Napco Security ( (NSSC) ) has released its Q2 earnings. Here is a breakdown of the information Napco Security presented to its investors.
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NAPCO Security Technologies, Inc., headquartered in Amityville, New York, is a leading manufacturer and designer of high-tech electronic security devices and wireless communication services for intrusion and fire alarm systems, as well as a provider of school safety solutions. The company operates through four divisions, including three wholly owned subsidiaries: Alarm Lock, Continental Instruments, and Marks USA.
In its fiscal 2025 second-quarter earnings report, NAPCO Security Technologies announced a reduction in net sales by 9.7% year-over-year to $43.0 million, alongside a significant increase in recurring service revenue by 14.4% to $21.2 million. Despite the decline in overall net income, the company reported an improvement in gross profit margin, rising to 57.0% from 52.6% in the previous year.
Key financial metrics for the quarter include a diluted EPS of $0.28, down from $0.34 in the prior year, and an Adjusted EBITDA of $12.2 million, reflecting a decrease of 19.3%. The company attributes its dip in equipment sales to reduced purchases from two major distributors and project timing issues but has seen encouraging growth in school security sales, evidenced by new contracts with educational institutions.
NAPCO is optimistic about its future prospects, underpinned by innovations like the Prima All-in-One Panel and the MVP Access platform, which introduces new recurring revenue opportunities. The company also highlights ongoing projects in various sectors, including education, healthcare, and retail, which are expected to drive growth.
Looking ahead to the latter half of fiscal 2025, NAPCO Security Technologies plans to focus on improving its profitability and cash flow, continuing its dividend program, and striving for product innovation and technical excellence to sustain its market position.
