Innovative Solutions & Support reported a strong start to fiscal year 2026, driven by significant revenue growth and improved profitability, particularly in the commercial aviation market. The company is benefiting from increased aftermarket demand, service activity, and operational leverage, while also integrating key production lines to enhance future margins.
Net sales increased 36.5% year-over-year to $21.8 million, driven by commercial aftermarket demand and services.
positiveGross profit increased 79.8% year-over-year to $11.9 million, with gross margin expanding to 54.5% from 41.4%.
positiveAdjusted EBITDA grew 140.9% year-over-year to $7.4 million, reflecting a favorable revenue mix and improved operating leverage.
positiveOperating cash flow increased significantly by 343% to $8.2 million.
positiveFree cash flow increased by 346% to $7.0 million.
positiveNet debt to trailing twelve-month Adjusted EBITDA ratio improved to 0.5x from 1.8x in the prior year.
positiveRevenue on the F-16 platform was lower due to the transition of product line manufacturing to the Company’s Exton facility.
attentionInventories increased to $28.3 million from $25.8 million in the prior quarter.
attentionSelling, general and administrative expenses increased to $4.3 million from $4.2 million in the prior year, although as a percentage of revenue it declined.
attentionMargin expansion indicates improving profitability and operational efficiency. Measured in basis points (bps): 100 bps = 1.0%.
Forward-looking guidance is subject to change and does not constitute a guarantee. Actual results may differ materially from these estimates.
Special items are non-recurring events that may distort period-over-period comparisons. Analysts typically adjust for these when calculating normalized earnings.
We delivered a strong start to the year, driven by significant organic growth in revenue, Adjusted EBITDA, and margins, supported by continued momentum within the commercial aviation market.
First quarter revenue grew 37% versus the prior-year period on increased commercial aftermarket demand and service activity, while Adjusted EBITDA grew 141%, reflecting a more favorable revenue mix and improved operating leverage.
We completed the integration of our F-16 component-related production into our recently expanded Exton facility during the first quarter, and we expect revenue related to this platform to scale as we move through the year.
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Operational metrics provide insight into business drivers and customer engagement beyond traditional financial measures.