ISSC Q3 Earnings Beat: Revenue Up 11%, Adjusted EPS $0.33 vs $0.22 Estimate
ISSC has more than doubled off its 52-week low of $8.13.
Summary
ISSC reported fiscal Q3 revenue of $26.7M (+10.7% YoY) and adjusted EPS of $0.33, beating estimates. Gross margin jumped to 51.7%, and the company announced a ticker change to 'IA', Russell 2000 inclusion, and a first production award for its Liberty Flight Deck.
Key Events · Earnings and Guidance · ISSC
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Q3 Earnings Beat
Revenue of $26.7 million, up 10.7% year-over-year, with adjusted EPS of $0.33 versus consensus of $0.22.
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Gross Margin Expansion
Gross margin expanded to 51.7% from 35.6% a year ago, driven by favorable mix and F-16 transition timing.
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Strong Cash Flow
Free cash flow of $12.3 million for nine months, up 155% year-over-year, with net debt to adjusted EBITDA of 1.4x.
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Strategic Announcements
Announced ticker change to 'IA', inclusion in Russell 2000 Index, and first production award for Liberty Flight Deck with a Japanese eVTOL developer.
Analysis · ISSC · Technology
A strong fiscal Q3 for Innovative Solutions & Support delivered revenue of $26.7 million, up 10.7% year-over-year, and adjusted EPS of $0.33, beating consensus estimates. Gross margin expanded dramatically to 51.7% from 35.6% a year ago, driving adjusted EBITDA growth of 74.7%. The company also announced a ticker change to 'IA', inclusion in the Russell 2000, and a first production award for its Liberty Flight Deck platform. Free cash flow of $12.3 million for nine months is up 155%, and net debt leverage remains modest at 1.4x trailing adjusted EBITDA. This is a clear positive earnings surprise with multiple strategic catalysts.
At the time of this filing, ISSC was trading at $21.66 on NASDAQ in the Technology sector, with a market capitalization of approximately $360.2M. The 52-week trading range was $8.13 to $30.94. This filing was assessed with positive market sentiment and an importance score of 8 out of 10.