Innovative Aerosystems, Inc.

Net revenues were $20.7 million in Q3 FY26, up approximately 11% year over year. Gross profit was $13.8 million versus $8.6 million last year, and gross margin was 51.7% compared with 35.6% a year ago. Net income was $4.5 million, or $0.25 per diluted share, versus $2.4 million, or $0.14 per share, last year; adjusted EPS was $0.33 versus $0.16, and adjusted EBITDA was $7.7 million versus $4.4 million. Backlog was approximately $83 million, new orders were $22.7 million, and Q4 revenue guidance was about $28 million to $30 million, including continued organic growth and contributions from recent acquisitions.

Shahram Askarpour framed the quarter as evidence that IA is executing on both growth and profitability, citing organic growth, margin expansion, and free cash flow conversion. He emphasized strategic progress from the Aiden Displays acquisition, the first major OEM award on the Liberty flight deck, and the company’s focus on organic growth, operational excellence, and disciplined capital allocation. His tone was upbeat and confident, saying the business is on track for a solid finish to fiscal 26 and is building momentum into fiscal 27.

Jeffrey DiGiovanni highlighted $20.7 million in Q3 revenue, $13.8 million in gross profit, 51.7% gross margin, $4.5 million in net income, and $7.7 million in adjusted EBITDA. He noted that operating cash flow for the first nine months was $15.5 million, capital expenditures were $3.2 million, and free cash flow was $12.3 million, supported by a capital-light model. He also said the company had $10.7 million of cash, $54.5 million of debt, $43.8 million of net debt, approximately $53.7 million of cash plus availability under its credit line, and net leverage of 1.4x.

Analysts focused on the eVTOL win, asking how long the sales process took, how to interpret the stated $50 million contract value, and whether the company was sole source. Management said it had been working with the customer for about a year, would not comment on contract value beyond saying the $50 million was based on all 400-plus units shipping, and indicated the opportunity could expand if the program scales. Questions also covered gross margin sustainability, with management pointing to a 45% to 50% range and saying around 50% is where they are heading, plus elevated R&D to support next-gen capabilities and the fact that supply chain issues like Honeywell’s are less of a concern because IA builds circuit cards in-house and qualifies multiple component sources.