Los 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/1683279a601/64403f22-951b-4c9c-b9c8-e193137d5314.pdf?rdr=true
Key Financial Highlights:
Q2 revenue more than doubled year-over-year to $21.9 million
Net income surged 300% to $5.3 million
Adjusted EPS for Q2 was $0.30, compared to $0.07 in Q2 2024
Adjusted EBITDA increased 219% to $7.7 million, compared to $2.4 million in Q2 2024
Operational Analysis:
The Company demonstrated significant improvement in key operational metrics during Q2 2025. The Company's strategic pivot toward military markets has transformed its growth profile, with military sales now accounting for 40-50% of total revenue (up from less than 10% in 2022), driven by $10.8 million from Honeywell-related programs and organic defense contracts.
Cost Management:
Operating expenses rose modestly to $4.3 million (19.6% of revenue), with incremental growth investments in R&D and headcount. However, operating leverage was evident as SG&A fell to 19.6% of revenue compared to 36.7% year-over-year.
Production Efficiency:
Gross margin rebounded to 51.4% (vs. 41.4% in Q1 2025) as Honeywell integration costs subsided, though management cautioned near-term lumpiness due to product mix shifts. The Exton facility expansion is on track to triple capacity by mid-2025, positioning ISSC for $250M+ revenue potential.
2025 Outlook Reaffirmed:
Management has reaffirmed its guidance for FY 2025:
Revenue growth expected to exceed 30%
EBITDA growth projected to exceed 30%
Military revenue expected to exceed 40% of total sales by FY 2025 year-end
Gross margins projected to stabilize in the mid-40% range post-integration
EBITDA margins expected to sustain >30% as scale benefits offset defense mix headwinds
Strategic Developments:
F-16 production shifts to Exton facility in Q3 2025, eliminating duplicative costs and unlocking margin recovery
Completed NetSuite ERP integration enables real-time data for inventory/labor optimization
Backlog stood at $80 million as of quarter-end, excluding long-term OEM programs
Free cash flow improved to $1.3 million (vs. $0.2M YoY) despite $1.6 million in capex for facility expansion
Contact:
Singular Research 818-222-6234 research@singularresearch.com.
About Singular Research
Singular Research aims to be the most trusted supplier of independent research, providing unbiased research on small-cap companies. Visit www.singularresearch.com for more information.
About Innovative Solutions & Support, Inc.
Innovative Solutions & Support, Inc. (NASDAQ: ISSC) is a systems integrator that designs, manufactures, sells, and services certified, safety-related equipment and systems for the aviation industry that are intended to increase efficiency, reliability, and safety. The Company's systems include Flat Panel Display Systems that are used in numerous military and commercial aircraft.
Disclaimer: This press release contains forward-looking statements and analysis based on current information. Actual results may differ materially from those projected. For full disclosures, please visit www.singularresearch.com.
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