DAKTRONICS INC /SD/

(dollar and share amounts in thousands, except per share data)

Note 1. Basis of Presentation

Daktronics, Inc. and its subsidiaries (the “Company”, “Daktronics”, “we”, “our”, or “us”) are recognized industry leaders in the design and manufacturing of electronic scoreboards, programmable display systems, and large-screen video displays serving sporting, commercial, and transportation markets.

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the applicable rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial reporting. In the opinion of management, these financial statements reflect all adjustments necessary for a fair presentation of the Company’s financial position, results of operations, and cash flows for the periods presented. All such adjustments are of a normal recurring nature.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and the disclosure of contingent liabilities. Significant estimates include, but are not limited to, revenue recognition, warranty obligations, the fair value of long-term debt and investments in affiliates, income tax provisions, and stock-based compensation. Actual results may differ materially from those estimates due to inherent uncertainties.

Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to SEC rules and regulations. The balance sheet as of April 26, 2025, has been derived from the audited financial statements as of that date but does not include all disclosures required for annual financial statements. These interim financial statements should be read in conjunction with the Company’s audited financial statements and notes thereto included in its Annual Report on Form 10-K for the fiscal year ended April 26, 2025 (the “Form 10-K”).

The Company operates on a 52- or 53-week fiscal year ending on the Saturday closest to April 30. When April 30 falls on a Wednesday, the fiscal year ends on the preceding Saturday. Each fiscal quarter consists of 13 weeks, except in a 53-week fiscal year, where the first quarter includes 14 weeks. The six months ended November 1, 2025, and October 26, 2024, included 27 and 26 weeks of operations, respectively.

There have been no material changes to the Company’s significant accounting policies and estimates as disclosed in the Form 10-K.

Cash and cash equivalents

Cash and cash equivalents are presented in the Condensed Consolidated Balance Sheets with the corresponding totals reported in the Condensed Consolidated Statements of Cash Flows. The Company had no restricted cash or restricted cash equivalents as of November 1, 2025 or October 26, 2024.

We maintain foreign currency cash accounts to support our global operations. These balances are subject to fluctuations in foreign exchange rates, which may impact our consolidated financial position and results of operations.

As of November 1, 2025, our total cash and cash equivalents were $149,604, of which $135,051 were denominated in U.S. dollars. Included in the U.S. dollar-denominated balances were $6,333 held by our foreign subsidiaries. The remaining $14,553 were denominated in foreign currencies, with $11,460 maintained in accounts held by our foreign subsidiaries.

Recent Accounting Pronouncements

Accounting Standards Adopted

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures (“ASU 2023-07”). ASU 2023-07 requires enhanced disclosures about significant segment expenses. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023 and for interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. ASU 2023-07 requires the retrospective adoption method. The Company adopted ASU 2023-07 for annual periods beginning in the fiscal year ended April 26, 2025, noting there were no changes to our reportable segments. The Company has adopted ASU 2023-07 for interim periods beginning in the fiscal year ending May 2, 2026.

Accounting Standards Not Yet Adopted

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) Improvements to Income Tax Disclosures("ASU 2023-09"). ASU 2023-09 requires the disclosure of specified additional information in its income tax rate reconciliation and to provide additional information for reconciling items that meet a quantitative threshold. ASU 2023-09 will also require the disaggregation of the disclosures of income taxes paid by federal, state, and foreign taxes, with further disaggregation required for significant individual jurisdictions. The Company is required to adopt this guidance for its annual reporting in fiscal year 2026 on a prospective basis. Early adoption and retroactive application are permitted. We are currently evaluating the impact of ASU 2023-09 on our income tax disclosures.

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40) ("ASU 2024-03"), requiring disclosure in the notes to the financial statements of specified information about certain costs and expenses. ASU 2024-03 is effective for annual periods beginning after December 15, 2026, and for interim periods beginning after December 15, 2027; however, early adoption is permitted and can be applied either prospectively or retrospectively. We are currently evaluating the impact of ASU 2024-03 on our expense disaggregation disclosures.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets ("ASU 2025-05"). ASU 2025-05 provides a practical expedient that all entities can use when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under ASC 606, Revenue from Contracts with Customers. Under this practical expedient, an entity is allowed to assume that the current conditions it has applied in determining credit loss allowances for current accounts receivable and current contract assets remain unchanged for the remaining life of those assets. ASU 2025-05 is effective for fiscal years beginning after December 15, 2025, and interim reporting periods in those years. Entities that elect the practical expedient and, if applicable, make the accounting policy election are required to apply the amendments prospectively. The Company is required to adopt this guidance in fiscal year 2027 on a prospective basis. We are currently evaluating the impact of ASU 2025-05 on our expense disaggregation disclosures.

In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40) (“ASU 2025-06”), which modernizes the accounting for internal-use software costs to reflect current development practices. The update eliminates the previous three-stage model (preliminary, application development, and post-implementation) and instead introduces a principles-based approach. Under the new guidance, capitalization begins when (1) management authorizes and commits to funding the project, and (2) it is probable the project will be completed and the software will be used for its intended purpose. ASU 2025-06 is effective for annual periods beginning after December 15, 2027, with early adoption permitted and transition options including prospective, retrospective, or modified retrospective application. We are currently evaluating the impact of ASU 2025-06 on our accounting policies and disclosures.

Note 2. Investments in Affiliates

We account for investments in other entities using the equity method when our ownership interest provides us with the ability to exercise significant influence over the operating and financial policies of the investee. Our assessment of significant influence considers factors such as ownership percentage, board representation, participation in policy-making decisions, commercial arrangements, and material intercompany transactions.

We evaluated our investments in affiliates of X Display Company Technology Limited (“XDC”), which is developing micro-LED mass transfer technologies, and Miortech Holding B.V. (dba Etulipa) (“Miortech”), which is focused on low-power outdoor electrowetting technology. As of November 1, 2025, our ownership interest in Miortech was 55.9 percent, and in XDC was 16.4 percent. Despite our majority ownership in Miortech, we determined that both entities are variable interest entities (“VIEs”) and, based on management’s analysis, Daktronics is not the primary beneficiary as the power criterion was not met. Accordingly, we do not consolidate these entities but account for our investments in such entities under the equity method.

As of November 1, 2025 and April 26, 2025, the carrying value of our equity method investments was zero. Our proportional share of the affiliates’ losses is recorded in “Other expense, net” in our Condensed Consolidated Statements of

Operations. For the three and six months ended November 1, 2025, our share of affiliate losses were $436 and $1,241, respectively, compared to $901 and $1,832, respectively, for the three and six months ended October 26, 2024.

We also engage in related party transactions with our equity method investees, primarily for research and development services. For the six months ended November 1, 2025 and October 26, 2024, we recorded expenses of $32 and $497, respectively, in “Product design and development.” Unpaid amounts related to these services were $124 and $134 as of November 1, 2025 and October 26, 2024, respectively, and are included in “Accounts payable.”

Additionally, we have provided funding to certain of our affiliates through promissory notes, some of which are convertible (collectively, the “Affiliate Notes”). During the six months ended November 1, 2025, we advanced $2,997 to such affiliates under the Affiliate Notes, as compared to $4,565 during fiscal year 2025. Accrued interest on the Affiliate Notes was $494 and $838 as of November 1, 2025 and April 26, 2025, respectively. The total face value of the outstanding Affiliate Notes was $23,404 and $19,843 as of November 1, 2025 and April 26, 2025, respectively. These balances are included in “Right of use, investment in affiliates, and other assets” in our Condensed Consolidated Balance Sheets.

We periodically assess the Affiliate Notes for impairment and expected credit losses. During the fourth quarter of fiscal 2025, we recorded a provision of $15,480 related to a note deemed uncollectible. During the three and six months ended November 1, 2025, an additional provision of $78 and $873, respectively, was recorded for another note expected to be uncollectible. These provisions are included in “Other expense, net.”

The balance of our Affiliate Notes totaled $4,570 and $3,123 as of November 1, 2025 and April 26, 2025, respectively.

Note 3. Earnings Per Share

We compute earnings per share (“EPS”) in accordance with the provisions of Accounting Standards Codification Topic 260, Earnings Per Share. Basic EPS is calculated by dividing net income attributable to holders of our common stock, par value $0.00001 per share (“Common Stock”), by the weighted average number of common shares outstanding during the reporting period.

Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised, converted, or otherwise resulted in the issuance of common shares that participate in our earnings.

The following table presents a reconciliation of net income and the number of shares of Common Stock used in the calculation of basic and diluted EPS for the three and six months ended November 1, 2025, and October 26, 2024:

During the three months ended November 1, 2025,47 shares of potential Common Stock related to stock-based compensation plans were excluded from the computation of diluted EPS because their inclusion would have been anti-dilutive.

During the six months ended November 1, 2025,47 shares of potential Common Stock related to stock-based compensation plans were excluded from the computation of diluted EPS because their inclusion would have been anti-dilutive. These potential shares include options to purchase 24 shares of Common Stock with a weighted average exercise price of $11.87.

For the three and six months ended October 26, 2024, options to purchase 51 and 114 shares of common stock, no par value, with a weighted average exercise price of $10.44 and $12.10, respectively, were excluded from the computation of diluted EPS due to their anti-dilutive effect.

During the three months ended October 26, 2024,4,037 potential shares of common stock, no par value, issuable upon conversion of a senior secured convertible promissory note in the original principal amount of $25,000 dated as of May 11, 2023, issued by the Company to Alta Fox Opportunities Fund, LP (the "Convertible Note") were included in the computation of diluted EPS. For the six months ended October 26, 2024,4,037 potential common shares issuable upon conversion of the Convertible Note were not included in the computation of diluted EPS, as their inclusion would have been anti-dilutive.

Note 4. Revenue Recognition

Disaggregation of revenue

In accordance with ASC 606-10-50, Revenue from Contracts with Customers, we disaggregate revenue based on the nature of the performance obligations and the timing of revenue recognition. This approach is intended to meet the disclosure objective of depicting how the nature, amount, timing, and uncertainty of revenue and cash flows are influenced by economic factors. It also enables users of the financial statements to understand the relationship between revenue streams and each of our reportable segments.

The following table presents our disaggregated revenue by segment:

See "Note 5. Segment Reporting" for a disaggregation of revenue by geography.

Contract balances

Contract assets represent revenue recognized for performance obligations satisfied but not yet billed and include unbilled receivables. Unbilled receivables reflect an unconditional right to payment that is subject only to the passage of time and are reclassified to accounts receivable once billed in accordance with contractual terms.

Contract liabilities represent amounts billed to customers in excess of revenue recognized to date and are recognized as revenue when the related performance obligations are satisfied.

The following table summarizes the changes in our contract assets and contract liabilities for the periods presented:

The changes in our contract assets and contract liabilities from April 26, 2025 to November 1, 2025 were primarily driven by the timing of billing schedules and revenue recognition. These fluctuations are influenced by the contractual payment terms and the seasonal nature of the sports markets.

No significant impairments of contract assets were identified during the three months ended November 1, 2025.

For service-type warranty contracts, revenue is allocated to the related performance obligation and recognized over time, while associated costs are recognized as incurred. Earned and unearned revenues related to these contracts are reported within the “Contract assets” and “Contract liabilities” line items in our Condensed Consolidated Balance Sheets.

The following table summarizes the changes in unearned service-type warranty contracts, net, for the six months ended November 1, 2025:

Contracts in progress identified as loss contracts as of November 1, 2025 and April 26, 2025 were immaterial. Provisions for such losses are recorded in the “Accrued expenses” line item in our Condensed Consolidated Balance Sheets.

During the six months ended November 1, 2025, we recognized $55,466 of revenue that was previously recorded as contract liabilities as of April 26, 2025.

Remaining performance obligations

As of November 1, 2025, the aggregate amount of the transaction price allocated to the remaining performance obligations was $387,750. This consists of $320,618 related to product agreements and $67,132 related to service agreements. We expect approximately $327,845 of these obligations to be recognized as revenue within the next 12 months, with the remainder recognized thereafter.

While remaining performance obligations represent legally binding business commitments, they are subject to change due to cancellations, deferrals, or scope adjustments. Known changes—including project cancellations, scope revisions, foreign currency exchange fluctuations, and deferrals—are reflected or excluded from the reported balance, as appropriate.

Revenue recognized during the six months ended November 1, 2025 and October 26, 2024 related to performance obligations satisfied in prior periods was immaterial.

Note 5. Segment Reporting

The following table presents selected financial information for each of ourfive reportable segments for the periods indicated:

No single geographic region, other than the United States, represents a material portion of our net sales or our property and equipment, net of accumulated depreciation.

The following table provides a summary of net sales and property and equipment, net of accumulated depreciation, for the United States and all other geographic areas:

We serve a diverse customer base across global markets for our products and services. No individual customer accounted for 10 percent or more of our net sales during the reporting period. Accordingly, we are not economically dependent on a limited number of customers for the sale of our products and services.

We also source raw materials and components from a broad network of suppliers. No single supplier represented 10 percent or more of our cost of sales. However, our global supply chain is complex and subject to geopolitical and transportation risks. Additionally, we rely on certain single-source suppliers, which may constrain availability or result in delays in obtaining critical materials and components required for manufacturing.

Note 6. Goodwill

The following table summarizes changes in the carrying amount of goodwill for each reportable segment with a goodwill balance for the six months ended November 1, 2025:

We perform an analysis of goodwill on an annual basis, and it is tested for impairment more frequently if events or changes in circumstances indicate that the carrying value may not be recoverable. Our annual impairment assessment is performed during the third quarter of each fiscal year, based on the goodwill balance as of the first business day of that quarter. As of November 1, 2025, our most recent annual goodwill impairment test concluded thatno impairment existed.

As of November 1, 2025 and April 26, 2025, the total accumulated goodwill impairments were $4,576.

Note 7. Financing Agreements

The following table summarizes the components of our long-term debt as of the dates indicated:

Credit Agreements

On May 11, 2023, the Company entered into a $75,000 senior credit facility (the “Credit Facility”) pursuant to a Credit Agreement dated as of May 11, 2023 (as amended, restated, modified, or supplemented from time to time, the “Credit Agreement”), between and among the Company, JPMorgan Chase Bank, N.A., as administrative agent (the “Administrative Agent”), the Lenders (as defined in the Credit Agreement), and the other Loan Parties (as defined in the Credit Agreement). The Credit Facility and the Credit Agreement were in effect throughout the periods covered by this Quarterly Report on Form 10-Q, including the quarter ended November 1, 2025, and were superseded and replaced by the New Credit Facility and the New Credit Agreement (as each such term is defined herein).

The Credit Facility made pursuant to the Credit Agreement was comprised of:

•a $60,000 asset-based revolving credit facility (the “ABL”), maturing on May 11, 2026, secured by a first-priority lien on the Company’s assets pursuant to a Pledge and Security Agreement dated May 11, 2023, between and among the Company, Daktronics Installation, Inc. (“Daktronics Installation”), and the Administrative Agent (the “Pledge and Security Agreement”); and

•a $15,000 delayed draw term loan (the “Delayed Draw Loan”), also secured by the first-priority lien on the Company’s assets pursuant to the Pledge and Security Agreement and a first-priority mortgage on the Company’s real estate located in Brookings, South Dakota.

Under the ABL, borrowing capacity was subject to certain conditions and may fluctuate based on various factors. As of November 1, 2025, the Company’s borrowing capacity under the ABL was $41,745, withno borrowings outstanding and $3,210 utilized for outstanding letters of credit. No borrowings were made under the ABL during the period ended November 1, 2025.

The interest rate on the ABL was determined on a sliding scale based on the Company’s trailing 12-month fixed charge coverage ratio and ranges from 2.5 to 3.5 percent over the Secured Overnight Financing Rate (“SOFR”).

The $15,000 Delayed Draw Loan was funded on July 7, 2023. It was amortized over a 10-year period with monthly principal payments of $125 and scheduled to mature on May 11, 2026. The interest rate on the Delayed Draw Loan was determined on a sliding scale based on the trailing 12-month fixed charge coverage ratio and ranged from 1.0 and 2.0 percent over the Commercial Bank Floating Rate (“CBFR”). As of November 1, 2025, the interest rate applicable to the Delayed Draw Loan was 8.5 percent.

The Credit Agreement also permitted the Company to secure Letters of Credit (as defined in the Credit Agreement) with terms that expire after the Credit Agreement’s scheduled maturity date of May 11, 2026 under certain conditions (the “Specified Letters of Credit”). Pursuant to the Credit Agreement, no later than 91 days before the Maturity Date (as defined below), the Company was required to deposit an amount of cash equal to 105% of the LC Exposure (as defined in the Credit Agreement) into one or more accounts (collectively, the “Specified LC Collateral Account”) controlled exclusively by the Administrative Agent. The Company was required to grant a security interest in the Specified LC Collateral Account to the Administrative Agent, and the funds in the Specified LC Collateral Account were to be used to cover any unreimbursed amounts owed to the issuing Lender, subject to certain exceptions. The Credit Agreement required the funds in the Specified LC Collateral Account to be returned to the Company and the other Borrowers (as defined in the Credit Agreement) in the event that the scheduled Maturity Date was further extended.

The Credit Agreement also required the Borrowers to fully pay any and all outstanding amounts owed under the Delayed Draw Loan on or before the earlier of: (i) May 11, 2026; and (ii) any earlier date on which the Commitments (as defined in the Credit Agreement) are reduced to zero or otherwise terminated pursuant to the terms of the Credit Agreement (the “Termination Date”). The Borrowers’ repayment obligations under the Credit Agreement were scheduled to mature on the earliest of: (A) November 30, 2026; (B) unless otherwise agreed in writing by the Administrative Agent (with the consent of all Lenders), the date that is six (6) months prior to the scheduled maturity date of the Term Loan Debt (as defined in the Credit Agreement); and (C) the Termination Date (such earliest date, the “Maturity Date”).

The Credit Agreement contained covenants that, among other things, restricted our ability to repurchase shares of Common Stock, pay dividends, incur additional indebtedness, and make certain investments. Those restrictions placed limits on our ability to return capital to stockholders through share repurchases or dividends, but did not have a material impact on our ability to make stock repurchases during the quarter ended November 1, 2025. For more information on the Company’s ability to repurchase shares under the Credit Agreement, please refer to “Item 2. Unregistered Sales of Equity Securities and Use of Proceeds” of Part II of this Quarterly Report on Form 10-Q.

On November 26, 2025, we entered into a new $71,500 senior secured credit facility (the “New Credit Facility”) pursuant to a Credit Agreement (the “New Credit Agreement”), between and among the Company, the Administrative Agent, the Lenders (as defined in the New Credit Agreement), and the other Loan Parties (as defined in the New Credit Agreement). See “Note 13. Subsequent Events” of the Notes to our Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for a description of the debt obligations under the New Credit Agreement.

Convertible Note

As of November 1, 2025 and April 26, 2025, there was no outstanding balance under the Convertible Note. During fiscal 2025, the Company fully settled the Convertible Note through a series of forced conversions in accordance with its terms. These conversions resulted in the issuance of shares of Common Stock to Alta Fox Opportunities and the extinguishment of the debt on the dates of settlement. Accordingly, there is no remaining principal or accrued interest associated with the Convertible Note, and no further obligations under its terms. Additional details regarding the Convertible Note activity during fiscal 2025 are included in “Note 17. Related Party Transactions” of the Form 10-K.

Debt Issuance Costs

Debt issuance costs incurred and capitalized are amortized on a straight-line basis over the term of the related debt agreement. In the event of early principal payments or conversions, a proportional amount of unamortized debt issuance costs is expensed. Amortization of debt issuance costs totaled $807 for each of thesix months ended November 1, 2025 and October 26, 2024. As of November 1, 2025, the remaining unamortized debt issuance costs of$870 were being amortized over the remaining term of the Credit Facility.

Future Maturities

The following table presents the aggregate contractual maturities of our long-term debt by fiscal year:

Note 8. Commitments and Contingencies

Litigation: We are involved in legal proceedings and claims that arise in the ordinary course of business. We continuously evaluate these matters, including regulatory reviews and inspections, and apply appropriate accounting guidance when determining accruals and disclosures. Contingency accruals are recorded when a loss is considered probable and the amount can be reasonably estimated. If a reasonably possible loss exceeds the amount accrued and disclosure is necessary to avoid misleading financial statements, we disclose the estimated range of loss. No accrual is recorded when a loss is probable but not reasonably estimable, or when a loss is considered reasonably possible or remote; however, material matters are disclosed as required under ASC 450-20, Contingencies – Loss Contingencies.

Our assessment of whether a loss is reasonably possible or probable is based on management’s evaluation and consultation with legal counsel regarding the ultimate outcome of each matter, including the impact of any appeals.

For other unresolved legal proceedings or claims, we do not believe there is a reasonable probability that a material loss will be incurred. Accordingly, no material accruals or disclosures of potential loss ranges have been made. We do not expect the ultimate resolution of these matters to have a material impact on our financial position, liquidity, or capital resources.

Warranties: The following table summarizes changes in our warranty obligations for the six months ended November 1, 2025.

Performance guarantees: We have entered into standby letters of credit, bank guarantees, and surety bonds with financial institutions to support our contractual obligations, primarily related to construction-type contracts. These instruments serve as guarantees of our future performance, including the operation and installation of equipment and the completion of contractual deliverables.

As of November 1, 2025, we had $64,091 of bonded work outstanding and $3,210 in letters of credit outstanding. These performance guarantees generally have terms ofone year, although specific durations may vary by contract.

We enter into written agreements with customers that may include indemnification provisions requiring us to compensate the customer for financial losses resulting from certain acts or omissions. We seek to negotiate reasonable limitations and caps on such indemnification obligations. As of November 1, 2025, we were not aware of any material indemnification claims.

Note 9. Income Taxes

The provision for income taxes during interim reporting periods is calculated by applying an estimate of the annual effective tax rate to “ordinary” income or loss for the reporting period, adjusted for discrete items. Due to various factors, including our estimate of annual income, our effective tax rate is subject to fluctuation.

Our effective tax rates for the three and six months ended November 1, 2025 were 20.0 percent and 23.0 percent, respectively. The tax rates were primarily driven by permanent tax adjustments and the reversal of a valuation allowance in proportion to the increase in pre-tax income during the period. The effective tax rate for the three and six months ended October 26, 2024 of 15.0 percent and 35.2 percent, respectively, were driven by the impacts of the Convertible Note fair value adjustments.

We operate both domestically and internationally and, as of November 1, 2025, the undistributed earnings of our foreign subsidiaries were considered to be reinvested indefinitely. Additionally, as of November 1, 2025, we had $558 of unrecognized tax benefits which would reduce our effective tax rate if recognized.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes significant tax related provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework, and the restoration of favorable tax treatment for certain business provisions. The OBBBA has multiple effective dates with the earliest provisions taking effect in fiscal 2026 and others beginning in fiscal 2027 and beyond. ASC 740, “Income Taxes”, requires the effects of changes in tax rates and laws affecting current taxes to be reflected in the estimated annual effective tax rate going forward, and adjustments to existing deferred taxes to be recognized on deferred tax balances to be recognized in the period in which the legislation is enacted.

We note that as of November 1, 2025, there were no material impacts to the Company’s financial statements. We will continue to evaluate the future tax and other provisions of the OBBBA and the potential effects on our financial position, results of operations, and cash flows.

Note 10. Fair Value Measurement

The following table presents our financial assets and liabilities measured at fair value on a recurring basis as of November 1, 2025 and April 26, 2025, classified by level within the fair value hierarchy based on the valuation techniques utilized to determine fair value.

There were no transfers between levels of the fair value hierarchy during the periods presented.

Note 11. Share Repurchase Program

On June 17, 2016, our Board of Directors (the “Board” or “Board of Directors”) authorized a share repurchase program (the “Repurchase Program”) under which the Company may repurchase up to $40,000 of outstanding Common Stock. On March 4, 2025, the Board approved a $10,000 increase in the limit under the Repurchase Program from $40,000 to $50,000. On June 23, 2025, the Board approved an additional $10,000 increase from $50,000 to $60,000.

Repurchases under the Repurchase Program may be made from time to time in open market transactions or privately negotiated transactions, subject to business and market conditions, applicable legal requirements, and other relevant factors. The Repurchase Program does not obligate the Company to repurchase any specific number of shares, may be suspended or terminated at any time at the discretion of the Board and has no fixed expiration date.

During the six months ended November 1, 2025, the Company repurchased 746 shares of Common Stock at a total cost of $12,215. As of November 1, 2025, $7,665 of the $60,000 authorized amount remained available for repurchase under the Repurchase Program.

For information on restrictions on the Company’s ability to repurchase shares under the Credit Agreement, please refer to “Note 7. Financing Agreement” of the Notes to the Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q and “Item 2. Unregistered Sales of Equity Securities and Use of Proceeds” of Part II of this Quarterly Report on Form 10-Q. For additional information, see “Note 13. Subsequent Events” of the Notes to the Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.

Note 12. Related Party Transactions

Daktronics Related Person Transaction Policy: The Board of Directors has adopted the Daktronics Related Person Transaction Policy, a written policy and procedures with respect to related party transactions (the “Policy”), which the Audit Committee of the Board (the "Audit Committee") oversees. Under the Policy, a “Related Person Transaction” is generally defined as a transaction, arrangement, or relationship (or any series of similar transactions, arrangements, or relationships) in which the Company was, is, or will be a participant; the amount involved exceeds $120; and any “Related Person” had, has, or will have a direct or indirect material interest. The Policy generally defines a "Related Person" as: a director, director nominee, or executive officer of the Company at any time during the last fiscal year; a beneficial owner of more than five percent of any class of our voting securities; or any immediate family member of any of the foregoing persons. Our Chief Financial Officer is responsible for overseeing the monitoring and identification of Related Person Transactions and the appropriate reporting of any potential Related Person Transactions to the Audit Committee. The Audit

Committee reviews and, if appropriate, approves Related Person Transactions, including certain transactions which are deemed to be pre-approved under the Policy. On an annual basis, the Audit Committee reviews any previously approved Related Person Transactions that are ongoing.

Transactions with Alta Fox Opportunities: As reported in Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the section entitled “Liquidity and Capital Resources” of the Form 10-K, effective May 11, 2023, the Company entered into a Securities Purchase Agreement with Alta Fox Opportunities under which the Company sold and issued to Alta Fox Opportunities the Convertible Note in exchange for the payment by Alta Fox Opportunities to the Company of $25,000 (the "Securities Purchase Agreement"). As of November 1, 2025, no principal or interest remained outstanding under the Convertible Note. For additional information on the Convertible Note, see “Note 7. Financing Agreements” of the Notes to our Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.

Alta Fox Opportunities reported in Amendment No. 2 to the Schedule 13D filed with the SEC on May 15, 2023 (“Amendment No. 2”) that, as of May 11, 2023, Alta Fox Opportunities, together with the following affiliates and associates, beneficially owned 4,768 shares of Common Stock, representing 9.99 percent of Common Stock outstanding: Alta Fox GenPar, LP, as the general partner of Alta Fox Opportunities; Alta Fox Equity, LLC, as the general partner of Alta Fox GenPar, LP; Alta Fox Capital Management, LLC, as the investment manager of Alta Fox Opportunities; and P. Connor Haley, as the sole owner, member, and manager of each of Alta Fox Capital Management, LLC and Alta Fox Equity LLC (collectively with Alta Fox Opportunities, “Alta Fox”). Accordingly, based on Amendment No. 2 and other publicly available information provided by Alta Fox Opportunities in its reports filed with the SEC as of May 11, 2023, Alta Fox was a “Related Person” of the Company under the Policy and the applicable provisions of the Securities Act of 1933, as amended (the "Securities Act"), and the rules promulgated thereunder. According to Amendment No. 4 to the Schedule 13D filed by Alta Fox on October 24, 2025 with the SEC, Alta Fox reported that it beneficially owned 4,431 shares of Common Stock on October 24, 2025, representing 9.10 percent of the outstanding shares of Common Stock.

The Securities Purchase Agreement, the Convertible Note, the Pledge and Security Agreement dated as of May 11, 2023 by and between the Company and Alta Fox Opportunities and the Registration Rights Agreement by and between the Company and Alta Fox Opportunities dated as of May 11, 2023 were approved in advance of their execution by the Strategy and Financing Review Committee of the Board of Directors, the members of which were all members of the Audit Committee.

Transactions with Reece A. Kurtenbach: Effective April 10, 2025, our former President and CEO and current Board member, Reece A. Kurtenbach, was appointed as Interim Chief Executive Officer of XDC, an entity in which the Company holds a 16.4 percent ownership interest and accounts for under the equity method of accounting. As previously disclosed in reports filed by the Company with the SEC, Reece A. Kurtenbach also served as a director and executive officer during the fiscal year ended April 26, 2025 and is the brother of Matthew J. Kurtenbach and Carla S. Gatzke, both of whom are executive officers of the Company. As a result of his appointment as Interim Chief Executive Officer of XDC and the foregoing relationships with the Company and its executive officers, Reece A. Kurtenbach is considered a Related Person under the Policy and a related party under ASC 850 - Related Party Disclosures. The Company continues to monitor the foregoing relationships with respect to Reece A. Kurtenbach to ensure appropriate governance and disclosure in accordance with applicable accounting standards and SEC rules.

Transactions with Milwaukee Bucks Inc.: In fiscal 2025, the Company entered into a change order to an existing agreement with Milwaukee Bucks Inc. The total value of the change order was $214. On April 29, 2025, the Company entered into a contract with Milwaukee Bucks Inc. The total value of the contract was $683. The terms of both of the above-referenced arrangements between the Company and Milwaukee Bucks Inc. were arm’s-length transactions made in the ordinary course of the Company’s business. Peter Feigin, a member of the Board, is the President of Milwaukee Bucks Inc.

See "Note 2. Investments in Affiliates" for further details of related party transactions with our investments in the Affiliate Notes.

Note 13. Subsequent Events

New Credit Facility

On November 26, 2025, the Company entered into the New Credit Facility with the Administrative Agent, the Lenders (as defined in the New Credit Agreement), and the other Loan Parties (as defined in the New Credit Agreement) pursuant to the New Credit Agreement.

The New Credit Facility created pursuant to the New Credit Agreement is comprised of:

• a $60,000 revolving credit facility (the “Revolver”), maturing on November 26, 2028 (the “Maturity Date”); and

•an $11,500 term loan (the "New Term Loan"), amortizing in equal quarterly installments of $288, with the remaining principal due on the Maturity Date.

Under the New Credit Agreement, both the Revolver and the New Term Loan are guaranteed by the Loan Parties and secured by perfected, first priority liens on personal property of the Company and the other Loan Parties pursuant to the Pledge and Security Agreement executed between and among the Company, Daktronics Installation (collectively with the Company and any additional entities that may become parties thereto, the "Grantors"), and the Administrative Agent for the benefit of the secured parties thereto under the New Credit Agreement (the "New Security Agreement") and other Collateral Documents (as defined in the New Credit Agreement). The New Security Agreement, which replaced the prior Pledge and Security Agreement, establishes a security interest in substantially all of the personal property and assets of the Grantors and secures the prompt and complete payment and performance of the Grantors' obligations under the New Credit Agreement and related loan documents. In connection with the execution of the New Security Agreement, the Grantors also executed other Collateral Documents customary for transactions of this type, including intellectual property security agreements in order to facilitate recordation and perfection of the underlying intellectual property assets.

Each borrowing under the New Credit Facility will accrue interest at one of the following rates to be selected by the Company, in its discretion: (i) the Adjusted Term SOFR Rate (as defined in the New Credit Agreement) plus a 0.10% margin; (ii) the Adjusted Daily Simple SOFR (as defined in the New Credit Agreement) plus a 0.10% margin; or (iii) the CB Floating Rate (as defined in the New Credit Agreement) with a 0.00% margin. Amounts repaid under the New Term Loan may not be reborrowed.

Undrawn commitments under the Revolver accrue a commitment fee of 0.20% per year. Letters of Credit (as defined in the New Credit Agreement) issued under the Revolver accrue customary fees and generally must expire no later than five business days prior to the Maturity Date. The financial covenants under the New Credit Agreement include a maximum quarterly Total Leverage Ratio (as defined in the New Credit Agreement) of 3.00 to 1.00 and a minimum Fixed Charge Coverage Ratio (as defined in the New Credit Agreement) of 1.25 to 1.00. There is a limited ability to exclude certain unfinanced capital expenditures from these calculations when specified liquidity thresholds are met. These covenants apply to borrowings under both the Revolver and the New Term Loan. Proceeds may be used for refinancing existing debt and for working capital and other general corporate purposes. The New Credit Agreement includes customary representations, covenants, and events of default, including limitations on incurring additional debt, liens, investments, asset sales, restricted payments, and affiliate transactions.

In connection with entering into the New Credit Agreement and the New Security Agreement, the Credit Agreement, the Pledge and Security Agreement, and other documents related to the Credit Facility were terminated, all outstanding payment obligations under the Credit Agreement were repaid in full, and all associated liens, including the mortgage recorded against the Company's Brookings, South Dakota real property, and other obligations of the Company under the Credit Facility were released, except for the following obligations, each of which will survive the termination of the Credit Agreement and related loan documents: (i) obligations specified in the Credit Agreement or related loan documents as surviving such agreement’s termination, such as indemnification and confidentiality; (ii) any Existing Letter of Credit (as defined in the New Credit Agreement), each of which constitutes a Letter of Credit (as defined in the New Credit Agreement); (iii) any filings made by the Administrative Agent with the United States Patent and Trademark Office with respect to security interests in intellectual property of the Loan Parties; or (iv) any UCC-1 Financing Statements previously filed by the Administrative Agent, as secured party, and any Loan Party as the debtor, regardless of whether any such UCC-1 Financing Statement was filed in connection with the Credit Agreement or any related loan documents. There were no material early termination penalties incurred by the Company as a result of the termination of the Credit Agreement.

Appointment of new CEO

On December 2, 2025, the Board approved the Company’s entry into a letter agreement with Ramesh Jayaraman (the “Letter Agreement”) and approved Mr. Jayaraman’s appointment as President and Chief Executive Officer of the Company, effective February 1, 2026 (the “Effective Date”), subject to Mr. Jayaraman’s continued employment through such date. Pursuant to the Letter Agreement, Mr. Jayaraman commenced full‑time employment with the Company on December 10, 2025 (the “Start Date”). In connection with the appointment, the Board also designated Mr. Jayaraman as an “executive officer” as defined in Rule 3b‑7 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and as an “officer” for purposes of Section 16 of the Exchange Act, effective as of the Start Date. As set forth in the Letter Agreement, Mr. Jayaraman is expected to be appointed to the Board no later than the Effective Date, following and subject to completion of the Company’s customary onboarding procedures for Board members.

For further information about the Letter Agreement and Mr. Jayaraman’s appointment as President and CEO of the Company, please refer to the Current Report on Form 8-K filed by the Company with the SEC on December 3, 2025.

Share Repurchases

On December 9, 2025, our Board of Directors approved the repurchase of an additional $20,000 of the Company’s outstanding shares of common stock under the stock repurchase program for a maximum authorized value of $80,000. For additional information, see “Note 11. Share Repurchase Program” of the Notes to our Consolidated Financial Statements included in this Form 10-Q.