NAPCO reports record Q4 revenue, recurring service growth in fiscal 2026

AMITYVILLE, N.Y.—NAPCO Security Technologies reported record fourth-quarter revenue of $55.8 million, a 10% increase over the same period a year earlier, driven by continued growth in recurring service revenue (RSR) and a rebound in equipment sales. 

NAPCO's recurring service revenue, which includes its StarLink communications business, rose 12.9% to $25.3 million from $22.4 million for the quarter. The company said the segment continues to generate gross margins exceeding 90% and represented roughly 45% of total quarterly revenue. 

Equipment sales increased 7.7% to $30.5 million, compared with $28.3 million in the prior-year quarter. 

Net income climbed 52.7% to a quarterly record $17.8 million, or $0.50 per diluted share, compared with $11.6 million, or $0.33 per diluted share, a year earlier. Adjusted EBITDA increased 44.3% to a record $20.6 million, with an adjusted EBITDA margin of 36.8%. 

Full year 

For the full fiscal year, NAPCO reported record revenue of $202.3 million, up 11.4% from $181.6 million in fiscal 2025. RSR increased 13% to $97.5 million, while equipment revenue grew 10% to $104.8 million. 

The company said its recurring revenue business now has a prospective annual run rate of approximately $103 million based on July 2026 recurring service revenue. 

Full-year net income totaled $43 million, essentially flat compared with $43.4 million in fiscal 2025. NAPCO said results were negatively affected by a $16 million litigation settlement charge recorded during the third quarter of fiscal 2026. Excluding certain items, non-GAAP net income increased 32% to $57.3 million. 

Buchel attributed the company's equipment growth to strong demand for door-locking products and a 36% increase in intrusion product sales during the quarter, driven primarily by higher sales of StarLink fire communicators. 

"Our RSR continues to deliver gross margins of over 90% and represents approximately 45% of total revenue in Q4," said NAPCO President and CEO Kevin Buchel. 

NAPCO's gross profit margin for the fourth quarter was 61.3%, compared with 52.8% in the prior-year quarter. The company said the quarter benefited from approximately 600 basis points related to tariff refunds. 

The board of directors also approved a 13.3% increase in NAPCO's quarterly dividend to $0.17 per share. The dividend will be paid Oct. 2, 2026, to shareholders of record as of Sept. 11, 2026. 

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Photo courtesy of NAPCO Security Technologies