Stockholders' Equity and Share-Based Compensation

12 Months Ended

May 02, 2026

Stockholders' Equity and Share-Based Compensation

Stockholders’ Equity and Share-Based Compensation

Authorized share types: Our 120,000 authorized shares of stock consist of 115,000 shares of Common Stock and 5,000 shares of Preferred Stock.

Stock incentive plans: During fiscal 2026, our shareholders approved the Daktronics, Inc. 2025 Stock Incentive Plan (“2025 Plan”), under which shares available for issuance include remaining authorized shares from the 2020 Stock Incentive Plan (“2020 Plan”). No new awards will be granted under the 2020 Plan. The 2025 Plan provides for the issuance of stock-based awards, including, but not limited to, stock options, restricted stock, restricted stock units (“RSUs”), performance stock, performance stock units (“PSUs”), and deferred stock to employees, directors, and consultants. Stock options issued to employees under the 2020 Plan and 2025 Plan generally have a 10-year life, an exercise price equal to the closing market value on the grant date, and a five-year annual vesting period. The restricted stock granted to independent directors vests in one year, provided that the directors remain on the Board of Directors. Restricted stock units are granted to employees and generally vest over a defined service period or, in the case of PSUs, based on performance criteria, which may vary by award. Performance stock awards are granted to employees and vest, if at all, based on the achievement of specified performance criteria. PSUs and RSUs are granted to employees as units that are settled in shares of Common Stock upon vesting based on the achievement of specified performance criteria. Pursuant to the terms of the applicable award agreements and the 2020 Plan or 2025 Plan, all currently outstanding stock-based awards under the 2020 Plan and 2025 Plan will be settled in shares of Common Stock on a one-to-one basis if and when such awards vest, and the ownership of such stock-based awards cannot be transferred during the applicable vesting period.

As of May 2, 2026, the aggregate number of shares of Common Stock available for future grants under the 2025 Plan was 3,418 shares. Shares of Common Stock subject to each stock award granted under the 2025 Plan are counted as one share of Common Stock for each share of Common Stock subject to the award.

Restricted stock and restricted stock units: We issue restricted stock to our non-employee directors and RSUs to employees. Restricted stock issued to non-employee directors are participating securities and receive dividends prior to vesting. Unvested restricted stock will terminate and be forfeited upon termination of employment or service. The fair value of our unvested restricted stock and RSU awards is measured based on the market value of our Common Stock on the grant date for the applicable award. The related compensation expense as calculated under ASC 718, net of estimated forfeitures, is recognized over the applicable vesting period. Unrecognized compensation expense related to the restricted stock and RSU awards was approximately $5,707 as of May 2, 2026, which is expected to be recognized over a weighted-average period of 3.31 years. The total fair value of restricted stock vested was $2,404, $1,209, and $1,536 in fiscal years 2026, 2025, and 2024, respectively.

Performance stock and performance stock units: We grant performance stock and PSUs to senior members of our management team subject to the achievement of specified performance targets and continuous service through the

applicable vesting dates. Our PSUs granted in fiscal 2026 were immaterial. In fiscal 2025 and 2024, we had no PSU grants. The performance conditions for the current PSUs are set to be achieved annually during a three-year period. The service condition must be met on each vesting date.

In March 2025, the Company granted a one-time equity award to its former interim Chief Executive Officer (“CEO”) and acting Chief Financial Officer (“CFO”). Pursuant to the terms of the applicable award agreements, 100 percent of the awarded RSUs will vest upon the appointment of a permanent CEO or CFO, as applicable, provided that the executive remains continuously employed by the Company or a subsidiary until immediately prior to such appointment. The vesting condition for the Company’s former interim CEO was satisfied during fiscal 2026 upon the appointment of his successor. As of May 2, 2026, the vesting condition for the acting CFO has not yet been satisfied.

During fiscal 2026, the Company recognized additional stock‑based compensation expense related to the accelerated vesting of certain equity awards in connection with the separation of an executive officer. The acceleration of vesting resulted in the recognition of approximately $620 of compensation expense during the period, which is included in “General and administrative” expense in our Consolidated Statements of Operations.

During fiscal 2026, the Company reclassified certain PSUs from equity‑classified awards to liability‑classified awards because the awards permit settlement in cash at the holder’s election. As of May 2, 2026, $304 was reclassified from additional paid‑in capital to accrued compensation liabilities, and $180 was recognized as stock-based compensation expense to reflect the awards’ fair value at the reclassification date. The liability is included in “Accrued expenses” in our Consolidated Statements of Operations. Liability‑classified awards are remeasured at fair value each reporting period until settlement.

A summary of non-vested restricted stock and RSUs for fiscal years 2026, 2025, and 2024 is as follows:


	Year Ended
	May 2, 2026			April 26, 2025			April 27, 2024
	Number of Nonvested Shares	Weighted Average Grant Date Fair Value Per Share		Number of Nonvested Shares	Weighted Average Grant Date Fair Value Per Share		Number of Nonvested Shares	Weighted Average Grant Date Fair Value Per Share
Outstanding at beginning of year	600	$	9.62	486	$	5.95	617	$	4.11
Granted	251	19.92		318	13.19		159	9.85
Vested	(253)	8.88		(189)	6.45		(280)	3.92
Forfeited	(24)	14.21		(15)	6.71		(10)	4.77
Outstanding at end of year	574	$	13.96	600	$	9.62	486	$	5.95

Stock Options: We issue incentive stock options to our employees. A summary of stock option activity under our 2020 Plan and 2025 Plan during the fiscal year ended May 2, 2026 is as follows:


	Stock Options	Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Life (Years)	Aggregate Intrinsic Value
Outstanding as of April 26, 2025	901	$	5.78	5.41	$	6,107
Granted	—	—		—	—
Cancelled or forfeited	(4)	8.51		—	—
Exercised	(290)	6.19		—	4,247
Outstanding as of May 2, 2026	607	$	5.57	4.85	$	8,573

Shares vested and expected to vest	603	$	5.56	4.83	$	8,518
Exercisable as of May 2, 2026	419	$	5.81	4.16	$	5,827

The aggregate intrinsic value of stock options represents the difference between the exercise price of stock options and the fair market value of the underlying Common Stock for all in-the-money options. We define in-the-money options as of May 2, 2026 as options having exercise prices lower than the $19.70 per share market price of our Common Stock on that date. There were 419 shares exercisable that were in-the-money options as of May 2, 2026. The total intrinsic value of options exercised during fiscal years 2026, 2025, and 2024 was $4,247, $3,594, and $708, respectively. The total fair value of stock options vested was $375, $410, and $453 for fiscal years 2026, 2025, and 2024, respectively.

We estimate the fair value of stock options granted using the Black-Scholes option valuation model. We recognize the fair value of the stock options on a straight-line basis as compensation expense. All options are recognized over the requisite service periods of the awards, which are generally the vesting periods.

The Black-Scholes option-pricing model was developed for use in estimating the fair value of traded options which have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions, including the expected stock price volatility. ASC 718 requires us to estimate forfeitures at the time of grant and to revise those estimates in subsequent periods if actual forfeitures differ from those estimates. We use historical data to estimate pre-vesting option forfeitures and record share-based compensation expense only for those awards expected to vest. The following factors are the significant assumptions used in the computation of the fair value of options:

Expected life. The expected life of options granted represents the period of time they are expected to be outstanding. We estimate the expected life of options granted based on historical exercise patterns, which we believe are representative of future behavior. We have examined our historical pattern of option exercises in an effort to determine if there were any discernible patterns of activity based on certain demographic characteristics. Demographic characteristics tested included age, salary level, job level, and geographic location. We have determined there were no meaningful differences in option exercise activity based on the demographic characteristics tested.

Expected volatility. We estimate the volatility of our common stock at the date of grant based on historical volatility consistent with ASC 718 and SEC Staff Accounting Bulletin No. 107, Share-Based Payments.

Risk-free interest rate. The rate is based on the United States Treasury zero-coupon yield curve on the grant date for a term similar to the expected life of the options.

Dividend yield. We use an expected dividend yield consistent with our historical dividend yield pattern.

The following table provides the weighted-average fair value of options granted and the related assumptions used in the Black-Scholes model. No stock options were granted during fiscal 2026; therefore, no Black‑Scholes assumptions were applicable.


	Year Ended
	April 26, 2025			April 27, 2024
Fair value of options granted	$	5.98		$	4.92
Risk-free interest rate	3.58		%	4.37		%

Expected volatility	49.14		%	46.28		%
Expected life of option (in years)	6.83			6.90

Employee stock purchase plan: We have an employee stock purchase plan (“ESPP”), which enables employees after six months of continuous employment to elect, in advance and semi-annually, to contribute up to 15 percent of their compensation, subject to certain limitations, toward the purchase of our Common Stock at a purchase price equal to 85 percent of the lower of the fair market value of the Common Stock on the first or last day of the participation period. The ESPP requires participants to hold any shares purchased under the ESPP for a minimum period of one year after the date of purchase. Compensation expense recognized on shares issued under our ESPP is based on the value of a traded option to purchase shares of our Common Stock at a 15 percent discount to the stock price. The total number of shares reserved under the ESPP is 5,500. The number of shares of Common Stock issued under the ESPP totaled 128, 148, and 355 shares in fiscal 2026, 2025, and 2024, respectively. The number of shares of Common Stock reserved for future employee purchases under the ESPP totaled 943 shares as of May 2, 2026. The ESPP is intended to qualify under Section 423 of the Internal Revenue Code of 1986, as amended.

Total share-based compensation expense: As of May 2, 2026, there was $6,001 of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under all equity compensation plans. Total unrecognized compensation cost will be adjusted for future changes in estimated forfeitures. We expect to recognize the cost over a weighted-average period of 3.31 years.

The following table presents a summary of the share-based compensation expense by equity type as follows:


	Year Ended
	May 2, 2026		April 26, 2025		April 27, 2024
Stock options	$	550	$	910	$	420
Restricted stock and stock units	4,029		1,591		1,177
Employee stock purchase plans	515		443		493
	$	5,094	$	2,944	$	2,090

A summary of the share-based compensation expense by classification in the Consolidated Statements of Operations for stock options, restricted stock, RSUs, and shares of Common Stock issued under the ESPP for fiscal years 2026, 2025, and 2024 is as follows:


	Year Ended
	May 2, 2026		April 26, 2025		April 27, 2024
Cost of sales	$	968	$	613	$	452
Selling	778		460		437
General and administrative	2,920		1,577		745
Product design and development	428		294		456
	$	5,094	$	2,944	$	2,090

We received $1,796 in cash from option exercises under all share-based payment arrangements for the fiscal year ended May 2, 2026. The tax expense related to non-qualified options and RSUs under all share-based payment arrangements totaled $215, $5, and $22 for fiscal years 2026, 2025, and 2024, respectively.