Innovative Solutions and Support Inc (ISSC) Q2 2025 Earnings Call Highlights: Record Revenue ...

GuruFocus News

Fri, May 16, 2025, 12:09 AM 3 min read

Release Date: May 15, 2025

For the implicit transcript of the net call, delight notation to the full net telephone transcript.

• Innovative Solutions and Support Inc (NASDAQ:ISSC) reported implicit 100% maturation successful revenue, driven by caller subject programs and bequest platforms.

• The institution achieved a important summation successful EBITDA and profit, with EBITDA up by implicit 260% and nett by implicit 300% from the erstwhile year.

• ISSC has a beardown backlog of astir $80 million, indicating sustained concern momentum.

• The institution is expanding its Exton, Pennsylvania facility, which volition triple accumulation capabilities, positioning it good for aboriginal growth.

• ISSC's acquisition strategy, including the integration of H1ywell's merchandise lines, is progressing good and expected to heighten aboriginal gross streams.

• Gross margins are expected to stay volatile owed to the premix of acquired products and the inherent little margins successful subject sales.

• The integration of H1ywell's merchandise lines involves duplicative costs and imaginable proviso concatenation challenges.

• Despite gross growth, determination is unit connected margins owed to acquisition-related costs and inventory adjustments.

• The institution faces uncertainties related to proviso concatenation issues, peculiarly with the modulation of H1ywell's production.

• Operating expenses accrued modestly, driven by merchandise improvement efforts and accrued headcount, which could interaction profitability if not managed carefully.

• Warning! GuruFocus has detected 3 Warning Signs with ISSC.

Q: Can you supply much details connected the pull-forward of H1ywell merchandise lines and its interaction connected FY25 guidance? A: We don't expect further delays post-transition. The modulation involves proviso concatenation issues with H1ywell, but we are moving intimately with them and Lockheed. We are assured successful achieving implicit 30% maturation for FY25. CEO Shaam Ascopour

Q: What is driving the betterment successful aerial transport revenue, and however does the pipeline look amid precocious involvement rates? A: The betterment is driven by precocious request for aftermarket upgrades owed to accumulation delays from Airbus and Boeing. Interest rates person minimal interaction connected our operations, and we expect this inclination to continue. CEO Shaam Ascopour

Q: How should we presumption gross margins arsenic H1ywell accumulation transitions to your facility? A: Gross margins are volatile owed to merchandise premix variability from acquisitions. We absorption much connected EBITDA and nett margins alternatively than gross margins. CEO Shaam Ascopour

Q: What percent of income were to the Department of Defense, and bash you expect this to continue? A: Approximately 40% of income were military-related, and we expect this percent to clasp for the year. CFO Jeff DiGiovanni