V2X — Third Quarter 2026 Earnings Summary

Financial Performance:

• Reported third-quarter revenue of $1.27 billion, a 9% increase year-over-year.
• Net income reached $32.0 million, up 30% year-over-year; adjusted net income was $51.7 million, up 19% year-over-year.
• Diluted EPS was $1.01, a 32% increase year-over-year; adjusted diluted EPS was $1.64, up 19% year-over-year.
• Adjusted EBITDA totaled $88.6 million with a margin of 7.0%, representing a 4% year-over-year increase.
• Net cash provided by operating activities for the quarter was $67.3 million; adjusted net cash provided by operating activities was $61.8 million.
• Net debt stood at $811.7 million at quarter-end, an improvement of $140.3 million year-over-year, resulting in a 2.2x net leverage ratio.
• For the nine months ended October 2, 2026, revenue was $3.78 billion and net income was $76.5 million.

Guidance and Future Outlook:

• Increased full-year 2026 revenue guidance to a range of $4.95 billion to $5.10 billion (prior guidance: $4.875 billion to $5.025 billion).
• Updated full-year 2026 adjusted EBITDA guidance to a range of $352.5 million to $367.5 million (prior guidance: $347.5 million to $362.5 million).
• Revised full-year 2026 adjusted diluted EPS guidance to a range of $6.15 to $6.55 (prior guidance: $5.90 to $6.30).
• Updated full-year 2026 adjusted net cash provided by operating activities guidance to a range of $175 million to $195 million (prior guidance: $160 million to $180 million).
• Management expects to achieve a net leverage ratio of approximately 2.0x by the end of 2026.
• Guidance excludes a quantitative reconciliation for forward-looking non-GAAP measures due to the inability to reasonably estimate certain M&A, integration, and related costs.

Business Segments and Product Lines:

• Total backlog as of October 2, 2026, was $12.8 billion, with funded backlog at $2.6 billion.
• Book-to-bill ratio was approximately 1.2x in the third quarter and 1.4x on a trailing twelve-month basis.
• Revenue by contract type showed a 470% year-over-year increase in Time-and-materials contracts ($159.9 million) and a 10.5% increase in Cost-plus and cost-reimbursable contracts ($2.18 billion for nine months).
• Geographic revenue analysis showed a 30.6% year-over-year increase in the United States ($894.1 million) and an 8.3% increase in Asia ($88.2 million), offset by a 30.2% decline in the Middle East ($240.5 million).
• Prime contractor revenue grew 9.9% year-over-year to $1.22 billion, while subcontractor revenue declined 9.9% to $51.8 million.
• Customer revenue breakdown indicated a 50.0% year-over-year increase for the Air Force ($251.3 million) and an 83.0% increase for "Other" customers ($292.8 million).

Market and Competitive Landscape:

• Management cited consistent demand for mission-critical capabilities and recent award activity as drivers of momentum.
• The company leverages a global presence and diverse capabilities to scale as customer requirements evolve.
• The company operates across national security, defense, civilian, and international markets with a global team of approximately 16,200 professionals.
• The company injects AI and machine learning capabilities to meet challenges across all operational domains.

Risks and Challenges:

• Forward-looking statements are subject to risks including the ability to win potential opportunities, retain existing contracts, and compete with other market participants.
• Significant risks include security breaches, cyber-attacks, and disruptions related to artificial intelligence technologies.
• Risks involve the mix of contract types (cost-plus, firm-fixed-price, time-and-materials) and maintaining relationships with the U.S. government.
• Potential impacts from changes in U.S. or international defense budgets, government regulations, and procurement process changes are noted.
• Other risks include geopolitical instability, inflation, interest rate risk, supplier performance, and the ability to retain qualified personnel.
• Risks related to the realization of full backlog amounts, goodwill impairment, and employee misconduct are also highlighted.

Management Commentary and Tone:

• Jeremy C. Wensinger, President and CEO, described the quarter as "strong," highlighting double-digit increases in net income and diluted EPS.
• Management attributed results to consistent team execution and reinforced momentum from on-contract growth and recent awards.
• The tone is confident regarding the company's ability to scale and deliver long-term value through the "Go Towards Tomorrow" strategy.
• Management expressed belief that current backlog and demand signals justify the increased full-year guidance.

Other Key Points:

• The company is not providing a quantitative reconciliation for forward-looking non-GAAP measures due to the "unreasonable efforts" exception under SEC rules regarding M&A and integration costs.
• A conference call with analysts and investors was scheduled for November 2, 2026, at 4:30 p.m. ET, with a live webcast and slide presentation available online.
• Total debt was $1.07 billion as of October 2, 2026, with long-term debt net of $1.03 billion.
• Cash, cash equivalents, and restricted cash totaled $265.1 million at quarter-end.
• The company reported a loss on extinguishment of debt of $1.7 million for the nine months ended October 2, 2026.
• Stock-based compensation for the nine months ended October 2, 2026, was $11.8 million.