Singular Research Reports on Innovative Solutions & Support's Q2 2025 ResultsMay 27, 2025 9:00 AM EDT | Source: Singular ResearchLos Angeles, California--(Newsfile Corp. - May 27, 2025) - Singular Research, a leading provider of independent research on small-cap companies, today released its analysis of Innovative Solutions & Support, Inc.'s (NASDAQ: ISSC) second quarter fiscal year 2025 financial results.A link to the report is available here: https://files.constantcontact.com/1683279a601/644 ...

Innovative Solutions And Support (NASDAQ: ISSC ) was severely punished this year after reporting poor Q1 2025 profitability. However, I commented at the time that this appeared to be temporary. In its recent Q2 2025 report, theMy name is María Fernanda and I'm currently studying an MBA. My inspiration investors are Warren Buffett, Peter Lynch and Terry Smith, so I look for quality companies at a reasonable valuation. I believe that, in the long term, fundamentals are what drive the share price, so I look to ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 001-41503 INNOVATIVE SOLUTIONS AND SUPPORT, INC. | Title of each class | Trading Symbol(s) | Name of each exchange on which regi ...

Innovative Solutions & Support (ISSC) Q2 2025 Earnings Call May 15, 2025 09:00 AM ET Company Participants Paul Bartolai - Investor RelationsShahram Askarpour - Chief Executive OfficerJeffrey DiGiovanni - Chief Financial OfficerDouglas Ruth - PresidentAndrew Rem - Portfolio Manager Conference Call Participants Gowshihan Sriharan - Analyst Operator Good day, and welcome to the Innovative Solutions and Support second quarter twenty twenty five results conference call and webcast. All participants will be in th ...

Innovative Solutions & Support (ISSC) Q2 2025 Earnings Call May 15, 2025 09:00 AM ET Speaker0 Good day, and welcome to the Innovative Solutions and Support second quarter twenty twenty five results conference call and webcast. All participants will be in the listen only mode. Should you need assistance, please signal the conference specialist by pressing the star key followed by 0. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press then 1 on your tele ...

Exhibit 99.1 INNOVATIVE SOLUTIONS & SUPPORT REPORTS SECOND QUARTER 2025 RESULTS Exton, PA, May 14, 2025 – Innovative Solutions & Support, Inc. (Nasdaq: ISSC) ("IS&S" or the "Company"), a leading provider of advanced avionic solutions for commercial, business aviation and military markets, today reported fiscal second quarter financial results for the three-month period ended March 31, 2025. SECOND QUARTER 2025 HIGHLIGHTS (all comparisons versus the prior year period unless otherwise noted) MANAGEMENT COMMEN ...

Core Insights - Innovative Solutions and Support (NASDAQ: ISSC) has experienced high sales growth following the acquisition of Honeywell product lines, but this has negatively impacted profit margins [1]. Group 1 - The company develops avionics systems and has seen significant sales growth due to the recent acquisition [1]. - The acquisition of Honeywell product lines has led to both increased revenue and challenges in maintaining profit margins [1].

Group 1 - The aerospace and defense contractors are facing challenges due to President Trump's announcement of significant budget cuts to the defense budget [1] - The Trump Administration's objective is to reduce the defense budget, which has implications for contractors working with the U.S. Department of Defense [1] Group 2 - The article does not provide any additional relevant information regarding companies or industries beyond the defense sector [2][3]

Financial Performance - For the three months ended December 31, 2024, total net sales increased, with product sales at 62.5% and service sales at 37.5% compared to 47.5% and 52.5% respectively in 2023[150] - Gross profit margin decreased to 41.4% in 2024 from 59.3% in 2023, indicating a significant decline in profitability[150] - Operating income fell to 8.4% in 2024 from 17.4% in 2023, reflecting challenges in maintaining profitability[150] - Net income decreased to 4.5% in 2024 compared to 11.4% in 2023, highlighting a decline in overall financial performance[150] - Net income for the three months ended December 31, 2024 was $0.7 million, down from $1.1 million in the same period of 2023, with diluted net income per share decreasing to $0.04 from $0.06[160] Sales and Cost Analysis - The cost of sales for products rose to 39.2% from 19.1%, while service costs decreased slightly to 19.4% from 21.6%, leading to a total cost of sales of 58.6% in 2024 compared to 40.7% in 2023[150] - Cost of sales was $9.4 million, or 58.6% of net sales, for the three months ended December 31, 2024, compared to $3.8 million, or 40.7% of net sales, for the same period in 2023, resulting in a gross margin decrease to 41.4% from 59.3%[153] - Operating expenses as a percentage of net sales decreased to 33.0% in 2024 from 42.0% in 2023, with research and development expenses at 7.0% and selling, general and administrative expenses at 26.0%[150] - Selling, general, and administrative expenses rose by $1.2 million, or 38.3%, to $4.2 million, accounting for 26.0% of sales compared to 32.3% in the prior year[155] Acquisitions and Strategic Initiatives - The company completed the acquisition of certain assets from Honeywell for a total consideration of $35.9 million in June 2023, followed by additional acquisitions totaling $4.2 million in July 2024 and $14.2 million in September 2024[135][136][137] - The strategic acquisitions from Honeywell are expected to enhance the company's offerings in air transport, military, and business aviation markets, potentially leading to cost synergies[138] - The company announced a multi-million dollar production contract for its 19" Multifunction Display with Integrated Mission Computer, enhancing its commercial growth strategy[178] Research and Development - The company continues to focus on research and development, with plans to invest in new product development while expensing associated R&D costs as incurred[140] - Research and development expenses increased to $1.1 million for the three months ended December 31, 2024, representing 7.0% of net sales, down from 9.7% in the same period of 2023[154] Market and Operational Risks - The company operates in a competitive environment, facing risks related to market acceptance of its products and potential economic downturns affecting customer spending[124][143] - The Company is exposed to market risks primarily due to changes in interest rates, with a hypothetical 1% increase potentially affecting interest income and cash flows by approximately $5,030 for the three months ended December 31, 2024[180] Backlog and Revenue Recognition - The company's backlog at December 31, 2024 was $80.8 million, down from $89.2 million at September 30, 2024, with $74.3 million of acquired backlog from a recent acquisition[177] - The company expects to recognize approximately 65% of its backlog as revenue over the next 12 months and about 98% over the next 24 months[177] Financial Position and Controls - Cash and cash equivalents increased to $604,561 as of December 31, 2024, compared to $538,977 as of September 30, 2024, while net cash provided by operating activities was $1.8 million[161][171] - The Company has no off-balance sheet arrangements or relationships with unconsolidated entities[179] - The Company's disclosure controls and procedures were evaluated as effective as of December 31, 2024, ensuring timely and accurate reporting[181] - There were no changes in the Company's internal control over financial reporting that materially affected its operations during the fiscal quarter ended December 31, 2024[182] - The Company is subject to various legal proceedings, but does not believe any pending matters will materially affect its financial position[183]

Financial Performance - The company achieved over 70% year-over-year revenue growth in Q1 2025, driven by new military programs and contributions from legacy platforms [7][20] - Gross profit increased approximately 20%, although margins were impacted by significant investments in growth initiatives [8][22] - Net income for Q1 was $700,000, or $0.04 per share, compared to $1.1 million, or $0.06 per share, in the previous year [27] - EBITDA for Q1 was $2.7 million, a 28% increase from $2.1 million last year, with adjusted EBITDA at $3.1 million, up from $2.5 million [27][30] Business Line Performance - Product sales reached $10 million, more than double last year's levels, primarily due to the recently acquired Honeywell military product line [21] - Service revenue was $6 million, driven by customer service sales from the Honeywell product lines and increased NRE revenue [21] Market Performance - The backlog as of December 31, 2024, was approximately $81 million, significantly up from $14.6 million in the prior year [8][27] - The company expects continued growth in military markets, which are anticipated to remain strong [7][17] Company Strategy and Industry Competition - The company is focused on its long-term value creation strategy, ISSCnext, which emphasizes commercial growth in high-value markets and disciplined capital allocation [9] - Significant investments are being made in infrastructure and systems capabilities to support defense customer requirements, including a modern ERP system [10][12] - The company aims to remain a strategic acquirer, focusing on complementary product lines and smaller avionics manufacturers [18] Management Commentary on Operating Environment and Future Outlook - Management expressed confidence in the growth opportunities across commercial air transportation, aviation, and military markets, with expectations for revenue and EBITDA growth of over 30% compared to fiscal year 2024 [19][17] - The company is optimistic about the integration of the Honeywell acquisition and the expected benefits from the new ERP system [19][86] Other Important Information - The company has increased its headcount by over 25% to support growth initiatives [14] - Capital expenditures were $300,000 in Q1, up from $200,000 in the same period last year [31] Q&A Session Summary Question: Strategies for gaining market share in military revenue - The company is working to become a Tier 1 supplier to the Department of Defense by ensuring compliance with DFARS and enhancing IT capabilities [38][39] Question: Margin profiles of foreign military engagements - Foreign military sales treated as commercial deals can yield better margins compared to domestic contracts [44][46] Question: Anticipated margin profile with military business mix - The company expects gross margins around 50% for military programs, focusing on EBITDA as a more relevant metric [52][100] Question: Balancing infrastructure investments with acquisitions - Current infrastructure and strategic initiatives are funded through operations and credit facilities, with a focus on maintaining a leverage ratio around three times [55] Question: Acquisition strategy and sourcing opportunities - The company utilizes a Business Development VP with M&A experience and maintains relationships with bankers to identify acquisition opportunities [62][66] Question: Transition of manufacturing from Honeywell - The transition is expected to occur in Q3, with potential revenue upticks anticipated from the Honeywell military product line [81][83] Question: Financial benefits from ERP implementation - The new ERP system is expected to improve data management and operational efficiencies, leading to better decision-making [86][88]