NAPCO Security Technologies reported fiscal fourth-quarter results that exceeded Wall Street expectations, sending shares up nearly 11% in premarket trading. The company posted non-GAAP diluted earnings per share of $0.50, a 28.2% increase from $0.39 a year earlier and $0.11 above analyst forecasts. Revenue totaled $55.8 million, up 10% year-over-year and topping estimates of $53.18 million.
For the full fiscal year, NAPCO achieved record sales of $202.3 million, a 11.4% increase from 2025. Non-GAAP net income rose 32% to $57.3 million, while adjusted EBITDA grew 44.3% to $20.6 million in the quarter, with a margin of 36.8%. Full-year adjusted EBITDA reached $66.7 million, representing a 33% margin. Free cash flow increased 19.9% to $17.2 million in Q4 and 15.2% to $59.2 million for the year.
Gross profit in the quarter climbed 27.7% to $34.2 million, with gross margin expanding to 61.3% from 52.8% a year prior. The improvement included approximately 600 basis points of benefit from IEEPA tariff refunds. Recurring service revenue, a key metric for the company, rose 12.9% to $25.3 million, with a gross margin of 90.1%. Full-year recurring monthly revenue increased 13% to $97.5 million, generating $88 million in gross profit.
Equipment sales rose 7.7% to $30.5 million in the quarter, while full-year equipment revenue grew 10% to $104.8 million. The company’s StarLink radio fire communicators continued to drive growth, with radio sales up 40% year-over-year in Q4 and nearly 30% sequentially. The annualized recurring revenue run rate reached approximately $103 million based on July figures.
NAPCO also announced a 13.3% increase in its quarterly dividend to $0.17 per share. The company ended the year with $137.6 million in cash and equivalents, up 38.7% from the prior year, and maintained zero debt as of June 30, 2026. Operating expenses rose modestly, with R&D increasing 13.2% to $3.7 million and SG&A up 5.6% to $12.1 million in the quarter.
CEO Kevin Buchel highlighted the company’s strategy to invest in innovation and expand recurring service offerings, noting that the annualized recurring revenue run rate had reached $103 million. Founder and Executive Chairman Dick Soloway emphasized the leadership transition, stating that the company was positioned to evolve beyond his day-to-day involvement. NAPCO is scheduled to participate in several investor events in the coming months, including conferences in New York and Nashville.
