Kevin Buchel: Thank you.
Operator: Our next question comes from the line of Raj Sharma with B. Riley Securities. Please proceed with your question.
Raj Sharma: Hi, thank you. Again, congratulations on really, really good results.
Kevin Buchel: Thank you, Raj.
Raj Sharma: Yeah, absolutely. My question is on the Continental locking axis, due to €“ were those increases in those equipments indicative of the school security projects?
Patrick McKillop: Certainly, helped it.
Richard Soloway: Yes. The product line utilizing our cellular technology that we invented for the fire intrusion is helping out a lot because of school security where you don’t have to wire the school, but you can get the lockdown functionality out of it and it goes through the cloud and people with cell phones can access what’s going on in the building and there has to be a lockdown electronically. It could be done. So it’s a great product and it has great growth potential. And one thing I’d like to point out, in the $150 million in equipment by 2026, $150million in equipment by 2026 and recurring revenue of $150 million by 2026 or before. We don’t have air access with this application included because it’s a new product with us.
It takes typically a year, in this case, 1.5 years for it to become more mainstream with dealers because it is very different. But it gives the dealer the benefit of recurring revenue. We never have recurring revenue on a product. It’s kind of what the fire and fire and burglar alarm dealers get now for locking and access dealers. So, it’s a very, very new and exciting product, and it’s reteaching the industry on how to sell it.
Raj Sharma: I understand that Air Access is still a minimal part of our non-existing part of the service contracts. Of the equipment €“ on the equipment side any estimate of what the school security contributes to the equipment currently?
Kevin Buchel: It’s hard to say, Raj, because we get a lot of orders that go directly through distribution and we don’t see it or a lot that we see. And what I look at, is to really get an indication. I like to see what’s our locking sales as a percentage of our overall hardware and so I see that our locking sales is about 59% of our overall hardware sales. That’s a lot. That’s a very healthy thing and I know it’s because of schools. It’s not only schools, it’s hospitals, it’s airports, it’s a lot of things. But when schools are doing well, the security end is doing well, that number does better. So I know it. And there are lots of wins we don’t talk about. We mentioned one on this call in a Massachusetts school district. For some reason the schools don’t let us really talk about it a lot.
They like to keep things quiet. We have mentioned a couple of really big wins on largest school districts in the country, which we got over the last six months, two top 10, so two of the 10 largest school districts in the country. So we were proud to get that. It’s early stages. I know we sound like a broken record. Despite all the shootings that have gone on, we’re still in the early stages of this as most schools still haven’t done enough. And now there is all kind of money available from both the federal and the state governments to help them and of course, if it’s a university, they have big endowments and can do it. We’re in the early innings, second and third inning, if you ask me, on school security. Big area. I wish we could be more specific, but we can’t.
