Napco Security reports Q2 EPS 34c, consensus 26c

Reports Q2 revenue $47.5M, consensus $43.92M. Richard Soloway, Chairman and President, commented, “The second quarter of fiscal 2024 was the strongest quarter in our Company’s history. Revenue was $47.5 million, which was the highest quarterly sales we ever achieved and was the thirteenth consecutive quarter of record sales for a quarterly reporting period. Our 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. 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.”