V2X (VVX 2.45%) is a global government services company focused on mission-critical support for defense, security, and related customers. On August 4, 2025, the company reported results for the second quarter of fiscal 2025, delivering a material non-GAAP earnings and GAAP revenue beat compared to consensus. Non-GAAP earnings per share finished at $1.33, handily outpacing the $0.97 average analyst estimate (non-GAAP), while revenue (GAAP) reached $1.08 billion, above the $1.05 billion expectation. Despite only modest year-over-year growth in GAAP revenue, the quarter revealed considerable bottom-line improvement. Management described the period as strong, citing significant margin expansion and successful execution of new contract wins.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $1.33 | $0.97 | $0.83 | 60.2 % |
| EPS (GAAP) | $0.70 | ($0.21) | NM | |
| Revenue | $1.08 billion | N/A | $1.07 billion | 0.9 % |
| Adjusted EBITDA | $82.4 million | N/A | N/A | |
| Adjusted Net Income | $42.3 million | $26.3 million | 60.8 % |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
About V2X and current focus
V2X is a mission solutions integrator, formed from the merger of Vectrus and Vertex Aerospace. Its work centers on operational support for government and defense customers, delivering training, logistics, supply chain services, and technology-enabled mission support worldwide. The company operates a single business segment in 329 locations across 47 countries and territories, serving clients such as the U.S. Army, Navy, Air Force, and allied government agencies.
Recently, V2X has focused on integrating its merger, driving diversification, and optimizing operations to deliver on margin and growth targets. It aims to use its greater scale and reach to compete for integrated, multi-year contracts. Key business success factors include operational execution, efficient cost management, regulatory compliance in government contracting, and maintaining a skilled, security-cleared workforce with expertise in complex defense environments.
Quarter highlights: Key achievements and developments
Growth was driven mainly by U.S. operations, which rose 9.2% to $632.4 million (GAAP). However, this was partly offset by lower contributions from the Middle East and Asia, which dropped 11.3% and 9.3%, respectively. The company attributed some of the stagnation to program transitions and the winding down of certain contracts, especially in the Air Force segment, which saw revenue fall 15.4%.
Despite flat top-line numbers, profitability and cash flow metrics improved sharply. Adjusted net income jumped 61% to $42.3 million, lifting the adjusted EBITDA margin to 7.6% (non-GAAP). Reported GAAP net income was $22.4 million, reversing a GAAP net loss in the prior year.
The quarter saw notable contract wins and milestones. The most significant was a $4.3 billion T-6 aircraft training program, which is expected to sustain long-term revenue visibility and showcases V2X's post-merger abilities to win major, multi-service aviation training opportunities. The company also achieved full operational capability on the Army’s largest training program, enabling it to deliver integrated training solutions globally and to support over 700 aircraft across the customer base.
Different customer segments performed unevenly. Army-related revenue (GAAP) remained flat at $457.4 million. The Navy segment, however, saw a 1.3% improvement to $354.3 million in revenue (GAAP), while "Other" customers grew 14.9%. The company’s geographical reach continued to aid stability, yet Middle East and Asia regions presented challenges due to contract cycles and program timing.
Additional financial metrics strengthened the company's profile. Net cash provided by operating activities (GAAP) reached $28.5 million. Adjusted operating cash flow exceeded $58 million, swinging positive to $28.5 million net cash provided by operating activities (GAAP) from negative net cash used in operating activities (GAAP) in the prior year. V2X initiated a $100 million share repurchase authorization, providing increased flexibility around capital allocation and future shareholder returns.
VVX does not currently pay a dividend.
Looking ahead: Management guidance and investor watch points
After the earnings beat, management raised its full-year adjusted diluted EPS forecast to a range of $4.65–$4.95, up from $4.45–$4.85. Revenue and adjusted EBITDA guidance were left unchanged. Management expects earnings and cash generation to be weighted toward the third and fourth quarters, mainly due to the ramp up of key programs and transitions.
V2X leadership encouraged investors to monitor program execution and cadence, the final ramp of large new contract awards, and the variability in customer and geographic revenue streams. Guidance for adjusted net cash from operations remains at $150–$170 million. No material regulatory or tariff pressures were identified for the business at this time.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
