Innovative Solutions and Support (NASDAQ:ISSC) Releases Earnings Results, Beats Estimates By $0.11 EPS

Innovative Solutions and Support (NASDAQ:ISSC) posted its quarterly earnings results on Thursday. The aerospace company reported $0.33 earnings per share for the quarter, topping analysts’ consensus estimates of $0.22 by $0.11, Zacks reports. Innovative Solutions and Support had a net margin of 20.50% and a return on equity of 31.50%. The business had revenue of $26.73 million for the quarter, compared to the consensus estimate of $23.98 million.

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

• Positive Sentiment: Third-quarter revenue rose approximately 11% to $26.7 million, while net income increased to $4.5 million, or $0.25 per diluted share. Gross margin expanded to 51.7% from 35.6%, and adjusted EBITDA grew approximately 75% year over year.
• Positive Sentiment: On an apples-to-apples basis excluding the F-16 comparison and acquisitions, organic growth exceeded 40%, led by commercial aftermarket, business aviation and higher service volumes. Management expects fourth-quarter revenue of approximately $28 million to $30 million.
• Positive Sentiment: The acquisition of Aydin Displays expands IA’s rugged-display capabilities and adds exposure to defense, naval, ground, industrial and medical applications. Management said its acquisition pipeline remains active and expects acquired product lines to ultimately support its approximately 50% gross-margin objective.
• Positive Sentiment: IA won its first OEM program based on the Liberty Flight Deck with a Japanese eVTOL developer, supporting an aircraft backlog of more than 400 units. Engineering is expected to begin in fiscal Q4 2026, with initial production targeted for late 2027 and broader production expected in 2028.
• Neutral Sentiment: Free cash flow reached $12.3 million through the first nine months, but net debt rose to $43.8 million after more than $35 million was deployed toward acquisitions and capital expenditures. Management reported 1.4x net leverage and approximately $53.7 million of cash and credit availability, preserving flexibility for further strategic investments.

Innovative Solutions and Support Stock Up 1.1%

Shares of ISSC stock traded up $0.24 on Friday, hitting $23.00. The company’s stock had a trading volume of 405,907 shares, compared to its average volume of 301,145. The stock has a market capitalization of $411.47 million, a price-to-earnings ratio of 21.90 and a beta of 0.59. Innovative Solutions and Support has a fifty-two week low of $8.13 and a fifty-two week high of $30.94. The firm’s fifty day moving average price is $18.61 and its 200-day moving average price is $20.83. The company has a debt-to-equity ratio of 0.68, a current ratio of 3.23 and a quick ratio of 1.53.

Hedge Funds Weigh In On Innovative Solutions and Support

Institutional investors have recently bought and sold shares of the stock. Marshall Wace LLP raised its stake in shares of Innovative Solutions and Support by 57.4% in the 4th quarter. Marshall Wace LLP now owns 754,488 shares of the aerospace company’s stock valued at $14,290,000 after acquiring an additional 275,286 shares in the last quarter. Vanguard Group Inc. raised its position in shares of Innovative Solutions and Support by 3.5% in the third quarter. Vanguard Group Inc. now owns 556,188 shares of the aerospace company’s stock valued at $6,947,000 after purchasing an additional 18,866 shares during the period. Dimensional Fund Advisors LP lifted its stake in shares of Innovative Solutions and Support by 1.5% in the fourth quarter. Dimensional Fund Advisors LP now owns 377,833 shares of the aerospace company’s stock worth $7,158,000 after buying an additional 5,525 shares during the last quarter. Punch & Associates Investment Management Inc. boosted its holdings in shares of Innovative Solutions and Support by 46.0% during the 3rd quarter. Punch & Associates Investment Management Inc. now owns 306,695 shares of the aerospace company’s stock worth $3,831,000 after buying an additional 96,695 shares during the period. Finally, Stifel Financial Corp acquired a new position in Innovative Solutions and Support in the 4th quarter valued at $5,529,000. 28.53% of the stock is currently owned by institutional investors.

Wall Street Analysts Forecast Growth

ISSC has been the topic of a number of recent research reports. Weiss Ratings downgraded Innovative Solutions and Support from a “buy (b-)” rating to a “hold (c+)” rating in a research note on Friday, June 12th. Zacks Research downgraded Innovative Solutions and Support from a “strong-buy” rating to a “hold” rating in a research note on Friday, May 15th. Finally, Wall Street Zen lowered Innovative Solutions and Support from a “buy” rating to a “hold” rating in a report on Saturday, May 23rd. Two investment analysts have rated the stock with a Strong Buy rating, one has issued a Buy rating and two have given a Hold rating to the company’s stock. Based on data from MarketBeat, the stock currently has an average rating of “Buy” and a consensus price target of $16.25.

Innovative Solutions and Support Company Profile

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.