Overview

• US avionics supplier's fiscal Q2 revenue rose 2%, beating analyst expectations

• Adjusted EPS for fiscal Q2 fell from prior year

• Company completed three acquisitions to expand recurring aftermarket revenue

Outlook

• Company expects business to continue on a favorable growth trajectory for the rest of fiscal 2026

• Company projects recent acquisitions to add $10 mln in annual revenue at about 50% gross margin

• F-16 manufacturing levels expected to normalize in the third quarter of 2026

Result Drivers

• SALES MIX SHIFT - Revenue growth driven by strong commercial aftermarket and business aviation, offsetting lower F-16 program sales due to timing of approvals and prior-year transition effects

• HIGHER OPERATING EXPENSES - Increased R&D spending and one-time acquisition costs raised operating expenses, affecting profitability

Company press release: ID:nBw8ChzMsa

Key Details

Metric	Beat/Miss	Actual	Consensus Estimate
Q2 Sales	Beat	$22.40 mln	$21.84 mln (4 Analysts)
Q2 EPS		$0.19
Q2 Net Income		$3.40 mln
Q2 Gross Profit		$11.40 mln
Q2 Orders		$24.70 mln

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 5 "strong buy" or "buy", no "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the aerospace & defense peer group is "buy"

• Wall Street's median 12-month price target for Innovative Solutions and Support Inc is $26.90, about 30.6% above its May 13 closing price of $20.59

• The stock recently traded at 25 times the next 12-month earnings vs. a P/E of 25 three months ago

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