NASDAQ$NSSC

Napco Security Technologies Inc · Q4 2023 earnings

Q4 2023 earnings · · Investor relations

Briefing

NAPCO reported record revenues, net income, and Adjusted EBITDA for Q4 2023.

NAPCO Security Technologies reported a 3% increase in net sales for the quarter, reaching $44.7 million, the highest Q4 sales in the Company’s history. Net income increased by 40% to $10.6 million, and Adjusted EBITDA increased by 41% to $13.0 million.

  • Net sales for the quarter increased 3% to $44.7 million.
  • Recurring service revenue increased 27% to $16.1 million.
  • Net income for the quarter increased 40% to $10.6 million.
  • Adjusted EBITDA for the quarter increased 41% to $13.0 million.

Headline financials

Total Revenue

$44.7M

Previous: $43.2M+3.3%
EPS (adj)

$0.28

Previous: $0.20+40.0%
Adjusted EBITDA

$13M

No prior period
Capital Expenditures

$415K

Previous: $293K+41.6%
Free Cash Flow

$11.9M

Previous: -$374K+3273.5%
Net Income

$10.6M

Previous: $7.5M+41.3%
Operating Income

$11.8M

Previous: $8.19M+44.1%
Gross Profit

$23M

Previous: $19.2M+19.8%
Cash & Equivalents

$36M

Previous: $41.7M-13.8%
Total Assets

$167M

Previous: $149M+12.2%
Stock-Based Comp

$330K

Previous: $270K+22.2%

Revenue & EPS history

Napco · Revenue · Quarterly

$44.7M

Q4 2023+3.3%vs Q4 2022
Beat estimate in 10 of 15 quarters(67%)
ActualEstimate

Revenue by segment

Napco · $16.1M total across 1 segment · Q4 2023

  • Recurring Services
    $16.1M

Forward guidance

NAPCO expects radio sales to continue to be a key contributor to hardware sales and lead to the continued growth of their highly profitable recurring revenue. The company believes that most of the additional material and freight costs due to the supply chain crisis are behind them, expecting much improved hardware gross margins going forward.

Tailwinds

  • Radio sales are expected to continue to be a key contributor to hardware sales.
  • High growth of recurring revenue is expected.
  • Most of the additional material and freight costs due to the supply chain crisis are believed to be behind them
  • Much improved hardware gross margins going forward are expected.
  • Company’s cash position continues to grow and balance sheet keeps getting stronger.

Headwinds

  • The company is not satisfied with the 2023 gross margin for hardware sales of 18%.
  • The company will delay filing its Form 10-K for up to 15 calendar days.
  • Equipment revenues declined 6% for the quarter.
  • Radio sales have slowed down when compared to the prior year, when the impending 3G Verizon sunset was approaching
  • School security continues to be a major concern to many in the country.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q4 2023

Historical avgQ4 2023

+1.4%

Avg return

Earnings day

+2.7%

Avg return

5 days after

+7.5%

Avg return

30 days after

45%

29 / 64 earnings

Positive

+33.0%

Q1 2024

Best reaction

-26.6%

Q2 2025

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q3 2026-15.2%-12.6%-22.9%
Q2 2026+11.4%+18.3%+18.1%
Q1 2026-6.8%-4.6%-7.1%
Q3 2025+3.6%+10.9%+20.2%
Q2 2025-26.6%-29.9%-33.7%
Q1 2025-6.9%+0.2%+5.7%
Q4 2024-16.4%-16.4%-25.2%
Q3 2024+7.7%+4.5%+22.0%
Q2 2024+21.3%+25.7%+14.9%
Q1 2024+33.0%+35.6%+69.5%
Q4 2023+8.9%-38.4%-38.6%
Q3 2023+20.9%+22.8%+39.2%
Q2 2023+14.3%+1.6%+8.8%
Q1 2023+8.9%+13.0%+5.0%
Q4 2022+16.3%+13.9%+17.2%
Q3 2022-2.2%+4.0%+21.9%
Q2 2022-2.9%-3.9%-0.1%
Q1 2022-5.9%-3.4%+2.5%
Q4 2021+18.5%+8.7%+18.3%
Q3 2021-1.8%-2.9%+1.5%
Q2 2021+15.1%+20.6%+33.5%
Q1 2021+10.3%+16.3%+25.3%
Q4 2020-4.8%-3.3%+5.6%
Q3 2020+12.2%+19.1%+34.0%
Q2 2020-25.6%-23.3%-30.0%
Q1 2020-0.1%-1.6%+4.3%
Q4 2019-24.0%-25.3%-26.2%
Q3 2019+12.0%+10.6%+21.2%
Q2 2019+21.8%+29.7%+32.9%
Q1 2019+12.9%+15.0%+7.8%
Q4 2018+2.0%+2.0%-3.6%
Q3 2018+7.9%+7.3%+7.8%
Q2 2018-0.4%-0.5%+1.6%
Q1 2018-3.4%-5.1%-5.6%
Q4 2017+18.6%+9.0%+28.4%
Q3 2017-5.0%-10.0%-6.7%
Q2 2017-0.6%-2.7%+6.5%
Q1 2017+4.8%+6.4%+19.1%
Q4 2016-5.9%-7.3%-2.0%
Q3 2016-0.7%
Q2 2016-2.6%
Q1 2016-4.4%
Q4 2015-3.1%
Q3 2015+2.7%
Q2 2015+8.0%
Q1 2015-6.1%
Q4 2014+5.1%
Q3 2014+7.2%
Q2 2014-5.9%
Q1 2014-1.3%
Q4 2013-1.8%
Q3 2013-1.8%
Q2 2013+2.9%
Q1 2013-3.7%
Q4 2012+7.6%
Q3 2011-7.7%
Q3 2012-7.7%
Q2 2011-10.7%
Q2 2012-10.7%
Q1 2012-1.8%
Q4 2011+1.8%
Q1 2011+1.8%
Q4 2010-2.2%
Q3 2010-0.9%

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