Napco Security reports Q2 EPS 23c, consensus 14c

Reports Q2 revenue $42.3M, consensus $39.14M. Richard Soloway, Chairman and President, commented, "The strong sales and profitability generated during the first quarter of fiscal 2023, continued during the second quarter, with Q2 record sales of $42.3M, a 27% increase over last year’s Q2 and the ninth consecutive quarter of record year-over-year quarterly sales. Our net income of $8.4 million is the largest quarterly net income in the Company’s history. Both equipment revenue and recurring service revenue, which increased 23% and 35%, respectively, contributed to the year-over-year overall sales growth. Gross margin for recurring service revenue increased 200 basis points to 89% and gross margins on hardware increased to 23% when compared to FY22 Q2 margins of 87% and 8%, respectively. Overall gross margins were 46%, a significant increase over last year’s Q2 gross margin of 34%.