V2X Raises 2026 Guidance as Q3 Revenue Rises 9%

V2X (NYSE: VVX) increased its full-year 2026 guidance after third-quarter revenue rose 9% year over year and adjusted operating cash flow strengthened, while contract awards and a $12.8 billion backlog provided visibility into 2027.

Revenue reached $1.27 billion for the quarter ended October 2, up from $1.17 billion a year earlier. Net income increased to $32.0 million from $24.6 million, and diluted earnings per share rose to $1.01 from $0.77.

Adjusted net income grew 19% to $51.7 million, while adjusted diluted EPS increased by the same percentage to $1.64. Adjusted EBITDA advanced to $88.6 million from $85.2 million, although the adjusted EBITDA margin narrowed to 7.0% from 7.3%.

Full-year outlook increased

V2X now expects 2026 revenue of $4.95 billion to $5.10 billion, compared with its prior range of $4.875 billion to $5.025 billion. The company increased its adjusted EBITDA forecast to between $352.5 million and $367.5 million from $347.5 million to $362.5 million.

Adjusted diluted EPS is projected at $6.15 to $6.55, up from the previous $5.90-to-$6.30 range. V2X also raised its outlook for adjusted net cash provided by operating activities to $175 million to $195 million from $160 million to $180 million.

The updated forecast assumes approximately $65 million of cash interest expense, $15 million of other expense, and $112 million of depreciation and amortization. It also incorporates a tax rate of about 23%, roughly 32 million weighted-average diluted shares and approximately $20 million of capital expenditures.

Backlog supports revenue visibility

Third-quarter awards totaled approximately $1.6 billion, resulting in a quarterly book-to-bill ratio of 1.2 times. The trailing 12-month ratio was 1.4 times, while year-to-date on-contract growth bookings were about $800 million.

Total backlog stood at $12.8 billion, comprising $2.6 billion of funded backlog and $10.2 billion of unfunded backlog. V2X said the award activity and backlog support its 2026 outlook and provide visibility moving into 2027. Unfunded backlog includes amounts not currently contractually obligated by customers, including certain unexercised options considered probable.

For the first nine months of 2026, revenue increased 16% to $3.78 billion. Net income rose to $76.5 million from $55.1 million, while adjusted net income increased 29% to $151.4 million. Adjusted EBITDA climbed 13% to $264.0 million, with the margin easing to 7.0% from 7.2%. Adjusted diluted EPS rose 30% to $4.80.

Cash generation also improved. Third-quarter adjusted operating cash flow increased to $61.8 million from $35.8 million. For the first nine months, it reached $111.5 million, compared with an adjusted cash outflow of $24.1 million in the prior-year period. V2X reported a net leverage ratio of 2.2 times and about $750 million of balance-sheet capacity.

Investment and preliminary 2027 view

V2X is investing in engineering, rapid prototyping, facilities, operational infrastructure and research and development to address anticipated customer demand. Customer-funded and internal R&D investment in 2026 is expected to be 2.3 times the prior-year level, while investment remains within the company’s approximately $20 million annual capital expenditure plan.

The company highlighted counter-unmanned aircraft systems, aircraft maintenance and predictive maintenance, and Asia-Pacific logistics as priority capabilities. Its presentation said V2X moved one counter-UAS offering from concept to live-fire testing in four months and to fielding in six months. The company also cited first-time quality rates above 96% across roughly 1,700 aircraft and more than 13,000 annual shipments involving 800,000 material items in the Asia-Pacific region.

In its preliminary 2027 perspective, management expects year-over-year revenue growth in Asia-Pacific, the T-6 program and modernization. National Security revenue is expected to remain flat through the first half, while Middle East revenue is expected to decline. Recompetes are estimated to represent about 6% of revenue. V2X also anticipates growth in adjusted EBITDA margin, adjusted EPS and adjusted operating cash flow.

The outlook remains subject to risks including V2X’s ability to win and retain contracts, convert backlog into revenue, control costs and recruit qualified personnel. Other uncertainties include government budget and procurement changes, contract protests, cybersecurity threats, indebtedness, inflation, interest rates, geopolitical conditions, tariffs and supplier performance.