NAPCO Security recurring revenue hits $100M milestone despite GAAP loss

NAPCO Security Technologies (NASDAQ:NSSC) reported a robust 11.8% increase in net revenue for its third fiscal quarter of 2026, reaching $49.2 million.

The results were headlined by the continued acceleration of the company’s recurring service revenue, which grew 15.4% year-over-year to $24.9 million.

The service segment continues to be the primary engine of profitability for the security equipment manufacturer.

With a gross margin of 90.4% in the quarter, the recurring revenue stream achieved a prospective annual run rate of approximately $101 million based on April 2026 activity.

This shift toward high-margin software and monitoring services pushed the consolidated gross margin to 60.0% and helped drive adjusted EBITDA to $15.8 million, a 20.2% increase over the same period last year.

On a GAAP basis, NAPCO reported a slight net loss of $(0.4) million.

However, on a non-GAAP basis—which excludes certain one-time items and non-cash charges—diluted EPS stood at $0.39.

The company's operational strength and cash-flow profile allowed the Board of Directors to declare a $0.15 quarterly dividend, payable on July 3, 2026, to shareholders of record as of June 12, 2026.