Shares of NAPCO Security Technologies, Inc. (NSSC) plunged more than 13% in pre-market trading on Friday, despite the company reporting better-than-expected earnings results for the first quarter of fiscal 2025.

The security products and software company reported record revenue of $44 million for the quarter ended September 30, 2024, up 6% year-over-year. Net income also reached a Q1 record of $11.2 million, an increase of 7% compared to the same period last year.

However, NAPCO's adjusted EBITDA declined 4% year-over-year to $12.3 million, and equipment sales fell 6% due to distributors reducing inventory levels. The company's recurring service revenue (RSR) showed strong growth, increasing 22% to $21.1 million, but this was not enough to offset the disappointment in other areas of the business.