NAPCO Security Technologies, Inc.

Ladies and gentlemen, and welcome to the NAPCO Security Technologies Fiscal Q3 2025 Earnings Call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press the star zero for the operator. This call is being recorded on Monday, May 5, 2025. I would now like to turn the conference over to Francis Okunuski, Vice President of Investor Relations. Please go ahead.

Thank you, Ludi, and good morning, everyone. This is Fran Okunuski, Vice President, Investor Relations for NAPCO Security Technologies. We want to thank you all for joining today's conference call to discuss financial results for our fiscal third quarter 2025. By now, all of you should have had the opportunity to review our earnings press release discussing our quarterly results. If you have not, a copy of the release is available in the investor relations section of our website, www.napcosecurity.com. On the call today are Dick Soloway, our Chairman and CEO of NAPCO Security Technologies, Kevin Buchel, President, Chief Operating Officer, and Chief Financial Officer, and Andrew Vono, our Senior Vice President of Finance and Chief Accounting Officer. Before we begin, let me take a moment to read the forward-looking statement, as this presentation contains forward-looking statements that are based on current expectations, estimates, forecasts, and projections of future performance based on management's judgment, beliefs, current trends, and anticipated product performance. These forward-looking statements include, without limitation, statements relating to growth drivers of the company's business, such as school security products, reoccurring revenue services, potential market opportunities, the benefits of our reoccurring revenue products to customers and dealers, our ability to control expenses and costs and expected annual run rate, or SAS reoccurring monthly revenue. Forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from those contained in the forward-looking statements. These factors include, but are not limited to, such risk factors described in our SEC filings, including our annual report on Form 10-K. Other unknown or unpredictable factors or underlying assumptions subsequently proving to be incorrect could cause actual results to differ materially from those in the forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. You should not place undue reliance on these forward-looking statements. All information provided in today's press release and this conference call are as of today's date unless otherwise stated, and we undertake no duty to update such information except as required under applicable law. I'll turn the call over to Dick in a moment, but before I do, I want to mention we're actively planning our investor relations calendar for non-deal roadshow and conference attendance in the near future. Investor outreach is an important part of NAPCO, and I'd like to thank all those folks who assist us in these types of events. We're looking forward to a packed and dynamic schedule of investor engagement this quarter. Later this month, we'll be on the ground in New York City for the Bank of America Industrials, Transportation, and Airlines Key Leaders Conference, Needham's 20th Annual Technology, Media, and Consumer Conference, and TD Cowen's 53rd Annual Technology Media and Telecom Conference. We're also participating in a couple of virtual non-deal roadshows with KeyBank and Seaport Global. Then, in June, our momentum continues with appearances at the Robert W. Baird 2025 Global Consumer Technology and Services Conference and Deutsche Bank's 16th Annual Global Industrials and Materials Conference, both in New York, as well as the Wells Fargo Industrial Conference in Chicago. It's a great opportunity to share our story, connect with investors, and continue building excitement around our vision and performance. With that out of the way, let me turn the call over to Dick Soloway, Chairman and CEO of NAPCO Security Technologies. Dick, the floor is yours.

Thank you, Fran. Good morning, everyone, and welcome to our conference call. We appreciate your participation today as we review our fiscal Q3 2025 performance. Our performance in Q3 continues to demonstrate the strength and resilience of our operating model, even as we navigate an environment shaped by ongoing microeconomic headwinds. We achieved a 30% adjusted EBITDA margin and maintained an exceptional 91% gross margin in our service revenues, which increased 10.6% to $21.6 million. Recurring service revenue remains a foundational component of our business, accounting for 49% of total revenue this quarter with an annualized run rate of approximately $89 million based on April results, which is an increase of $3 million over the run rate for January reported last quarter. Our balance sheet remains a core strength. We are debt-free and maintain substantial cash reserves and continue to generate strong cash flow giving us the flexibility to invest confidently and execute on our long-term growth strategy. While demand signals in the broader market have shown some variability, we remain focused on what we can control. We are accelerating innovation, and our product development pipeline is the strongest it has ever been. These advancements are helping expand our portfolio of high-margin recurring service revenue offerings, positioning us for continued success. Now I'd like to turn the call over to our President, Chief Operating Officer, and Chief Financial Officer, Kevin Bushell, who will provide an overview of our fiscal third quarter results. Following Kevin's remarks, I will return to delve deeper into into our strategies and market outlook. Kevin, the floor is yours.