# Napco Sets Fiscal 2027 Equipment Margin Target at 26% to 27% By John Kim Canonical URL: https://www.tokenpost.com/news/business/47098 Published: 2026-11-03T00:42:17.000Z Updated: 2026-11-03T00:42:17.000Z Section: Business > The outlook follows a 24.3% first-quarter equipment margin. Recurring-service revenue reached an annualized pace of about $106 million using October revenue. Napco Security Technologies expects its fiscal 2027 equipment gross margin to reach 26% to 27%, up from 24.3% in the first quarter but below its fiscal 2026 result if achieved. CFO Andrew Vuono outlined the target on Nov. 2, during a call that began at 11 a.m. ET (16:00 UTC). “We expect us to be in the 26, 27% range, you know, conservatively,” he said. The projection relies mainly on sales volume and product mix and excludes potential price increases. Vuono did not give separate quarterly margin targets. Equipment revenue fell 7.3% from a year earlier to $23.85 million in the three months ended Sept. 30. The segment’s gross margin was 24.3%, down from 26% in the year-earlier quarter. Napco recorded a 30.3% equipment gross margin for fiscal 2026, which ended June 30. The first-quarter margin reflected lower overall sales volume, the mix of locking products sold, tariff costs, increased inventory scrap and higher technical-services costs. CEO Kevin Buchel said two locking distributors reduced purchases during the quarter, even as sell-through at both increased year over year and sequentially. Equipment sales and margins therefore moved lower as Napco set a full-year target that depends mainly on volume and product mix. Recurring-service revenue rose 11.5% to $26.13 million in the quarter, with a 90.1% gross margin. The service segment primarily earns recurring fees from monthly cellular communications for security systems. Growth came as more cellular radio devices were placed in service and activated by dealers. Service revenue exceeded equipment revenue in the quarter, and its gross margin was substantially higher. October recurring-service revenue translated to an approximately $106 million annualized run rate, $3 million above the figure based on July revenue. The run rate is an annualized pace, not revenue earned during fiscal 2027. Napco’s total first-quarter revenue was $49.98 million, up 1.7% from a year earlier, as [its fiscal first-quarter results]() showed service growth alongside lower equipment sales. ## Links in this article - [its fiscal first-quarter results](https://www.tokenpost.com/news/business/46453)