NAPCO Security Technologies, Inc. Reports Fiscal 2026 Q2 Results

Fiscal Q2 2026 Highlights

• Record Q2 Net revenues of $48.2 million, a 12.2% YoY increase
• Equipment revenue increased 12.0% YoY to $24.3 million
• Recurring service revenue ("RSR") increased 12.5% YoY to $23.8 million with a 90.2% gross margin
• RSR had a prospective annual run rate of approximately $99 million based on January 2026 recurring service revenues.
• Gross profit margin for Q2 2026 of 58.6% vs 57.0% in prior fiscal year quarter
• Diluted EPS increased YoY to $0.38 vs $0.28
• The Board declared a quarterly dividend of $0.15 per share, a 7% increase from last quarter, payable on April 3, 2026 to shareholders of record on March 12, 2026.

AMITYVILLE, N.Y., Feb. 2, 2026 /PRNewswire/ -- NAPCO Security Technologies, Inc. (NASDAQ: NSSC), one of the leading manufacturers and designers of high-tech electronic security equipment, wireless communication devices for intrusion and fire alarm systems and the related recurring service revenues as well as a provider of school safety solutions, today announced financial results for its second quarter of fiscal 2026.

Richard Soloway, Chairman and CEO, commented, "NAPCO delivered another strong quarter fueled by our recurring service revenue and its consistent year over year double digit growth, and the continued demand for our door-locking products that drove double digit growth in our equipment revenue and improved equipment gross margins. Our RSR continues to see growth quarter over quarter with sustained gross margins of 90%, and represents approximately 50% of total revenue in Q2, and has a prospective run rate of approximately $99 million based on our January 2026 recurring service revenue. As a result of our revenue growth and margin expansion, net income increased 29% year over year to a Q2 record of $13.5 million and our adjusted EBITDA margin was 31.9% as compared to 28.4% in Q2 of Fiscal 2025.

Our focus remains on expanding RSR solutions across all our platforms, including locking products, such as our MVP Access platform which is gaining traction in the marketplace as we are actively supporting and educating our dealers on the benefits of adopting this new solution.

Our fiscal 2026 Q2 results are a continuation of the positive start to the fiscal 2026, and we remain confident that our net income, Adjusted EBITDA* and Free Cash Flow*, will continue to grow throughout the balance of the fiscal year.

As such we are pleased to continue our dividend program and will be paying the next quarterly dividend of $0.15 per share on April 3, 2026 to shareholders of record on March 12, 2026. This is a 7% increase over the dividend we declared last quarter.

Mr. Soloway concluded "Our goal of product innovation, technical superiority and consistent delivery of strong profitability, will continue through the balance of fiscal 2026 and beyond". 

Addition of Chief Revenue Officer

The Company announced that Joseph Pipczynski has joined the NAPCO team and was appointed as the Company's Chief Revenue Officer effective January 29, 2026. Mr. Pipczynski will be reporting to the Company's President and Chief Operating Officer, Kevin Buchel. Stephen Spinelli, Senior Vice President of Sales, will continue in his current role and will report to Mr. Pipczynski.

Mr. Soloway commented "We are excited to have Joe join the NAPCO family, and with his 35+ years as a business development executive he will provide the Company strong leadership and vision and will supplement the existing talented sales team at NAPCO."

Conference Call Information

Management will conduct a conference call at 11 a.m. ET today, February 2, 2026, and in order to participate please go to the Investor Relations section of the Company website at https://investor.napcosecurity.com/events-presentations or choose https://app.webinar.net/dMv73PZxKlL. Alternatively, interested parties may participate in the call by dialing (US) 1-800-836-8184 or 1-646-357-8785.  A replay of the webcast will be available on the Investor Relations section of the Company's website.

About NAPCO Security Technologies, Inc.

NAPCO Security Technologies, Inc., is one of the leading manufacturers and designers of high-tech electronic security devices, wireless recurring communication services for intrusion and fire alarm systems as well as a provider of school safety solutions, The Company consists of four Divisions: NAPCO, plus three wholly owned subsidiaries: Alarm Lock, Continental Instruments, and Marks USA. Headquartered in Amityville, New York, its products are installed by tens of thousands of security professionals worldwide in commercial, industrial, institutional, residential and government applications. NAPCO products have earned a reputation for innovation, technical excellence and reliability, positioning the Company for growth in the multi-billion dollar and rapidly expanding electronic security market. For additional information on NAPCO, please visit the Company's web site at http://www.napcosecurity.com.

Safe Harbor Statement

This press release contains forward-looking statements that are based on current expectations, estimates, forecasts and projections of future performance based on management's judgment, beliefs, current trends, and anticipated product performance. These forward-looking statements include, but are not limited to, statements relating to the impact of COVID-19 pandemic; supply chain challenges and developments; the growth of recurring service revenues and annual run rate; the strength of our balance sheet; our expectations regarding future results; the introduction of new access control and locking products; the opportunities for school security products; business trends , including the replacement of 3G radios, and our ability to execute our business strategies. Actual results, performance or achievements could differ materially from those anticipated in such forward-looking statements as a result of certain factors, including those risk factors set forth in the Company's filings with the Securities and Exchange Commission, such as our annual report on Form 10-K and quarterly reports on Form 10-Q. Other unknown or unpredictable factors or underlying assumptions subsequently proving to be incorrect could cause actual results to differ materially from those in the forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance, or achievements. You should not place undue reliance on these forward-looking statements. All information provided in this press release is as of today's date, unless otherwise stated, and the Company undertakes no duty to update such information, except as required under applicable law.

*Non-GAAP Financial Measures

Certain non-GAAP measures are included in this press release, including non-GAAP operating income, Adjusted EBITDA, Adjusted EBITDA per share (diluted), Free Cash Flow and Free Cash Flow Margin. We define Adjusted EBITDA as GAAP net income plus income tax expense, net interest expense, non-cash stock-based expense, non-recurring legal expense, other non-recurring income and depreciation and amortization expense. Non-GAAP operating income does not include amortization of intangibles or stock-based compensation expense. Adjusted EBITA margin is Adjusted EBITA divided by revenue. We define Free Cash Flow (FCF) as net cash provided by operating activities less capital expenditures. FCF margin is the FCF divided by revenue. These non-GAAP measures are provided to enhance the user's overall understanding of our financial performance. By excluding these charges our non-GAAP results provide information to management and investors that is useful in assessing NAPCO's core operating performance and in comparing our results of operations on a consistent basis from period to period. Our use of non-GAAP financial measures has certain limitations in that such non-GAAP financial measures may not be directly comparable to those reported by other companies. For example, the terms used in this press release, such as Adjusted EBITDA, do not have a standardized meaning. Other companies may use the same or similarly named measures, but exclude different items, which may not provide investors with a comparable view of our performance in relation to other companies. The presentation of this information is not meant to be a substitute for the corresponding financial measures prepared in accordance with generally accepted accounting principles. Investors are encouraged to review the reconciliation of GAAP to non-GAAP financial measures set forth above.

Contacts:

Francis J. Okoniewski

Vice President of Investor Relations

NAPCO Security Technologies, Inc.

Office 800-645-9445 x 374

Mobile 516-404-3597

[email protected]

SOURCE NAPCO Security Technologies, Inc.