AMITYVILLE, N.Y. — Electronic security manufacturer NAPCO‘s stock surged almost 19% as the company saw its recurring monthly revenue jump 25% to $18.5 million for the three-month period ending Dec. 31, 2023, up from $14.9 million.
NAPCO’s net sales also reached record levels in the second quarter of fiscal 2024, spiking 12% year-over-year to $47.5 million, the highest quarterly mark in the company’s history, while net income also reached its highest level in company history, rising 221% from $3.9 million to $12.6 million for FY24 Q2.
“The second quarter of fiscal 2024 was the strongest quarter in our company’s history,” said Richard Soloway, chairman and president of NAPCO Security Technologies, in the company’s quarterly filing.
More About NAPCO’s Record-Setting Quarter
NAPCO’s Q2 revenue was $47.5 million, the highest quarterly sales the company ever achieved and was the 13th consecutive quarter of record sales for a quarterly reporting period. The company’s net income of $12.6 million and adjusted EBITDA of $15.1 million were also quarterly record-breakers.
Equipment revenue improved, growing 6% for the quarter, with gross margins on such sales sequentially increasing to 29% from 28% last quarter. Recurring service revenues, which increased 25%, was also a major contributor to the year-over-year overall sales and earnings growth.
Gross margin for recurring service revenues was once again strong, at 90% and when combined with gross margin on equipment revenues of 29%, the total gross margins for Q2 amounted to 53%, which compared to 34% for last year’s Q2.
“We were particularly pleased to see the growth in equipment revenues, which was primarily attributable to the continued strength of locking revenue in addition to the improvement of intrusion sales,” says Soloway.
“We were also pleased with the increase in the recurring revenues annual run rate, which increased to $76.5 million based on January 2024 recurring revenues, compared to an annual run rate of $72.5 million based on October 2023 recurring revenues,” he says.
NAPCO’s Q2 results marked the second consecutive quarter in which the company set a new three-month record for revenue, net income and EBITDA.
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