Interpreting Security Companies’ First-Quarter Earnings Reports
ASSA ABLOY and Allegion reported first quarter results within days of each other, and the strategic takeaway from both is nearly identical: the shift from mechanical to electromechanical access control is accelerating, commercial nonresidential demand remains healthy, and residential continues to struggle. NAPCO Security Technologies reported solid fiscal Q3 2026 results, with total revenue up nearly 12% year-over-year to $49.2 million. Recurring service revenue grew 15.4% to $24.9 million, crossing the $100 million annualized run rate threshold for the first time.
The full report from SecurityInfoWatch.com includes Q1 earnings calls recaps for ASSA ABLOY, Allegion, ADT, Johnson Controls, APi Group, NAPCO, Axon, and Securitas reveal broader industry trends.
Key Takeaways
- The shift from mechanical to electromechanical access control is accelerating at both ASSA ABLOY and Allegion, with electronic products outgrowing mechanical across every geography. Commercial construction demand remains strong at both companies, pointing to a healthy pipeline.
- Data center demand is the dominant growth story. Nearly every company on this list has meaningful and growing data center exposure.
- Security service revenue is softening in places, but for different reasons. Johnson Controls is deliberately pulling back on security service volume to improve pricing discipline and margin improvement. Securitas' installation business was hit by three winter storms and a lost contract and is looking for a fast rebound.
- Tariffs and material inflation are being managed through pricing across the board. Nobody is calling it a crisis, but nobody is dismissing it either.
- M&A remains active across the sector. APi Group deployed more than $1 billion in fire and life safety acquisitions in a single quarter. ASSA ABLOY closed its 400th acquisition. NAPCO has indicated a move into the M&A market with specific targets identified. Securitas acquired a threat intelligence platform.