Innovative Solutions and Support (NASDAQ:ISSC) Releases Quarterly Earnings Results, Beats Estimates By $0.15 EPS

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

Shares of Innovative Solutions and Support stock traded up $2.49 on Thursday, reaching $21.47. 698,964 shares of the stock were exchanged, compared to its average volume of 542,289. The company has a current ratio of 3.04, a quick ratio of 1.50 and a debt-to-equity ratio of 0.34. The firm has a market capitalization of $381.67 million, a PE 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 business has a fifty day moving average price of $17.83 and a two-hundred day moving average price of $13.97.

Analysts Set New Price Targets

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

Institutional Investors Weigh In On Innovative Solutions and Support

Several institutional investors have recently made changes to their positions in ISSC. Global Retirement Partners LLC acquired a new stake in shares of Innovative Solutions and Support in the 4th quarter worth approximately $36,000. Bank of America Corp DE grew its holdings in 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 last quarter. Quantbot Technologies LP acquired a new stake in Innovative Solutions and Support in the third quarter valued at $160,000. American Century Companies Inc. increased its position in shares of Innovative Solutions and Support by 21.9% in the second quarter. American Century Companies Inc. now owns 12,386 shares of the aerospace company’s stock valued at $172,000 after buying an additional 2,228 shares in the last quarter. Finally, Squarepoint Ops LLC acquired a new position in shares of 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.

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.