• Earnings Per Share (EPS) of $0.38 exceeded estimates, showcasing strong financial performance.
• Record net revenues of $48.2 million for Q2 fiscal 2026, with a significant contribution from Recurring Service Revenue (RSR).
• Improved gross profit margin to 58.6% and a robust current ratio of 6.74, indicating healthy liquidity.

NAPCO Security Technologies, Inc. (NASDAQ:NSSC) is a leading designer and manufacturer of advanced electronic security devices. The company is known for its innovative security solutions, including door-locking products and recurring service revenue (RSR) offerings. NSSC competes in a dynamic market, where it strives to maintain its edge through continuous product development and strategic financial management.

On February 2, 2026, NSSC reported earnings per share (EPS) of $0.38, exceeding the estimated $0.33. This represents a significant year-over-year increase from $0.28, highlighting the company's strong financial performance. The Board of Directors declared a quarterly dividend of $0.15 per share, a 7% increase from the previous quarter, payable on April 3, 2026, to shareholders of record as of March 12, 2026.

NSSC achieved record net revenues of $48.2 million for the second quarter of fiscal 2026, marking a 12.2% increase compared to the same period last year. Equipment revenue rose by 12% year-over-year to $24.3 million, while RSR saw a 12.5% increase, reaching $23.8 million. The RSR now accounts for approximately 50% of the total revenue for the quarter, with a robust gross margin of 90.2%.

The company's gross profit margin improved to 58.6%, up from 57% in the previous fiscal year's quarter. This improvement reflects the growing demand for NSSC's products and services, as highlighted by Richard Soloway, Chairman and CEO. The company's strong liquidity is evident in its current ratio of 6.74, indicating its ability to cover short-term liabilities with current assets.

NSSC's financial metrics, such as a price-to-earnings (P/E) ratio of 33.32 and a price-to-sales ratio of 7.89, reflect the market's valuation of its earnings and revenue. The enterprise value to sales ratio of 7.53 and the enterprise value to operating cash flow ratio of 25.62 suggest how the company's cash flow is valued relative to its enterprise value. With a low debt-to-equity ratio of 0.033, NSSC demonstrates a conservative use of debt in its capital structure.