Key Highlights

  • Fiscal fourth-quarter net revenue was $55.8 million, up 10.0%, a quarterly record.
  • Recurring service revenue was $25.3 million, up 12.9%, with margins above 90%.
  • Fiscal 2026 net revenue was $202.3 million, up 11.4%.
  • Non-GAAP net income rose 32.0% to $57.3 million.

NAPCO Security Technologies, Inc. (NASDAQ:NSSC) joined the S&P SmallCap 600 before the market opened on March 13, 2026. Seven months on, the focus is on whether the security hardware and services maker can sustain the momentum shown in its fiscal 2026 results, which closed with a record quarter. For investors who follow index-linked small caps, NAPCO combines a growing stream of recurring service revenue with a balance sheet that reported no debt at June 30, 2026.

Latest Company Context

On August 24, 2026, NAPCO reported fiscal fourth-quarter net revenue of $55.8 million, up 10.0% and a quarterly record. Recurring service revenue reached $25.3 million, up 12.9%, with margins above 90%. Net income was $17.8 million, or $0.50 per diluted share, versus $0.33 a year earlier; roughly $0.09 of that came from net tariff refunds. For the full year, net revenue was $202.3 million, up 11.4%. GAAP net income was $43.0 million, down 0.9%, reflecting a $16 million litigation settlement charge, while non-GAAP net income rose 32.0% to $57.3 million, or $1.60 per diluted share. Adjusted EBITDA was $66.7 million, a 33.0% margin, and free cash flow was $59.2 million.

Key Business Drivers

Recurring service revenue, which totalled $97.5 million for the year, is the central driver; the company cited a prospective annual run rate of about $103 million based on July 2026. Equipment revenue rose 10.0% to $104.8 million, helped by door-locking demand and a 36% rise in fourth-quarter intrusion product sales, driven by StarLink fire communicators. Gross margin was 59.2% for the year, including about 50 basis points from tariff refunds, so the underlying figure may be lower than the headline. Cash and equivalents stood at $126.9 million, plus $10.6 million of marketable securities, against $16.0 million of accrued litigation costs. The board declared a quarterly dividend of $0.17 per share, up 13.3%, payable October 2, 2026. No share repurchases were made in fiscal 2026, compared with $36.8 million in fiscal 2025.

What Investors Should Watch

The company did not issue formal revenue or earnings guidance in the release, so the recurring-revenue run rate is the main forward-looking marker. Investors may watch whether quarterly service revenue continues to grow at double-digit rates and whether gross margin settles without further tariff-related benefits. The payment of the accrued $16.0 million litigation settlement is another item that could affect cash. Management's capital allocation choices, including dividends versus buybacks, may also draw interest given the growing cash balance. The next quarterly results, expected in the coming months, could show whether the record fourth quarter is repeatable.

Recurring Service Revenue and No Debt Behind a Record Quarter

NAPCO ended fiscal 2026 with a record quarter, growing recurring service revenue and no debt. Roughly $0.09 of quarterly EPS came from net tariff refunds, and a $16 million litigation settlement charge weighed on GAAP net income.