"record sales of $50.3 million for this quarter, making our 15th consecutive quarter of achieving record quarterly sales."
— Dick Soloway
03Detailed Report
NSSC
Company NSSC
Period
Q4 2024
CurrencyUSD
Report TypeQuarterly Earnings
GeneratedJun 13, 2026
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Executive Summary
Napco Security Technologies delivered a record-breaking QQ4 2024, with net sales of $50.3 million, marking the 15th consecutive quarter of record quarterly sales. Recurring monthly service revenues surged 27% year over year in Q4 and now run at an annualized rate of approximately $84 million, underpinning earnings durability and high-margin recurring income. The company holds a strong balance sheet with no debt and cash and investments totaling $97.7 million, supporting a very healthy current ratio of 7.6x and robust operating cash flow generation. Management emphasized a strategic pivot toward higher-margin recurring revenues, expansion of the StarLink radio ecosystem, and the Prima All-in-One security panel to capture a much larger residential/small business addressable market. While hardware margins benefited from favorable mix and overhead absorption, the firm reiterated plans to improve hardware gross margins in fiscal 2025 and beyond and continues to invest in R&D and SG&A to support product development and go-to-market initiatives. The dividend was raised to $0.125 per share, signaling confidence in sustained cash generation and profitability trajectory. Near-term drivers include continued penetration of locking hardware in schools, healthcare, airports, and multifamily markets, coupled with greater distributor collaboration (including ADI) to scale radio and recurring revenue adoption. Risks center on radio mix volatility, distributor inventory dynamics, and the ongoing need to convert legacy fire protection installs (3G sunset retrofit cycle) into StarLink-enabled systems. Overall, the QQ4 2024 results reinforce Napco’s position as a cash-generative, asset-light growth story within the security/industrials space, with meaningful upside from Prima and expanded recurring revenue streams.
Key Performance Indicators
Revenue
Increasing
50.33M
QoQ: 2.16% | YoY: 12.70%
Gross Profit
Increasing
27.85M
55.32% margin
QoQ: 5.14% | YoY: 115.30%
Operating Income
Increasing
13.96M
QoQ: -3.66% | YoY: 717.56%
Net Income
Increasing
13.53M
QoQ: 2.56% | YoY: 840.51%
EPS
Increasing
0.37
QoQ: 2.78% | YoY: 27.59%
Revenue Trend
Margin Analysis
Financial Highlights
Revenue and profitability overview:
- QQ4 2024 revenue: $50.33 million, up 13% YoY from $44.6 million; FY2024 revenue (12 months ended June 30, 2024): $188.8 million, up 11% YoY.
- Gross profit: QQ4 gross profit $27.85 million (gross margin 55.3%); FY2024 gross margin 54% (vs 43% prior year).
- Recurring revenue: QQ4 recurring revenue $20.3 million, up 27% YoY; FY2024 recurring revenue $75.7 million, up 26% YoY; recurring as a share of total revenue approximately 40% in 2024; gross margin on recurring revenue 90% (QQ4 90%, FY2024 90%).
- Equipment sales (hardware): QQ4 revenue $29.9 million, up 5% YoY; QQ4 equipment gross margin 31% (FY2024 equipment gross margin 29%).
- Operating performance: QQ4 operating income $14.0 million (operating margin 27.7%); FY2024 operating income $53.8 million (operating margin ≈28%).
- EBITDA/Adjusted EBITDA: QQ4 EBITDA $14.5 million; QQ4 Adjusted EBITDA $15.4 million (EBITDA margin 31% for both quarterly and full-year on adjusted basis); FY2024 Adjusted EBITDA $58.9 million (≈31% margin).
- Net income and EPS: QQ4 net income $13.54 million, $0.36 diluted EPS; FY2024 net income $49.8 million, $1.34 diluted EPS.
- Balance sheet and liquidity: Cash and equivalents and marketable securities $97.7 million; no debt; current ratio 7.6x; working capital $146.5 million; Capex: QQ4 $0.551 million; FY2024 total Capex $1.6 million.
- Cash flow: Net cash from operating activities (12 months ended 6/30/2024) $45.4 million; free cash flow (FY2024) approximately $43.8 million (OPERATING CF minus CapEx); quarterly free cash flow $13.8 million.
- Dividend: Management announced a dividend increase to $0.125 per share, payable Oct 3, 2024 (record date Sept 12, 2024).
- Notable multiples (as of QQ4 2024 data): highly valued on price-to-earnings, price-to-sales, and enterprise-value multiples, reflecting growth optionality in recurring revenues and Prima, with a P/S around the high 30s and P/E around 35–36x; dividend yield ~0.2%.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
50.33M
12.70%
2.16%
Gross Profit
27.85M
115.30%
5.14%
Operating Income
13.96M
717.56%
-3.66%
Net Income
13.53M
840.51%
2.56%
EPS
0.37
27.59%
2.78%
Key Financial Ratios
Gross Profit Margin
Good
55.30%
Gross profit margin is healthy and competitive within industry standards
Operating Profit Margin
Excellent
27.70%
Operating margin is exceptional, indicating strong pricing power and operational efficiency
Net Profit Margin
Excellent
26.90%
Net profit margin is exceptional, indicating strong pricing power and operational efficiency
Return on Assets
Fair
6.51%
Return on assets is acceptable but below top-tier companies
Return on Equity
Fair
7.57%
Return on equity is acceptable but below top-tier companies
Current Ratio
Strong
7.59
Current ratio indicates excellent liquidity and financial flexibility
Debt to Equity
Conservative
0.03
Debt-to-equity shows conservative leverage and low financial risk
P/E Ratio
Growth
35.81x
Elevated P/E suggests growth expectations or premium valuation
Price to Book
High Premium
10.84x
Very high premium suggests asset-light business model or lofty expectations
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