies. We are driving faster inventory turnover and improved inventory efficiency by leveraging our platform designs to reduce complexity.

We released a modernized service software system this past May that will help us to enhance customer experience through better self-service management and enablement of self-service options. We are furthering our utilization of previously released AI-guided troubleshooting and technical services. We are simplifying some of our products. I talked about that earlier to allow us to bring them to market more quickly and to utilize our components, reducing our inventory across the company. We talk about digital transformation. Significant progress has been made here. I mentioned our modernized service software system that we released in Q1, and we have the technical build-out of our corporate performance management tool was accomplished as well. Our goals are to build with digital transformation, are to build our systems to scale our operations for growth while increasing internal efficiency and improved business engagement for customers and partners.

During the remainder of 2026, we have slated a number of items which are mentioned here from our quoting platform to drive faster, more efficient quotes while capturing the data that the system generates for capacity planning. We’re doing an AI experimentation roadmap and governance development, tool updates for our project management team to scale our teams for continued growth, continued service platform enhancements for our customers, and a tool upgrade for our subscription management system, along with preparing for an ERP system upgrade in the future. Additionally, we have plans to further enablement of subscription management and fulfillment performance reporting. We embarked on this journey to generate better returns for all our stakeholders.

This past year, we invested heavily in an outside consultant to work with our team to develop to come up with a plan for the next three years to address what we’re setting out to do here. We’re targeting a performance aligned with higher operating margins of 10 to 12%, operating in the top quartile return on invested capital of 17 to 20%. In order to do that, we need to achieve this compound annual growth of 7 to 10% throughout FY28, along that journey. We believe these are achievable. We’re on track to do it. We’ve also continued to introduce new best practice initiatives, including improved financial planning protocols, incentive compensation plans that better align compensation with shareholder value and with annual operating performance. Our plan is in place. We are executing on it. We have work to do, and our team is committed to its success.

In summary, we are a global industry leader, the only U.S. manufacturer of scale with a global footprint. We’re a technology leader with world-class service and a transformation commitment toward revenue growth faster than an addressable market, 10 to 12% operating margin, and 17 to 20% returns on capital throughout by FY28. Pictured here is the Intuit Dome for the LA Clippers in Los Angeles. With that, I think I can open it up for questions.

Anja Soderström, Senior Equity Analyst, CIdoti: Thank you, Brad. That was a good overview. Anja, if you would like to participate in the Q&A, you can submit your question in the Q&A function at the bottom of your screen. I’ll kick it off with a couple of questions first. You recently won, or you’ve been winning some large programs, especially in the live events. Despite winning these programs, how do you see that pipeline develop? Has that expanded? Have you been able to more than backfill what you’ve been winning, or what does that look like?

Brad Wiemann, Interim CEO, President, Daktronics: Yeah, we participate in all levels of Major League sports, whether it be the NBA, NFL, Major League Baseball, minor league baseball, up and down college universities. We have a very active large pipeline of projects, and we track these. We’ve been in this business for a long time. Our teams know the opportunities that are out there, whether it’s a replacement, a new stadium growth, or add-on systems. I talked a lot about add-on capabilities, indoor products, things that go outside of the bowl itself. We have a very active list. It looks out over many years, and our teams track it well.

Anja Soderström, Senior Equity Analyst, CIdoti: All right, I think you froze. Brad, I think your internet froze. I don’t know if you can hear me. Maybe Howard can jump in.

Howard Atkins, Interim CFO, Daktronics: I think, as Brad Wiemann mentioned, we ended the first quarter with a strong backlog as well as a decent pipeline. That’s pretty much across the businesses. I would say, if anything, the backlog may have been heavily weighted towards live events, the large stadiums that we’ve been talking about. The issue there is that while we had obviously very strong order growth, including live events in those stadiums in the last two or three quarters, those projects probably won’t be starting until later on in 2026 and in some cases even into 2027. The good news there is that we have a good revenue tailwind coming from that pipeline and that backlog. That may play out over a longer period of time; it’s not going to all occur in the second quarter or even in the third quarter. It’s going to play out over a period of time.

Anja Soderström, Senior Equity Analyst, CIdoti: Okay, thank you for that input. Welcome back, Brad. In terms of the high school and park and recreation, how has that been trending and what’s the opportunity for you there? It seems like you have a very good value proposition to your customers there with them financing it through advertisements.

Brad Wiemann, Interim CEO, President, Daktronics: Yeah, a very good question. If you go back and look at our financials over the years, you’ll see high school park and recreation as one of our fastest growing and healthy businesses that’s been doing very well. What’s driving that for the most part is the adoption of video displays across that segment. Started with outdoor stadium type video, high school football, for instance, with outdoor video systems. We have a great product offering that fits this very well. We standardized that over the years and can, one, execute, get the quotes out the door. We’re price competitive. We can deliver many of these systems. Our teams are very busy this time of year installing, just kind of completing at this point high school football and moving into the basketball and baseball seasons. We have a great line of products, but video is driving this, the implementation of video.

You start talking about the things that can differentiate you in that space, but really helping the schools to be able to purchase. How do I afford these? How can I do these? How can we bring a sports marketing concept to this to help fund it? What are some of the differentiators that we bring to the table that enable customers or places in their hearts the desire to purchase our products? Those are differentiated services like Daktronics curriculum. We work with the school on a curriculum activity to help them to train their students how to operate these systems, get them high school credits, even college credits for this. It provides a great avenue for that student then to apply into part of our overall story in the sports world. We have this great presence in Major League sports.

We have a great presence in college and university, and of course, we’re on high school campuses. We can tie all those together with our service offerings and provide an avenue for students to move up along that chain across all those platforms. Our sports marketing and our product offerings, both for indoor and outdoor, yes, the sporting events, but that extends into the whole school, whether it’s a message center out in front of the school or displays up and down the concourses and throughout the campus to communicate. COVID was a big driver of it. It was a help from the standpoint of safety and communication across all the different stakeholders in a school. It drove a lot of this, but on the high school sports side, competition is a big driver as well. One campus gets this within a school district, and pretty soon they’re all following.

Those are a lot of the growth drivers for high school.

Anja Soderström, Senior Equity Analyst, CIdoti: Okay, thank you. A question from the audience is, as the third largest in the world and largest in the U.S., how important is your international strategy, and what % does the segment make up?

Brad Wiemann, Interim CEO, President, Daktronics: Yeah, today, I think I had that on a slide earlier. It’s about 10% of our overall business. I can pop that up. It showed up here, I think, 9% for that trailing 12 months. Very important to us. We see this as a great growth opportunity. What we do here in the U.S., we can do elsewhere. We’re doing that in the Middle East, we’re doing it in Australia, we’re doing it in Europe. China is a market that’s not really, we don’t have a big presence. Our competitive base is really out of China, and that’s a place where we just decided that that’s not in our best interest to go after. All the other areas across the world, whether it be in sports, advertising, retail, we have a very good presence and a lot of opportunity there. Highly important to us.

Anja Soderström, Senior Equity Analyst, CIdoti: Okay, among live events, commercial, transportation, and high school, where do you see the largest opportunity and market moving forward?

Brad Wiemann, Interim CEO, President, Daktronics: We see growth in all of them. That’s important, first of all. We don’t see any of these shrinking by any means. The indoor, to answer that question is a tough one because one of our product lines or one of our great opportunities is we have a very high presence with outdoor displays. We also participate in indoor, but we brought on a large line of products for indoor, and the opportunities there are extensive. I talked about live events. We do a lot in the bowl. You go outside the bowl into the concourse. We’re doing work with indoor displays, whether it be in the weight room or in the meeting halls all across the campus. We talked about commercial. We do a lot with on-premise advertising with signage out in front. We do menu boards indoor.

We now have our own LED line of products that fits this very well. All these segments have an indoor play to it: transportation, airports, the airport market, mass transit systems. All these play part of it. We see good growth in high school, commercial, international, and we already talked about. Strong growth, but I would say the strongest growth is probably in high school park and rec and commercial opportunities.

Anja Soderström, Senior Equity Analyst, CIdoti: Okay, another question. Do you see any opportunities in South America or potentially Australia?

Brad Wiemann, Interim CEO, President, Daktronics: We have a great presence in Australia already. We do a lot of out-of-home billboards and stadium projects throughout Australia. Very, very nice presence there, retail. South America has been a more challenging market for us, but we have great wins down there. We have large stadium projects. The one that wasn’t in there was the Middle East. We do a lot of work in the Middle East. Great one. We have seen all those expanding. Those are our target areas for us.

Anja Soderström, Senior Equity Analyst, CIdoti: You also talked to who are your two to three largest competitors and also maybe how you differentiate yourself.

Brad Wiemann, Interim CEO, President, Daktronics: Yeah, so each one of these, if we step back and look at them, they’re all different, whether it be transportation or live events, commercial, high school park and recreation. If I talked about it in terms of revenue at the live events space, there’s a number of Chinese competitors. We run into Panasonic. Samsung has been a competitor in that space. We have a large market share presence. They have a few here and there, but those would be companies that we compete against. High school park and recreation, there’s a lot of different competitors. Traditional scoreboard providers like Fair-Play or Nevco, a company out of Omaha that we compete with. There’s a lot of them. Watchfire, commercial segment, we have different competitors in our out-of-home space that we compete with.

I can name a lot of them, but there’s probably about 10 or 20 competitors in each of these. We’re positioned well. Differentiators, you asked that question. I hit on it a little bit. We are a world-class provider. We support our customers. We interface with them very well. We’ve been around a long time. A lot of differentiators that we bring to the table. I talked about some of those in high schools. Our image quality, how our products last in the marketplace, how we support them are key to our winning.

Anja Soderström, Senior Equity Analyst, CIdoti: Okay, in terms of tariffs, how is that impacting your business? Do you think that also could be, I mean, you talked about that maybe also being a competitive advantage to you with your U.S. footprint. Maybe you can just speak to that as well.

Brad Wiemann, Interim CEO, President, Daktronics: Yeah, good one. Tariffs.

Howard Atkins, Interim CFO, Daktronics: Tariffs.

Brad Wiemann, Interim CEO, President, Daktronics: Yeah, tariffs is, first of all, I want to make the point that we’re still dealing in a highly uncertain situation with respect to tariffs. The good news is that we are maintaining as much agility and flexibility as we can as we learn and adapt to try to offset as much as we know. It is still very uncertain. Part of the uncertainty is our, you know, how we’re affected relative to other parties. On the one hand, as you know, we manufacture most of our product in the U.S. By comparison with those competitors who are finishing product outside the country and bringing it in, we are competitively advantaged. On the other hand, to a certain extent, in order to manufacture in the United States, we’re still bringing parts in from outside the United States, which in many cases are subject to tariff.

We can’t avoid being tariffed, is what I’m saying. How that plays out competitively, you know, remains to be seen how the ultimate tariff rates play out.

Anja Soderström, Senior Equity Analyst, CIdoti: Okay, thank you. Another question here. Can you talk about your transformation initiatives? What is your confidence in achieving your fiscal 2028 financial objectives?

Brad Wiemann, Interim CEO, President, Daktronics: We’re on a path. We are happy to reaffirm that path. We’re off to a good start. We are continually refining our approach to three years out, and we’re reconfirming our objectives. That’s sort of how I would answer the question.

Anja Soderström, Senior Equity Analyst, CIdoti: Okay, one last one from me in terms of your balance sheet has improved and cash flow. Can you just speak to your capital allocation priorities?

Brad Wiemann, Interim CEO, President, Daktronics: Good question. Thank you. Yes. The good news is we have the cash and the capital to invest, and that’s a good position to be in. The right way to answer your question, Anja, is that we’re, as a company, we’re focused on return on investment for our shareholders. That’s the guiding principle in terms of how we allocate our capital. You know, targeting high teens, ROIC as a company and across each of our businesses, if we can achieve that, that obviously means that just reinvesting in the business is important because we’ll get a good return that way. As our success has moved forward, we are getting incoming on possible acquisition opportunities. There are strategic things we can do that we’re focusing on. Again, that will only happen if we can get the right returns and anything is on the correct strategic path for us. There’s share repurchase.

We have been very active in the past year on share repurchase and have continued to build on cash even with the share repurchase. We have a lot of flexibility to reinvest in the business, to do selective acquisitions, and to repurchase shares. The guiding principle is going to be where do we get the best return for our shareholders.

Anja Soderström, Senior Equity Analyst, CIdoti: I’m going to squeeze in one more. I’m not sure to what extent you can comment on it, but how’s the CEO search going?

Brad Wiemann, Interim CEO, President, Daktronics: We’ve articulated publicly that we are doing a search, that we’re getting good candidate opportunities. Those are being narrowed down, and we do expect to have a named party, if not literally before the end of this year, then shortly in the new year. It’s being narrowed down pretty rapidly.

Anja Soderström, Senior Equity Analyst, CIdoti: Okay, sounds exciting. With that, we’re out of time. I know you have a very full one-on-one schedule, but if anyone wants to catch up with you outside of this presentation or wants to follow up on anything, you can reach out to us at CIdoti or the company directly, and I’m sure the management team will make themselves available. With that, I’ll hand it over to you, Brad, for some closing remarks.

Brad Wiemann, Interim CEO, President, Daktronics: Okay, thank you, Anja. I might have become disconnected somewhere in there, so I don’t know. Thank you everyone for attending the conference today. We have an exciting company, and we’ve got a great team of dedicated employees that are excited about the opportunities that are in front of us. We’re in a growing market, growing space, and we continue to invest in differentiating technology and focus on our three-year plan like Howard talked about. We thank you for attending today, and I appreciate that you are giving us your time.

Anja Soderström, Senior Equity Analyst, CIdoti: Thank you. Thank you, everyone.

Brad Wiemann, Interim CEO, President, Daktronics: Thank you.

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