NAPCO Security Technologies, Inc. Reports Fiscal 2026 Q3 Results

Rhea-AI Summary

NAPCO Security Technologies (NASDAQ: NSSC) reported Fiscal Q3 2026 results: net revenue $49.2M (+11.8% YoY), gross margin 60.0%, and Q3 Adjusted EBITDA $15.8M (+20.2% YoY; margin 32.2%). Recurring service revenue was $24.9M (15.4% YoY) with ~90.4% gross margin and a prospective annual run rate of ~$101M based on April 2026. GAAP net loss was $(0.4)M; Non-GAAP diluted EPS was $0.39. Board declared a $0.15 quarterly dividend payable July 3, 2026.

AI-generated analysis. Not financial advice.

Positive

• Net revenue $49.2M (+11.8% YoY)
• Q3 Adjusted EBITDA $15.8M (+20.2% YoY)
• Recurring service revenue $24.9M (+15.4% YoY)
• RSR run rate approximately $101M (April 2026)
• Gross margin improved to 60.0% in Q3
• Quarterly dividend $0.15 per share declared

Negative

• GAAP net loss $(0.4)M in Q3
• Includes $16.0M litigation settlement charge year-to-date
• Operating loss GAAP $(1.2)M for the quarter

News Market Reaction – NSSC

-15.22% 2.4x vol

38 alerts

-15.22% News Effect

-10.9% Trough in 5 hr 56 min

-$282M Valuation Impact

$1.57B Market Cap

2.4x Rel. Volume

On the day this news was published, NSSC declined 15.22%, reflecting a significant negative market reaction. Argus tracked a trough of -10.9% from its starting point during tracking. Our momentum scanner triggered 38 alerts that day, indicating elevated trading interest and price volatility. This price movement removed approximately $282M from the company's valuation, bringing the market cap to $1.57B at that time. Trading volume was elevated at 2.4x the daily average, suggesting increased selling activity.

Data tracked by StockTitan Argus on the day of publication.

Key Figures

Q3 2026 Net Revenue: $49.2M Recurring Service Revenue: $24.9M Equipment Revenue: $24.2M +5 more

8 metrics

Q3 2026 Net Revenue $49.2M Fiscal Q3 2026, up 11.8% YoY

Recurring Service Revenue $24.9M Fiscal Q3 2026, up 15.4% YoY, 90.4% gross margin

Equipment Revenue $24.2M Fiscal Q3 2026, up 8.4% YoY

Gross Profit Margin 60.0% Fiscal Q3 2026 vs 57.2% prior-year quarter

Non-GAAP Diluted EPS $0.39 Fiscal Q3 2026 vs $0.28 prior-year quarter

Adjusted EBITDA $15.8M Fiscal Q3 2026, up 20.2% YoY; margin 32.2%

Litigation Charge $16.0M Included in GAAP results for three and nine months ended Mar 31, 2026

Quarterly Dividend $0.15 per share Declared, payable Jul 3, 2026 to holders of record Jun 12, 2026

Market Reality Check

Price: $40.82 Vol: Volume 288,707 is slightl...

normal vol

$40.82 Last Close

Volume Volume 288,707 is slightly below the 20-day average of 300,524 (relative volume 0.96) prior to the release. normal

Technical Shares at $46.72 trade above the 200-day MA of $40.54, sitting 2.91% below the 52-week high of $48.12 and well above the 52-week low of $22.73.

Peers on Argus

Pre-news, NSSC was near its 52-week high with a marginal -0.06% move, while key ...

Pre-news, NSSC was near its 52-week high with a marginal -0.06% move, while key peers showed mixed performance: EVLV +1.18%, NL +1.83%, MG +1.74%, CXW -0.29%, BRC -0.22%, indicating stock-specific rather than broad sector momentum.

Historical Context

5 past events · Latest: Apr 29 (Neutral)

Pattern 5 events

Date	Event	Sentiment	Move	Catalyst
Apr 29	Earnings date notice	Neutral	-1.0%	Announcement of Fiscal Q3 2026 release date and conference call details.
Mar 16	Product showcase	Positive	+1.6%	Plan to demo cloud and 5G security solutions at ISC West 2026.
Mar 09	Index inclusion	Positive	+0.8%	Selection for inclusion in the S&P SmallCap 600 index.
Feb 23	Conference participation	Neutral	+0.0%	Participation in Raymond James institutional investors conference.
Feb 06	Conference participation	Neutral	+0.4%	Planned meetings at Barclays and Citi industrial tech conferences.

Pattern Detected

Recent news has generally seen modestly positive or neutral price reactions, especially around index inclusion and product/visibility updates, with no instances of sharp divergence.

Recent Company History

Over the last few months, NSSC has focused on visibility and capital markets milestones. It announced inclusion in the S&P SmallCap 600 on Mar 13, 2026, showcased next‑generation cloud and 5G solutions at ISC West 2026, and participated in multiple institutional conferences. An Apr 29, 2026 notice set expectations for the Fiscal Q3 2026 release on May 4, 2026. Price reactions to these events have been modestly positive or flat, suggesting steady investor reception to corporate developments.

Market Pulse Summary

The stock dropped -15.2% in the session following this news. A negative reaction despite strong Non-...

Analysis

The stock dropped -15.2% in the session following this news. A negative reaction despite strong Non-GAAP results would fit a scenario where investors focus on GAAP optics, including the $16.0M litigation settlement charge and reported quarterly net loss of $0.4M. Past news—such as index inclusion and product showcases—saw modestly positive or neutral moves, so a sharp decline would mark a departure from recent patterns. Future quarters’ revenue growth, margins near 60.0%, and recurring service performance could be key to reassessing sentiment.

Key Terms

recurring service revenue, gross profit margin, gaap, non-gaap, +2 more

6 terms

recurring service revenue financial

"Recurring service revenue ("RSR") increased 15.4% YoY to $24.9 million..."

Revenue that a company earns on a steady, repeat basis from ongoing services—typically subscriptions, maintenance contracts, or usage-based fees—rather than one-time sales. Investors care because it acts like a predictable paycheck for the business: it smooths cash flow, signals customer loyalty, and makes future earnings easier to forecast, which often supports higher valuations and lower investment risk. Think of it as the monthly subscription fee that keeps the lights on.

gross profit margin financial

"Gross profit margin for Q3 2026 of 60.0% vs 57.2% in prior fiscal year quarter"

Gross profit margin shows how much money a company keeps from sales after paying for the goods or services it sold. It’s like checking how much profit is left over from each dollar earned before covering other costs. A higher margin indicates the company makes more money from its sales, which helps assess its profitability and efficiency.

gaap financial

"Results are reported in accordance with U.S. generally accepted accounting principles ("GAAP")..."

GAAP, or Generally Accepted Accounting Principles, are a set of standardized rules and guidelines that companies follow when preparing their financial statements. They ensure consistency, transparency, and comparability across different companies, making it easier for investors to understand and compare financial information accurately. This helps investors make informed decisions based on trustworthy and uniform financial reports.

non-gaap financial

"and are also reported adjusting for certain items ("Non-GAAP")."

Non-GAAP refers to financial measures that companies use to show their earnings or performance without including certain expenses or income that are often added back to give a different picture. It matters because it can make a company's results look better or more favorable, but it may also hide important costs, so investors need to look at both GAAP (official rules) and non-GAAP numbers to get a full understanding.

adjusted ebidta financial

"Q3 Adjusted EBITDA increased 20.2% YoY to $15.8 million..."

Adjusted EBITDA is a company’s reported profit from its core operations before subtracting interest, taxes, and accounting for long-term costs like depreciation, further cleaned up by removing one-time, unusual, or non-cash items. Think of it as the operating cash-flow picture after erasing temporary blips so different periods and companies can be compared more easily; investors use it to judge underlying business performance, but it is not a standardized accounting measure and can be shaped by management choices.

free cash flows financial

"Free Cash Flows | | $16,022 | | $13,314 | | 20.3 | %"

Free cash flow is the cash a company has left after paying for day-to-day operations and necessary upkeep or replacements of equipment — like the money left in your wallet after covering bills and basic home repairs. It matters to investors because it shows how much real, spendable cash a business can use to pay dividends, buy growth opportunities, pay down debt or survive a slowdown, so it helps reveal financial strength beyond reported profits.

AI-generated analysis. Not financial advice.

Fiscal Q3 2026 Highlights

• 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			199,083
Treasury Stock, at cost, 4,114,614 shares as of both March 31, 2026 and June 30, 2025			(56,315)			(56,315)
Accumulated other comprehensive income			175			160
Total Stockholders' Equity			177,782			168,606
Total Liabilities and Stockholders' Equity		$	222,009		$	198,141

 

NAPCO SECURITY TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
		Three Months ended March 31,
		2026			2025
		(in thousands, except for share and per share data)
Revenue:
Equipment revenue		$	24,238		$	22,351
Service revenue			24,929			21,610
Total revenue			49,167			43,961
Cost of Revenue:
Cost of equipment revenue			17,289			16,852
Cost of service revenue			2,389			1,982
Total cost of revenue			19,678			18,834
Gross Profit			29,489			25,127
Operating Expenses:
Research and development			3,418			3,185
Selling, general, and administrative			11,259			10,796
Litigation settlement cost			16,000			—
Total Operating Expenses			30,677			13,981
Operating (Loss) Income			(1,188)			11,146
Other Income:
Interest income, net			881			762
Other income, net			105			100
(Loss) Income before Provision for Income Taxes			(202)			12,008
Provision for Income Taxes			206			1,886
Net (Loss) Income		$	(408)		$	10,122
(Loss) Income Per Share:
Basic		$	(0.01)		$	0.28
Diluted		$	(0.01)		$	0.28
Weighted Average Number of Shares Outstanding:
Basic			35,691,000			36,111,000
Diluted			35,691,000			36,253,000

 

NAPCO SECURITY TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
		Nine Months Ended March 31,
		2026			2025
		(in thousands, except for share and per share data)
Revenue:
Equipment revenue		$	74,300		$	66,993
Service revenue			72,207			63,904
Total revenue			146,507			130,897
Cost of Revenue:
Cost of equipment revenue			53,942			50,968
Cost of service revenue			6,992			5,697
Total cost of revenue			60,934			56,665
Gross Profit			85,573			74,232
Operating Expenses:
Research and development			10,131			9,349
Selling, general, and administrative expenses			32,234			30,710
Litigation settlement cost			16,000			—
Total Operating Expenses			58,365			40,059
Operating Income			27,208			34,173
Other Income:
Interest income, net			2,618			2,631
Other income, net			346			296
Income before Provision for Income Taxes			30,172			37,100
Provision for Income Taxes			4,912			5,326
Net Income		$	25,260		$	31,774
Income Per Share:
Basic		$	0.71		$	0.87
Diluted		$	0.70		$	0.86
Weighted Average Number of Shares Outstanding:
Basic			35,689,000			36,511,000
Diluted			35,911,000			36,743,000

 

NAPCO SECURITY TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
		Nine Months ended March 31,
		2026			2025
		(in thousands)
Cash Flows from Operating Activities
Net Income		$	25,260		$	31,774
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			1,670			1,705
Change in accrued interest on other investments			—			(194)
Unrealized gain on marketable securities			—			(131)
Realized gain on sales of marketable securities			(296)			—
Charge (recovery) of credit losses			2			(12)
Change to inventory reserve			(580)			78
Deferred income taxes			4,779			(2,324)
Stock-based compensation expense			784			1,143
Changes in operating assets and liabilities:
Accounts receivable			1,579			7,660
Inventories			(1,541)			2,973
Prepaid expenses and other current assets			52			841
Income tax receivable			(2,769)			(905)
Other assets			10			84
Accounts payable, accrued expenses, accrued litigation costs, accrued salaries and wages, accrued income taxes			14,541			(3,789)
Net Cash Provided by Operating Activities			43,491			38,903
Cash Flows from Investing Activities
Purchases of property, plant, and equipment			(1,512)			(1,879)
Purchases of marketable securities			(7,825)			(10,222)
Proceeds from sales of marketable securities			13,691			—
Purchases of other investments			—			(78)
Redemption of other investments			—			27,252
Net Cash Provided by Investing Activities			4,354			15,073
Cash Flows from Financing Activates
Proceeds from stock option exercises			—			54
Dividends paid			(14,977)			(9,164)
Repurchase of common stock			—			(36,794)
Payment of tax withholdings related to stock option exercises			(1,541)			—
Net Cash Used in Financing Activities			(16,518)			(45,904)
Net increase in Cash and Cash Equivalents			31,327			8,072
Cash and Cash Equivalents - Beginning			83,081			65,341
Cash and Cash Equivalents - Ending		$	114,408		$	73,413
Supplemental Cash Flow Information
Interest paid		$	—		$	—
Income taxes paid		$	3,114		$	8,350
Non-Cash Investing and Financing Transactions
Dividends declared and not paid		$	5,357		$	4,467

 

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 March 31, 2026
Revenue	$	49,167		$	—		$	—		$	49,167
Gross Profit		29,489			—			—			29,489
Operating Expenses		30,677			(16,000)			—			14,677
Operating (loss) Income		(1,188)			16,000			—			14,812
Net (loss) Income		(408)			16,000			(1,733)			13,859
Non-GAAP adjusted net income margin											28.2	%
Non-GAAP adjusted net income per share - diluted										$	0.39
Three months ended March 31, 2025
Revenue	$	43,961		$	—		$	—		$	43,961
Gross Profit		25,127			—			—			25,127
Operating Expenses		13,981			—			—			13,981
Operating (loss) Income		11,146			—			—			11,146
Net (loss) Income		10,122			—			—			10,122
Non-GAAP adjusted net income margin											23.0	%
Non-GAAP adjusted net income per share - diluted										$	0.28
Nine months ended March 31, 2026
Revenue	$	146,507		$	—		$	—		$	146,507
Gross Profit		85,573			—			—			85,573
Operating Expenses		58,365			(16,000)			—			42,365
Operating Income		27,208			16,000			—			43,208
Net Income		25,260			16,000			(1,733)			39,527
Non-GAAP adjusted net income margin											27.0	%
Non-GAAP adjusted net income per share - diluted										$	1.10
Nine months ended March 31, 2025
Revenue	$	130,897		$	—		$	—		$	130,897
Gross Profit		74,232			—			—			74,232
Operating Expenses		40,059			—			—			40,059
Operating Income		34,173			—			—			34,173
Net Income		31,774			—			—			31,774
Non-GAAP adjusted net income margin											24.3	%
Non-GAAP adjusted net income per share - diluted										$	0.86
	Three months ended March 31,						Nine months ended March 31,
	2026			2025			2026			2025
Denominator:
Weighted average shares outstanding
Basic, as reported		35,691,000			36,111,000			35,689,000			36,511,000
Effect of Dilutive Securities		—			142,000			222,000			232,000
Diluted, (Denominator)		35,691,000			36,253,000			35,911,000			36,743,000

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 March 31,						Nine months ended March 31,
	2026			2025			2026			2025
Non-GAAP adjusted EBITDA:
Net (loss) income, as reported	$	(408)		$	10,122		$	25,260		$	31,774
Interest income, net		(881)			(762)			(2,618)			(2,631)
Provision for income taxes		206			1,886			4,912			5,326
Depreciation and amortization		535			572			1,670			1,705
Non-GAAP EBITDA		(548)			11,818			29,224			36,174
Adjustments:
Stock based compensation		290			386			784			1,143
Nonrecurring legal expense(1)		78			957			104			560
Litigation settlement cost(2)		16,000			—			16,000			—
Total adjustments		16,368			1,343			16,888			1,703
Non-GAAP adjusted EBITDA	$	15,820		$	13,161		$	46,112		$	37,877
Non-GAAP adjusted EBITDA margin		32.2	%		29.9	%		31.5	%		28.9	%
Non-GAAP per share data:
Non-GAAP adjusted EBITDA per share - diluted	$	0.44		$	0.36		$	1.28		$	1.03
Denominator:
Weighted average shares outstanding
Basic, as reported		35,691,000			36,111,000			35,689,000			36,511,000
Effect of Dilutive Securities		—			142,000			222,000			232,000
Diluted, (Denominator)		35,691,000			36,253,000			35,911,000			36,743,000

1.	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
2.	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 March 31,							Nine months ended March 31,
		(dollars in thousands)							(dollars in thousands)
		2026			2025				2026			2025
Free cash flow:
Net Cash Provided by Operating Activities		$	16,756		$	13,379			$	43,491		$	38,903
Less: Purchases of property, plant, and equipment			(734)			(65)				(1,512)			(1,879)
Free Cash Flow(1)		$	16,022		$	13,314			$	41,979		$	37,024
Free Cash Flow Margin(1)			32.6	%		30.3	%			28.7	%		28.3	%

1.	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
fokoniewski@napcosecurity.com

View original content:https://www.prnewswire.com/news-releases/napco-security-technologies-inc-reports-fiscal-2026-q3-results-302760891.html

SOURCE NAPCO Security Technologies, Inc.

FAQ

What were NAPCO (NSSC) Fiscal Q3 2026 revenues and growth rate?

NAPCO reported Q3 net revenue of $49.2 million, an 11.8% year‑over‑year increase. According to the company, revenue growth was driven by equipment demand and recurring service revenue strength.

How much recurring service revenue did NAPCO (NSSC) report in Q3 2026?

NAPCO reported recurring service revenue of $24.9 million in Q3, up 15.4% year‑over‑year. According to the company, RSR carried a ~90.4% gross margin and a ~$101 million prospective annual run rate.

What was NAPCO's (NSSC) Q3 2026 Adjusted EBITDA and margin?

Adjusted EBITDA for Q3 was $15.8 million with a 32.2% margin, a 20.2% increase year‑over‑year. According to the company, this reflected margin expansion from recurring services and equipment mix.

Why did NAPCO (NSSC) report a GAAP loss in Q3 2026?

GAAP net loss for Q3 was $(0.4) million, while Non‑GAAP results were profitable. According to the company, year‑to‑date results include a $16.0 million litigation settlement charge affecting GAAP figures.

What dividend did NAPCO (NSSC) declare and when is it payable?

The board declared a $0.15 quarterly dividend payable July 3, 2026 to shareholders of record on June 12, 2026. According to the company, the dividend continues the firm's ongoing dividend program.