V2X (NYSE:VVX) reported higher third-quarter revenue, earnings and cash flow, citing growth in engineering and mission-readiness programs, national security work and activity in the Asia-Pacific region. The company also raised its full-year 2026 outlook and said it expects growth in revenue, margins, adjusted earnings per share and cash flow in 2027.
Third-quarter revenue increased 9% year over year to $1.27 billion, while year-to-date revenue rose 16% to $3.78 billion. Adjusted net income climbed 19% to $51.7 million, and adjusted diluted earnings per share increased 19% to $1.64. Adjusted EBITDA rose 4% to $88.6 million, producing a 7.0% margin.
“Consistent execution, recent contract wins, and continued alignment with national security priorities drove strong growth,” President and CEO Jeremy Wensinger said during the company’s earnings call.
Bookings, Backlog and Investment
V2X booked approximately $1.6 billion in awards during the quarter, resulting in a quarterly book-to-bill ratio of 1.2x and a trailing 12-month ratio of 1.4x. Total backlog stood at $12.8 billion at quarter-end, including $2.6 billion in funded backlog.
Wensinger said the quarter’s bookings were margin accretive to the company’s existing profile and could support margin expansion in 2027. The company also reported approximately $800 million in year-to-date on-contract growth bookings.
Management highlighted investments in engineering and rapid prototyping, facilities, infrastructure and research and development. Customer-funded and internal R&D spending in 2026 is expected to be 2.3 times the 2025 level, according to Wensinger. He said the company’s product business is now its fastest-growing area.
One example cited was Tempest, V2X’s counter-unmanned aircraft system offering. Wensinger said the company moved the system from concept to live-fire testing in four months and fielded it within six months. Tempest has completed more than 1,000 successful engagements in less than 18 months, he said.
During the question-and-answer session, Wensinger said Tempest had one customer a year ago and now has five customers. He described the system as a proven solution and said customer demand has expanded across the platform’s family of systems.
Regional Trends and Program Performance
Revenue from discrete national security activities totaled approximately $130 million in the third quarter and $334 million year to date. Chief Financial Officer Shawn Mural said the company has line of sight to continued activity through the third quarter of 2027, with first-half 2027 volumes expected to be consistent with the first half of 2026, though potentially below the third quarter’s $130 million level.
Asia-Pacific revenue increased 8% year over year in the third quarter. Wensinger said the region is expected to be a growth driver in the fourth quarter and into 2027, pointing to customer demand related to deterrence, training and capability build-outs.
U.S. revenue increased 31% year over year, driven primarily by recent program awards and national security support. Conversely, Middle East revenue declined 30% from the prior-year quarter amid changing customer requirements and regional shifts.
Mural said Middle East conditions would be the primary reason for low-single-digit year-over-year growth implied by the company’s updated fourth-quarter outlook. Management said it expects continued ramp-up on an Israel-related program and sees opportunities in Balad and foreign military sales work, but emphasized that the region remains fluid.
The company also cited performance in its aviation-support programs. V2X said it averaged more than 96% first-time quality across approximately 1,700 aircraft. On the TH-73 Advanced Helicopter Training System, first-time quality reached a record 96.45% in September, above a 92.5% target. The company said the Navy T-45 fleet flew more than 62,000 mishap-free hours during fiscal 2026 and that V2X exceeded Navy availability standards.
Cash Flow, Debt and Updated Outlook
Third-quarter net cash provided by operating activities was $67.3 million, while adjusted operating cash flow was $61.8 million, compared with $35.8 million in the prior-year period. For the first nine months, adjusted operating cash flow was $111.5 million, a $135.6 million improvement year over year.
V2X reported three-year cumulative adjusted operating cash flow of about $500 million. Net debt improved by approximately $140.3 million from a year earlier, and the company said it had roughly $750 million of capacity available for investment.
The company raised its 2026 guidance to the following ranges:
- Revenue of $4.95 billion to $5.10 billion.
- Adjusted EBITDA of $352.5 million to $367.5 million.
- Adjusted diluted EPS of $6.15 to $6.55.
- Adjusted net cash from operations of $175 million to $195 million.
Mural said fourth-quarter adjusted EBITDA margin is expected to accelerate sequentially and from a year earlier, with an implied midpoint margin of about 7.7%. He attributed the anticipated improvement primarily to productivity, the timing of expenses and some mix changes.
Early 2027 Perspective
For 2027, V2X said it has limited recompete exposure, estimated at about 6% of expected revenue. Management expects Asia-Pacific demand, engineering and rapid-prototyping activity, and a full year of contribution from the T-6 program to support revenue growth.
Mural said the T-6 program generated more than $100 million of revenue year to date, with its ramp occurring predominantly in the third quarter. He said the program had previously been expected to generate roughly $250 million to $300 million annually at a full run rate.
Management expects growth drivers in 2027 to be partially offset by lower Middle East revenue due to scope changes. It nevertheless said the net effect is expected to be top-line expansion, accompanied by margin expansion and growth in adjusted diluted EPS and adjusted operating cash flow.
About V2X (NYSE:VVX)
V2X, Inc provides mission solutions and support services to the U.S. government, defense agencies, and allied governments. The company supports military and government operations through services that include logistics, operations and maintenance, training, engineering, modernization, cybersecurity, and other technology-enabled solutions.
Its work spans the defense and national security lifecycle, including the sustainment of aircraft, vehicles, equipment, and infrastructure; supply-chain and base operations; intelligence and analytical support; and digital, communications, and systems-integration services.
