Napco Security Technologies, Inc. (NASDAQ:NSSC) Q1 2024 Earnings Call Transcript

Raj Sharma: Great. So, this alarm slowdown then shouldn’t impact the recurring revenues down, a few quarters down, they should pick it up as you see a pickup in alarm sales?

Kevin Buchel: That’s what we believe. And remember, the higher the number goes, and it’s, recurring is 41% of overall sales. Remember, when you have been with us long enough to remember it was a very small percent, now it’s 41%. The higher that number goes, the harder it is to keep that increased percentage up to simple math. But we have managed to do a good job keeping it up, but we are also introducing new stuff, new products like Prima to give us more recurring so that we can keep the pace up as we go forward and head to our 2026 goal. In the 2026 goal, we didn’t even include prima. So, we are giving ourselves extra ways to get there, Prima being one of them. And also in our 2026 goal, we used 80% gross margin on the recurring and we were at 90% this quarter. So, these are the things to keep in mind as we head towards that 2026 timeframe.

Raj Sharma: Got it. Great. Thank you for taking my questions. I will take it offline. Thank you and congratulations again.

Richard Soloway: Thank you, Raj. Thank you.

Operator: [Operator Instructions] At this time, there appears to be no further questions. I would like to turn the call back over to Mr. Soloway for closing remarks.

Richard Soloway: Thank you everyone for participating in today’s conference call. As always, should you have any further questions, feel free to call Fran, Kevin or myself for further information. We thank you for your interest and support, and we look forward to speaking to you all again in a few months to discuss Napco’s fiscal Q2 results. Bye-bye and have a wonderful day.

Operator: This concludes today’s conference call. Thank you for attending.