V2X (VVX) Q3 2024 earnings summary

Executive summary

• Achieved record Q3 2024 revenue of $1.08 billion, up 8% year-over-year, with Indo-Pacific revenue growing 31% and Middle East up 13%.

• Net income reached $15.1 million, a $21.5 million improvement year-over-year; adjusted net income rose 76% to $41.3 million.

• Adjusted EBITDA was $82.7 million, up 28% year-over-year, with a 7.6% margin; adjusted diluted EPS was $1.29, up 77%.

• Secured approximately $5 billion in new awards, including a $3.7 billion Warfighter-Training Readiness Solutions contract.

• Backlog totaled $12.2 billion, with a book-to-bill ratio of approximately 1.0x and $3.0 billion funded.

Financial highlights

• Q3 2024 revenue: $1.08 billion (+8% year-over-year); year-to-date: $3.164 billion (+8%).

• Adjusted EBITDA: $82.7 million for Q3 (+28%); $224.1 million year-to-date; margin 7.6%.

• Adjusted diluted EPS: $1.29 for Q3 (+77%); $3.01 year-to-date.

• Net income for Q3: $15.1 million, reversing a net loss of $6.4 million in Q3 2023.

• Adjusted net cash from operating activities: $130.1 million for Q3 (+35%); year-to-date adjusted net cash used: $7.2 million.

Outlook and guidance

• Raised 2024 revenue guidance to $4.225–$4.28 billion; adjusted EPS guidance to $3.95–$4.20.

• Adjusted EBITDA guidance reaffirmed at $300–$315 million; net cash from operations at $145–$165 million.

• Targeting net leverage ratio at or below 3.0x by year-end 2024.

• Expect continued growth in 2025, with strong backlog and revenue visibility.

• 23% of remaining performance obligations to be recognized as revenue in 2024, 77% in 2025.