Napco Q3 Results Lifted by Services as Recurring Revenue Reaches 51%

A growing base of subscription revenue gives the business more predictable, higher‑margin cash flow.

Overview

Revenue rose 11.8% to $49.2 million in fiscal Q3.
Recurring service sales grew 15.4% to $24.9 million and reached 51% of total sales.
Profitability improved with a 60% gross margin, $13.9 million in non‑GAAP net income, a 20.2% rise in adjusted EBITDA, and $16.0 million in free cash flow.
The company booked a one‑time $16 million litigation settlement that management said removes uncertainty without affecting the $0.15 dividend.
The balance sheet held about $125 million in cash with no debt, and hardware sales rose 8.4% to $24.2 million as management pointed to MVP cloud access subscriptions starting to contribute meaningfully around October 2026.