To that end, I will now provide an update on our progress on the IA Next, our long-term value creation strategy. Our IA Next strategy prioritizes profitable growth, sustained operational excellence and disciplined capital allocation as key drivers of long-term value creation. This framework is the mechanism by which we intend to deliver on our long-term target of $250 million in revenue and adjusted EBITDA margins of between 25% to 30%, driven by a combination of organic and inorganic growth. Our strong fis ...

Company Performance - Innovative Solutions and Support, Inc. (ISSC) reported fourth quarter fiscal 2025 sales of $22.2 million, reflecting a year-over-year growth of 44.6% [2] - The company's earnings per share (EPS) were 39 cents, indicating a year-over-year growth of 116.7% [2] - The consensus EPS estimate for the upcoming quarter is $0.07, representing a year-over-year change of +75%, with expected revenues of $18.29 million, up 14.5% from the previous year [4] Market Reaction - ISSC shares increased by 9.8% in the last trading session, closing at $18.23, with notable trading volume [1] - The stock has gained 85.9% over the past four weeks, indicating strong investor demand and market confidence [1][2] Product and Industry Position - ISSC plays a significant role in aircraft modernization and retrofit programs, providing in-house design, manufacturing, installation, and support [3] - The introduction of the new Liberty Flight Deck, a customizable cockpit solution, is expected to enhance future growth and strengthen the company's market position [3] Earnings Estimate Trends - The consensus EPS estimate for ISSC has been revised 133.3% higher over the last 30 days, suggesting potential price appreciation [5] - Positive trends in earnings estimate revisions are correlated with near-term stock price movements, indicating a favorable outlook for ISSC [4][5] Industry Comparison - ISSC belongs to the Zacks Aerospace - Defense Equipment industry, where another company, Woodward (WWD), has also shown positive performance with a 3% increase in the last trading session [5] - Woodward's consensus EPS estimate has changed +6.2% over the past month, reflecting a +21.5% change from the previous year [6]

Core Insights - Innovative Solutions and Support Inc. (ISSC) is recognized as a strong investment opportunity in the aerospace and defense sector by Wall Street analysts [1][2] - The company reported a significant increase in revenue and net income for the fourth quarter and full year of fiscal 2025, indicating robust operational performance [1][2] Financial Performance - Fourth-quarter revenue increased by 44.6% to $22.2 million, driven by higher throughput and contributions from newly acquired Honeywell product lines [1] - For the full year, revenue rose by 78.6% to $84.3 million, with net income more than doubling to $7.1 million [2] - Gross margin improved to 63.2%, and Adjusted EBITDA reached $24.8 million [2] - The company ended the year with $21.7 million in net debt and total liquidity of $77.7 million [2] Operational Developments - Fiscal 2025 was characterized by meaningful operational progress, including investments in manufacturing capacity, engineering, sales, and digital infrastructure [3] - The company completed its rebranding to Innovative Aerosystems and integrated F-16 production into its Exton facility [3] - A significant milestone was the launch of the Liberty Flight Deck, a customizable cockpit platform that received strong interest during its unveiling [3] Future Outlook - The company anticipates building on its recent progress, with a backlog of $77.4 million supported by steady order activity [4] - Innovative Aerosystems reaffirmed its long-term goal of achieving $250 million in revenue and a 25-30% Adjusted EBITDA margin by fiscal 2029, driven by organic growth and targeted acquisitions [4] Company Overview - Innovative Solutions and Support, Inc. designs, manufactures, and services advanced cockpit systems and avionics for military, commercial, and business aircraft [5]

Core Insights - Innovative Solutions and Support Inc. (ISSC) is recognized as a strong investment opportunity in the aerospace and defense sector by Wall Street analysts [1][2] - The company reported a significant increase in revenue and net income for the fourth quarter and full year of fiscal 2025, indicating robust operational performance [1][2] Financial Performance - Fourth-quarter revenue increased by 44.6% to $22.2 million, driven by higher throughput and contributions from newly acquired Honeywell product lines [1] - For the full year, revenue rose by 78.6% to $84.3 million, with net income more than doubling to $7.1 million [2] - Gross margin improved to 63.2%, and Adjusted EBITDA reached $24.8 million [2] - The company ended the year with $21.7 million in net debt and total liquidity of $77.7 million [2] Operational Developments - Fiscal 2025 was characterized by meaningful operational progress, including investments in manufacturing capacity, engineering, sales, and digital infrastructure [3] - The company completed its rebranding to Innovative Aerosystems and advanced strategic initiatives such as integrating F-16 production into its Exton facility and launching a new ERP system [3] - A notable achievement was the launch of the Liberty Flight Deck, a customizable cockpit platform that garnered strong interest during its unveiling [3] Future Outlook - The company anticipates building on its recent progress, with a backlog of $77.4 million supported by steady order activity across core programs [4] - Innovative Aerosystems reaffirmed its long-term goal of achieving $250 million in revenue and a 25-30% Adjusted EBITDA margin by fiscal 2029, driven by organic growth and targeted acquisitions [4] Company Overview - Innovative Solutions and Support, Inc. designs, manufactures, and services advanced cockpit systems and avionics for military, commercial, and business aircraft [5]

Financial Data and Key Metrics Changes - Fourth quarter revenue increased by 45% year-over-year to $22 million, with full-year revenue reaching $84 million, up nearly 80% from the previous year [5][6] - Fourth quarter net income was $7.1 million, or $0.39 per diluted share, compared to $3.2 million, or $0.18 per diluted share, in the prior year [25] - Adjusted EBITDA for the fourth quarter was $9.6 million, a 71% increase from $5.6 million in the previous year, while full-year adjusted EBITDA was $25 million, up just over 80% [6][25] Business Line Data and Key Metrics Changes - Product sales in the fourth quarter were $14.3 million, up from $9.8 million, driven by strong demand in the air transport sector [22] - Service revenue was $7.9 million, including $300,000 from the F-16 program and an increase of $1.3 million in non-recurring engineering services [22] - Gross profit for the fourth quarter was $14.1 million, up from $8.5 million, resulting in a gross margin of 63.2%, compared to 55.4% in the same period last year [23] Market Data and Key Metrics Changes - New orders in the fourth quarter were approximately $27 million, with a backlog of about $77 million as of September 30, 2025 [25][26] - The company expects to return to normal production levels for the F-16 in the first half of Fiscal 2026, following a pause in production during the transition to the Exton facility [22] Company Strategy and Development Direction - The company rebranded to Innovative Aerosystems to reflect its focus on advanced avionics solutions for various aviation markets [4] - The strategic framework includes a long-term target of $250 million in revenue with adjusted EBITDA margins of 25%-30%, driven by organic and inorganic growth [7][19] - Key growth initiatives include new product development, cross-selling, and expansion of military capabilities, particularly with the F-16 program [8][9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's position to benefit from foundational investments made in recent years, with favorable end-market trends and a solid financial position [19] - The outlook for Fiscal 2026 anticipates organic revenue growth to be more modest due to the pull forward of revenues related to the F-16 platform [29][30] Other Important Information - The company completed a new five-year $100 million credit agreement, providing additional liquidity to support growth and acquisitions [17] - The engineering team has expanded significantly, representing a third of the total headcount, which is critical for achieving long-term growth objectives [12][13] Q&A Session Summary Question: Is the strength in sales driven by the F-16 or other military programs? - Management clarified that the sales strength is not solely related to the F-16, with approximately $2 million in revenue from the C-130 and other Boeing programs [32][33] Question: What are the assumptions underpinning the 2029 revenue targets? - The $250 million revenue target assumes high single-digit organic growth, supported by a disciplined acquisition strategy [34][35] Question: What are the expectations for gross margins moving forward? - Management projected EBITDA margins in the range of 25%-30%, driven by growth and investments in R&D [36][37] Question: What feedback was received on the Liberty Flight Deck? - Customers appreciated the customizable design and the ability to meet specific needs without significant non-recurring engineering costs [40][41] Question: What is the expected trajectory of revenue in the next four quarters? - Management refrained from providing specific forward-looking guidance but emphasized the focus on achieving the $250 million revenue target [57]

Financial Data and Key Metrics Changes - Fourth quarter revenue increased by 45% year over year to $22 million, with full year revenue reaching $84 million, up nearly 80% from the previous year [5][6] - Fourth quarter net income was $7.1 million or $0.39 per diluted share, compared to $3.2 million or $0.18 per diluted share in the prior year [25] - Adjusted EBITDA for the fourth quarter was $9.6 million, a 71% increase from the previous year, while full year adjusted EBITDA was $25 million, up just over 80% [6][7] Business Line Data and Key Metrics Changes - Product sales in the fourth quarter were $14.3 million, up from $9.8 million in the same period last year, driven by strong demand in the air transport sector [22] - Service revenue was $7.9 million, including $300,000 from the F-16 program and an increase of $1.3 million in non-recurring engineering services [22] - Gross profit for the fourth quarter was $14.1 million, up from $8.5 million, resulting in a gross margin of 63.2%, up from 55.4% in the prior year [23] Market Data and Key Metrics Changes - The company reported a backlog of approximately $77 million as of September 30, 2025, with new orders in the fourth quarter totaling around $27 million [25][26] - The air transport market and business aviation sectors contributed significantly to revenue growth, with increased demand noted in the retrofit market [47] Company Strategy and Development Direction - The company rebranded to Innovative Aerosystems to better reflect its focus on advanced avionics solutions for various aviation markets [4] - The strategic framework includes a long-term target of $250 million in revenue with adjusted EBITDA margins of 25% to 30%, driven by both organic and inorganic growth [7][18] - Key growth initiatives include new product development, cross-selling, and expansion of military capabilities, particularly with the F-16 program [8][9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's position to benefit from foundational investments made in recent years, with expectations for continued profitable growth [19] - The outlook for Fiscal 2026 anticipates organic revenue growth to be more modest due to the pull forward of revenues related to the F-16 platform [29][30] - The company plans to drive growth through market share gains, new product development, and disciplined organic growth strategies [30] Other Important Information - The company completed a five-year $100 million credit agreement, providing improved liquidity and flexibility for strategic initiatives [17] - Significant investments were made in engineering and infrastructure to support growth, including the expansion of the Exton facility [15][16] Q&A Session Summary Question: Is the strength in sales driven by military programs related to the F-16? - Management clarified that the strength is not solely from the F-16, with contributions also from the C-130 and other Boeing programs [32][33] Question: What are the assumptions underpinning the $250 million revenue target? - The target assumes high single-digit organic growth, supported by a disciplined acquisition strategy [35] Question: What did customers like most about the Liberty Flight Deck? - Customers appreciated the customizable design and the ability to meet specific needs without significant non-recurring engineering costs [40][41] Question: What should be expected in terms of capital expenditures in the next year? - Management indicated that major shifts in capital expenditures are not expected following the completion of the Exton facility expansion [60]

Financial Data and Key Metrics Changes - Fourth quarter revenue increased by 45% year over year to $22 million, with full year revenue reaching $84 million, up nearly 80% from the previous year [5][24] - Fourth quarter net income was $7.1 million or $0.39 per diluted share, compared to $3.2 million or $0.18 per diluted share in the prior year [5][24] - Adjusted EBITDA for the fourth quarter was $9.6 million, a 71% increase from the previous year, with full year adjusted EBITDA at $25 million, up just over 80% [5][6][24] Business Line Data and Key Metrics Changes - Product sales in the fourth quarter were $14.3 million, up from $9.8 million, driven by strong demand in the air transport sector [21] - Service revenue was $7.9 million, including $300,000 from the F-16 program and an increase of $1.3 million in non-recurring engineering services [22] - Gross profit for the fourth quarter was $14.1 million, a 65% increase from $8.5 million in the same period last year, with a gross margin of 63.2%, up from 55.4% [22][23] Market Data and Key Metrics Changes - New orders in the fourth quarter were approximately $27 million, with a backlog of about $77 million as of September 30, 2025 [24][25] - The company expects to return to normal production levels for the F-16 in the first half of Fiscal 2026, following a pause in production [20] Company Strategy and Development Direction - The company rebranded to Innovative Aerosystems to reflect its focus on advanced avionics solutions for various aviation markets [4] - The strategic framework includes a long-term target of $250 million in revenue and adjusted EBITDA margins of 25% to 30% [7][19] - Key growth initiatives include new product development, expansion of military capabilities, and enhancements to integrated avionics solutions [8][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver profitable growth, supported by a solid financial position and favorable end-market trends [19] - The company anticipates organic revenue growth to be more modest in Fiscal 2026 due to the pull forward of revenues related to the F-16 platform [27][28] Other Important Information - The company completed a new five-year $100 million credit agreement, providing additional liquidity to support growth and acquisitions [17] - Significant investments were made in engineering and infrastructure to support future growth, including a 50% increase in the engineering team [12][16] Q&A Session Summary Question: Is the strength in sales driven by the F-16 or other military programs? - Management clarified that the strength is not solely related to the F-16, with contributions from the C-130 and other Boeing programs [29][30] Question: What are the assumptions underpinning the $250 million revenue target? - The target assumes high single-digit organic growth, supplemented by a disciplined acquisition strategy [30] Question: What is the outlook for gross margins? - Management projected EBITDA margins in the range of 25% to 30%, driven by growth and operating expense management [31] Question: What feedback was received on the Liberty Flight Deck? - Customers appreciated the customization options and the ability to meet specific needs without significant non-recurring engineering costs [32][33] Question: What contributed to the strong Q4 results? - Increased demand in the retrofit market and a comeback in business aviation were noted as key contributors [35] Question: What is the expected revenue trajectory for the next year? - Management did not provide specific forward-looking guidance but emphasized the focus on achieving the $250 million revenue target [42]