NAPCO Security Technologies, Inc. (NASDAQ: NSSC) reported results for its fiscal fourth quarter and full year 2026 on Aug. 24, 2026, from its headquarters in Amityville, New York. Net revenue for the fourth quarter reached a quarterly record $55.8 million, up 10.0% from $50.7 million in the fourth quarter of fiscal 2025.
For the full fiscal year, net revenue rose 11.4% to a record $202.3 million, compared with $181.6 million in fiscal 2025.
#Recurring Service Revenue Approaches a $103 Million Run Rate
Recurring service revenue for the fourth quarter increased 12.9% to $25.3 million, with a gross margin of over 90%, compared with $22.4 million in the fourth quarter of fiscal 2025.
NAPCO said recurring service revenue accounted for approximately 45% of its total revenue in the fourth quarter.
For the full year, recurring service revenue increased 13.0% to $97.5 million, with a gross margin of over 90%, compared with $86.3 million in fiscal 2025.
NAPCO said recurring service revenue had a prospective annualized run rate of approximately $103 million, based on the company's recurring service revenue for July 2026.
Equipment revenue for the fourth quarter increased 7.7% to $30.5 million, compared with $28.3 million a year earlier. For the full year, equipment revenue rose 10.0% to $104.8 million, compared with $95.3 million in fiscal 2025.
#Fourth-Quarter Net Income Rises to a Record $17.8 Million
Fourth-quarter net income increased 52.7% to a quarterly record $17.8 million, compared with $11.6 million in the fourth quarter of fiscal 2025.
Diluted earnings per share for the quarter rose 51.5% to $0.50, compared with $0.33 a year earlier. NAPCO said the increase included a benefit of approximately $0.09 per share from net tariff refunds.
Gross profit margin for the quarter was 61.3%, compared with 52.8% in the fourth quarter of fiscal 2025. NAPCO said the increase included a benefit of approximately 600 basis points from tariff refunds.
Non-GAAP Adjusted EBITDA for the quarter increased 44.3% to a quarterly record $20.6 million, with an Adjusted EBITDA margin of 36.8%, compared with 28.1% in the fourth quarter of fiscal 2025.
For the full year, net income decreased 0.9% to $43.0 million, compared with $43.4 million in fiscal 2025. NAPCO said full-year net income was negatively affected by a $16 million litigation settlement charge taken in the third quarter of fiscal 2026.
Full-year diluted earnings per share increased 0.8% to $1.20, compared with $1.19 in fiscal 2025. NAPCO said the figure included a benefit of approximately $0.03 per share from net tariff refunds and a negative impact of approximately $0.40 per share from the litigation settlement.
Non-GAAP net income for the year increased 32.0% to $57.3 million, compared with $43.4 million in fiscal 2025.
Non-GAAP diluted earnings per share for the year increased 34.5% to $1.60, compared with $1.19 in fiscal 2025.
Full-year non-GAAP Adjusted EBITDA increased 27.9% to a record $66.7 million, with an Adjusted EBITDA margin of 33.0%, compared with 28.7% in fiscal 2025.
"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," said Kevin Buchel, CEO and President of NAPCO Security Technologies, in the earnings release. Buchel said the intrusion product growth was driven primarily by increased sales of the company's StarLink fire communicators.
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#NAPCO Raises Quarterly Dividend to $0.17 Per Share
NAPCO's board of directors declared a quarterly dividend of $0.17 per share, an increase of 13.3% from the company's prior quarterly dividend, according to Buchel. The dividend is payable Oct. 2, 2026, to shareholders of record as of Sept. 11, 2026.
The company reported cash and cash equivalents of $126.9 million as of June 30, 2026, compared with $83.1 million a year earlier. Free cash flow for the year increased 15.2% to $59.2 million, compared with $51.4 million in fiscal 2025.
NAPCO Security Technologies operates through four divisions, NAPCO, Alarm Lock, Continental Instruments and Marks USA, and is headquartered in Amityville, New York. The company's net revenue was $188.8 million in fiscal 2024, declined to $181.6 million in fiscal 2025, and rose to a record $202.3 million in fiscal 2026.
NAPCO said its results and outlook remain subject to risks and uncertainties, including those described in its fiscal 2026 annual report on Form 10-K, filed with the Securities and Exchange Commission on Aug. 24.
Buchel said NAPCO plans to continue its dividend program following the board's decision to raise the quarterly payout, citing the company's recurring revenue growth and cash position. NAPCO said actual results could differ from its expectations due to supply chain challenges, execution of its business strategies and other risks disclosed in its SEC filings.