Napco Security Technologies delivered a strong fiscal Q1 2026, highlighted by record quarterly revenue of $49.2 million, up 11.7% year-over-year. Recurring revenue continued to build robustly, up 11.6% to $23.5 million and now representing approximately half of total sales, underscored by a very high recurring gross margin of 90.3%. The quarter also featured a sequential improvement in equipment gross margin (26.0%, up 300 basis points from Q4 fiscal 2025) and a solid profitability runway with operating income of $13.6 million and net income of $12.2 million, or $0.34 per diluted share. Importantly, NSSC remains debt-free with a cash balance of about $106 million and a cash position that supports a quarterly dividend of $0.14 per share, declared for January 2, 2026. Management highlighted ongoing pricing actions tied to tariffs and annual price increases, with expectations that the full impact will materialize in coming quarters. The company remains positioned for durable growth through StarLink recurring services and the MVP cloud-based access control platform, which pairs hardware and cloud software to unlock a sizable recurring revenue opportunity across millions of doors. The Dominican Republic manufacturing footprint provides cost advantages and tariff resilience, while school security and ADI distribution continue to present meaningful long-term opportunities. Overall, NSSC’s growth thesis rests on a high-margin recurring revenue engine, expanded product capabilities, and an asset-light, debt-free balance sheet that affords capital allocation optionality.