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Dec 31, 2020
Napco Q2 2021 Earnings Report
Reported a record Q2 sales and strong recurring service revenues.
Key Takeaways
NAPCO Security Technologies reported a 5% increase in net sales, reaching a record $27.2 million for the fiscal second quarter. Recurring service revenues grew by 42% to $8.2 million, with a gross margin of 85%. Net income increased by 38% over the fiscal first quarter.
Net sales increased by 5% year-over-year to a record $27.2 million.
Recurring service revenues increased by 42% year-over-year to $8.2 million with a gross margin of 85%.
Net income increased by 38% over the fiscal first quarter.
Cash and cash equivalents increased to $26.8 million.
Napco
Napco
Forward Guidance
NAPCO is well-positioned for the expected economic recovery and remains focused on generating continued strong recurring revenue growth and increasing overall gross margins.
Positive Outlook
- Well-positioned for the economic recovery.
- Focused on generating continued strong recurring revenue growth.
- Will continue efforts to expand recurring revenue product offerings into all segments of the Company.
- Strong underlying business fundamentals.
- Market-leading brands.
Challenges Ahead
- COVID-19 pandemic has caused some delay in spending at certain K-12 schools, colleges, and universities.
- Postponements of planned security upgrades.
- The communication paradigm continues to "sunset" away from legacy copper and 3G infrastructure.
- Dependence on distributors for product sales, which can be affected by their access to installation sites.
- Potential impact of competition and technological changes in the security market.