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

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

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 13.7%

ISSC stock traded up $2.61 during trading on Thursday, hitting $21.59. 706,182 shares of the company’s stock traded hands, compared to its average volume of 542,289. The firm has a market capitalization of $383.78 million, a P/E ratio of 24.81 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 quick ratio of 1.50, a current ratio of 3.04 and a debt-to-equity ratio of 0.34. The business has a fifty day simple moving average of $17.83 and a two-hundred day simple moving average of $13.97.

Analysts Set New Price Targets

ISSC has been the subject of several analyst reports. Craig Hallum began coverage on shares of Innovative Solutions and Support in a report on Friday, December 5th. They issued a “buy” rating and a $16.00 target price for the company. Northland Securities initiated coverage on shares of Innovative Solutions and Support in a research note on Friday, November 21st. They issued an “outperform” rating and a $16.50 price objective for the company. Wall Street Zen raised Innovative Solutions and Support from a “hold” rating to a “buy” rating in a research note 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, Weiss Ratings restated a “hold (c+)” rating on shares of Innovative Solutions and Support in a report on Thursday, January 22nd. Four research analysts have rated the stock with a Strong Buy rating, one has issued a Buy rating and one has assigned a Hold rating to the company. According to MarketBeat, Innovative Solutions and Support has a consensus rating of “Strong Buy” and a consensus target price of $16.25.

Institutional Investors Weigh In On Innovative Solutions and Support

A number of hedge funds have recently made changes to their positions in the stock. Jane Street Group LLC grew its stake in Innovative Solutions and Support by 53.5% in the first quarter. Jane Street Group LLC now owns 48,250 shares of the aerospace company’s stock valued at $303,000 after purchasing an additional 16,808 shares during the last quarter. Geode Capital Management LLC boosted its holdings in shares of Innovative Solutions and Support by 0.6% in the 2nd quarter. Geode Capital Management LLC now owns 123,258 shares of the aerospace company’s stock valued at $1,711,000 after buying an additional 725 shares in the last quarter. JPMorgan Chase & Co. purchased a new position in shares of Innovative Solutions and Support in the 2nd quarter worth approximately $848,000. American Century Companies Inc. grew its position in shares of Innovative Solutions and Support by 21.9% in 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 last quarter. Finally, Arrowstreet Capital Limited Partnership raised its stake in shares of Innovative Solutions and Support by 415.2% during the 2nd quarter. Arrowstreet Capital Limited Partnership now owns 157,250 shares of the aerospace company’s stock worth $2,183,000 after acquiring an additional 126,729 shares in the last quarter. 28.53% of the stock is currently owned by hedge funds and other institutional investors.

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.