V2X, Inc. Q2 FY2025 earnings call

• Second quarter results: Revenue $1.08 billion, strong profitability with adjusted EBITDA $82 million (7.6% margin), adjusted net income $42 million, and adjusted EPS $1.33 up 59% Y/Y.
• Strategic execution: Focus on optimize the core, growth in adjacencies, extended offerings, and strategic investments. Notable initiatives include the T-6 award, F-16 program, and presence at Ascension Island.
• Operational performance: Delivering on commitments, executing strategy, robust pipeline, and awards validating performance and strategy.

In the second quarter, revenue was $1.08 billion. Adjusted EBITDA was $82 million, representing a 7.6% margin. Adjusted net income was $42 million, and adjusted EPS was $1.33, increasing 59% year-over-year. Year-to-date revenue was $2.94 billion, adjusted EBITDA for the first half was $149.4 million with a 7.1% margin, and adjusted net income was $73.8 million, up 34% year-over-year.

• Reaffirmed revenue, adjusted EBITDA, and cash flow guidance for 2025.
• Increased adjusted EPS guidance due to debt refinancing and tax benefits. Midpoint: revenue $4.4 billion, adjusted EBITDA $313 million, adjusted EPS $4.80.

• Protests on awards could push new awards to the right and into 2026.
• Budget and funding uncertainties affecting program execution.
• Episodic nature of award notifications impacting book-to-bill metrics.

Q: Ken Herbert with RBC Capital Markets asked about the T-6 contract's incremental revenues, ramp, and scaling.

A: Shawn Mural said no impact this year, transition until early 2026, and historicals suggest $200-300M/year. Jeremy added the team's past performance was the driver.

Q: Andre Madrid with BTIG asked about the T-6 being one of 5 $1B+ opportunities and strategic acquisitions.

A: Jeremy said it was one, progress on others, and they look to build MRO and mission modernization. Shawn mentioned complementary components for M&A.

Q: Jonathan Siegmann with Stifel asked about managing risk on the T-6 contract and margins.

A: Jeremy praised the team's execution ability, Shawn said margins will ramp from below composite average to align over 18-24 months.

Q: Peter Arment with Baird asked about FMS as a margin enhancer and opportunities.

A: Shawn said it's a mix, with recent F-16 award showing demand pull, and Jeremy noted the entire company is involved.

Q: Tobey Sommer with Truist asked about 3Q contract award season and backlog.

A: Shawn said awards are episodic, Jeremy mentioned net bookings and backlog details.

Q: Joe Gomes with NOBLE Capital asked about Asia Pacific revenue decline and backlog.

A: Jeremy said delays in exercises, and Shawn discussed net bookings and backlog components.

Q: Mariana Perez Mora with Bank of America asked about protest environment and commercial approach on T-6.

A: Jeremy said they manage risks, Shawn noted new award cadence, and Jeremy discussed commercial-based procurement.

Q: Kristine Liwag with Morgan Stanley asked about T-6 revenue waterfall and book-to-bill.

A: Shawn said it depends on funding, Jeremy mentioned task orders and back half drivers.

Q: Noah Poponak with Goldman Sachs asked about EPS guidance increase and book-to-bill.

A: Jeremy said it was due to refinancing and tax benefits, Shawn discussed back half drivers and book-to-bill expectations