Napco Security Recurring Revenue Surges
Napco Security Technologies (NASDAQ:NSSC) reported Q4 2025 earnings on August 25, 2025, with net sales of $50.7 million (up 0.8% year-over-year) and the full-year recurring revenue run rate reaching $94 million, up $5 million sequentially. Recurring revenue gross margin remained at 91% for the year, GAAP net income totaled $43.4 million (24% of sales), and year-end cash was $99.1 million with zero debt; management highlighted double-digit recurring revenue growth, strong hardware rebound, and sharpened pricing strategies for fiscal 2026.
StarLink fire radio activations boosted recurring monthly service revenue (RMR) by 10% year-over-year, with recurring revenue now accounting for nearly half of annual sales and sustaining exceptionally high gross margins. Gross profit from recurring service revenue reached $78.5 million at a 91% gross margin, directly contrasting a 15.7% year-over-year decline in GAAP equipment sales.
The increasing contribution of high-margin, contract-based service revenue ensures predictable cash flows and positions Napco Security Technologies for resilient earnings even through equipment revenue volatility.
Source Fool.com
