NAPCO Security Technologies(US:NSSC) Prnewswire·2025-02-03 12:00Core Insights - NAPCO Security Technologies reported mixed financial results for Q2 of fiscal 2025, with a notable decline in net sales but an increase in recurring service revenue [1][4][5]. Financial Performance - Net sales for Q2 were $42.9 million, a decrease of 9.7% compared to $47.5 million in the same quarter last year [2][5]. - Recurring service revenue (RSR) increased by 14.4% to $21.2 million, representing 49% of total revenue for the quarter [4][5]. - Gross profit was $24.5 million, with a gross profit margin of 57.0%, up from 52.6% in the prior year [2][4]. - Net income decreased by 17.0% to $10.5 million, with diluted EPS at $0.28, down from $0.34 [2][5]. - Adjusted EBITDA was $12.2 million, a decline of 19.3% year-over-year [2][4][17]. Revenue Breakdown - Equipment revenues were $21.7 million, down from $29.0 million, while service revenues rose to $21.2 million from $18.5 million [14][5]. - The overall gross margin improved by over 400 basis points compared to the previous year [4]. Market Developments - The company is experiencing growth in school security sales, highlighted by a contract with Pasadena Unified School District for security solutions across 23 schools [4]. - New product introductions, such as the cloud-based MVP Access platform, are expected to generate recurring revenue and enhance security management capabilities [6][4]. Future Outlook - The company anticipates improvement in equipment sales for the remainder of fiscal 2025, driven by historical purchasing patterns from major distributors [4]. - NAPCO remains focused on expanding its presence in healthcare, retail loss prevention, and multi-dwelling commercial and residential applications [4].