Innovative solutions and support INC (ISSC) Q2 2025 yield highlights: record income …

Appearance date: May 15, 2025

You can find the complete copy of the earnings call in the complete earnings call.

• Innovative solutions and support INC (NASDAQ: ISSC) reported on sales growth of 100%, which is due to new military programs and legacy platforms.

• The company achieved a significant increase in EBITDA and profit, with the EBITDA increased by over 260% and the profit by over 300% compared to the previous year.

• ISSC has a strong gap of approximately 80 million US dollars, which points out that persistent business dynamics.

• The company is expanding its establishment of Exton, Pennsylvania, which triples production capacities and positions it well for future growth.

• The ISSC acquisition strategy, including the integration of H1YWELL product lines, continues and expects the future sources of income to be expanded.

• It is expected that the gross margins will remain fleeting due to the mixture of acquired products and the inherent of lower margins in military sales.

• The integration of the H1YWELL product lines contains twice the costs and potential challenges for the supply chain.

• Despite the growth of sales, there is pressure on margins due to acquisition costs and inventory adjustments.

• The company faces uncertainties in connection with problems of the supply chain, especially with the transition of the production of H1YWELL.

• The operating costs rose slightly, which is due to the product development efforts and increased stress, which could affect profitability if they are not carefully managed.

Q: Can you provide further details about the Pull Forward from H1YWELL product lines and their effects on the financial year25? A: We do not expect any further delays after the transition. The transition contains problems with the supply chain with H1YWELL, but we work closely with them and Lockheed. We are confident of achieving 25% growth in the financial year. CEO Shaam Ascopour

Q: What drives the improvement of air traffic revenue and what does the pipeline look like under high interest rates? A: The improvement is due to the high demand for aftermarket upgrades due to the high demand from Airbus and Boeing. The interest rates have a minimal impact on our business and we expect this trend to be continued. CEO Shaam Ascopour

Q: How should we pass the gross margins as a H1YWELL production? A: Gross margins are volatile due to the product mixing variability of acquisitions. We focus more on Ebitda and profit margins than on gross margins. CEO Shaam Ascopour

Q: What percentage of sales were the Ministry of Defense and expect this to continue? A: About 40% of sales were military and we expect this percentage to apply for the year. CFO Jeff Digiovanni