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Mar 31, 2025
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.
Revenue by Segment
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
Historical Earnings Impact
Analyze how earnings announcements historically affect stock price performance
Avg. Return Before/After Earnings
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