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- **Record Q1 Growth**: $49.2M revenue (+12% YoY), driven by 12% equipment sales and 11.6% recurring revenue. Net income $12.2M, up 9% YoY.
- **High-Margin Recurring Revenue**: 90.3% gross margin, with $95M annual run rate. MVP cloud access control poised for growth, targeting $3M/door recurring revenue.
- **School Security Leadership**: NAPCO's integrated locking/access control systems win contracts amid school safety concerns, with Pasadena project completed.
- **Cash Strength**: $106M cash, no debt, supporting dividend ($0.14/share) and strategic M&A.
- **Tariff Stability**: 10% Dominican Republic tariffs, no additional price hikes planned. Pricing actions in Q1 contributed 40% to equipment growth.

**【Management Opening Remarks】**
- Fran Okoniewski introduced the call, emphasizing the company's strong Q1 performance and upcoming trade show appearances. Forward-looking statements were noted, highlighting risks and uncertainties.

**【CEO Commentary】**
- Dick Soloway highlighted Q1 record revenue of $49.2M (+12% YoY), driven by recurring revenue growth and equipment sales. He emphasized the resilience of the business model, with recurring revenue at 48% of total sales and a 90.3% gross margin. Strategic focus on school security and MVP cloud-based access control was stressed.

**【COO Remarks】**
- Kevin Buchel detailed Q1 performance: total revenue up 12% YoY, equipment sales $25.7M (+12%), recurring revenue $23.5M (+11.6%). Gross margin improved to 56.6%, with equipment margin rising to 25.7%. Operating income increased 15%, net income reached $12.2M, and cash grew to $106M. Dividend of $0.14 per share was declared.

**【CFO Financial Commentary】**
- Andrew Vuono provided financial breakdown: GAAP net income $12.2M, non-GAAP EPS $0.34. Recurring revenue run rate $95M. Equipment revenue growth 60% from volume, 40% from pricing. Gross profit up 13.1% to $27.8M. Operating expenses increased 13% due to legal fees and commissions. Adjusted EBITDA rose 21% to $14.9M.

**【CEO Closing Remarks】**
- Dick Soloway highlighted school security as a growth driver, with NAPCO as the only company offering integrated locking, access control, and alarm systems. MVP technology was positioned as a game-changer, with potential for $3M annual recurring revenue per door. Balance sheet strength ($106M cash, no debt) supports M&A and shareholder returns.

**【Q&A Highlights】**
- **Locking Product Mix**: 66% of equipment sales, with MVP gaining traction post-upgrades. Traditional locks remain dominant but MVP offers recurring revenue potential.
- **Pricing Impact**: Q1 equipment growth 60% volume, 40% pricing; full pricing impact expected in later quarters.
- **Service Margins**: 90.3% recurring margin, slight decline due to T-Mobile integration costs and large dealer discounts. Price increase for T-Mobile radios imminent.
- **Manufacturing**: Dominican Republic facility stable, unaffected by hurricanes. Tariffs at 10%, stable with no additional price hikes planned.
- **M&A**: Cash position allows selective acquisitions, focusing on accretive deals with recurring revenue potential.


Napco Security Technologies, Inc. (NSSC) Q1 2026 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

NSSC

NSSC fundamentals

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