Key Highlights

  • Revenue rose 8.9% to USD 1,271.5 million, with U.S. program Revenue up USD 209.4 million.
  • Operating income rose 6.8% to USD 59.5 million, though Margin was 4.7% versus 4.8% a year earlier.
  • Net income rose to USD 32.0 million, or USD 1.01 per diluted share, from USD 24.6 million and USD 0.77.
  • Interest expense, net, fell to USD 15.5 million from USD 20.0 million, and the company raised full-year 2026 guidance.

Quarter in Numbers

V2X, Inc. (NYSE:VVX), a provider of mission support services to defense and national security customers, reported revenue of USD 1,271.5 million for the quarter ended October 2, 2026, an increase of USD 104.3 million, or 8.9%, from USD 1,167.1 million. Revenue from programs in the United States rose USD 209.4 million and from Asia rose USD 6.8 million, partly offset by decreases of USD 104.1 million in the Middle East and USD 7.8 million in Europe. Cost of revenue rose 8.9% to USD 1,168.0 million, consistent with revenue, so gross spread after cost of revenue was USD 103.4 million versus USD 94.5 million by our calculation.

Selling, general and administrative expenses rose 13.2% to USD 44.0 million from USD 38.8 million on higher operating costs associated with growth. Operating Income rose 6.8% to USD 59.5 million, or 4.7% of revenue versus 4.8%. Cumulative catch-up adjustments reduced operating income by USD 1.1 million, compared with an increase of USD 2.5 million a year earlier.

Earnings

Interest expense, net, fell to USD 15.5 million from USD 20.0 million, and other expense, net, was USD 2.4 million versus USD 3.0 million. Income before income taxes rose to USD 41.5 million from USD 32.7 million. Income tax expense was USD 9.5 million, an effective rate of 22.9%, compared with USD 8.1 million. Net Income was USD 32.0 million versus USD 24.6 million, or USD 1.01 per diluted share versus USD 0.77, on 31.6 million diluted shares versus 31.9 million.

By our calculation, the lower interest expense contributed USD 4.4 million of the USD 8.8 million rise in pre-tax income, so reduced financing cost accounted for about half of the improvement. The effective tax rate fell to 22.9% from 24.9% by our calculation, which also helped net income grow about 30% while operating income grew 6.8%.

Nine Months and Guidance

For the nine months, revenue was USD 3,782.2 million versus USD 3,261.4 million, operating income was USD 157.4 million versus USD 142.9 million, net income was USD 76.5 million versus USD 55.1 million, and diluted Earnings per share were USD 2.42 versus USD 1.73. Selling, general and administrative expense was USD 161.4 million versus USD 125.4 million, and interest expense, net, was USD 50.4 million versus USD 60.3 million.

On the earnings call, management said consistent execution, recent contract wins and continued alignment with national security priorities drove the quarter, that it is increasing its full-year 2026 guidance, and that it has a clear line of sight into 2027 with growth anticipated across revenue, margins, earnings per share and free cash flow.

Program Mix Indicators

Revenue growth came from U.S. programs while Middle East activity declined by roughly the same order of magnitude, which shows a shift in program mix rather than a broad increase. Items to track include U.S. contract ramp-up, Middle East program wind-down, selling and administrative cost growth against revenue, cumulative catch-up adjustments and interest expense.