Executive Summary

Record revenue of $1.17B (+8% y/y) and adjusted diluted EPS of $1.37 (+6% y/y); both exceeded Wall Street consensus for Q3 2025 (Revenue: $1.134B*, EPS: $1.21*) as VVX delivered stronger U.S. demand and program execution. Bold beat: Revenue and EPS beat .
Raised FY2025 midpoints for revenue ($4.425–$4.500B), adjusted EBITDA ($312–$320M), and adjusted EPS ($4.85–$5.05); lowered adjusted operating cash flow to $120–$150M to reflect potential timing delays from the government shutdown (collections) .
Capital deployment advanced: $10M buyback executed; closed the QinetiQ U.S. Intelligence acquisition to expand capabilities and addressable market; multiple awards underscoring momentum (e.g., F-16 cockpit displays $425M IDIQ; Tempest counter‑UAS award) .
Near‑term stock catalysts: accelerating back-half ramp from program transitions, visible backlog (~3x annual revenue, per prior commentary), and continued fixed‑price award mix; narrative supported by robust U.S. growth (+13.2% y/y in Q3) .

What Went Well and What Went Wrong

What Went Well

Demand and execution: “Record revenue of $1.17 billion, up 8% y/y” with adjusted EBITDA of $85.2M (7.3% margin), highlighting resilient demand and operational execution .
Strategic awards: Tempest counter‑UAS platform went “from idea to fielding in a matter of months,” plus $425M IDIQ to modernize F‑16 cockpit displays—evidence of rapid prototyping and smart modernization differentiation .
Portfolio expansion and capital returns: Closed QinetiQ U.S. Intelligence acquisition to deepen data/cyber capabilities and repurchased $10M of shares, initiating capital deployment consistent with articulated strategy .

What Went Wrong

Cash flow headwind: Lowered FY2025 adjusted operating cash flow midpoint (to $120–$150M) due to potential collection timing from the government shutdown, despite delivering $39.4M net CFO in Q3 and $35.8M adjusted CFO; y/y adjusted CFO down vs Q3 2024 ($130.1M) .
Margin compression: Adjusted EBITDA margin declined 30 bps y/y to 7.3% as mix and program cost timing weighed versus prior year (7.6%) .
Regional variability: Middle East revenue modestly down y/y (-0.6%), with growth concentrated in U.S. (+13.2%)—exposing geographic dependency and tougher comps in certain regions .

Financial Results

Metric	Q1 2025	Q2 2025	Q3 2025
Revenue ($USD Millions)	$1,015.923	$1,078.330	$1,167.137
GAAP Diluted EPS ($)	$0.25	$0.70	$0.77
Adjusted Diluted EPS ($)	$0.98	$1.33	$1.37
Operating Income ($USD Millions)	$34.298	$52.940	$55.669
Adjusted EBITDA ($USD Millions)	$66.961	$82.435	$85.156
EBITDA Margin %	6.6%	7.6%	7.3%
Net Income ($USD Millions)	$8.107	$22.391	$24.605
Net Cash Provided by Operating Activities ($USD Millions)	$(95.464)	$28.532	$39.448

Revenue Breakdown by Customer (Trend)

Customer ($USD Thousands)	Q1 2025	Q2 2025	Q3 2025
Army	$442,136	$457,443	$449,031
Navy	$346,118	$354,282	$390,542
Air Force	$99,126	$107,822	$167,571
Other	$128,543	$158,783	$159,993
Total Revenue	$1,015,923	$1,078,330	$1,167,137

Revenue by Geographic Region (Trend)

Region ($USD Thousands)	Q1 2025	Q2 2025	Q3 2025
United States	$577,458	$632,357	$684,659
Middle East	$318,345	$320,317	$344,605
Asia	$75,978	$76,793	$81,417
Europe	$44,142	$48,863	$56,456
Total Revenue	$1,015,923	$1,078,330	$1,167,137

KPIs and Capital Structure

KPI	Q1 2025	Q2 2025	Q3 2025
Adjusted Operating Cash Flow ($USD Thousands)	$(118,073)	$58,254	$35,755
Cash Interest Expense, net ($USD Thousands)	$18,231	$19,055	$18,405
Weighted Avg Diluted Shares (Millions)	32.021	31.883	31.856
Share Repurchase ($USD Millions)	—	—	$10.0

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue ($B)	FY2025	$4.375–$4.500 (Q2 update)	$4.425–$4.500	Raised midpoint
Adjusted EBITDA ($M)	FY2025	$305–$320 (Q2 update)	$312–$320	Raised midpoint
Adjusted Diluted EPS ($)	FY2025	$4.65–$4.95 (Q2 update)	$4.85–$5.05	Raised midpoint
Adjusted Net Cash Provided by Operating Activities ($M)	FY2025	$150–$170 (Q2 update)	$120–$150	Lowered

Note: Q1 initiated FY2025 guidance at Revenue $4.375–$4.500B, Adj. EBITDA $305–$320M, Adj. EPS $4.45–$4.85, Adj. Operating Cash Flow $150–$170M .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 2025 and Q1 2025)	Current Period (Q3 2025)	Trend
AI/technology initiatives	“Advancing V2X to be a leader in data-enabled mission solutions… partnerships” (Q2 PR)	“Accelerating innovation strategy through partnerships in AI and smart readiness”	Building momentum
Supply chain/readiness	T‑6 $4.3B contract awarded; aircraft readiness >90% cited in Q1 call context	Tempest counter‑UAS rapid prototyping; F‑16 cockpit modernization	Strengthening execution
Tariffs/macro	Minimal tariff impact; bookings back-half weighted; CR effects modest (Q1 call)	Government shutdown timing risk to collections; lowering operating cash flow guidance	Timing risk, fundamentals intact
Product/program performance	WTRS ramp and F‑5 uplift back‑half (Q1 call)	Q3 revenue up 8% y/y; U.S. +13%; Air Force +37.5% y/y	Improving mix
Regulatory/legal	FAR reform early; monitoring (Q1 Q&A)	No new regulatory disclosures beyond safe harbor	Stable awareness
Regional trends	INDOPACOM growth; Middle East tough comps (Q1 call)	U.S. strong; Middle East slightly down y/y; Europe +19.2% y/y	Mixed regional

Management Commentary

CEO: “Our differentiated capabilities… proven firsthand through several new awards… Tempest… engineered to detect, engage, and defeat various UAS… went from idea to fielding in a matter of months.”
CEO: “We… completed a strategic acquisition that brings new capabilities and access to new opportunities in the intelligence community… partnerships with top tier technology providers in AI and smart readiness.”
CFO: “Operating income of $55.7M (+12% y/y)… adjusted operating income $79.6M (+4% y/y)… adjusted EBITDA $85.2M (7.3% margin)… adjusted diluted EPS $1.37 (+6% y/y).”
CFO: “Repurchased $10M of shares… increasing midpoint of revenue, adjusted EBITDA, and adjusted diluted EPS; lowering midpoint of adjusted operating cash flow due to potential temporary delays in collections.”

Q&A Highlights

Backlog/visibility: Backlog ~3x annual revenue; recompetes reduced to ~1–2% for 2025; fixed‑price awards expected to drive bookings in back half .
Capital allocation: Optionality across buybacks, M&A, internal investments; deleveraging continues with sequential improvement .
Program ramp: WTRS ramp largely back-half; F‑5 contributes roughly $50M in H2; combined H2 uplift remains intact .
Macro/tariffs: Minimal impact expected; CR disruptions modest and temporary; funding stream changes acknowledged .
Regional mix: Middle East activity has tough comps; U.S. strength and INDOPACOM emphasis aligned with priorities .

Note: Q3 2025 earnings call transcript was not available in our corpus; Q&A highlights reflect Q1 2025 call for trend context .

Estimates Context

Metric	Q3 2025 Consensus	Q3 2025 Actual
Revenue ($USD)	$1,133,678,590*	$1,167,137,000
Primary EPS ($)	$1.21111*	$1.37
Primary EPS – # of Estimates	9*	—
Revenue – # of Estimates	10*	—

Values retrieved from S&P Global.*
Outcome: Bold beat on revenue and EPS vs consensus.

Key Takeaways for Investors

VVX delivered a clean beat on revenue and adjusted EPS with broad-based strength, notably in U.S. operations and Air Force programs, while margins remained healthy despite slight y/y compression .
FY2025 midpoint raises on revenue/EBITDA/EPS signal confidence in execution and backlog conversion; lowered operating cash flow midpoint is timing‑related—management emphasized underlying business unchanged .
Strategic acquisition (QinetiQ U.S. Intelligence) and mission awards (Tempest, F‑16 displays, T‑6) bolster pipeline quality and capability differentiation—supporting multi‑year growth and addressable market expansion .
Back-half revenue catalysts remain intact (WTRS and F‑5), with fixed‑price award mix and enhanced bid velocity positioning for bookings uplift and backlog accretion .
Watch operating cash flow cadence and collection timing into Q4 given government shutdown dynamics; any normalization could relieve cash concerns near term .
Mix shift (U.S. strength, Middle East variability) and program transitions drive quarterly variability—investors should focus on FY trajectory and backlog quality rather than single‑quarter region swings .
Medium term: AI/smart readiness partnerships and modernization initiatives are becoming embedded in VVX’s offering, creating optionality across defense and intelligence markets .

V2X, Inc. (VVX)·Q3 2025 Earnings Summary