Napco Security Technologies Reports 11.4% Revenue Growth to $202.3 Million for Fiscal Year Ending June 30, 2026

Napco Security Technologies, Inc. reported its financial results for the fiscal year ending June 30, 2026, revealing a net revenue increase of 11.4% to $202.3 million, up from $181.6 million in the previous year. The growth was primarily driven by a 13% rise in recurring service revenue, which reached $97.5 million, and a 10% increase in equipment revenue, totaling $104.8 million. The overall gross margin improved to 59.2%, benefiting from a reduction in tariffs and effective pricing strategies, despite a one-time litigation settlement charge of $16 million that contributed to a slight decrease in net income, which fell by 1% to $43 million.

The company has made significant strides in operational efficiency, with gross profit rising to $119.8 million, an 18.6% increase from the prior year. The gross margin for service revenue remained high at 90.3%, while equipment gross profit margins improved to 30.3%. Napco's strategic focus on enhancing its product offerings and expanding its service capabilities has been evident, particularly in the door-locking and intrusion product segments, which saw revenue increases of 11.1% and 14.3%, respectively.

In terms of operational metrics, Napco reported a notable increase in the number of cellular communication devices activated, which was a key driver for the growth in service revenue. The company also maintained a strong balance sheet, with cash and cash equivalents rising to $126.9 million from $83.1 million year-over-year. The working capital increased by $27.1 million to $165.5 million, reflecting effective management of current assets and liabilities. The company’s employee headcount remained stable, supporting its operational needs without significant fluctuations.

Looking ahead, Napco expressed optimism about its growth trajectory, citing ongoing investments in research and development to innovate and adapt to market demands. The company is also navigating challenges related to supply chain constraints and tariff impacts, particularly in light of recent legal rulings affecting tariffs. Despite these challenges, Napco is committed to leveraging its strong market position and expanding its geographic reach, particularly in North America, where it generates the majority of its sales. The company anticipates continued growth in both equipment and service revenues as it capitalizes on emerging opportunities in the security technology sector.