AI-extracted from the 10-Q filed 2026-08-13 — Q3 FY2026 (quarter ended June 30, 2026). Every figure is machine-verified against the filing text on SEC EDGAR.
Net sales rose 10.7% YoY to $26.7M as gross margin expanded to 51.7% from 35.6%, driven by a mix shift toward higher-margin commercial aftermarket and business aviation sales offsetting a decline in military/F-16 revenue.
Biggest Revenue Drivers
Product$17.5M+5.5% YoY
Commercial aftermarket product sales up $4.0M and business aviation up $2.1M, partly offset by a $4.9M decline in military product sales from a prior-period decline in F-16 revenues off elevated levels
Services$9.2M+22% YoY
Increased service volumes on IRU, radio and autopilot product lines acquired in 2023, 2024 and 2026, plus higher engineering project revenue
Biggest Revenue Drivers
Total revenue: $26.7M+10.7% YoY
Product$17.5M+5.5% YoY
Commercial aftermarket product sales up $4.0M and business aviation up $2.1M, partly offset by a $4.9M decline in military product sales from a prior-period decline in F-16 revenues off elevated levels
Services$9.2M+22% YoY
Increased service volumes on IRU, radio and autopilot product lines acquired in 2023, 2024 and 2026, plus higher engineering project revenue
Largest Expense Items
Cost of sales$12.9M-17% YoY
Reflects favorable product mix, with net sales growth concentrated in higher-margin commercial aftermarket and business aviation while lower-margin military sales declined
Selling, general and administrative$5.9M+42.2% YoY
Employee-related costs up $0.6M and $1.2M of costs tied to new business from recently completed acquisitions
Research and development$1.9M+104.8% YoY
Additional headcount added to drive next-generation, multi-platform product capabilities
Margins: Gross margin expanded to 51.7% of net sales from 35.6% a year ago, which the company attributes to increased commercial and business aviation sales that carry higher margins than military sales.
Watch Items from the Filing
Four customers accounted for 21%, 10%, 8% and 6% of net sales in the quarter (about 45% combined), versus two customers at 52% and 8% in the prior-year quarter.
Two suppliers were each individually responsible for more than 10% of total inventory-related purchases in the quarter.
Long-term debt grew to $48.7M from $21.7M at fiscal year-end, after drawing $32.0M on the Delayed Draw Term Loan to fund the Honeywell Autopilot and Generators acquisitions; a new $53.7M interest rate swap fixes 4.057% on the variable-rate term loans.
Subsequent to quarter-end, the company agreed to acquire Sparton Aydin, LLC (Aydin Displays) for $24.5M, financed via additional borrowing under its existing credit facility, further increasing leverage.
Backlog grew to $82.9M at June 30, 2026 from $77.4M at September 30, 2025, with roughly 78% expected to convert to revenue over the next 12 months.
AI-extracted and verified against SEC EDGAR filing text. Not investment advice.
About INNOVATIVE SOLUTIONS & SUPPORT INC (IA): stock profile, AI score and financials
INNOVATIVE SOLUTIONS & SUPPORT INC (IA) stock profile, AI quality score, and SEC EDGAR financial data, a Technology sector company. 13F Pro's AI-powered ranking engine scores IA at 64.0/100 on a composite quality score built from its SEC filings, placing it at rank #573 of 2,925 stocks — the top 25% of the AI-ranked universe. IA scores in the top quartile across balance sheet strength (93.7), revenue growth (92.9), profitability (84.4). Areas of concern include revenue scale (15.0) and institutional flow (20.2), which score below median versus the broader universe. Shareholder dilution risk is elevated at 33.3/100, reflecting ongoing share issuance or stock-based compensation. Based on the latest XBRL financial filings (Q3 2026), INNOVATIVE SOLUTIONS & SUPPORT INC reports quarterly revenue of $26.7M, net income of $4.5M, an operating margin of 22.6%. IA trades on the Nasdaq exchange and files with the SEC under CIK 836690. 13F Pro's AI research platform runs 10 specialized AI analysts — value, growth, momentum, macro, and activist specialists — that debate IA daily and publish AI-generated analysis with cited SEC sources. The platform aggregates historical XBRL financial facts, 10-Q and 10-K filings, insider Form 4 transactions, and institutional 13-F holdings for INNOVATIVE SOLUTIONS & SUPPORT INC directly from SEC EDGAR.