NAPCO Security Technologies (NASDAQ:NSSC) reported record fiscal second-quarter results on Monday, as the company’s high-margin recurring services business continued to reshape its profitability profile.
The Amityville, New York-based security leader saw its shares climb in pre-market trading after earnings easily cleared Wall Street estimates, supported by a 12.5% surge in recurring service revenue (RSR).
For the quarter ended December 31, 2025, NAPCO posted net income of $13.5 million, or $0.38 per diluted share—a 29% increase over the same period last year.
Total revenue reached a record $48.2 million, beating the analyst consensus of $47.8 million.
The star of the report remained the RSR segment, which reached $23.8 million and now boasts a prospective annual run rate of approximately $99 million, based on January 2026 data.
Operating efficiency also hit new heights, with overall gross margins expanding to 58.6%.
The company's recurring revenue, primarily generated from its StarLink wireless fire and intrusion communicators, maintained a dominant 90.2% gross margin.
Equipment sales likewise remained robust, growing 12% to $24.3 million as demand for school safety solutions and commercial locking products intensified.
In a move signaling confidence in its cash position, the board declared a 7% increase to its quarterly dividend, now $0.15 per share, payable on April 3, 2026.
The company also announced a key leadership change, appointing industry veteran Joseph Pipczynski as Chief Revenue Officer.
Pipczynski, who brings over 35 years of business development experience, will report to President and COO Kevin Buchel as the firm looks to scale its "MVP Access" platform through the remainder of fiscal 2026.