Innovative Solutions and Support (NASDAQ:ISSC) Releases Quarterly Earnings Results

Innovative Solutions and Support (NASDAQ:ISSC) released its quarterly earnings results on Thursday. The aerospace company reported $0.25 EPS for the quarter, beating the consensus estimate of $0.10 by $0.15, Zacks reports. Innovative Solutions and Support had a net margin of 18.54% and a return on equity of 26.52%. The business had revenue of $21.81 million for the quarter, compared to analyst estimates of $18.82 million.

Here are the key takeaways from Innovative Solutions and Support’s conference call:

• Management reported Q1 revenue of $21.8M (up ~36.5% YoY), Adjusted EBITDA of $7.4M (up ~141%), net income of $4.1M and free cash flow of $7M, while noting full‑year gross margins are expected in the mid‑40% range.
• The company completed recertification and resumed full‑scale production of the Digital Flight Control Computer for the F‑16 at Exton, expects IPDG recertification this quarter, and plans to insource F‑16 subassemblies in late 2026 to improve and stabilize margins.
• IA completed test flights of its next‑generation UMS on the Pilatus PC‑24, has begun unit production, and expects to begin deliveries to Pilatus in mid‑2026, advancing its position in cockpit automation and autonomous‑flight systems.
• Management disclosed near‑term headwinds from manufacturing transitions: F‑16 production transition reduced F‑16 revenue by about $1.2M and the Pilatus UMS migration reduced revenue by about $1.0M in the quarter.
• Backlog was ~$75M with Q1 new orders of ~$19M, and the company finished the quarter with net leverage of 0.5x and approximately $83.3M of cash plus credit availability, supporting an active, disciplined M&A pipeline.

Innovative Solutions and Support Stock Up 13.1%

NASDAQ:ISSC traded up $2.49 during mid-day trading on Thursday, hitting $21.47. The company had a trading volume of 698,964 shares, compared to its average volume of 542,289. The business has a fifty day simple moving average of $17.83 and a 200-day simple moving average of $13.97. The firm has a market capitalization of $381.67 million, a price-to-earnings ratio of 24.71 and a beta of 0.64. Innovative Solutions and Support has a 1 year low of $5.30 and a 1 year high of $23.80. The company has a current ratio of 3.04, a quick ratio of 1.50 and a debt-to-equity ratio of 0.34.

Institutional Investors Weigh In On Innovative Solutions and Support

Hedge funds have recently modified their holdings of the stock. Global Retirement Partners LLC acquired a new position in Innovative Solutions and Support during the 4th quarter worth approximately $36,000. Bank of America Corp DE boosted its stake in shares of Innovative Solutions and Support by 589.9% in the third quarter. Bank of America Corp DE now owns 9,113 shares of the aerospace company’s stock valued at $114,000 after purchasing an additional 7,792 shares during the period. Quantbot Technologies LP acquired a new stake in Innovative Solutions and Support during the 3rd quarter valued at $160,000. American Century Companies Inc. increased its stake in Innovative Solutions and Support by 21.9% during the 2nd quarter. American Century Companies Inc. now owns 12,386 shares of the aerospace company’s stock worth $172,000 after buying an additional 2,228 shares during the period. Finally, Squarepoint Ops LLC purchased a new stake in Innovative Solutions and Support during the 3rd quarter worth $180,000. 28.53% of the stock is currently owned by hedge funds and other institutional investors.

Wall Street Analysts Forecast Growth

A number of analysts recently commented on ISSC shares. Zacks Research upgraded Innovative Solutions and Support from a “hold” rating to a “strong-buy” rating in a research report on Wednesday, December 24th. Weiss Ratings reiterated a “hold (c+)” rating on shares of Innovative Solutions and Support in a report on Thursday, January 22nd. Northland Securities began coverage on shares of Innovative Solutions and Support in a research note on Friday, November 21st. They set an “outperform” rating and a $16.50 price objective on the stock. Jones Trading upgraded Innovative Solutions and Support to a “strong-buy” rating in a report on Monday, January 5th. Finally, Craig Hallum assumed coverage on Innovative Solutions and Support in a report on Friday, December 5th. They set a “buy” rating and a $16.00 price objective on the stock. Four investment analysts have rated the stock with a Strong Buy rating, one has assigned a Buy rating and one has issued a Hold rating to the company’s stock. According to MarketBeat.com, Innovative Solutions and Support presently has an average rating of “Strong Buy” and a consensus target price of $16.25.

About Innovative Solutions and Support

Innovative Solutions and Support, Inc (NASDAQ: ISSC) is a provider of technology solutions and mission support services to U.S. federal government agencies, with a focus on defense, intelligence, and national security programs. The company delivers integrated program management, systems engineering, and advanced IT infrastructure support designed to enhance operational readiness and maintain secure, scalable environments for mission-critical operations.

Its core service offerings include systems integration, custom software development, data analytics, cybersecurity, and logistics management.