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Jun 30, 2023
Napco Q4 2023 Earnings Report
NAPCO reported record revenues, net income, and Adjusted EBITDA for Q4 2023.
Key Takeaways
NAPCO Security Technologies reported a 3% increase in net sales for the quarter, reaching $44.7 million, the highest Q4 sales in the Company’s history. Net income increased by 40% to $10.6 million, and Adjusted EBITDA increased by 41% to $13.0 million.
Net sales for the quarter increased 3% to $44.7 million.
Recurring service revenue increased 27% to $16.1 million.
Net income for the quarter increased 40% to $10.6 million.
Adjusted EBITDA for the quarter increased 41% to $13.0 million.
Napco
Napco
Napco Revenue by Segment
Revenue by Segment
Recurring Services Revenue
CapyFin.com Forward Guidance
NAPCO expects radio sales to continue to be a key contributor to hardware sales and lead to the continued growth of their highly profitable recurring revenue. The company believes that most of the additional material and freight costs due to the supply chain crisis are behind them, expecting much improved hardware gross margins going forward.
Positive Outlook
- Radio sales are expected to continue to be a key contributor to hardware sales.
- High growth of recurring revenue is expected.
- Most of the additional material and freight costs due to the supply chain crisis are believed to be behind them
- Much improved hardware gross margins going forward are expected.
- Company’s cash position continues to grow and balance sheet keeps getting stronger.
Challenges Ahead
- The company is not satisfied with the 2023 gross margin for hardware sales of 18%.
- The company will delay filing its Form 10-K for up to 15 calendar days.
- Equipment revenues declined 6% for the quarter.
- Radio sales have slowed down when compared to the prior year, when the impending 3G Verizon sunset was approaching
- School security continues to be a major concern to many in the country.