V2X, Inc. Q4 FY2025 earnings call

• Jeremy highlighted solid financial performance in Q4 and full year 2025, with record revenue, adjusted EBITDA, and cash flow. • Mentioned winning key contracts across growth areas like T-6 Aircraft, F-16 Modernization, training, and advanced capabilities. • Focus on building technology first foundation with targeted investments and best-in-class partnerships for innovation. • Qualified pipeline over $60 billion, targeting 30% increase in bid velocity in 2026. • Shawn discussed fourth quarter and full year financials, including revenue growth, adjusted EBITDA, cash flow, and net debt reduction. • Backlog at end of 2025 was $11.1 billion, with T-6 award to be booked in Q1 2026.

Fourth quarter revenue increased 5% year-over-year to $1.22 billion, with adjusted EBITDA of $88.7 million, a record. Full year revenue grew 4% to $4.48 billion, adjusted EBITDA was $323.3 million with a margin of 7.2%. Adjusted net income was $166.8 million for the full year, up 20% year-over-year. Net debt improved by $116 million, net leverage ratio at 2.2x. Training, foreign military sales, rapid prototyping, T-6 Aircraft, F-16 Modernization, General Motors training, MDA Shield IDIQ, Advanced Technology Support Program IDIQ, and classified national security programs contributed to performance.

• 2026 revenue expected to be $4.675 billion to $4.825 billion, midpoint $4.75 billion, 6% growth. • Adjusted EBITDA estimated at $335 million to $350 million. • Adjusted diluted earnings per share guidance $5.50 to $5.90, 9% growth at midpoint. • Adjusted net cash provided by operating activities expected $150 million to $170 million. • Cash interest expense expected ~$69 million, other expenses $15 million, capital expenditures ~$25 million.

• Uncertainty in the Middle East region regarding employee safety and impact on business activities. • Potential legal hurdles with contracts like the T-6 award. • Uncertainty in award adjudication for remaining large opportunities. • Impact of political and budgetary factors on award cadence and business operations. • Dependence on timely execution and performance of new programs like T-6 which may have initial margin implications.

Q: Comment on company's revenue and activity in Middle East region.

A: Shawn and Jeremy mentioned concern for employee safety, fluid situation, and importance of presence.

Q: Contribution and legal hurdles of T-6 contract.

A: Shawn said T-6 program starts March 1, assumed revenue of $140 - $160 million this year, can't speculate on legal hurdles.

Q: Trajectory of intel business.

A: Jeremy said QinetiQ acquisition positions well, pipeline to grow.

Q: Status of remaining large opportunities.

A: Jeremy said 2 retired, 3 waiting on adjudication, 1 bid in fall, 1 in 2027.

Q: Indo Pacific market update.

A: Shawn said flat to slightly down in 2025, continue into 2026, early innings.

Q: AI partnerships and margin profile.

A: Jeremy and Shawn discussed AI partnerships with Google and AWS, incremental impact on margin.

Q: Net leverage and M&A.

A: Shawn said look at all options for value creation, happy with leverage, optionality.

Q: AI lever for company.

A: Jeremy and Shawn said AI partnerships enable better outcomes, incremental use.

Q: Golden Dome requirements and Shield IDIQ.

A: Shawn said long-term play, presence and contract vehicles key.

Q: Book-to-bill and T-6.

A: Jeremy said T-6 booked in Q1, Shawn said above 1x book-to-bill with T-6.

Q: Margin and new work.

A: Shawn and Jeremy said new work ramps, programs go through life cycle, team will deliver.

Q: Cash flow shape in 2026.

A: Shawn said more balanced than previous years.

Q: Recompete risk and major programs driving growth.

A: Shawn said recompetes 3% of revenue, FMS, training, T-6, Middle East activities drive growth.

Q: Risks to achieving 2026 guidance.

A: Jeremy said being prepared for customer's moment's notice on mission requirements.