On August 6, 2024, V2X Inc (VVX, Financial) released its 8-K filing detailing its financial performance for the second quarter of 2024. V2X Inc is a U.S.-based company that provides services to the U.S. government, including facility and logistics services, information technology mission support, and engineering and digital integration services.
Performance Overview
V2X Inc reported record revenue of $1.07 billion for Q2 2024, a 10% increase year-over-year, surpassing the analyst estimate of $1.042 billion. However, the company posted a net loss of $6.5 million, translating to a diluted EPS of ($0.21), which fell short of the analyst estimate of $0.35. Adjusted diluted EPS was $0.83, indicating a more favorable performance when excluding certain non-recurring items.
Financial Achievements and Challenges
Despite the net loss, V2X Inc achieved several significant milestones. The company secured over $4 billion in recent awards, including a new five-year contract valued at over $3 billion to provide next-generation readiness. Additionally, V2X Inc successfully repriced and extended its $904 million Term Loan B, which is expected to yield interest expense savings and lower the overall cost of capital.
“V2X reported record revenue of $1.07 billion in the quarter, which represents 10% year-over-year growth,” said Shawn Mural, Senior Vice President and Chief Financial Officer.
Key Financial Metrics
For the quarter, V2X Inc reported operating income of $27.4 million and adjusted operating income of $65.8 million. Adjusted EBITDA was $72.3 million with a margin of 6.7%. The company’s total backlog as of June 28, 2024, was $12.2 billion, with a funded backlog of $2.9 billion. Bookings in the quarter amounted to $759 million.
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Revenue | $1.07 billion | $977.85 million |
| Operating Income | $27.4 million | $34.27 million |
| Net Income (Loss) | ($6.5 million) | $1.8 million |
| Adjusted EBITDA | $72.3 million | $77.75 million |
| Diluted EPS | ($0.21) | $0.06 |
| Adjusted Diluted EPS | $0.83 | $1.10 |
Balance Sheet and Cash Flow
As of June 28, 2024, V2X Inc reported total assets of $3.15 billion, with total liabilities amounting to $2.16 billion. The company’s net debt stood at $1.15 billion, with a net leverage ratio of 3.56x. Year-to-date, net cash used by operating activities was $31.6 million, reflecting working capital requirements to support growth.
Analysis and Outlook
V2X Inc’s record revenue and significant contract wins underscore the company’s strong market position and growth potential. However, the net loss and lower-than-expected EPS highlight ongoing challenges, including high interest expenses and integration costs. The company’s ability to secure large contracts and manage its debt effectively will be crucial for future profitability and growth.
For the full year 2024, V2X Inc has raised its revenue guidance to a range of $4.175 billion to $4.275 billion, while reaffirming its adjusted EBITDA, EPS, and operating cash flow guidance. This optimistic outlook reflects the company’s confidence in its strategic initiatives and market opportunities.
Investors and analysts will be closely monitoring V2X Inc’s performance in the coming quarters to assess the impact of its recent contract wins and financial strategies on overall profitability and shareholder value.
Explore the complete 8-K earnings release (here) from V2X Inc for further details.
