Innovative Solutions and Support(ISSC) - 2025 Q4 - Annual Results

Financial Performance - Fourth quarter net sales reached $22.2 million, an increase of 44.6% year-over-year[4] - Full-year net sales totaled $84.3 million, reflecting a growth of 78.6% compared to the previous year[4] - Gross profit for the fourth quarter was $14.1 million, with a gross margin of 63.2%, up from 55.4% in the prior year[13][14] - Adjusted EBITDA for the fourth quarter was $9.6 million, representing a 71.1% increase year-over-year[4][15] - The company ended fiscal 2025 with a net income of $15.6 million, or $0.88 per diluted share, compared to $8.3 million, or $0.46 per diluted share in the previous year[4] - Operating income for the three months ended September 30, 2025, was $8,229,520, up 88.5% from $4,366,168 in the prior year[35] - Net income for the twelve months ended September 30, 2025, was $15,627,660, compared to $6,998,380 in 2024, representing a 123.4% increase[35] Cash Flow and Liquidity - Operating cash flow for fiscal 2025 was $13.3 million, a significant increase from $5.8 million in the previous year[19] - Free cash flow for fiscal 2025 was $6.8 million, compared to $5.1 million in the prior year, marking a 32.2% increase[19] - Total available liquidity as of September 30, 2025, was $77.7 million, including $2.7 million in cash and $75 million available under the credit line[18] - Free cash flow for the twelve months ended September 30, 2025, was $6,791,212, an increase from $5,138,433 in 2024[37] Growth and Future Outlook - New orders in the fourth quarter amounted to $27.2 million, with a backlog of $77.4 million as of September 30, 2025[17] - The company aims for $250 million in revenue and an Adjusted EBITDA margin of 25-30% by fiscal 2029[5][7] - The company anticipates continued growth through new product development and market expansion, with a focus on integrating Honeywell product lines[31] Balance Sheet and Assets - Total assets increased to $103,360,153 as of September 30, 2025, compared to $82,382,261 in 2024, marking a growth of 25.4%[34] - Current liabilities rose to $16,661,109 as of September 30, 2025, from $7,265,254 in 2024, reflecting a significant increase[34] - The leverage ratio improved to 0.9x as of September 30, 2025, down from 2.0x in 2024, indicating a stronger balance sheet[39] Research and Development - Research and development expenses for the twelve months ended September 30, 2025, were $3,992,086, slightly down from $4,137,985 in 2024[35]