EXTON, PA — Innovative Solutions & Support, Inc., operating as Innovative Aerosystems (Nasdaq: ISSC), reported sharply higher revenue, profits, and cash flow for its fiscal fourth quarter and full year ended September 30, 2025, marking what management called a transformational year for the aerospace and defense supplier.
Fourth-quarter net sales rose 44.6 percent to $22.2 million, driven by military program momentum, a favorable sales mix, and contributions from acquired Honeywell product lines. Net income more than doubled to $7.1 million, or $0.39 per diluted share, while adjusted EBITDA climbed 71.1 percent to $9.6 million. Gross margin expanded to 63.2 percent, reflecting higher throughput and improved operating leverage.
For the full fiscal year, revenue increased 78.6 percent to $84.3 million. Net income reached $15.6 million, or $0.88 per diluted share, and adjusted EBITDA grew 81.6 percent to $24.8 million. Operating cash flow rose to $13.3 million, and free cash flow totaled $6.8 million, even as the company invested heavily in expanding its Exton manufacturing facility.
“Fiscal 2025 was another transformational year for our entire organization, highlighted by strong financial results and meaningful progress across our strategic priorities,” said Chief Executive Officer Shahram Askarpour. He said the company’s investments in manufacturing capacity, engineering talent, sales capabilities, and digital infrastructure are laying the foundation for sustained growth.
Innovative Aerosystems also introduced a longer-term financial target, aiming to reach $250 million in annual revenue with an adjusted EBITDA margin of 25 to 30 percent by fiscal 2029. Management said that goal will be supported by organic growth and selective acquisitions aligned with its aerospace and defense focus.
Operationally, the company benefited from improved efficiency, with operating expenses declining to 24.1 percent of sales for the year, down from 34.4 percent in the prior year. Fourth-quarter results also included a $1.8 million benefit related to the Employee Retention Tax Credit tied to prior-period qualifying wages.
During the quarter, new orders totaled $27.2 million, and backlog stood at $77.4 million at year-end, excluding additional potential orders under long-term OEM programs. The backlog spans major platforms including the Lockheed Martin F-16, Boeing KC-46A and T-7 Red Hawk, Pilatus PC-24, and Textron King Air.
The company said its rebranding to Innovative Aerosystems reflects a sharpened focus on integrated avionics and systems solutions. A key growth driver is the newly launched Liberty Flight Deck, a customizable cockpit architecture designed for commercial, business aviation, and military aircraft. The system was unveiled publicly in October at the National Business Aviation Association conference.
Innovative Aerosystems ended the fiscal year with net debt of $21.7 million and total available liquidity of $77.7 million, supported by a $75 million credit facility. Management said the balance sheet strength and declining leverage position the company to continue investing in capacity, technology, and potential acquisitions as it enters fiscal 2026.
Askarpour said favorable end-market trends, strong customer demand, and the company’s expanded operational foundation support expectations for another year of profitable growth.
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