V2X raises 2025 revenue guidance to $4.5B while strengthening defense contract pipeline

Earnings Call Insights: V2X, Inc. (VVX) Q3 2025

Management View

• CEO Jeremy Wensinger reported strong third quarter results, marking record revenue and adjusted EPS. Wensinger stated, "Performance was strong, yielding both record revenue and adjusted EPS in the third quarter. Revenue increased 8% year-over-year to $1.17 billion, delivering adjusted EPS of $1.37." He emphasized successful execution of the capital allocation strategy, including a completed acquisition expanding access to the intelligence community and a $10 million share repurchase.

• Wensinger highlighted significant contract wins: "We delivered a solid 1.2x book-to-bill ratio... We've been awarded what we expect to be a $1 billion foreign military sales for the Iraq's F-16 program" and referenced the $4 billion T-6 award, calling it a "cornerstone award" for training military pilots. He noted ongoing growth in the company’s technology-driven offerings, particularly in counter-UAS and mission support.

• The CEO discussed investments in data and AI and expanding the training portfolio, as well as the company’s $50 billion pipeline. He signaled optimism for continued growth through modernization and readiness solutions.

• CFO Shawn Mural stated, "Revenue in the third quarter increased 8% to $1,167 million. Growth was fueled by the WTRS, F-5 and Iraq F-16 programs." He added, "Adjusted EBITDA in the quarter was $85.2 million, delivering a margin of 7.3%. Interest expense in the third quarter was $20 million. Cash interest expense was $18.4 million, improving $7.2 million year-over-year. Net income for the quarter was $24.6 million. Adjusted net income was $43.7 million, up 6% year-over-year." Mural also reported a $10 million share repurchase and a small acquisition.

Outlook

• Management raised guidance for 2025, with Mural stating, "We are increasing the midpoint of our 2025 guidance for revenue, adjusted EBITDA and adjusted EPS to $4.5 billion, $316 million and $4.95, respectively." The company is lowering the midpoint of adjusted operating cash flow guidance, citing potential timing delays related to the government shutdown, which are described as "purely a timing adjustment and doesn't reflect any changes to the fundamentals of the business."

• Wensinger emphasized confidence in continued growth for 2026, supported by major contract wins and minimal recompete exposure.

Financial Results

• Third quarter revenue was $1,167 million, adjusted EBITDA was $85.2 million, and adjusted net income was $43.7 million. Third quarter diluted EPS was $0.77 and adjusted diluted EPS was $1.37. Adjusted operating cash flow in the quarter was $35.8 million.

• Year-to-date revenue reached $3,261 million, adjusted EBITDA was $234.6 million, and adjusted net income was $117.5 million. Diluted EPS in the first 9 months was $1.73; adjusted diluted EPS was $3.68.

• Total backlog at the end of the third quarter was $11.6 billion, with $2.3 billion funded. Third quarter net bookings were $1.4 billion, and sequential backlog growth was approximately $240 million. Book-to-bill ratio for the trailing 12 months was 0.9x.

Q&A

• Peter Arment, Baird: Asked about cash flow guidance amid government shutdown. Mural explained, "...the payment has been elongated a bit, on average, about 7 days... we felt it appropriate to bring down the midpoint about $25 million. Again, purely timing."

• Arment: Questioned pipeline progress. Wensinger cited maturity in the growth organization and the hiring of Roger Mason as Chief Growth Officer, "I feel really good about the fact that we've retired 2 of the 5 major pursuits... again, I think the maturity of the company, along with the maturity in the growth organization is starting to come to bear."

• Jonathan Siegmann, Stifel: Asked about backlog treatment of protested awards. Mural stated, "It's our policy that we have. Anything in protest, we would not take a booking on."

• Andre Madrid, BTIG: Asked about the impact of the shutdown on recompete holiday and growth regions. Mural said, "We'll see how those recompetes play out... we see cost type revenue grow faster... from a region standpoint, the U.S. growing faster than some other areas."

• Kenneth Herbert, RBC: Inquired about growth drivers and margin outlook. Mural responded, "the strength of those 3 programs continues, and we expect that trajectory to continue into Q4... mostly timing of expenses is the way that I'd frame it up."

• Tobey Sommer, Truist: Discussed foreign military sales and payment timing. Wensinger and Mural described demand pull from international customers and clarified that payment delays are a secondary effect of the shutdown, not a broader risk.

• Joseph Gomes, NOBLE: Asked about INDOPACOM and T-6 protest timing. Wensinger noted continued confidence in INDOPACOM and said the T-6 protest timing is difficult to predict.

• Trevor Walsh, Citizens JMP: Asked about counter-UAS opportunities and acquisition impact. Wensinger and Mural described Tempest as an example of rapid prototyping and confirmed that the recent acquisition was about customer access more than size.

• Kristine Liwag, Morgan Stanley: Asked if strong book-to-bill reflected a pull-forward of contracts. Wensinger said awards were "mostly just normal timing." On the U.S. withdrawal from Romania, Wensinger stated continued importance of existing defense programs.

• Noah Poponak, Goldman Sachs: Asked about Q4 growth range drivers and 2026 growth. Mural explained funding variability and ramping of WTRS and F-16 Iraq would support growth into 2026. On margins, Mural commented, "over time, we certainly see margin expansion opportunities... that's the nature of what we're here to help generate."

Sentiment Analysis

• Analysts focused on the potential impact of the government shutdown, payment delays, and contract timing, with a slightly cautious tone. Repeated questions about cash flow and backlog policy reflected concern around uncertainty but also interest in the company’s growth pipeline.

• Management maintained a confident tone throughout, repeatedly emphasizing that payment delays are "purely timing" and not reflective of underlying business issues. Phrases such as "we are confident" and "we remain optimistic" were frequent in both prepared remarks and responses.

• Compared to the previous quarter, both analysts and management showed increased focus on timing and risk management related to government funding. Management’s confidence level remained steady, while analysts’ questions became more probing regarding the impact of external government processes.

Quarter-over-Quarter Comparison

• The company raised revenue, adjusted EBITDA, and adjusted EPS guidance for 2025, up from reaffirmed levels in the previous quarter. There was a shift in guidance language to address the government shutdown's impact on cash flow, now described as a "timing" issue.

• Management continued to focus on major contract wins, with new awards highlighted this quarter, including the Iraq F-16 program and rapid prototyping contracts. Strategic priorities remained consistent, with added emphasis on technology investments and expanding customer access.

• Analyst focus shifted from overall growth and pipeline to the specifics of contract timing, payment delays, and the implications of the government shutdown. Management’s sentiment remained confident, but with more direct acknowledgment of potential delays due to external factors.

Risks and Concerns

• Management identified the ongoing U.S. government shutdown as a key risk, specifically regarding potential temporary delays in contract adjudication and collections. They stated that these are timing-related, not credit risks.

• The T-6 award remains under protest, with timing of resolution uncertain. Other contract awards may be delayed by the shutdown, affecting backlog and book-to-bill ratios in the near term.

• Analysts expressed concern about the impact of payment delays, government funding, and the predictability of contract wins and revenue timing.

Final Takeaway

V2X delivered record third quarter results and raised its 2025 financial guidance, underpinned by strong contract wins and an expanding pipeline. While the ongoing government shutdown may cause timing delays in payments and contract actions, management emphasized these do not reflect underlying business weakness. Major franchise awards, new capabilities from acquisitions, and investments in technology position the company for continued growth into 2026, with a robust $50 billion pipeline and increasing demand for mission-critical solutions.

Read the full Earnings Call Transcript