NAPCO Security Technologies, Inc. Reports Fiscal Q4 and Full Year 2026 Results

AMITYVILLE, N.Y., Aug. 24, 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 fourth quarter and fiscal year 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.

Fourth Quarter 2026 Financial Results as Compared to Fourth Quarter 2025

Full Year 2026 Financial Results as Compared to Full Year 2025

Kevin Buchel, CEO and President, commented, "Our Fiscal Q4 performance completes a strong close to our fiscal year end and reflects continued positive financial results. We achieved record Q4 revenue and Adjusted EBITDA of $55.8 and $20.6 million, respectively, which was bolstered by our recurring service revenue with its continued year over year double digit growth. We saw a rebound in our equipment sales, which increased 10.0% for the year, driven by strong demand for our door-locking products as well as a 36% growth in sales of our intrusion products in Q4, which is primarily a result of increased sales of our StarLink fire communicators. Our RSR continues to deliver gross margins of over 90%, and represents approximately 45% of total revenue in Q4, and has a prospective run rate of approximately $103 million based on our July 2026 recurring service revenue. Our revenue growth and margin expansion in Q4 resulted in a 53% increase in net income, a 44% increase in Non-GAAP Adjusted EBITDA and our Adjusted EBITDA margin was 36.8% as compared to 28.1% in Q4 of Fiscal 2025.

As such we are pleased to continue our dividend program and will be increasing the quarterly dividend by 13.3% to $0.17 per share, which will be paid on October 2, 2026, to shareholders of record on September 11, 2026."

Three months ended June 30,

Year ended June 30,

(dollars in thousands)

% Increase/

Financial Highlights

2026

2025

(decrease)

2026

2025

(decrease)

GAAP Results

Net Revenue

55,809

50,724

10.0

202,316

181,621

11.4

Gross Profit

34,218

26,798

27.7

119,791

101,030

18.6

Gross Profit Margin

61.3

52.8

59.2

55.6

Operating Income

18,430

12,086

52.5

45,638

46,259

(1.3)

Net Income

17,767

11,632

52.7

43,027

43,406

(0.9)

Diluted Earnings Per Share

0.50

0.33

51.5

1.20

1.19

0.8

Non-GAAP Results

Operating Income

18,430

12,086

52.5

61,638

46,259

33.2

Net Income

17,767

11,632

52.7

57,294

43,406

32.0

Net Income Margin

31.8

22.9

28.3

23.9

Diluted Earnings Per Share

0.50

0.33

51.5

1.60

1.19

34.5

Adjusted EBITDA

20,559

14,249

44.3

66,670

52,126

27.9

Adjusted EBITDA Margin

36.8

28.1

33.0

28.7

Adjusted EBITDA Per Share

0.57

0.40

42.5

1.86

1.43

30.1

Free Cash Flows

17,249

14,387

19.9

59,228

51,411

15.2

Free Cash Flows Margin

30.9

28.4

29.3

28.3

Conference Call Information

Management will conduct a conference call at 11 a.m. ET today, August 24, 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/OM3bGdQ8gY1. 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 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; the opportunities for fire alarm products; 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 expenses, litigation settlement costs, and depreciation and amortization expenses. 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)

June 30, 2026

June 30, 2025

(in thousands, except share data)

Assets

Current Assets

Cash and cash equivalents

126,928

83,081

Marketable securities

10,637

16,095

Accounts and other receivable, net of allowance for credit losses of $101 and $25 as of June 30, 2026 and June 30, 2025, respectively

35,975

30,108

Inventories

30,118

29,962

Prepaid expenses and other current assets

4,325

3,198

Total Current Assets

207,983

162,444

Inventories - non-current

9,256

11,313

Property, plant and equipment, net

9,238

9,233

Intangible assets, net

2,990

3,287

Deferred income taxes

4,105

6,476

Operating lease - Right-of-use asset

4,906

5,188

Other assets

190

200

Total Assets

238,668

198,141

Liabilities and Stockholders' Equity

Current Liabilities

Accounts payable

6,925

5,742

Accrued expenses

8,546

8,712

Accrued litigation costs

16,000

—

Accrued salaries and wages

4,484

4,398

Dividends payable

5,365

4,992

Accrued income taxes

1,134

213

Total Current Liabilities

42,454

24,057

Accrued income taxes

143

Operating lease liability

5,179

5,335

Total Liabilities

47,666

29,535

Commitments and Contingencies (Note 13)

Stockholders' Equity

Common Stock, par value $0.01 per share; 100,000,000 shares authorized as of June 30, 2026 and 2025; 39,883,051 and 39,771,035 shares issued; and 35,768,437 and 35,656,421 shares outstanding, respectively.

399

398

Additional paid-in capital

25,355

25,280

Retained earnings

221,403

199,083

Treasury Stock, at cost, 4,114,614 shares as of both June 30, 2026 and June 30, 2025

(56,315)

Accumulated other comprehensive income

160

Total Stockholders' Equity

191,002

168,606

Total Liabilities and Stockholders' Equity

238,668

198,141

NAPCO SECURITY TECHNOLOGIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

Three Months ended June 30,

2026

2025

2024

(in thousands, except for share and per share data)

Revenue:

Equipment revenue

30,488

28,298

29,938

Service revenue

25,321

22,426

20,392

Total revenue

55,809

50,724

50,330

Cost of Revenue:

Cost of equipment revenue

19,089

21,827

20,530

Cost of service revenue

2,502

2,099

1,955

Total cost of revenue

21,591

23,926

22,485

Gross Profit

34,218

26,798

27,845

Operating Expenses:

Research and development

3,660

3,232

3,027

Selling, general, and administrative

12,128

11,480

10,854

Total operating expenses

15,788

14,712

13,881

Operating Income

18,430

12,086

13,964

Other Income:

Interest income, net

969

725

712

Other income, net

251

158

Income before Provision for Income Taxes

19,650

12,969

14,726

Provision for Income Taxes

1,883

1,337

1,192

Net Income

17,767

11,632

13,534

Income Per Share:

Basic

0.50

0.33

0.37

Diluted

0.50

0.33

0.36

Weighted Average Number of Shares Outstanding:

Basic

35,747,000

35,656,000

36,939,000

Diluted

35,883,000

35,764,000

37,232,000

NAPCO SECURITY TECHNOLOGIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

Year Ended June 30,

2026

2025

2024

(in thousands, except for share and per share data)

Revenue:

Equipment revenue

104,788

95,291

113,071

Service revenue

97,528

86,330

75,749

Total revenue

202,316

181,621

188,820

Cost of Revenue:

Cost of equipment revenue

73,031

72,795

79,862

Cost of service revenue

9,494

7,796

7,204

Total cost of revenue

82,525

80,591

87,066

Gross Profit

119,791

101,030

101,754

Operating Expenses:

Research and development

13,791

12,581

10,763

Selling, general, and administrative expenses

44,362

42,190

37,173

Litigation settlement cost

16,000

—

Total operating expenses

74,153

54,771

47,936

Operating Income

45,638

46,259

53,818

Other Income:

Interest income, net

3,587

3,356

2,375

Other income, net

597

454

193

Income before Provision for Income Taxes

49,822

50,069

56,386

Provision for Income Taxes

6,795

6,663

6,568

Net Income

43,027

43,406

49,818

Income Per Share:

Basic

1.21

1.20

1.35

Diluted

1.20

1.19

1.34

Weighted Average Number of Shares Outstanding:

Basic

35,690,000

36,298,000

36,812,000

Diluted

35,891,000

36,499,000

37,066,000

NAPCO SECURITY TECHNOLOGIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

Fiscal Year ended June 30,

2026

2025

2024

(in thousands)

Cash Flows from Operating Activities

Net Income

43,027

43,406

49,818

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

2,208

2,276

2,163

Change in accrued interest on other investments

—

Unrealized gain on marketable securities

—

(177)

(56)

Realized gain on sales of marketable securities

(407)

(56)

—

Charge (recovery) of credit losses

(7)

(99)

Change to inventory reserve

(444)

643

1,691

Deferred income taxes

2,371

(1,048)

(2,776)

Stock-based compensation expense

989

1,513

1,733

Changes in operating assets and liabilities:

Accounts and other receivable

(5,943)

1,797

(5,730)

Inventories

2,344

7,995

(3,255)

Prepaid expenses and other current assets

(1,127)

1,071

(867)

Income tax receivable

(1)

Other assets

Accounts payable, accrued expenses, accrued litigation costs, accrued salaries and wages, accrued income taxes

18,041

(4,020)

2,688

Net Cash Provided by Operating Activities

61,145

53,527

45,368

Cash Flows from Investing Activities

Purchases of property, plant, and equipment

(1,917)

(2,116)

(1,594)

Purchases of marketable securities

(11,370)

(12,835)

(206)

Proceeds from sales of marketable securities

17,236

2,556

—

Purchases of other investments

—

(1,351)

Redemption of other investments

—

26,980

—

Net Cash Provided by (Used in) Investing Activities

3,949

14,585

(3,151)

Cash Flows from Financing Activates

Proceeds from stock option exercises

628

427

Dividends paid

(20,334)

(13,632)

(13,258)

Purchase of treasury shares

—

(36,794)

—

Payment of tax withholdings related to stock option exercises

(1,541)

—

Net Cash Used in Financing Activities

(21,247)

(50,372)

(12,831)

Net increase in Cash and Cash Equivalents

43,847

17,740

29,386

Cash and Cash Equivalents - Beginning

83,081

65,341

35,955

Cash and Cash Equivalents - Ending

126,928

83,081

65,341

Supplemental Cash Flow Information

Interest paid

—

Income taxes paid, net of refunds received

3,505

8,427

9,330

Non-Cash Investing and Financing Transactions

Dividends declared and not paid

5,365

4,992

—

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 June 30, 2026

Revenue

55,809

—

55,809

Gross Profit

34,218

—

34,218

Operating Expenses

15,788

—

15,788

Operating Income

18,430

—

18,430

Net Income

17,767

—

17,767

Non-GAAP adjusted net income margin

31.8

Non-GAAP adjusted net income per share - diluted

0.50

Three months ended June 30, 2025

Revenue

50,724

—

50,724

Gross Profit

26,798

—

26,798

Operating Expenses

14,712

—

14,712

Operating Income

12,086

—

12,086

Net Income

11,632

—

11,632

Non-GAAP adjusted net income margin

22.9

Non-GAAP adjusted net income per share - diluted

0.33

Year ended June 30, 2026

Revenue

202,316

—

202,316

Gross Profit

119,791

—

119,791

Operating Expenses

74,153

(16,000)

—

58,153

Operating Income

45,638

16,000

—

61,638

Net Income

43,027

16,000

(1,733)

57,294

Non-GAAP adjusted net income margin

28.3

Non-GAAP adjusted net income per share - diluted

1.60

Year ended June 30, 2025

Revenue

181,621

—

181,621

Gross Profit

101,030

—

101,030

Operating Expenses

54,771

—

54,771

Operating Income

46,259

—

46,259

Net Income

43,406

—

43,406

Non-GAAP adjusted net income margin

23.9

Non-GAAP adjusted net income per share - diluted

1.19

Three months ended June 30,

Fiscal year ended June 30,

2026

2025

2026

2025

Denominator:

Weighted average shares outstanding

Basic, as reported

35,747,000

35,656,000

35,690,000

36,298,000

Effect of Dilutive Securities

136,000

108,000

201,000

Diluted, (Denominator)

35,883,000

35,764,000

35,891,000

36,499,000

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 June 30,

Year ended June 30,

2026

2025

2026

2025

Non-GAAP adjusted EBITDA:

Net income, as reported

17,767

11,632

43,027

43,406

Interest income, net

(969)

(725)

(3,587)

(3,356)

Provision for income taxes

1,883

1,337

6,795

6,663

Depreciation and amortization

539

571

2,208

2,276

Non-GAAP EBITDA

19,220

12,815

48,443

48,989

Adjustments:

Stock based compensation

205

370

989

1,513

Nonrecurring legal expense (1)

1,134

1,064

1,238

1,624

Litigation settlement cost (2)

—

16,000

—

Total adjustments

1,339

1,434

18,227

3,137

Non-GAAP adjusted EBITDA

20,559

14,249

66,670

52,126

Non-GAAP adjusted EBITDA margin

36.8

28.1

33.0

28.7

Non-GAAP per share data:

Non-GAAP adjusted EBITDA per share - diluted

0.57

0.40

1.86

1.43

Denominator:

Weighted average shares outstanding

Basic, as reported

35,747,000

35,656,000

35,690,000

36,298,000

Effect of Dilutive Securities

136,000

108,000

201,000

Diluted, (Denominator)

35,883,000

35,764,000

35,891,000

36,499,000

Three months ended June 30,

Year ended June 30,

(dollars in thousands)

2026

2025

2026

2025

Free cash flow:

Net Cash Provided by Operating Activities

17,654

14,624

61,145

53,527

Less: Purchases of property, plant, and equipment

(405)

(237)

(1,917)

(2,116)

Free Cash Flow (1)

17,249

14,387

59,228

51,411

Free Cash Flow Margin (1)

30.9

28.4

29.3

28.3

Contacts:

Francis J. Okoniewski

Vice President of Investor Relations

NAPCO Security Technologies, Inc.

Office 800-645-9445 x 374

Mobile 516-404-3597

[email protected]

SOURCE NAPCO Security Technologies, Inc.