NAPCO Security Technologies Inc
F:NS1
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NAPCO Security Technologies Inc
F:NS1
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NAPCO Security Technologies Inc
NAPCO Security Technologies makes alarm and access-control equipment for buildings that need protection. Its products include intrusion and fire alarm panels, door locks, cloud-connected security devices, and cellular communicators that keep alarm systems connected to monitoring centers. It sells mainly to security dealers, installers, distributors, and end customers in places like homes, small businesses, schools, and other commercial properties. The company makes money in two main ways. First, it sells hardware and related equipment through the security channel. Second, it earns recurring service revenue from connected devices and monitoring-related services, which gives it a mix of one-time product sales and ongoing income. That recurring piece matters because alarm systems often need constant communication and support. What makes NAPCO's business model different is that it sits at the link between security hardware and monitoring services. It does not just sell a box on a wall; it builds the devices that trigger and connect the alarm system, then keeps those systems linked over time. This gives the company a role in both the upfront sale and the long-term operation of security systems.
NAPCO Security Technologies makes alarm and access-control equipment for buildings that need protection. Its products include intrusion and fire alarm panels, door locks, cloud-connected security devices, and cellular communicators that keep alarm systems connected to monitoring centers. It sells mainly to security dealers, installers, distributors, and end customers in places like homes, small businesses, schools, and other commercial properties.
The company makes money in two main ways. First, it sells hardware and related equipment through the security channel. Second, it earns recurring service revenue from connected devices and monitoring-related services, which gives it a mix of one-time product sales and ongoing income. That recurring piece matters because alarm systems often need constant communication and support.
What makes NAPCO's business model different is that it sits at the link between security hardware and monitoring services. It does not just sell a box on a wall; it builds the devices that trigger and connect the alarm system, then keeps those systems linked over time. This gives the company a role in both the upfront sale and the long-term operation of security systems.
Revenue: NAPCO reported fiscal Q3 revenue of $49.2 million, up 11.8% year over year, with growth coming from both recurring services and hardware.
Recurring mix: Recurring monthly service revenue rose 15.4% to $24.9 million and now runs at about a $101 million annual rate, with gross margins above 90%.
Margins: Overall gross margin improved to 60%, helped by stronger hardware margins and a higher mix of high-margin recurring revenue.
Profitability: Non-GAAP net income rose 36.9% and adjusted EBITDA rose 20.2%, showing operating leverage stronger than revenue growth.
Litigation: The company recorded a $16 million litigation settlement charge, which management said removes a source of uncertainty and should not affect the dividend.
Outlook: Management sounded upbeat about fiscal 2026, citing healthy demand, disciplined discounting, and continued growth in recurring services and locking products.
