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.