NAPCO Security Technologies, Inc. released its first quarter fiscal year 2027 financial results on November 2, 2026, reporting record quarterly net revenue and recurring service revenue alongside a declared dividend of $0.17 per share.

Key Highlights

  • Record Q1 net revenue: Net revenue increased 1.7% to $50.0 million for the first quarter of fiscal year 2027, compared to $49.168 million in the prior-year quarter, according to the filing.
  • Recurring service revenue record: Recurring service revenue rose 11.5% to $26.1 million, with over 90% gross margin, and carries a prospective annual run rate of approximately $106 million based on October 2026 results.
  • Equipment revenue decline: Equipment revenue decreased 7.3% to $23.9 million, which the company attributed to two locking distributors reducing purchases during the quarter.
  • Net income and EPS growth: GAAP net income increased 6.9% year-over-year to $13.009 million, and diluted earnings per share increased 5.9% to $0.36.
  • Adjusted EBITDA record: Non-GAAP Adjusted EBITDA rose 3.8% to $15.509 million, reflecting an Adjusted EBITDA Margin of 31.0%, compared to $14.942 million and 30.4% in the prior-year quarter.
  • Quarterly dividend declared: The board declared a quarterly dividend of $0.17 per share, payable January 4, 2027, to shareholders of record on December 14, 2026.
  • Free cash flow declined: Free Cash Flow was $2.317 million, down 79.8% from $11.444 million in the prior-year quarter, with a Free Cash Flow Margin of 4.6% versus 23.3%.

NAPCO Security Q1 FY2027 Results: Revenue Records Alongside Equipment Softness

NAPCO Security Technologies, Inc. (NASDAQ:NSSC), headquartered in Amityville, New York, reported its first quarter fiscal year 2027 results for the three months ended September 30, 2026. According to the filing, net revenue reached $49.980 million, a 1.7% increase over the $49.168 million posted in the same quarter of fiscal year 2026. The company described this as a first quarter record. Gross profit margin expanded to 58.7% from 56.6% in the prior-year period, with gross profit of $29.352 million compared to $27.846 million.

The filing highlighted that recurring service revenue, which the company tracks separately from equipment revenue, grew 11.5% to $26.1 million and carried a gross margin of over 90%. The company disclosed a prospective annual run rate of approximately $106 million for recurring service revenue based on October 2026 figures, representing what the filing described as a $3 million increase from the run rate reported in July 2026. Equipment revenue, by contrast, declined 7.3% to $23.9 million. CEO and President Kevin Buchel stated in the filing that the decrease "was driven by two locking distributors reducing their purchases during the quarter," while adding that "sell-through at both distributors grew year-over-year and strengthened meaningfully on a sequential basis."

On the balance sheet as of September 30, 2026, the company reported cash and cash equivalents of $123.882 million and marketable securities of $10.734 million. Total assets stood at $231.471 million, with total liabilities of $33.283 million. Operating income for the quarter was $14.117 million, up from $13.643 million in the prior-year quarter. The filing notes that accrued litigation costs of $16.000 million that appeared on the June 30, 2026 balance sheet were reduced to zero as of September 30, 2026. The company's forward-looking statements, including those regarding the recurring service revenue run rate, are subject to the cautionary language detailed in the filing.

What Was Disclosed

NAPCO Security Technologies disclosed first quarter fiscal year 2027 financial results including record net revenue of $50.0 million, record recurring service revenue of $26.1 million, GAAP net income of $13.009 million, and a declared quarterly dividend of $0.17 per share payable January 4, 2027.