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ISSC, Innovative Solutions and Support Inc.

IT Services & Consulting asset-light Cyclical

A software business, earning high margins on code once it is written.

Latest annual: FY2025 10-K

ISSC · Innovative Solutions and Support Inc.

The business

What it sells, where the money comes from, the kind of company it is.

Revenue · FY2025

$84M

+78.6% YoY · 31% 5-yr CAGR

Vital signs · TTM, with 5-yr average

Revenue $91M 5-yr avg $43M

Gross margin 51% 5-yr avg 56%

Operating margin 25.4% 5-yr avg 21.7%

ROIC 14% 5-yr avg 21%

Owner-earnings margin 19% 5-yr avg 13%

Free cash flow margin 15% 5-yr avg 13%

The business in brief

What this business is and what moves its needle, from its own SEC filings.

Situation: Cyclical. Margins collapse and recover repeatedly across the record; a single year, good or bad, misstates the through-cycle earning power.
What moves the needle: Gross margin has run about 55% and operating margin about 17% through the cycle, a wide spread between price and the cost of what it sells — whether that advantage is durable pricing power or a margin that can erode is the question the record is for. The operating margin has swung widely — from −27% to 26% — on a steadier 55% gross margin, so what moves it sits below the gross line, in operating spend and one-off charges more than in the cost of the product itself. Inventory runs near 25% of sales, so how fast it turns back into cash — and the risk of writing it down when demand softens — sits alongside the margin. Read this kind of business on retention and the cost of growth.
Is it a good business?: Return on capital has sat near the cost of capital (median 11%). The steadier read is owner earnings: roughly 12% of revenue reaches owners as cash, consistently. The cycle and the balance sheet decide this one; the worst year tells more than the median, and the rest is in the 10-K.

Every line is arithmetic on the company's filings, shown in full in the sections below.

The record

Ten years of arithmetic, read across the cycle.

The record, 2017–2025

realized figures from each filing · older years to the left

2017’17	2018’18	2019’19	2020’20	2021’21	2022’22	2023’23	2024’24	2025’25	TTMTTMMar 2026
										Income statement
$17M	$14M	$18M	$22M	$23M	$28M	$35M	$47M	$84M	$91M	RevenueRevenue
48%	47%	56%	55%	55%	60%	61%	55%	48%	51%	Gross marginGross mgn
22%	48%	33%	28%	27%	24%	31%	26%	20%	20%	SG&A / revenueSG&A/rev
27%	26%	14%	14%	11%	10%	9%	9%	5%	6%	R&D / revenueR&D/rev
($78K)	($4M)	$2M	$3M	$4M	$7M	$7M	$10M	$20M	$23M	Operating incomeOp. inc.
−0.5%	−26.8%	8.7%	12.7%	16.9%	26.0%	21.1%	20.5%	23.8%	25.4%	Operating marginOp. mgn
$5M	($4M)	$2M	$3M	$5M	$6M	$6M	$7M	$16M	$17M	Net incomeNet inc.
5%	—	0%	—	—	25%	21%	21%	22%	25%	Effective tax rateTax rate
										Cash flow & returns
$6M	($2M)	$2M	$5M	$5M	$6M	$2M	$6M	$13M	$21M	Operating cash flowOp. cash
$449K	$436K	$451K	$432K	$432K	$368K	$698K	$2M	$4M	$4M	DepreciationDeprec.
$1M	$1M	($194K)	$891K	($905K)	$202K	($6M)	($4M)	($8M)	($3M)	Working capital & otherWC & other
$153K	$3M	$81K	$341K	$341K	$161K	$298K	$658K	$7M	$7M	CapexCapex
0.9%	18.4%	0.5%	1.6%	1.5%	0.6%	0.9%	1.4%	7.7%	8.2%	Capex / revenueCapex/rev
$6M	($2M)	$2M	$4M	$4M	$6M	$2M	$5M	$10M	$17M	Owner earningsOwner earn.
35.2%	−15.7%	11.5%	19.7%	18.5%	21.4%	5.2%	10.9%	11.4%	18.8%	Owner earnings marginOE mgn
$6M	($4M)	$2M	$4M	$4M	$6M	$2M	$5M	$7M	$13M	Free cash flowFCF
35.2%	−31.0%	11.5%	19.7%	18.5%	21.4%	5.2%	10.9%	8.1%	14.6%	Free cash flow marginFCF mgn
—	—	—	—	—	—	$36M	$14M	—	$14M	AcquisitionsAcquis.
—	—	—	$20M	$20M	—	—	—	—	$20M	Dividends paidDiv. paid
-1%	-21%	11%	18%	24%	40%	11%	10%	18%	14%	ROICROIC
12%	-11%	5%	12%	21%	18%	16%	15%	24%	24%	Return on equityROE
—	—	—	−59%	−60%	—	—	—	—	−4%	Retained to equityRetained/eq
										Balance sheet
$25M	$20M	$22M	$13M	$8M	$17M	$3M	$539K	$3M	$7M	Cash & investmentsCash+inv
$3M	$3M	$2M	$4M	$4M	$4M	$10M	$13M	$13M	$13M	ReceivablesReceiv.
$4M	$4M	$4M	$4M	$5M	$5M	$6M	$13M	$26M	$28M	InventoryInvent.
$1M	$2M	$1M	$791K	$624K	$709K	$1M	$2M	$4M	$4M	Accounts payablePayables
$6M	$6M	$6M	$8M	$8M	$9M	$15M	$23M	$35M	$37M	Operating working capitalOper. WC
$34M	$29M	$30M	$33M	$18M	$28M	$35M	$35M	$51M	$53M	Current assetsCur. assets
$3M	$3M	$2M	$14M	$2M	$4M	$6M	$7M	$17M	$16M	Current liabilitiesCur. liab.
10.2×	8.6×	13.5×	2.4×	7.2×	7.2×	5.4×	4.8×	3.0×	3.2×	Current ratioCurr. ratio
—	—	—	—	—	—	$4M	$5M	$7M	$16M	GoodwillGoodwill
$41M	$38M	$39M	$42M	$27M	$35M	$63M	$82M	$103M	$138M	Total assetsAssets
—	—	—	—	—	—	$20M	$28M	$24M	$55M	Total debtDebt
—	—	—	—	—	—	$16M	$27M	$21M	$48M	Net debt / (cash)Net debt
—	—	—	—	—	—	18.7×	10.3×	11.6×	12.0×	Interest coverageInt. cov.
$38M	$34M	$36M	$28M	$25M	$31M	$39M	$47M	$65M	$72M	Shareholders’ equityEquity
—	—	—	—	—	—	4.2%	2.1%	2.8%	3.3%	Stock comp / revenueSBC/rev
										Per share
16.9M	16.8M	16.9M	17.1M	17.2M	17.3M	17.4M	17.5M	17.8M	18.2M	Shares out (diluted)Shares
$1.00	$0.82	$1.04	$1.26	$1.34	$1.61	$2.00	$2.70	$4.73	$4.98	Revenue / shareRev/sh
$0.27	$-0.22	$0.11	$0.19	$0.29	$0.32	$0.35	$0.40	$0.88	$0.94	EPS (diluted)EPS
$0.35	$-0.13	$0.12	$0.25	$0.25	$0.34	$0.10	$0.29	$0.54	$0.94	Owner earnings / shareOE/sh
$0.35	$-0.26	$0.12	$0.25	$0.25	$0.34	$0.10	$0.29	$0.38	$0.73	Free cash flow / shareFCF/sh
—	—	—	$1.16	$1.15	—	—	—	—	$1.09	Dividends / shareDiv/sh
$0.01	$0.15	$0.00	$0.02	$0.02	$0.01	$0.02	$0.04	$0.37	$0.41	Cap. spending / shareCapex/sh
$2.23	$2.03	$2.14	$1.62	$1.43	$1.78	$2.22	$2.67	$3.62	$3.97	Book value / shareBVPS

Per-share growththe realized rate an owner's share compounded

	8-yr	5-yr
Revenue / share	+21.5%/yr	+30.2%/yr
Owner earnings / share	+5.5%/yr	+16.7%/yr
EPS	+15.8%/yr	+35.6%/yr
Dividends / share	−0.7%/yr (1-yr)	−0.7%/yr (1-yr)
Capital spending / share	+58.7%/yr	+78.9%/yr
Book value / share	+6.2%/yr	+17.4%/yr

The record, charted

FY2017–2025

Each measure over its full record; the current point and the worst year marked.

Share count

18Mpeak FY2025

ROIC

18%low FY2018

Gross margin

48%low FY2018

Net debt ÷ owner earnings

2.2×peak FY2023

Owner earnings vs. net income

Owner earningsNet income

The accountant's number, and the cash an owner can take; the gap is the tell.

$10Mowner earningsvs.$16Mnet incomelow FY2018

Where the cash went

ReinvestBuybacksDividendsAcquisitionsRetainedBeyond op. cash

Each year's outlays against its operating cash: the mix, and how it drifts. The hatched cap is spending beyond that year's operating cash — financed from the balance sheet or borrowing, not operations.

FY2017FY2025

Owner-earnings bridge

FY2021–FY2025cash-flow statement, SEC EDGAR →

Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.

In fiscal 2025 the business earned $10M of owner earnings, the operating cash left after the $4M it takes just to hold its position. It put $3M more into growth; free cash flow, after that spending, was $7M.

Reported net income$16M

Owner earnings$10M · 11% of revenue

	FY2025	FY2024	FY2023	FY2022	FY2021
Reported net income	$16M	$7M	$6M	$6M	$5M
Depreciation & amortizationnon-cash charge added back	+$4M	+$2M	+$698K	+$368K	+$432K
Stock-based compensationreal costnon-cash, but a real cost	+$2M	+$1M	+$1M	—	—
Working capital & othertiming of cash in and out, other non-cash items	−$8M	−$4M	−$6M	+$202K	−$905K
Cash from operations	$13M	$6M	$2M	$6M	$5M
Maintenance capital expenditurethe spending needed just to hold position and volume	−$4M	−$658K	−$298K	−$161K	−$341K
Owner earnings	$10M	$5M	$2M	$6M	$4M
Growth capital expenditurediscretionary; spent to get bigger, not to stand still	−$3M	—	—	—	—
Free cash flow	$7M	$5M	$2M	$6M	$4M
Owner-earnings marginowner earnings ÷ revenue	11%	11%	5%	21%	18%

Owner earnings is the cash an owner could pull out without starving the business: operating cash less the maintenance capital it must spend to hold its position (here about $4M, roughly its depreciation, the rate its assets wear out). The other $3M of its capital spending is growth it chose, not upkeep it owed; charged only with the maintenance it must do, the business earns well more than the year's free cash flow shows. The cash-flow statement also adds stock comp back as non-cash, but it is a real cost paid in shares; counted as the expense it is (less $2M), owner earnings is nearer $7M.

Much of fiscal 2025's profit didn't arrive as operating cash; it sits in “working capital & other” above. That can be a real inventory or timing swing, or profit that doesn't run through operating cash at all: a heavy tax year, equity-method earnings, or investment income booked through investing. For a year like this, owner earnings understates the cash earned; the full cash-flow statement carries the rest.

Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.

III

Quality & stewardship

Returns, the balance sheet, capital allocation, and pay.

Owner’s Scorecard

FY2025 10-K · source on SEC EDGAR →

Will it survive?

Can it pay its interest? 11.6×

Comfortable

Operating income $20M ÷ interest expense $2M

What this means
Operating profit covers interest with the kind of margin Graham wanted for a defensive holding. Necessary, not sufficient, it says solvent, not cheap.
How heavy is the debt, net of cash? $21M · 1.1× operating profit

Modest net debt

Cash $3M − debt $24M

What this means
Netting $3M of cash and short-term investments against $24M of debt leaves $21M owed, about 1.1× a year's operating profit (1.2× on the gross debt, before the cash). Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
How long is cash tied up? 241d

Long (60+ days)

DSO 56 + DIO 215 − DPO 30 days

What this means
Days cash is tied up between paying suppliers and collecting from customers. Lower is better; a long cycle means growth itself eats cash.

Is it a good business?

Return on invested capital 11%

Solid through the cycle

9-yr median, range -21%–40%; 18% latest = NOPAT $16M ÷ invested capital $86M

Industry peers: median -40%

What this means
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 9 years (it ran 18% most recently), so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
Owner-earnings margin 12%

Solid through the cycle

9-yr median margin, range -16%–35%; latest $10M = operating cash $13M − maintenance capex $4M

Industry peers: median -34%

What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's 11% of revenue this year, a 12% median across 9 years. It chose to put $3M more into growth, so free cash flow this year was $7M — the gap is investment, not weakness. Treating stock comp as the real expense it is (less $2M of SBC) leaves $7M.
Are earnings backed by cash? 0.85×

Mostly cash-backed

Cash from ops $13M ÷ net income $16M

What this means
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.

How is the cash used?

Where do the earnings go? 214%

Returned more than it generated

Dividends + buybacks $21M ÷ Owner Earnings $10M

What this means
The company returned more than it generated: against $10M of Owner Earnings, $21M (214%) went back to shareholders, $20M dividends, $725K buybacks — the excess came from the balance sheet or borrowing, not the year's operations. But the buybacks barely exceed stock issued to employees ($2M SBC), net of dilution, little was truly returned. Sustained, that pattern draws down cash or adds debt; the net-debt line above shows where it stands.
Investing or harvesting? 1.74×

Expanding

Capex $7M ÷ depreciation $4M

What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.

Graham’s defensive tests · 3 of 6 met

Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.

Adequate size Miss

Revenue ≥ $2B · $84M

What this means
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
Strong liquidity Pass

Current ratio ≥ 2× · 3.04×

What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
Conservative debt Pass

Debt ≤ working capital · $24M vs $34M WC

What this means
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
Earnings stability Near

A profit every year (9-yr record) · 1 loss year

What this means
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
Dividend record Miss

Uninterrupted dividends · 2 of 9 yrs

What this means
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
Earnings growth Pass

Earnings +33% over the record · +936%

What this means
At least a third more earnings than a decade ago, averaging three years at each end. Net income (not per-share), so stock splits don't distort it, buybacks and dilution show up in the share-count line instead.
Moderate price —

P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price

What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $0.53/share (latest year $0.87), the averaged base the calculator's gate runs on, and book value is $3.61/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.

Durability & moat, 2017–2025

Whether the record’s returns held, and what the capital reinvested earned.

Profitable years 8 of 9

What this means
Lost money in 1 year(s), look at what happened there before trusting the average.
Return on capital ≥ 15% 1 of 3 yrs

What this means
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
Operating margin −6% → 22% (3-yr avg ends)

What this means
Through the cycle the operating margin widened — about −6% early to 22% lately, median 17% — pricing power intact or improving.
Reinvestment, incremental ROIC returns capital

What this means
The capital base barely grew: this business returns cash through dividends and buybacks rather than reinvesting. Judge it on the cash returned, not on compounding.
Owner earnings growth +19%/yr

What this means
Owner earnings grew about 19% a year over the record.
Worst year 2018 · −26.8% op. margin

What this means
Operations went underwater in 2018, understand why before trusting the good years.
Share count +0.7%/yr

What this means
Roughly flat share count, little dilution, little buyback.
Dividend record paid

What this means
Paid a dividend in 2 of the years on record.

Does AI threaten the moat?

Elevated contestability

The product is software or information, the very thing capable AI now produces more cheaply, so the moat is more contestable than the record alone implies.

AI has collapsed the cost of building a capable substitute for the very thing this business sells. When a credible alternative can be assembled for a fraction of the incumbent's price, it is pricing power that erodes first, not revenue tomorrow. The live question is whether the moat survives that, not whether it held in the past. Whether that question is answerable at all is yours to decide, against your own circle of competence.

Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.

All figures as filed; the source filing is linked above.

Current Position

as of the latest quarter, Mar 31, 2026

Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.

Current assets$53M

Cash & short-term investments$7M
Receivables$13M
Inventory$28M
Other current assets$5M

Current liabilities$16M

Debt due within a year$6M
Accounts payable$4M
Other current liabilities$6M

Current ratio3.23×all current assets ÷ what's due · Graham looked for 2×

Quick ratio1.53×stricter: inventory excluded

Cash ratio0.41×strictest: cash alone against what's due

Working capital$37Mthe cushion left after near-term bills

Debt due this year vs. cash$6M due · $7M cash covered by cash on hand, no refinancing forced · both figures from the Mar 31, 2026 balance sheet

Revenue, latest quarter vs. a year ago+2.0%the freshest read on whether the business is still growing

Current ratio, recent quarters1.6× → 3.2×

Deeper floors

Tangible book value$9Mequity stripped of goodwill & intangibles

Net current asset value($13M)Graham's net-net: current assets less all liabilities

Debt incl. operating leases$55M$4K of it operating leases

Deferred revenue$2Mcustomer cash collected before delivery; operating float

From the company's latest filing.

How the cash was used, 2017–2025

Over the record, the business generated $43M of operating cash; how management split it reads as a cash returner, paying most of what it earns straight back to owners.

Reinvested$11M · 26%
Dividends$40M · 92%

Returned to owners$40M
108% of the owner earnings the business produced over the span, $40M as dividends and $0 as buybacks.
Source of funding−$8M
Reinvestment and shareholder returns ran $8M beyond the operating cash the business generated, so the gap was financed off the balance sheet: cash and short-term investments drew down $18M.
Net change in share count7.9%
The diluted count rose from 17M to 18M: issuance (stock pay, deals) outran any buybacks, so owners were diluted on net.
Dividend record$1.15/sh
Paid in 2 of the years on record, the per-share dividend shrinking about 1% a year. It was never cut over the span.
Return on what it retained63%
Of the earnings it kept rather than paid out ($6M over the span), annual owner earnings (first three years vs last three) grew $4M, so each retained $1 added about 0.63 of yearly owner earnings. Buffett's test, run on owner earnings instead of market value.

Buybacks are gross of stock issued to staff; the share-count line above is the net of that, the figure that decides whether owners gained. The average price paid blends a year of purchases (and any accelerated repurchase), so it is close, not exact. The record of where the cash went and on what terms.

Acquisitions & goodwill

from the balance sheet & the 9-year cash-flow record

Goodwill grows only when a company acquires and falls only when it concedes it overpaid. The size of that bet, the cash put into buying rather than building, and how much has already been written off.

Goodwill & intangibles$30M29% of all assets; the premium carried on the balance sheet for businesses acquired

Against book equity10%goodwill is this share of book equity; the rest is the company’s own retained and paid-in capital

Cash spent acquiring$50Mover 9 years buying other businesses, against $11M of capital spent building

None written down over the record; the goodwill is still carried at full cost. That is the deals holding their value on the books so far; whether they keep doing so is the test an owner watches, since the write-down, when it comes, is the admission the price was too high.

Goodwill, acquired intangibles and equity from the latest balance sheet; acquisition spend and write-downs summed across the 9-year record, from the company's own filings.

Management, ownership & pay

read the proxy →

From the proxy: how much of the business the people running it own, and how they are paid, beside what the business earned for its owners in the same years.

Fiscal year	Chief executive	Pay, as filed	“Actually paid”	Owner earnings
2023	Shahram Askarpour	$2.4M	$2.4M	$2M
2024	Shahram Askarpour	$3.0M	$2.6M	$5M
2025	Shahram Askarpour	$2.5M	$3.5M	$10M

Both pay figures are the company’s own, from the pay-versus-performance table its proxy statement files. “As filed” is the Summary Compensation Table total: salary, bonus, and equity awards at their value on the day of grant. “Actually paid” is the SEC’s prescribed recalculation, which re-marks those equity awards to what they became as they vested; it can swing far above or below the filed figure in either direction, and negative years occur. Owner earnings are the whole business's, from the record above, for the same fiscal years.

Stock-based compensation$2M
The slice of the business handed to employees in shares this year, 3% of revenue, equal to 12% of operating profit. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. One trap: the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.

Inverting the record

Invert: instead of why Innovative Solutions and Support Inc. is a good business, the question is what would make owning it a mistake, and whether those marks are in the record. Disconfirming tests across 2017–2025.

1 of the 5 tests turned up something to look into; the other 4 came back clean.

Look hereDid the share count rise anyway?7.9%
Diluted shares grew 7.9% over 2017–2025. Owners were diluted on net; each share owns less of the business than it did. Read the buyback line beside this one, not on its own.

And these came back clean

Is it less profitable than it was?
Did reported profit become cash?
Did receivables and inventory outpace sales?
Are "one-time" charges a yearly habit?

Each test is read from the filings and is noisy alone; a flag can mark a cyclical trough or a year of heavy investment as easily as a problem. The filing says which.

Peers, IT Services & Consulting

The same industry, side by side on owner economics. Each figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.

Company	Revenue	Gross margin	Op. margin	ROIC	Owner earn. margin
BLNDBlend Labs Inc.	$124M	64%	-84.1%	-57%	-69%
CEVACeva, Inc.	$110M	89%	-1.2%	-0%	7%
RUMRumble Inc.	$101M	—	-125.9%	-322%	-86%
GLOOGloo Holdings Inc.	$95M	—	-209.1%	-76%	-196%
RDVTRed Violet Inc. Common Stock	$90M	—	-3.0%	-3%	20%
ISSCInnovative Solutions and Support Inc.	$84M	55%	16.9%	11%	12%
SLPSimulations Plus Inc.	$79M	74%	27.8%	9%	29%
SVCOSilvaco Group Inc.	$63M	80%	-67.5%	-40%	-34%
Group median	—	74%	-35.2%	-21%	-14%

The price

What a price has to assume.

What the price implies

reverse-DCF

Type today's close and see the owner-earnings growth you'd have to believe to justify it, beside what Innovative Solutions and Support Inc. has delivered.

Today’s price $

Through the cycle, Innovative Solutions and Support Inc. earns about $10M on its 11.5% median owner-earnings margin. This year’s 11.4% margin runs in line with that. Normalize, below, values the price on that through-cycle figure rather than the latest year.

Base Normalize · through-cycle ($10M) Net of stock comp (−$3M) Steady-state · maintenance capex ($17M)

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The assumptions Required return 9% Years of high growth 10 Terminal growth 2.5%

9.0% = the 4.55% 10-year Treasury (Jul 15, 2026) + 4.45 points of equity premium. The rate you require is yours to set.

Enter a price above to run it.

Implied by the price—

Owner-earnings growth · ’21→’25+10%/yr

Owner-earnings growth · ’17→’25+28%/yr

Owner-earnings yield—

P/E (3-yr earnings ’23–’25)—

P/B—

Graham’s price gate—

Graham capped the multiple at 15×; Buffett and Munger let that rule go: a wonderful business can deserve 50× if the thesis holds. The gate marks the bargain-hunter's floor.

Against a high-grade bond: Graham’s yardstick bond yield%

Prefilled with the 10-year Treasury (4.55%, as of Jul 15, 2026). Edit it for today’s exact figure, or a AAA corporate yield.

Graham measured a stock against the bond you could own instead, the heart of his margin of safety. Enter a price above to weigh the owner-earnings yield against this bond.

Free cash flow $13M on 18M shares outstanding, per the 10-Q cover, as of 2026-04-30; net debt $48M. The base is the latest year by default; Normalize values it on the through-cycle median owner-earnings margin (to avoid paying on a peak year). Net of stock comp treats option pay as the expense it is. Capex ($7M) runs well above depreciation ($4M), so this is a build-out; Steady-state swaps total capex for maintenance (≈ depreciation), lifting the base to about $17M, the cash it would throw off if it stopped expanding. The dials set the multiple a growth belief justifies; the price, and every dollar on this page, is yours.

Weigh ISSC against another business →

The owners of ISSC: the meeting and the votes →

Cite: Owner Scorecard, "Innovative Solutions and Support Inc. (ISSC), the owner's record," https://ownerscorecard.com/c/ISSC, data as of 2026-07-09.

Manual order: ← ISRG its page in the Manual ISTR →

Industry order: ← INOD the IT Services & Consulting chapter LIF →