NAPCO Security Technologies, Inc. Reports Impressive Fiscal 2026 Q2 Financial Results With Record Revenues

NAPCO Security Technologies, Inc. Reports Fiscal 2026 Q2 Results

NAPCO Security Technologies, Inc. (NASDAQ NSSC), a prominent manufacturer and designer in the electronic security domain, has revealed its fiscal second quarter results for 2026, marking a period of remarkable financial growth and operational excellence. The company reported record net revenues of $48.2 million, showcasing a notable 12.2% increase compared to the previous year. This increase was not just a statistic; it reflects the robust demand for security solutions within the market, particularly in equipment and recurring service revenues.

Revenue Breakdown

The total net revenue for the quarter reached $48.2 million, with equipment revenue specifically climbing to $24.3 million, a 12.0% year-over-year growth. Additionally, recurring service revenue (RSR) amounted to $23.8 million, reflecting a 12.5% increase, with gross margins recorded at an impressive 90.2%. This category, which has become critical for the company, is projected to maintain an annual run rate of approximately $99 million based on data from January 2026.

The overall gross profit margin for the second quarter was recorded at 58.6%, an improvement from the 57.0% margin observed during the same period last year. This healthy margin demonstrates not just revenue growth but also effective cost management strategies employed by NAPCO.

Income and Earnings

NAPCO also reported a significant net income of $13.5 million for the quarter, representing a 29% increase from $10.5 million in the previous year. Diluted earnings per share also saw a substantial rise, increasing to $0.38 from $0.28, further highlighting the company's profitability trajectory.

A highlight of this financial performance is the declared quarterly dividend of $0.15 per share, which marks a 7% increase from the previous quarter. This dividend, payable on April 3, 2026, to shareholders of record on March 12, reflects the company's commitment to returning value to its investors amidst growing profits.

Executive Commentary

Richard Soloway, Chairman and CEO, expressed his satisfaction with the results, emphasizing the consistency in the growth of recurring service revenues and the enhanced demand for secure door-locking products. He remarked that these developments made significant contributions to achieving double-digit growth rates in equipment revenue, alongside improving equipment gross margins. Soloway also highlighted the importance of innovation and technical superiority as drivers for future growth, particularly in their RSR solutions across various markets.

“It’s our continuous focus on expanding RSR solutions that is helping us cater to evolving customer requirements effectively. The MVP Access platform, in particular, is gaining traction, and we are dedicated to supporting our dealers in understanding its potential benefits,” he said.

New Additions to Leadership

Furthermore, NAPCO announced the appointment of Joseph Pipczynski as the Chief Revenue Officer, effective January 29, 2026. With over 35 years in business development, Pipczynski's leadership is expected to enhance the existing sales strategy and help in steering the company towards even greater success.

Looking Ahead

As the company moves forward in fiscal 2026, NAPCO remains confident in its projections for continued growth in net income, adjusted EBITDA, and free cash flow. The strong financial base established in Q2 2026 sets a solid foundation for subsequent quarters, ensuring that NAPCO can continue to innovate and provide high-quality security solutions.

In conclusion, NAPCO Security Technologies, Inc. has shown remarkable resilience and performance in the face of market challenges, positioning itself advantageously in the expanding electronic security landscape. Investors and stakeholders have every reason to remain optimistic about the firm's future prospects and its commitment to delivering shareholder value.