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

Innovative Solutions and Support (NASDAQ:ISSC – Get Free Report) posted 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 firm had revenue of $21.81 million during the quarter, compared to the consensus estimate of $18.82 million. Innovative Solutions and Support had a net margin of 21.02% and a return on equity of 31.80%.

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 Down 4.5%

Shares of ISSC opened at $19.83 on Friday. Innovative Solutions and Support has a 52-week low of $5.30 and a 52-week high of $23.80. The company has a market capitalization of $352.54 million, a PE ratio of 18.89 and a beta of 0.64. The stock has a fifty day simple moving average of $18.24 and a two-hundred day simple moving average of $14.05. The company has a quick ratio of 1.50, a current ratio of 3.04 and a debt-to-equity ratio of 0.34.

Analyst Upgrades and Downgrades

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

Read Our Latest Analysis on Innovative Solutions and Support

Trending Headlines about Innovative Solutions and Support

Here are the key news stories impacting Innovative Solutions and Support this week:

• Positive Sentiment: Q1 beat on both EPS and revenue: ISSC reported $0.25 EPS vs. consensus ~$0.10 and revenue of $21.8M vs. ~$18.8M, confirming the quarter materially outperformed estimates. Innovative Solutions and Support, Inc. (ISSC) Q1 Earnings and Revenues Beat Estimates
• Positive Sentiment: Significant margin and profitability improvement: gross margin expanded (~54.5%) and operating income rose to ~$6.3M, driven by higher‑margin aftermarket sales and disciplined costs — supporting higher profitability going forward. Management reiterated long‑term targets ($250M revenue and 25–30% EBITDA margin). Innovative Solutions Q1 2026 Earnings Show Strong Growth Despite F-16 Timing Effects
• Neutral Sentiment: Earnings call/transcript and replay available for deeper color — useful for investors who want management’s detail on backlog, margins and timing. Innovative Aerosystems, Inc. (ISSC) Q1 2026 Earnings Call Transcript
• Neutral Sentiment: Comparative performance coverage: sector pieces note ISSC has outpaced some aerospace peers year‑to‑date, which may influence relative valuation discussions. Has Innovative Solutions and Support (ISSC) Outpaced Other Aerospace Stocks This Year?
• Negative Sentiment: Near‑term revenue timing risk: management said organic revenue is expected to be roughly flat year‑over‑year because certain F‑16 revenues were pulled forward, creating a timing headwind — this can pressure short‑term top‑line growth despite strong margins. Innovative Solutions Q1 2026 Earnings Show Strong Growth Despite F-16 Timing Effects
• Neutral Sentiment: Short‑interest data posted in market feeds looks erroneous (shows 0 shares and NaN changes); no clear evidence of a meaningful short squeeze or squeeze risk at present. (Data reliability note.)

Institutional Investors Weigh In On Innovative Solutions and Support

Several hedge funds and other institutional investors have recently bought and sold shares of ISSC. Jane Street Group LLC raised its stake in Innovative Solutions and Support by 53.5% during the first quarter. Jane Street Group LLC now owns 48,250 shares of the aerospace company’s stock worth $303,000 after purchasing an additional 16,808 shares during the period. Geode Capital Management LLC raised its position in shares of Innovative Solutions and Support by 0.6% during 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 during the period. JPMorgan Chase & Co. purchased a new stake in shares of Innovative Solutions and Support during the 2nd quarter valued at approximately $848,000. American Century Companies Inc. lifted its holdings in 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 acquiring an additional 2,228 shares during the last quarter. Finally, Arrowstreet Capital Limited Partnership grew its position in Innovative Solutions and Support by 415.2% in the second 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 during the period. 28.53% of the stock is currently owned by institutional investors and hedge funds.

About Innovative Solutions and Support

(Get Free Report)

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.

Recommended Stories

• Five stocks we like better than Innovative Solutions and Support
• ALERT: Drop these 5 stocks before January 2026!
• Think You Missed Silver? You’re Wrong. Here’s Why.
• Your Bank Account Is No Longer Safe
• Will Social Security checks vanish by 2027?
• Is Trump Done? Shocking leak…