NAPCO Security Technologies Inc. (NASDAQ: NSSC) stock plummeted 5.68% in pre-market trading on Tuesday, following the release of its mixed second-quarter 2025 earnings results.

The security solutions provider reported a 9.7% year-over-year decline in net sales to $42.9 million, missing analyst expectations. The significant drop was primarily driven by a 25% decrease in equipment sales to $21.7 million, which outweighed a 15% increase in recurring monthly service revenue to $21.2 million.

Furthermore, NAPCO Security's net income fell 17% to $10.5 million, or $0.28 per diluted share, also missing analysts' estimates. The company attributed the decline to lower revenue, despite an improvement in gross margin from 53% to 57% due to the strong performance of its recurring service revenue segment.