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Mar 31
Napco Q3 2025 Earnings Report
Napco reported lower revenue and earnings compared to the prior year, with strength in recurring services but a decline in equipment sales.
Key Takeaways
NAPCO Security Technologies, Inc. saw a decline in total revenue and net income in Q3 FY25. Recurring service revenue continued to grow and now comprises nearly half of total revenue, helping offset a substantial drop in equipment sales.
Recurring service revenue grew 10.6% YoY to $21.6M.
Equipment sales declined by 24.8% YoY.
EPS was $0.28, down from $0.36 in Q3 FY24.
Gross profit margin improved to 57.2% from 53.8% last year.
Napco
Napco
Napco Revenue by Segment
Revenue by Segment
Recurring Services Revenue
CapyFin.comEquipment Sales Revenue
CapyFin.com Forward Guidance
Napco expects continued growth in recurring revenue and improving profitability, while facing uncertainty from tariffs.
Positive Outlook
- Strong growth in recurring service revenue.
- RSR now represents 49% of total revenue.
- Introduction of MVP Access cloud platform targeting future recurring revenue.
- High gross margin of 91% on RSR.
- Strong operating cash flow of $38.9M for the quarter.
Challenges Ahead
- 10.8% decline in total net sales YoY.
- 24.8% drop in equipment sales due to distributor pullbacks.
- EPS and net income declined YoY.
- Adjusted EBITDA fell 15.5% YoY.
- Tariff-related uncertainties affecting pricing and planning.
Revenue & Expenses
Visualization of income flow from segment revenue to net income