Short answer
NAPCO SECURITY TECHNOLOGIES, INC (NSSC) filed its fiscal 2026 10-K annual report with the SEC on Aug 24, 2026. It reported revenue of $202M (+11.4% year over year) and net income of $43M.
- Top risk flagged: Regulatory risk from uncertain U.S. trade policies and tariffs including IEEPA, Section 122, and Section 301 impact costs and supply chain stability
FY2026 key financial metrics · XBRL
- Revenue
- $202M
- +11.4% YoY
- Net income
- $43M
- −0.9% YoY
- Operating margin
- 22.6%
- −2.9 pp YoY
- Gross margin
- 59.2%
- +3.6 pp YoY
- EPS (diluted)
- $1.20
- +0.8% YoY
- ROE
- 22.5%
- −3.2 pp YoY
- Operating cash flow
- $61M
- +14.2% YoY
Source: XBRL data from the NAPCO SECURITY TECHNOLOGIES, INC (NSSC) FY2026 10-K on SEC EDGAR. USD.
NAPCO SECURITY TECHNOLOGIES, INC FY2026 10-K analysis
AI summary of each section, grounded in the filing text
Business Overview
- Core business: Manufacturer of integrated electronic security products and recurring cellular communication services for intrusion, fire alarms, and school safety
- Emphasis on expanding recurring cellular communication services driving 13% revenue growth to $202.3M, with 48% of total revenue and gross margin ~90.3% in 2026
- Strategic focus shift towards mandatory, non-elective security systems and IoT-driven connectivity amid copper landline phase-out trends
- Employee count steady at 1,049 with 756 in Dominican Republic manufacturing facility, leveraging low-cost vertical integration for margins
- Noteworthy litigation settlement charge of $16 million impacting 2026 net income, which was $43.0 million despite revenue growth
Management Discussion & Analysis
- Revenue $202.3M, up 11.4% YoY from $181.6M; Equipment revenue $104.8M (+10.0%), Service revenue $97.5M (+13.0%)
- Gross margin 59.2% vs 55.6% YoY; Equipment gross margin 30.3% vs 23.6%, Service gross margin 90.3% vs 91.0%
- Best segment: Service revenue gross profit at $88.0M with 90.3% margin; Worst: Access alarm products revenue down 11.0% to $7.6M
- Operating income $45.6M, down 1.3% YoY; Net income $43.0M, down 0.9% after $16M litigation settlement charge
- Operating cash flow $61.1M (+14%), dividends paid $20.3M (+49% YoY), capex $1.9M, no buybacks in 2026 vs $36.8M prior year
- Management notes AI-driven component shortages as risk; expects tariff refund uncertainty; projects cash sufficiency for next 12 months
Risk Factors
- Regulatory risk from uncertain U.S. trade policies and tariffs including IEEPA, Section 122, and Section 301 impact costs and supply chain stability
- Geopolitical risk from global AI-driven semiconductor demand causing supply shortages and lead time extensions for critical electronic components
- Operational risk concentrating manufacturing in Dominican Republic with no alternative facility, vulnerable to workforce shortages and natural disasters
- Competitive risk from about 12 larger rivals investing more in R&D, risking loss of market share and pricing pressure
- Financial risk from reliance on senior management aged 73 and 80, whose loss could materially disrupt business strategy and operations
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