Napco Security Reports 10.8% Decrease in Q3 Net Sales

By Bobby Samwell • Monday, May 05 15:22 • Permanent Link

Napco Security Technologies, Inc. has reported its fiscal 2025 third quarter results, indicating a 10.8% year-over-year decrease in net sales to $44.0 million. Recurring service revenue (RSR) increased by 10.6% to $21.6 million, while equipment sales decreased by 24.8% to $22.4 million. The gross profit margin increased to 57.2% from 53.8% in the prior fiscal year quarter.

Net income decreased by 23.3% to $10.122 million, with diluted earnings per share (EPS) decreasing by 22.2% to $0.28. Adjusted EBITDA also decreased by 15.5% to $13.159 million. However, cash flows from operating activities increased by 25.4% to $38.903 million.

The board declared a quarterly dividend of $0.14 per share, representing a sequential increase over the most recent dividend paid of $0.125 per share.

Richard Soloway, Chairman and CEO, indicated that RSR represents 49% of total revenue in Q3 and had a prospective run rate of approximately $89 million based on April 2025 recurring service revenue. The decrease in equipment revenue was attributed to reduced sales to larger distributors.

Napco Security Technologies also introduced a new generational cloud-based MVP access platform at the recent International Security Conference in Las Vegas, which is expected to generate monthly recurring revenue for the company.

As the company enters the final quarter of fiscal 2025, it faces challenges and uncertainties related to tariffs. In response, a price increase on all equipment products has been instituted, and the company will continue to monitor the situation and adjust pricing accordingly.

Napco Security Technologies remains confident in its strong net income, adjusted EBITDA, and cash flow, expressing the intention to continue the dividend program with an increase over the most recent dividend.

The company will conduct a conference call at 11 a.m. ET on May 5, 2025, to discuss these financial results.

Napco Security Technologies, Inc. is a leading manufacturer and designer of high-tech electronic security equipment and wireless communication devices, with a focus on recurring service revenues and school safety solutions. The company consists of four divisions and is headquartered in Amityville, New York. The market has reacted to these announcements by moving the company's shares 5.5% to a price of $25.08. Check out the company's full 8-K submission here.

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