Napco Security Technologies Inc (NSSC)

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Napco Security Technologies shares jump nearly 6% after strong Q2 beat

February 2, 2026 8:42 AM
IH Market News

Napco Security Technologies (NASDAQ:NSSC) shares surged almost 6% in premarket trading on Monday after the company reported fiscal second-quarter results that came in well ahead of expectations, supported by robust growth in recurring service revenue and improving margins.

The security systems maker posted adjusted earnings of $0.38 per share for the quarter ended December 31, exceeding the analyst consensus of $0.32 by nearly 19%. Revenue rose 12.2% year on year to a record $48.17 million, topping forecasts of $47.8 million.

A key driver of the performance was recurring service revenue, which increased 12.5% from a year earlier to $23.8 million and continued to deliver an exceptionally high gross margin of 90.2%.

“NAPCO delivered another strong quarter fueled by our recurring service revenue and its consistent year over year double digit growth, and the continued demand for our door-locking products that drove double digit growth in our equipment revenue and improved equipment gross margins,” said Richard Soloway, chairman and chief executive officer.

Equipment sales climbed 12.0% year on year to $24.3 million, while the company’s overall gross margin widened to 58.6% from 57.0% in the same period last year. Net income rose 29% to $13.5 million.

Recurring service revenue now accounts for about half of Napco’s total sales and implies an annualized run rate of roughly $99 million, based on January 2026 recurring revenue levels.

Reflecting confidence in the outlook, Napco’s board declared a quarterly dividend of $0.15 per share, up 7% from the previous quarter.

“Our goal of product innovation, technical superiority and consistent delivery of strong profitability, will continue through the balance of fiscal 2026 and beyond,” Soloway added.

The company also announced that Joseph Pipczynski has been appointed chief revenue officer, effective January 29, 2026.

Napco Security Technologies stock price

Original: Napco Security Technologies shares jump nearly 6% after strong Q2 beat