Overview

* NAPCO fiscal Q4 revenue of $50.7 mln beats analyst expectations

* Recurring service revenue grows 10% in Q4, maintaining 91% gross margin

* Equipment sales decrease 5% YoY, but rise 27% sequentially from Q3

Outlook

* NAPCO expects equipment sales growth in fiscal 2026

* Company anticipates recurring service revenue run rate of $94 mln

* Company sees strong net income and cash flow in fiscal 2026

Result Drivers

* RECURRING SERVICE REVENUE - RSR increased 10% in Q4, with a 91% gross margin, representing 44% of total revenue

* EQUIPMENT SALES DECLINE - Equipment sales fell 5% YoY in Q4, attributed to distributor destocking and project timing issues

* GROSS MARGIN DROP - Q4 gross profit margin decreased to 52.8% from 55.3% in the prior year qtr

Key Details

Metric Beat/Mis Actual Consensu

s s

Estimate

Q4 Beat $50.70 $44.40

Revenue mln mln (6

Analysts

)

Q4 EPS $0.33

Q4 Gross 52.8%

Margin

Analyst Coverage

* The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 3 "strong buy" or "buy", 3 "hold" and no "sell" or "strong sell"

* The average consensus recommendation for the communications & networking peer group is "buy"

* Wall Street's median 12-month price target for NAPCO Security Technologies Inc ( NSSC ) is $29.00, about 9.3% below its August 22 closing price of $31.70

* The stock recently traded at 27 times the next 12-month earnings vs. a P/E of 19 three months ago

Press Release:

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)