NAPCO Security Technologies(US:NSSC)2026-02-02 18:54Financial Performance - Record Q2 net revenues of $48.2 million, a 12.2% year-over-year increase[8] - Net income rose 29% year-over-year to a Q2 record of $13.5 million, representing 28.0% of total revenue[5][8] - Total revenue for the three months ended December 31, 2025, was $48,172,000, representing a 12.3% increase from $42,933,000 in the same period of 2024[17] - Net income for the six months ended December 31, 2025, was $25,668,000, up 18.5% from $21,652,000 in 2024[18] - Gross profit for the three months ended December 31, 2025, was $28,238,000, a 15.3% increase compared to $24,489,000 in 2024[17] - Operating income for the six months ended December 31, 2025, increased to $28,396,000, up 23.0% from $23,027,000 in 2024[18] - Basic income per share for the three months ended December 31, 2025, was $0.38, compared to $0.29 in 2024, reflecting a 31.0% increase[17] Revenue Breakdown - Equipment revenue increased 12.0% year-over-year to $24.3 million[8] - Recurring service revenue ("RSR") increased 12.5% year-over-year to $23.8 million with a 90.2% gross margin[8] - RSR represents approximately 50% of total revenue in Q2, with a prospective annual run rate of approximately $99 million[5][8] Cash Flow and Dividends - Free cash flows for Q2 were $14.5 million, a 17.4% increase year-over-year[3][8] - Free cash flow for the six months ended December 31, 2025, was $25,957,000, an increase from $23,710,000 in 2024, with a free cash flow margin of 26.7%[22] - The company announced a quarterly dividend of $0.15 per share, a 7% increase from the previous quarter[7][8] Operational Efficiency - Adjusted EBITDA margin improved to 31.9% from 28.4% in Q2 of Fiscal 2025[5][8] - Adjusted EBITDA for the six months ended December 31, 2025, was $30,291,000, compared to $24,716,000 in 2024, indicating a strong operational performance[21] Expenses and Cash Position - Total operating expenses for the three months ended December 31, 2025, were $13,485,000, slightly up from $13,318,000 in 2024[17] - Cash and cash equivalents at the end of December 31, 2025, were $104,919,000, compared to $86,019,000 at the end of 2024[19] - Research and development expenses for the six months ended December 31, 2025, were $6,713,000, up from $6,164,000 in 2024[18] Leadership Changes - Joseph Pipczynski appointed as Chief Revenue Officer to enhance leadership and sales strategy[10][11]