Q3 Net revenues of $49.2 million, a 11.8% YoY increase
Equipment revenue increased 8.4% YoY to $24.2 million
Recurring service revenue ("RSR") increased 15.4% YoY to $24.9 million with a 90.4% gross margin
RSR had a prospective annual run rate of approximately $101 million based on April 2026 recurring service revenues.
Gross profit margin for Q3 2026 of 60.0% vs 57.2% in prior fiscal year quarter
Net (loss) income for the three and nine months ended March 31, 2026, of $(0.4) million and $25.3 million is inclusive of a $16.0 million litigation settlement charge
Non-GAAP Diluted Net Income per share increased YoY to $0.39 vs $0.28
Q3 Adjusted EBITDA increased 20.2% YoY to $15.8 million with an Adjusted EBITDA Margin of 32.2%
The Board declared a quarterly dividend of $0.15 per share, payable on July 3, 2026 to shareholders of record on June 12, 2026.
AMITYVILLE, N.Y., May 4, 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 third quarter of fiscal 2026. Results are reported in accordance with U.S. generally accepted accounting principles ("GAAP") and are also reported adjusting for certain items ("Non-GAAP"). A reconciliation between GAAP and Non-GAAP operating results is provided at the end of this press release.
Three months ended March 31,
Nine months ended March 31,
(dollars in thousands)
(dollars in thousands)
% Increase/
% Increase/
Financial Highlights
2026
2025
(decrease)
2026
2025
(decrease)
GAAP Results
Net Revenue
$
49,167
$
43,961
11.8
%
$
146,507
$
130,897
11.9
%
Gross Profit
$
29,489
$
25,127
17.4
%
$
85,573
$
74,232
15.3
%
Gross Profit Margin
60.0
%
57.2
%
58.4
%
56.7
%
Operating (Loss) Income
$
(1,188)
$
11,146
(110.7)
%
$
27,208
$
34,173
(20.4)
%
Net (Loss) Income
$
(408)
$
10,122
(104.0)
%
$
25,260
$
31,774
(20.5)
%
Diluted (Loss) Earnings Per Share
$
(0.01)
$
0.28
(103.6)
%
$
0.70
$
0.86
(18.6)
%
Non-GAAP Results
Operating Income
$
14,812
$
11,146
32.9
%
$
43,208
$
34,173
26.4
%
Net Income
$
13,859
$
10,122
36.9
%
$
39,527
$
31,774
24.4
%
Net Income Margin
28.2
%
23.0
%
27.0
%
24.3
%
Diluted Earnings Per Share
$
0.39
$
0.28
39.3
%
$
1.10
0.86
27.9
%
Adjusted EBITDA
$
15,820
$
13,161
20.2
%
$
46,112
$
37,877
21.7
%
Adjusted EBITDA Margin
32.2
%
29.9
%
31.5
%
28.9
%
Adjusted EBITDA Per Share
$
0.44
$
0.36
22.2
%
$
1.28
$
1.03
%
24.3
%
Free Cash Flows
$
16,022
$
13,314
20.3
%
$
41,979
$
37,024
13.4
%
Free Cash Flows Margin
32.6
%
30.3
%
28.7
%
28.3
%
1. In millions except percentages and per share data or as otherwise noted.
Richard Soloway, Chairman and CEO, commented, "Our Fiscal Q3 performance reflects positive financial results, including record Q3 Adjusted EBITDA of $15.8 million, which was sustained by our recurring service revenue with its continued year over year double digit growth, and the consistent demand for our door-locking products that drove growth in our equipment revenue and improved equipment gross margins, which increased to approximately 29%. Our RSR continues to sustain gross margins of over 90%, represents approximately 51% of total revenue in Q3, and has a prospective run rate of approximately $101 million based on our April 2026 recurring service revenue. Our revenue growth and margin expansion resulted in a 37% increase in Non-GAAP net income, a 20% increase in Adjusted EBITDA and our adjusted EBITDA margin was 32.2% as compared to 29.9% in Q3 of Fiscal 2025.
As such we are pleased to continue our dividend program and will be paying the next quarterly dividend of $0.15 per share on July 3, 2026 to shareholders of record on June 12, 2026."
Conference Call Information
Management will conduct a conference call at 11 a.m. ET today, May 4, 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/Yr185qlxvQE. 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 because 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 proved 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, non-GAAP net income, non-GAAP net income per share (diluted), non-GAAP net income margin, Adjusted EBITDA, Adjusted EBITDA per share (diluted), Adjusted EBITDA per share margin, Free Cash Flow and Free Cash Flow margin. We define non-GAAP net income as GAAP net income plus litigation settlement costs. We define Adjusted EBITDA as GAAP net income plus income tax expense, net interest income (expense), stock-based compensation, non-recurring legal expense, litigation settlement costs, and depreciation and amortization expense. Non-GAAP net income margin is non-GAAP net income divided by revenue. Adjusted EBITDA margin is Adjusted EBITDA 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.
NAPCO SECURITY TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
March 31, 2026
June 30, 2025
(in thousands, except share data)
Assets
Current Assets
Cash and cash equivalents
$
114,408
$
83,081
Marketable securities
10,544
16,095
Accounts receivable, net of allowance for credit losses of $27 and $25 as of March 31, 2026
and June 30, 2025, respectively
28,527
30,108
Inventories
33,384
29,962
Income tax receivable
2,765
—
Prepaid expenses and other current assets
3,146
3,198
Total Current Assets
192,774
162,444
Inventories - non-current
10,012
11,313
Property, plant and equipment, net
9,297
9,233
Intangible assets, net
3,064
3,287
Deferred income taxes
1,697
6,476
Operating lease - Right-of-use asset
4,975
5,188
Other assets
190
200
Total Assets
$
222,009
$
198,141
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable
$
5,786
$
5,742
Accrued expenses
7,999
8,712
Accrued litigation costs
16,000
—
Accrued salaries and wages
3,834
4,398
Dividends payable
5,357
4,992
Accrued income taxes
—
213
Total Current Liabilities
38,976
24,057
Accrued income taxes
34
143
Operating lease liability
5,217
5,335
Total Liabilities
44,227
29,535
Commitments and Contingencies (Note 13)
Stockholders' Equity
Common Stock, par value $0.01 per share; 100,000,000 shares authorized as of March 31,
2026 and June 30, 2025; 39,841,951 and 39,771,035 shares issued; and 35,727,337 and
35,656,421 shares outstanding, respectively.
398
398
Additional paid-in capital
24,523
25,280
Retained earnings
209,001
