Innovative Solutions & Support Reports Q3 GAAP EPS of $0.14, Revenue of $24.1M

Innovative Solutions and Support reported Q3 GAAP EPS of $0.14 and revenue of $24.1M, up from $11.7M in Q3/2024. Adjusted EBITDA was $4.4M, up from $3.1M in Q3/2024.

Title: Innovative Solutions and Support Reports Strong Third Quarter 2025 Results

Innovative Solutions and Support, Inc. (ISSC), a leading provider of advanced avionic solutions for commercial, business aviation, and military markets, reported its third-quarter 2025 financial results. The company reported a net revenue of $24.1 million, representing a 105.2% increase compared to the same period last year. Gross profit reached $8.6 million, up 36.7% from the previous year. Adjusted EBITDA stood at $4.4 million, an increase of 43.3% year-over-year.

The quarter was marked by significant revenue growth, driven by the recently acquired F-16 product line. However, the company expects a reduction in revenues from the F-16 product line during the next two quarters as finished inventory levels normalize. Gross margins were impacted by elevated costs on the F-16 product line due to Honeywell's efforts to expedite the building of safety stock ahead of transitioning production to ISSC's Exton facility. Once the transition is complete, the company expects to realize product-level and operational cost efficiencies, which will improve gross margins in the latter quarters of fiscal 2026.

Operating expenses increased to $5.1 million compared to $4.2 million in the third quarter of last year, reflecting incremental expenses from the Honeywell acquisitions. Net income was $2.4 million, or $0.14 per diluted share, compared to $1.6 million, or $0.09 per share, in the same period last year. Adjusted EBITDA was $4.4 million, up from $3.1 million in the third quarter of 2024.

The company's balance sheet as of June 30, 2025, shows total long-term debt of $23.3 million and cash and cash equivalents of $0.6 million, resulting in net debt of $22.7 million. Despite elevated capital expenditures during the quarter relating to the Exton facility expansion, net debt declined $3.5 million during the quarter. The company's total cash and availability under its credit line were approximately $12.3 million as of July 2025.

IS&S also reported a new five-year, $100 million committed credit agreement with a lending syndicate led and arranged by JPMorgan Chase Bank, N.A. This agreement provides an additional $65 million in expanded liquidity and an option to request up to $25 million in additional loan commitments under an accordion feature.

The company remains committed to its disciplined capital allocation strategy, focusing on delivering value for shareholders. IS&S will host a conference call on August 14, 2025, to discuss the third-quarter 2025 results.

References
[1] https://www.stocktitan.net/news/ISSC/innovative-solutions-support-reports-third-quarter-2025-r29vuewyms6d.html