NAPCO Security Technologies Reports Q4 and Full Year 2025 Financial Results

NAPCO Security Technologies Financial Report for Q4 and FY 2025

NAPCO Security Technologies, Inc., a leader in the security equipment sector, has released its financial results for the fourth quarter and full year 2025. The report indicates that while total net sales for the fourth quarter rose slightly to $50.7 million—a 1% increase year-over-year—the overall sales for the fiscal year decreased by 4%, totaling $181.6 million.

Financial Highlights

In Q4, the company has seen strong performance in its recurring service revenue (RSR), which surged by 10% to $22.4 million, contributing significantly to the earnings with a remarkable gross margin of 91%. For the entire fiscal year, RSR reached $86.3 million, reflecting an impressive annual growth of 14%.

However, equipment sales did not fare as well. They dropped by 5% year-over-year to $28.3 million in Q4 and saw a 16% decrease for the full year at $95.3 million. Despite this decline, sequentially, equipment sales rose by 27% from Q3 to Q4, hinting at a potential resurgence in demand.

The company reported a gross profit margin of 52.8% for Q4, down from 55.3% the previous year, yet a slight year-on-year improvement for the full year, recording at 55.6% compared to 53.9% last year. Despite the challenges in equipment sales, NAPCO managed to maintain a healthy margin particularly due to its robust service offerings.

Earnings Movement

Diluted earnings per share (EPS) for Q4 fell to $0.33 from $0.36, and for the entire year, it decreased from $1.34 to $1.19. Additionally, NAPCO's adjusted EBITDA showed a decline down to $14.2 million in Q4 from $15.4 million, echoing similar trends in the annual figures, where it dipped from $58.9 million to $52.1 million.

The company, led by Chairman and CEO Richard Soloway, declared a quarterly dividend of $0.14 per share, payable on October 3, 2025, solidifying its commitment to shareholder returns despite the fluctuating financial landscape.

Future Outlook

Soloway expressed optimism about the fiscal 2026 outlook, particularly in relation to new product launches including the MVP Access platform. This innovative cloud-based solution enhances security management capabilities, allowing users real-time control and monitoring capabilities without the need for on-site infrastructure. Such innovations may bolster recurring revenue streams as market demands evolve.

The company concluded FY 2025 with robust cash flows from operations amounting to over $53 million while eliminating long-standing debts, thus preserving financial agility amid changing market conditions. The ongoing focus on reducing inventory, which has been cut by $8.6 million, supports future liquidity and growth strategies.

Conclusion

As NAPCO Security Technologies continues to navigate the competitive security landscape, its emphasis on service revenues and innovative product offerings positions it well for future growth. The commitment to ongoing financial strength, technical innovation, and shareholder returns remains steadfast as the company prepares for a promising fiscal 2026 and beyond.

For more details about NAPCO's financial performance and strategic direction, visit NAPCO Security.