NAPCO Security Technologies, Inc. Reports Fiscal Q4 and Full Year 2026 Results

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Aug 24, 2026, 07:00 ET

AMITYVILLE, N.Y., Aug. 24, 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 fourth quarter and fiscal year 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.

Fourth Quarter 2026 Financial Results as Compared to Fourth Quarter 2025

Net revenue increased 10.0% to a quarterly record $55.8 million, as compared to $50.7 million
Recurring service revenue ("RSR") increased 12.9% to $25.3 million, with over 90% gross margin, as compared to $22.4 million
Equipment revenue increased 7.7% to $30.5 million, compared to $28.3 million
Gross profit margin of 61.3%, which included a benefit of approximately 600 basis points from tariff refunds, vs 52.8% in prior fiscal year quarter
Net Income increased 52.7% YoY to a quarterly record $17.8 million, as compared to $11.6 million
Diluted Net Income per share increased 51.5% to $0.50, which is inclusive of a benefit of approximately $0.09 from net tariff refunds, as compared to $0.33
Non-GAAP Adjusted EBITDA increased 44.3% to a quarterly record $20.6 million with an Adjusted EBITDA Margin of 36.8%

Full Year 2026 Financial Results as Compared to Full Year 2025

Net revenue increased 11.4% to a record $202.3 million, as compared to $181.6 million
RSR increased 13.0% to $97.5 million, with over 90% gross margin, as compared to $86.3 million
RSR has a prospective annual run rate of approximately $103 million based on July 2026 recurring service revenues
Equipment revenue increased 10.0% to $104.8 million, compared to $95.3 million
Gross profit margin of 59.2%, which included a benefit of approximately 50 basis points from tariff refunds, vs 55.6% in prior fiscal year
Net Income decreased (.9%) to $43.0 million, as compared to $43.4 million. Full year net income and net income per share were negatively affected by a $16 million litigation settlement charge taken in Q3 of fiscal 2026
Diluted Net Income per share increased 0.8% YoY to $1.20, which is inclusive of a benefit of approximately $0.03 from net tariff refunds and negative impact of approximately $0.40 from net litigation settlement costs, as compared to $1.19
Non-GAAP Net Income increased 32.0% to $57.3 million, as compared to $43.4 million
Non-GAAP Diluted Net Income per share increased 34.5% YoY to $1.60, as compared to $1.19.
Non-GAAP Adjusted EBITDA increased 27.9% YoY to a record $66.7 million, with an Adjusted EBITDA Margin of 33.0%
The Board declared a quarterly dividend of $0.17 per share, payable on October 2, 2026 to shareholders of record on September 11, 2026.

Kevin Buchel, CEO and President, commented, "Our Fiscal Q4 performance completes a strong close to our fiscal year end and reflects continued positive financial results. We achieved record Q4 revenue and Adjusted EBITDA of $55.8 and $20.6 million, respectively, which was bolstered by our recurring service revenue with its continued year over year double digit growth. We saw a rebound in our equipment sales, which increased 10.0% for the year, driven by strong demand for our door-locking products as well as a 36% growth in sales of our intrusion products in Q4, which is primarily a result of increased sales of our StarLink fire communicators. Our RSR continues to deliver gross margins of over 90%, and represents approximately 45% of total revenue in Q4, and has a prospective run rate of approximately $103 million based on our July 2026 recurring service revenue. Our revenue growth and margin expansion in Q4 resulted in a 53% increase in net income, a 44% increase in Non-GAAP Adjusted EBITDA and our Adjusted EBITDA margin was 36.8% as compared to 28.1% in Q4 of Fiscal 2025.

As such we are pleased to continue our dividend program and will be increasing the quarterly dividend by 13.3% to $0.17 per share, which will be paid on October 2, 2026, to shareholders of record on September 11, 2026."


	Three months ended June 30,								Year ended June 30,
	(dollars in thousands)								(dollars in thousands)
							% Increase/								% Increase/
Financial Highlights	2026			2025			(decrease)		2026			2025			(decrease)
GAAP Results
Net Revenue	$	55,809		$	50,724		10.0	%	$	202,316		$	181,621		11.4	%
Gross Profit	$	34,218		$	26,798		27.7	%	$	119,791		$	101,030		18.6	%
Gross Profit Margin		61.3	%		52.8	%				59.2	%		55.6	%
Operating Income	$	18,430		$	12,086		52.5	%	$	45,638		$	46,259		(1.3)	%
Net Income	$	17,767		$	11,632		52.7	%	$	43,027		$	43,406		(0.9)	%
Diluted Earnings Per Share	$	0.50		$	0.33		51.5	%	$	1.20		$	1.19		0.8	%

Non-GAAP Results
Operating Income	$	18,430		$	12,086		52.5	%	$	61,638		$	46,259		33.2	%
Net Income	$	17,767		$	11,632		52.7	%	$	57,294		$	43,406		32.0	%
Net Income Margin		31.8	%		22.9	%				28.3	%		23.9	%
Diluted Earnings Per Share	$	0.50		$	0.33		51.5	%	$	1.60		$	1.19		34.5	%
Adjusted EBITDA	$	20,559		$	14,249		44.3	%	$	66,670		$	52,126		27.9	%
Adjusted EBITDA Margin		36.8	%		28.1	%				33.0	%		28.7	%
Adjusted EBITDA Per Share	$	0.57		$	0.40		42.5	%	$	1.86		$	1.43		30.1	%
Free Cash Flows	$	17,249		$	14,387		19.9	%	$	59,228		$	51,411		15.2	%
Free Cash Flows Margin		30.9	%		28.4	%				29.3	%		28.3	%

Conference Call Information

Management will conduct a conference call at 11 a.m. ET today, August 24, 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/OM3bGdQ8gY1. 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 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; the opportunities for fire alarm products; 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 expenses, litigation settlement costs, and depreciation and amortization expenses. 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)


	June 30, 2026		June 30, 2025
	(in thousands, except share data)
Assets
Current Assets
Cash and cash equivalents	$	126,928	$	83,081
Marketable securities		10,637		16,095
Accounts and other receivable, net of allowance for credit losses of $101 and $25 as of June 30, 2026 and June 30, 2025, respectively		35,975		30,108
Inventories		30,118		29,962
Prepaid expenses and other current assets		4,325		3,198
Total Current Assets		207,983		162,444
Inventories - non-current		9,256		11,313
Property, plant and equipment, net		9,238		9,233
Intangible assets, net		2,990		3,287
Deferred income taxes		4,105		6,476
Operating lease - Right-of-use asset		4,906		5,188
Other assets		190		200
Total Assets	$	238,668	$	198,141

Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable	$	6,925	$	5,742
Accrued expenses		8,546		8,712
Accrued litigation costs		16,000		—
Accrued salaries and wages		4,484		4,398
Dividends payable		5,365		4,992
Accrued income taxes		1,134		213
Total Current Liabilities		42,454		24,057
Accrued income taxes		33		143
Operating lease liability		5,179		5,335
Total Liabilities		47,666		29,535
Commitments and Contingencies (Note 13)
Stockholders' Equity
Common Stock, par value $0.01 per share; 100,000,000 shares authorized as of June 30, 2026 and 2025; 39,883,051 and 39,771,035 shares issued; and 35,768,437 and 35,656,421 shares outstanding, respectively.		399		398
Additional paid-in capital		25,355		25,280
Retained earnings		221,403		199,083
Treasury Stock, at cost, 4,114,614 shares as of both June 30, 2026 and June 30, 2025		(56,315)		(56,315)
Accumulated other comprehensive income		160		160
Total Stockholders' Equity		191,002		168,606
Total Liabilities and Stockholders' Equity	$	238,668	$	198,141

NAPCO SECURITY TECHNOLOGIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

	Three Months ended June 30,
	2026		2025		2024
	(in thousands, except for share and per share data)
Revenue:
Equipment revenue	$	30,488	$	28,298	$	29,938
Service revenue		25,321		22,426		20,392
Total revenue		55,809		50,724		50,330
Cost of Revenue:
Cost of equipment revenue		19,089		21,827		20,530
Cost of service revenue		2,502		2,099		1,955
Total cost of revenue		21,591		23,926		22,485

Gross Profit		34,218		26,798		27,845

Operating Expenses:
Research and development		3,660		3,232		3,027
Selling, general, and administrative		12,128		11,480		10,854
Total operating expenses		15,788		14,712		13,881

Operating Income		18,430		12,086		13,964

Other Income:
Interest income, net		969		725		712
Other income, net		251		158		50
Income before Provision for Income Taxes		19,650		12,969		14,726
Provision for Income Taxes		1,883		1,337		1,192
Net Income	$	17,767	$	11,632	$	13,534

Income Per Share:
Basic	$	0.50	$	0.33	$	0.37
Diluted	$	0.50	$	0.33	$	0.36

Weighted Average Number of Shares Outstanding:
Basic		35,747,000		35,656,000		36,939,000
Diluted		35,883,000		35,764,000		37,232,000

NAPCO SECURITY TECHNOLOGIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

	Year Ended June 30,
	2026		2025		2024
	(in thousands, except for share and per share data)
Revenue:
Equipment revenue	$	104,788	$	95,291	$	113,071
Service revenue		97,528		86,330		75,749
Total revenue		202,316		181,621		188,820
Cost of Revenue:
Cost of equipment revenue		73,031		72,795		79,862
Cost of service revenue		9,494		7,796		7,204
Total cost of revenue		82,525		80,591		87,066

Gross Profit		119,791		101,030		101,754

Operating Expenses:
Research and development		13,791		12,581		10,763
Selling, general, and administrative expenses		44,362		42,190		37,173
Litigation settlement cost		16,000		—		—
Total operating expenses		74,153		54,771		47,936

Operating Income		45,638		46,259		53,818

Other Income:
Interest income, net		3,587		3,356		2,375
Other income, net		597		454		193
Income before Provision for Income Taxes		49,822		50,069		56,386
Provision for Income Taxes		6,795		6,663		6,568
Net Income	$	43,027	$	43,406	$	49,818

Income Per Share:
Basic	$	1.21	$	1.20	$	1.35
Diluted	$	1.20	$	1.19	$	1.34

Weighted Average Number of Shares Outstanding:
Basic		35,690,000		36,298,000		36,812,000
Diluted		35,891,000		36,499,000		37,066,000

NAPCO SECURITY TECHNOLOGIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
	Fiscal Year ended June 30,
	2026		2025		2024
	(in thousands)
Cash Flows from Operating Activities
Net Income	$	43,027	$	43,406	$	49,818
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		2,208		2,276		2,163
Change in accrued interest on other investments		—		—		31
Unrealized gain on marketable securities		—		(177)		(56)
Realized gain on sales of marketable securities		(407)		(56)		—
Charge (recovery) of credit losses		76		(7)		(99)
Change to inventory reserve		(444)		643		1,691
Deferred income taxes		2,371		(1,048)		(2,776)
Stock-based compensation expense		989		1,513		1,733
Changes in operating assets and liabilities:
Accounts and other receivable		(5,943)		1,797		(5,730)
Inventories		2,344		7,995		(3,255)
Prepaid expenses and other current assets		(1,127)		1,071		(867)
Income tax receivable		(1)		48		2
Other assets		11		86		25
Accounts payable, accrued expenses, accrued litigation costs, accrued salaries and wages, accrued income taxes		18,041		(4,020)		2,688
Net Cash Provided by Operating Activities		61,145		53,527		45,368
Cash Flows from Investing Activities
Purchases of property, plant, and equipment		(1,917)		(2,116)		(1,594)
Purchases of marketable securities		(11,370)		(12,835)		(206)
Proceeds from sales of marketable securities		17,236		2,556		—
Purchases of other investments		—		—		(1,351)
Redemption of other investments		—		26,980		—
Net Cash Provided by (Used in) Investing Activities		3,949		14,585		(3,151)
Cash Flows from Financing Activates
Proceeds from stock option exercises		628		54		427
Dividends paid		(20,334)		(13,632)		(13,258)
Purchase of treasury shares		—		(36,794)		—
Payment of tax withholdings related to stock option exercises		(1,541)		—		—
Net Cash Used in Financing Activities		(21,247)		(50,372)		(12,831)

Net increase in Cash and Cash Equivalents		43,847		17,740		29,386
Cash and Cash Equivalents - Beginning		83,081		65,341		35,955
Cash and Cash Equivalents - Ending	$	126,928	$	83,081	$	65,341
Supplemental Cash Flow Information
Interest paid	$	—	$	—	$	14
Income taxes paid, net of refunds received	$	3,505	$	8,427	$	9,330
Non-Cash Investing and Financing Transactions
Dividends declared and not paid	$	5,365		4,992		—

NAPCO SECURITY TECHNOLOGIES, INC. RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL DATA* (unaudited) (in thousands, except share and per share data)
			Non-GAAP Adjustments
			Litigation
			Settlement		Tax
	GAAP		Cost		Adjustments ⁽¹⁾		Non-GAAP
Three months ended June 30, 2026
Revenue	$	55,809	$	—	$	—	$	55,809
Gross Profit		34,218		—		—		34,218
Operating Expenses		15,788		—		—		15,788
Operating Income		18,430		—		—		18,430
Net Income		17,767		—		-		17,767
Non-GAAP adjusted net income margin								31.8	%
Non-GAAP adjusted net income per share - diluted							$	0.50

Three months ended June 30, 2025
Revenue	$	50,724	$	—	$	—	$	50,724
Gross Profit		26,798		—		—		26,798
Operating Expenses		14,712		—		—		14,712
Operating Income		12,086		—		—		12,086
Net Income		11,632		—		—		11,632
Non-GAAP adjusted net income margin								22.9	%
Non-GAAP adjusted net income per share - diluted							$	0.33

Year ended June 30, 2026
Revenue	$	202,316	$	—	$	—	$	202,316
Gross Profit		119,791		—		—		119,791
Operating Expenses		74,153		(16,000)		—		58,153
Operating Income		45,638		16,000		—		61,638
Net Income		43,027		16,000		(1,733)		57,294
Non-GAAP adjusted net income margin								28.3	%
Non-GAAP adjusted net income per share - diluted							$	1.60

Year ended June 30, 2025
Revenue	$	181,621	$	—	$	—	$	181,621
Gross Profit		101,030		—		—		101,030
Operating Expenses		54,771		—		—		54,771
Operating Income		46,259		—		—		46,259
Net Income		43,406		—		—		43,406
Non-GAAP adjusted net income margin								23.9	%
Non-GAAP adjusted net income per share - diluted							$	1.19


	Three months ended June 30,				Fiscal year ended June 30,
	2026		2025		2026		2025
Denominator:
Weighted average shares outstanding
Basic, as reported		35,747,000		35,656,000		35,690,000		36,298,000
Effect of Dilutive Securities		136,000		108,000		201,000		201,000
Diluted, (Denominator)		35,883,000		35,764,000		35,891,000		36,499,000

1. The 'with or without' method is utilized to determine the income tax effect of all Non-GAAP adjustments.

NAPCO SECURITY TECHNOLOGIES, INC. RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL DATA* (unaudited) (in thousands, except share and per share data)
	Three months ended June 30,						Year ended June 30,
	2026			2025			2026			2025
Non-GAAP adjusted EBITDA:
Net income, as reported	$	17,767		$	11,632		$	43,027		$	43,406
Interest income, net		(969)			(725)			(3,587)			(3,356)
Provision for income taxes		1,883			1,337			6,795			6,663
Depreciation and amortization		539			571			2,208			2,276
Non-GAAP EBITDA		19,220			12,815			48,443			48,989
Adjustments:
Stock based compensation		205			370			989			1,513
Nonrecurring legal expense⁽¹⁾		1,134			1,064			1,238			1,624
Litigation settlement cost⁽²⁾		—			—			16,000			—
Total adjustments		1,339			1,434			18,227			3,137
Non-GAAP adjusted EBITDA	$	20,559		$	14,249		$	66,670		$	52,126
Non-GAAP adjusted EBITDA margin		36.8	%		28.1	%		33.0	%		28.7	%

Non-GAAP per share data:
Non-GAAP adjusted EBITDA per share - diluted	$	0.57		$	0.40		$	1.86		$	1.43

Denominator:
Weighted average shares outstanding
Basic, as reported		35,747,000			35,656,000			35,690,000			36,298,000
Effect of Dilutive Securities		136,000			108,000			201,000			201,000
Diluted, (Denominator)		35,883,000			35,764,000			35,891,000			36,499,000

Nonrecurring Legal Expenses, which are net of any insurance reimbursements, are legal fees that are determined not to be of a normal recuring nature and expenses necessary to operate the business
Litigation settlement costs, which are net of any insurance reimbursements, were determined not to be of a recurring nature and costs that are not in the normal cost of business or necessary to operate the business


	Three months ended June 30,						Year ended June 30,
	(dollars in thousands)						(dollars in thousands)

	2026			2025			2026			2025
Free cash flow:
Net Cash Provided by Operating Activities	$	17,654		$	14,624		$	61,145		$	53,527
Less: Purchases of property, plant, and equipment		(405)			(237)			(1,917)			(2,116)
Free Cash Flow⁽¹⁾	$	17,249		$	14,387		$	59,228		$	51,411
Free Cash Flow Margin⁽¹⁾		30.9	%		28.4	%		29.3	%		28.3	%

Free cash flow is calculated as net cash provided by operating activities less capital expenditures. Free cash flow margin is the free cash flow divided by revenue.

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.