NSSC Fiscal Q4 2026 Earnings Call: Revenue Hits Record, Recurring Run Rate Reaches $103M
Source Tradingkey
Key Takeaways
- Fiscal Q4 2026 net sales rose 10% year over year to a quarterly record of $55.8 million. Recurring service revenue increased 12.9% to $25.3 million, while equipment revenue grew 7.7% to $30.5 million.
- July recurring revenue implied an annualized run rate of approximately $103 million. Full-year recurring service revenue reached $97.5 million, up 13%, with a 90.3% gross margin.
- Q4 GAAP net income increased 52.7% to $17.8 million, or $0.50 per diluted share. Adjusted EBITDA rose 44.3% to $20.6 million, representing a 36.8% margin.
- StarLink radio unit sales grew 40% year over year and nearly 30% sequentially in Q4. Management said radio activations typically translate into recurring revenue after a five- to seven-month lag.
- NAPCO ended fiscal 2026 with $137.6 million in cash, cash equivalents and marketable securities, no debt, and $59.2 million in annual free cash flow.
- The company raised its quarterly dividend by 13.3% to $0.17 per share. Management also said it is evaluating potential acquisitions, while maintaining a focus on margin expansion.
Key Financial Data
| Metric | Fiscal Q4 2026 | Change / Context |
|---|---|---|
| Net sales | $55.8 million | Up 10% year over year; quarterly record |
| Recurring service revenue | $25.3 million | Up 12.9%; 90.1% gross margin |
| Equipment revenue | $30.5 million | Up 7.7% |
| Gross profit | $34.2 million | Up 27.7% |
| Gross margin | 61.3% | Included an approximately 600-basis-point benefit from IEEPA tariff refunds |
| Operating income | $18.4 million | Up 52.5% |
| GAAP net income | $17.8 million | Up 52.7%; 31.8% of revenue |
| Diluted EPS | $0.50 | Versus $0.33; tariff refunds contributed approximately $0.09 |
| Adjusted EBITDA | $20.6 million | Up 44.3%; 36.8% margin |
| Free cash flow | $17.2 million | Up 19.9%; 30.9% margin |
| Metric | Fiscal 2026 | Change / Context |
|---|---|---|
| Net revenue | $202.3 million | Up 11.4%; first year above $200 million |
| Recurring service revenue | $97.5 million | Up 13%; 90.3% gross margin |
| Equipment revenue | $104.8 million | Up 10% |
| Gross profit | $119.8 million | Up 18.6%; 59.2% gross margin |
| Operating income | $45.6 million | Down 1.3%, reflecting a $16 million legal settlement |
| GAAP net income | $43.0 million | Up 0.9%; diluted EPS of $1.20 |
| Non-GAAP net income | $57.3 million | Up 32%; diluted EPS of $1.60 |
| Adjusted EBITDA | $66.7 million | Up 27.9%; 33% margin |
| Free cash flow | $59.2 million | Up 15.2%; 29.3% margin |
| Cash and marketable securities | $137.6 million | Up 38.7%; no debt |
Business and Operating Performance
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