Napco Security Technologies Reports Record Q2 Revenue

By Chris Stiles • Monday, February 02 17:50 • Permanent Link

Napco Security Technologies, Inc. has reported its fiscal Q2 2026 results, showing substantial growth in various key metrics. The company achieved a record Q2 net revenue of $48.2 million, marking a 12.2% year-over-year (YoY) increase. Equipment revenue saw a 12.0% YoY increase to $24.3 million, while recurring service revenue (RSR) increased by 12.5% YoY to $23.8 million, with an impressive 90.2% gross margin.

The prospective annual run rate for RSR based on January 2026 recurring service revenues reached approximately $99 million. Gross profit margin for Q2 2026 also improved to 58.6% from 57.0% in the prior fiscal year quarter. Additionally, diluted earnings per share (EPS) saw a significant YoY increase to $0.38 from $0.28.

Notably, the board declared a quarterly dividend of $0.15 per share, reflecting a 7% increase from the previous quarter. This dividend is payable on April 3, 2026, to shareholders of record on March 12, 2026.

In terms of financial performance, Napco's net income increased by 29.0% YoY to $13.5 million, while adjusted EBITDA showed a 26.0% YoY increase to $15.35 million. Free cash flows also saw a notable 17.4% YoY increase to $14.512 million. The company's adjusted EBITDA margin improved to 31.9% from 28.4% in Q2 of fiscal 2025.

These positive results were attributed to the consistent year-over-year double-digit growth in RSR and the continued demand for door-locking products, which drove double-digit growth in equipment revenue and improved equipment gross margins.

Moreover, the company announced the appointment of Joseph Pipczynski as the Chief Revenue Officer, effective January 29, 2026, to further strengthen its leadership team.

Richard Soloway, the Chairman and CEO, expressed confidence in Napco's future growth, stating that the company's focus remains on expanding RSR solutions across all platforms, including locking products. He highlighted the company's goal of product innovation, technical superiority, and consistent delivery of strong profitability throughout fiscal 2026 and beyond.

Napco Security Technologies, Inc. will be conducting a conference call at 11 a.m. ET on February 2, 2026, to discuss these results further.

The market has reacted to these announcements by moving the company's shares -2.33% to a price of $38.60. If you want to know more, read the company's complete 8-K report here.

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