Innovative Solutions & Support Skyrockets After Crushing Q2 Expectations

Key Highlights:

• Q2 revenue doubled YoY to $21.9M; Adjusted EBITDA surged 219%
• Strong demand from F-16 and Honeywell defense product lines
• Stock rallies over 35% as investors cheer robust growth and guidance

Shares of Innovative Solutions & Support, Inc. (NASDAQ: ISSC) surged 35.4% to $9.95 in Thursday morning trade after the aerospace electronics provider delivered a stellar fiscal Q2 performance that significantly beat Street expectations and reinforced bullish investor sentiment around its defense-driven growth strategy.

The Pennsylvania-based company reported net revenue of $21.9 million for the quarter ended March 31, 2025, marking a 104% increase year-over-year. The standout driver was strong demand for its F-16 product line and the recently acquired Honeywell military assets, which accelerated both top-line and margin growth. Adjusted EBITDA jumped 219% to $7.7 million, showcasing operating leverage and scalability within its vertically integrated model.

Net income came in at $5.3 million, or $0.30 per diluted share—up sharply from $1.2 million, or $0.07 per share, in the year-ago period. Gross profit doubled to $11.3 million, maintaining a strong margin of 51.4%, even amid infrastructure investments and workforce expansion.

CEO Shahram Askarpour noted the quarter’s performance “keeps us on track” to achieve full-year targets of more than 30% growth in revenue and EBITDA. The expansion of the company’s Exton facility, slated to triple production capacity, remains on schedule for mid-year completion—an important move to support the growing military backlog, which currently stands at $79.6 million.

Aiding sentiment further, IS&S reaffirmed its long-term strategic roadmap, pointing to continued investments in ERP integration, product scalability, and U.S.-based manufacturing capabilities. CFO Jeffrey DiGiovanni emphasized the company’s robust liquidity position, with over $8.8 million in available capital through cash and credit facilities.

While capital expenditures rose to $1.8 million in H1, the company still generated $1.3 million in free cash flow, balancing growth investment with financial discipline.

With strong fundamentals, rising defense demand, and a promising commercial aviation rebound, Innovative Solutions & Support appears firmly on a high-growth trajectory, reinforcing investor conviction in its long-term value proposition.