Shares of NAPCO Security Technologies, Inc., (NSDQ: NSSC) jumped about 20% in early trading Monday after the company reported record revenues, net income and EBITDA for Q1 of fiscal 2024.

So to see what has investors so interested in the company: here are some of the financial highlights from NAPCO’s fiscal 2024 Q1 report.

Overview of NAPCO’s Q1 2024 Financial Report

Net sales for NAPCO in Q1 2024 increased 6% to $41.7 million (the highest Q1 sales in the company’s history) as compared to $39.5 million for the same period last year.

Recurring service revenues for the quarter increased 25% to $17.3 million as compared to $13.8 million for the same period last year. Recurring service revenues had a prospective annual run rate of approximately $72.5 million based on October 2023 recurring revenues.

Gross margin for recurring service revenues remained robust for the quarter at 90%, compared to 88% for the same period last year.

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Gross margin for equipment revenues was 28% for the first quarter compared to 9% in last year’s first quarter.

Net income for the quarter increased 239% to a first quarter record $10.5 million as compared to $3.1 million for the same period a year ago.

Earnings per share (diluted) for the quarter increased 250% to $0.28 as compared to $0.08 for the same period a year ago.

Adjusted EBITDA* for the quarter increased 174% to a first quarter record $12.9 million as compared to $4.7 million for the same period a year ago.

Adjusted EBITDA per share (diluted)* for the quarter increased 169% to $0.35 as compared to $0.13 for the same period a year ago.

Cash and cash equivalents, other investments and marketable securities were $74.6 million at Sept. 30, 2023 as compared to $66.7 million at June 30, 2023, a 12% increase. The company had no debt as of Sept. 30, 2023.

Cash provided by operating activities for the three months ended Sept. 30, 2023 was $11.2 million as compared to a $2.0 million loss for the same period last year.

Deloitte & Touche LLP has been appointed as the Company’s independent registered public accounting firm for the fiscal year ending June 30, 2024, effective immediately after the filing of the company’s first quarter 10-Q.

“Fiscal 2024 began with record first quarter sales of $41.7 million, which was the 12th consecutive quarter we achieved record sales for a quarterly reporting period,” says chairman and president Richard Soloway in the announcement.

“Our net income of $10.5 million is the largest Q1 net income in the company’s history. While equipment revenues declined 5% for the quarter, gross margins on such sales increased to 28% from 9% in last year’s first quarter,” he says. “Recurring service revenues, which increased 25%, was also a major contributor to the year-over-year overall sales and earnings growth.”

Noteworthy Developments for NAPCO in FY24 Q1

NAPCO’s Alarm Lock and Marks locking hardware lines continued to see growth in school and classroom security, healthcare, and retail loss prevention, as well as in multi-dwelling commercial and residential applications within the quarter. During this period the company also introduced Prima by NAPCO, a new all-in-one panel for security, fire, video and connected home.

“We anticipate that Prima will address an important mass segment of the security market, including residential and small business systems,” says chairman and president Richard Soloway in the announcement.

“With built-in Wi-Fi/cellular radio communications, customer alert notifications, and video and smart home subscription options for each -installed system, the security dealer, as well as the company, can add more recurring-revenue generating accounts.”

“NAPCO’s record-breaking results for Q1 of fiscal year 2024 was primarily the result of the continued growth and profitability from recurring revenues as well as the strong sales from our Alarm Lock and Marks locking product lines,” he says.

Meanwhile, the company notes that radio sales have continued to slow down when compared to last year’s first quarter, when the impending 3G Verizon sunset was rapidly approaching, says Soloway. Though he does anticipate radio sales to be a key contributor to hardware sales heading deeper into 2024.

Craig MacCormack is a veteran journalist who joined Security Sales & Integration in June 2023 as web editor. He covered AV, IT and security with SSI’s sister publication, Commercial Integrator, from January 2011 to June 2021.

Another version of this article originally appeared on our sister site Security Sales & Integrations. It has since been updated for CE Pro audiences.

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