NAPCO Security Technologies(US:NSSC)2026-02-02 18:57Revenue Growth - Total revenue increased by 12.2% to $48.2 million for the three months ended December 31, 2025, and by 12.0% to $97.3 million for the six months ended December 31, 2025[133]. - Equipment revenue rose by 12.0% to $24.3 million for the three months and by 12.1% to $50.1 million for the six months, while recurring service revenues increased by 12.5% to $23.8 million for the three months and by 11.8% to $47.3 million for the six months[133]. - The increase in net equipment revenue for the three months was driven by door locking products, which rose by $1.8 million (12.6%), and intrusion and access products, which increased by $817,000 (10.8%) due to pricing increases and sales volume growth[143]. - Net service revenues for the three months increased by $2.6 million (12.5%) due to a rise in the number of activated cellular communication devices[144]. Profitability - Gross profit margin improved from 57.0% to 58.6% for the three months and from 56.5% to 57.6% for the six months ended December 31, 2025[141]. - Operating income surged by 32.1% to $14.8 million for the three months and by 23.3% to $28.4 million for the six months ended December 31, 2025[141]. - Net income increased by 29.0% to $13.5 million for the three months and by 18.5% to $25.7 million for the six months ended December 31, 2025[141]. - Gross profit on service revenues for the six months ended December 31, 2025, increased to $56,084,000, or 57.6% of net revenue, compared to $49,105,000, or 56.5% for the same period last year[151]. - Gross profit from equipment revenue rose to $13,409,000, or 26.8% of equipment revenue, up from $10,526,000, or 23.6% for the comparable period, driven by product mix and increased volume[152]. Expenses - Research and development expenses increased by 11.8% to $3.5 million for the three months ended December 31, 2025[141]. - Research and development expenses for the six months ended December 31, 2025, increased to $6,713,000, or 6.9% of net revenue, from $6,164,000, or 7.1% for the same period last year[155]. - Selling, general and administrative expenses decreased by 1.9% to $10.0 million for the three months ended December 31, 2025, as a percentage of net revenue, this represented a reduction from 23.8% to 20.8%[141]. - Selling, general and administrative expenses for the six months ended December 31, 2025, increased to $20,975,000, compared to $19,914,000 for the same period last year, primarily due to increased legal fees and commission expenses[157]. Cash Flow and Financial Position - Cash and cash equivalents increased by $21,838,000 during the six months ended December 31, 2025, totaling $104,919,000 as of December 31, 2025[164]. - Net cash provided by operating activities was $26.7 million for the six months ended December 31, 2025, driven by net income of $25.7 million[166]. - Cash used in financing activities was $10.0 million for the six months ended December 31, 2025, primarily for stockholder dividends[169]. - The company had no material commitments for capital expenditures or inventory purchases as of December 31, 2025[170]. Tax and Interest - The provision for income taxes for the three months ended December 31, 2025, increased to $2,236,000, with an effective tax rate of 14.2%, up from 13.4% for the same period last year[160]. - Interest income decreased by 5% for the three months ended December 31, 2025, to $884,000, and by 7% for the six months ended December 31, 2025, to $1,738,000, primarily due to lower interest rates[158]. Market Impact - The company is actively monitoring the impact of U.S. tariff measures on its financial position, although no material impact has been experienced to date[136].