Fourth Quarter & Full-Year 2024 Results MISSION ENABLEMENT l END-TO-END CAPABILITIES l GLOBAL REACH February 24, 2025 GO TOWARDS TOMORROW #goV2X GO TOWARDS TOMORROW #goV2X ibdroot\projects\IBD-NY\vitus2024\938510_1\03. Roadshow Presentation\V2X - Roadshow Presentation (Nov- 2024)_vF.pptx ibdroot\projects\IBD-NY\vitus2024\938510_1\03. Roadshow Presentation\V2X - Roadshow Presentation (Nov- 2024)_vF.pptx Disclaimers FORWARD-LOOKING STATEMENTS This presentation contains forward-looking statements within the me ...

Group 1 - V2X reported quarterly earnings of $1.33 per share, exceeding the Zacks Consensus Estimate of $1.14 per share, and showing an increase from $1.22 per share a year ago, resulting in an earnings surprise of 16.67% [1] - The company achieved revenues of $1.16 billion for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 6.27%, compared to $1.04 billion in the same quarter last year [2] - Over the last four quarters, V2X has surpassed consensus EPS estimates three times and topped consensus revenue estimates four times [2] Group 2 - The stock has underperformed, losing about 12% since the beginning of the year, while the S&P 500 has gained 2.2% [3] - The current consensus EPS estimate for the upcoming quarter is $0.94 on revenues of $1.04 billion, and for the current fiscal year, it is $4.78 on revenues of $4.45 billion [7] - The Zacks Industry Rank indicates that the Technology Services sector is in the top 33% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8]

Financial Performance - Record revenue of $1.16 billion in Q4 2024, representing an 11% year-over-year growth[5] - Record net income of $25.0 million in Q4 2024; adjusted net income of $42.7 million, up 10% year-over-year[5] - Full-year revenue for 2024 was $4.32 billion, up 9% year-over-year[7] - Net income for the year ended December 31, 2024, was $34,684, compared to a net loss of $(22,573) in 2023[25] - Revenue for the twelve months ended December 31, 2024, was $4,322,155, an increase from $3,963,126 in 2023, representing a growth of approximately 9.1%[32] - Adjusted diluted EPS for 2024 increased 16% year-over-year to $4.34[7] - Operating income for the year ended December 31, 2024, was $159,204, up from $124,416 in 2023, representing a growth of approximately 28%[32] Revenue Breakdown - Indo-Pacific region revenue grew by 27% year-over-year, driven by increased demand[5] - Revenue from the Army segment was $1,837,843, up 12.5% from $1,633,525 in 2023[35] - Revenue from prime contracts amounted to $4,049,543, representing a 8.7% increase from $3,726,199 in 2023[37] - Cost-plus and cost-reimbursable contracts generated $2,531,792 in revenue, a rise of 14.6% from $2,209,241 in 2023[36] - Revenue from the United States was $2,388,598, reflecting a growth of 4.5% compared to $2,286,052 in 2023[38] - The Middle East region contributed $1,399,436, an increase of 17.3% from $1,193,598 in 2023[38] - The Air Force segment's revenue decreased to $481,265, down 10.7% from $538,698 in 2023[35] Cash Flow and Debt Management - Strong year-to-date cash flow from operations of $254 million[5] - Net cash provided by operating activities for the year ended December 31, 2024, was $254,237, up from $187,968 in 2023, indicating a growth of approximately 35.2%[25] - Cash, cash equivalents, and restricted cash at the end of the year was $268,321, compared to $72,651 at the beginning of the year, showing a significant increase[25] - Net debt reduced by $210 million year-over-year, with a net leverage ratio of 2.6x at the end of Q4 2024[6] - Cash and cash equivalents totaled $265,173, while total debt stood at $1,138,833[33] Future Outlook - Book-to-bill ratio of 1.2x in Q4 2024, with a total backlog of $12.5 billion as of December 31, 2024[5][6] - 2025 revenue guidance set at a midpoint of $4.44 billion, assuming approximately 4% contribution from recompetes[8][9] Adjusted Metrics - Adjusted EBITDA for Q4 2024 was $86.2 million, with a margin of 7.4%[6] - Adjusted EBITDA for the twelve months ended December 31, 2024, was $310,211, compared to $293,857 in 2023, reflecting an increase of about 5.5%[32] - Adjusted operating cash flow for the year ended December 31, 2024, was $160,982, compared to $159,459 in 2023, indicating a slight increase[32] - The company incurred $36,124 in M&A, integration, and related costs for the year ended December 31, 2024[32] - The company reported additional permitted add-backs of $71,284, which include non-cash losses and transaction-related costs[33]

Employee and Workforce Management - As of December 31, 2024, the company employed approximately 16,100 full-time employees and utilized about 6,200 subcontract workers[45] - Approximately 28% of the company's employees were represented by 45 collective bargaining agreements with labor unions[45] - The company offers a comprehensive benefits package, including flexible work options, education benefits, wellness programs, and retirement savings plans[48] - In 2024, the company provided access to over 4,000 virtual courses through its online V2X University to support employee development[51] - The company has established a robust talent and succession planning process to develop its talent pipeline for critical roles[52] - The Chief Growth Officer, appointed in January 2025, previously led a $2 billion business focused on advanced products and solutions for the space and defense markets[60] - The company has been recognized as a military-friendly employer, with over 38% of U.S. employees voluntarily reporting a military background[50] - The company conducts annual employee engagement surveys to assess workplace culture and employee satisfaction[47] Health and Safety - The health and safety management system aligns with ISO 45001 standards, focusing on continuous improvement and incident management[54] - The company is committed to complying with human rights provisions and has established a Code of Conduct to address issues like human trafficking and child labor[56] Financial Management and Market Risks - The company reported a $7.1 million change in annual cash interest expenses for each one percentage point change in the variable rate of the Vertex First Lien Credit Agreement[282] - A fully drawn 2023 Revolver at $500.0 million would result in a $5.1 million change in annual cash interest expense for each one percentage point change in interest rates[282] - As of December 31, 2024, the notional value of the company's interest rate swap agreements totaled $439.1 million[283] - The company has discontinued its forward foreign exchange contracts, which expired in January 2022, and no such contracts are outstanding as of December 31, 2024[284] - The majority of the company's business is conducted in U.S. dollars, but it is exposed to foreign currency exchange risks due to some contracts denominated in foreign currencies[284] - Earnings, cash flows, and financial position are exposed to market risks related to fluctuations in interest rates and foreign currency exchange rates[281] - The company has a history of entering into forward foreign exchange contracts to protect against volatility in foreign currency values, although the impact was previously deemed immaterial[284] Strategic Initiatives - The company intends to use its website for disclosing material non-public information and complying with disclosure obligations under Regulation FD[65] - The company has a focus on inorganic activities, including merger & acquisition strategy and execution, managed by the Corporate Vice President of Treasury, Investor Relations and Corporate Development[63] - The company aims to enhance operational efficiency and organic growth through strategic initiatives led by its senior executives[64]

Core Insights - V2X, Inc. reported a record revenue of $1.16 billion for Q4 2024, reflecting an 11% year-over-year growth, with significant contributions from the Indo-Pacific region, which saw a 27% increase [2][3][9] - The company achieved a book-to-bill ratio of 1.2x and has a total backlog of $12.5 billion as of December 31, 2024, indicating strong future revenue potential [3][9] - Full-year revenue for 2024 reached $4.32 billion, a 9% increase from the previous year, with adjusted diluted EPS rising 16% year-over-year to $4.34 [4][9] Financial Performance - Q4 2024 operating income was reported at $51.6 million, with adjusted operating income at $80.6 million, and adjusted EBITDA at $86.2 million, representing a margin of 7.4% [3][4] - The company generated net cash from operating activities of $223.1 million in Q4, with adjusted net cash provided by operating activities increasing 122% year-over-year to $168.2 million [3][4] - For the full year, V2X reported an operating income of $159.2 million and adjusted EBITDA of $310.2 million, with a margin of 7.2% [4][9] Debt and Cash Management - V2X reduced its net debt by $210 million year-over-year, ending Q4 2024 with a net debt of $874 million and a net leverage ratio of 2.6x, improving by 0.7x from the previous year [3][4][9] - The company emphasized its commitment to cash generation and debt reduction as key priorities for financial health [3][4] Future Outlook - For 2025, V2X set guidance with a mid-point revenue target of $4.44 billion and adjusted EBITDA of $313 million, anticipating stronger performance in the second half of the year [5][9] - The company expects approximately 4% of revenue to come from recompetes, indicating a strategic focus on maintaining and expanding its market position [5][9] Revenue Breakdown - In 2024, V2X's revenue by customer included $1.84 billion from the Army, $1.44 billion from the Navy, and $481 million from the Air Force, showcasing a diversified customer base [27][30] - Revenue by contract type showed $2.53 billion from cost-plus and cost-reimbursable contracts, and $1.68 billion from firm-fixed-price contracts, indicating a balanced approach to contract types [28][30] - Geographically, the U.S. accounted for $2.39 billion of total revenue, followed by the Middle East at $1.40 billion, highlighting the company's international reach [30]

Core Insights - V2X Inc. has secured a $21 million contract to maintain critical avionics and electronic warfare systems for the U.S. Air Force, specifically for the B-52, B-1B, and C-130 aircraft [1][4] - The contract emphasizes the importance of V2X's role in enhancing the operational effectiveness of legacy aircraft through advanced electronic warfare capabilities [2][3] Contract Details - The contract is a firm-fixed-price agreement aimed at the repair and maintenance of AN/ALQ-172 and AN/ALQ-161 components [1] - Work will be conducted at Robins Air Force Base in Georgia and Indianapolis, Indiana, with an expected completion date in 2029 [4] Electronic Warfare Capabilities - The AN/ALQ-172 system provides multi-threat countermeasures against various radar threats, while the AN/ALQ-161 system has been upgraded to counter evolving electronic threats since its initial deployment in the 1980s [2] - V2X's expertise in sustaining and enhancing these systems is crucial for extending the lifespan and effectiveness of legacy aircraft [3] Company Mission and Vision - V2X aims to enhance legacy systems with cost-effective, technology-driven solutions while ensuring the safety of aircrews in a changing threat landscape [4] - The company integrates AI and machine learning capabilities to address challenges across national security, defense, and civilian markets [5]

Core Viewpoint - The market anticipates a year-over-year decline in earnings for V2X despite higher revenues, with a focus on how actual results will compare to estimates [1][2]. Earnings Expectations - V2X is expected to report earnings of $1.14 per share, reflecting a year-over-year decrease of 6.6%, while revenues are projected to be $1.09 billion, an increase of 4.7% from the previous year [3]. - The earnings report is scheduled for February 24, 2025, and could influence stock movement based on whether results exceed or fall short of expectations [2]. Estimate Revisions - The consensus EPS estimate for V2X has remained unchanged over the last 30 days, indicating stability in analyst expectations [4]. - The Most Accurate Estimate for V2X is higher than the Zacks Consensus Estimate, resulting in an Earnings ESP of +4.85%, suggesting a bullish outlook from analysts [10]. Earnings Surprise Prediction - A positive Earnings ESP reading is a strong indicator of potential earnings beats, especially when combined with a Zacks Rank of 1, 2, or 3 [8]. - V2X currently holds a Zacks Rank of 3, indicating a likelihood of beating the consensus EPS estimate [11]. Historical Performance - In the last reported quarter, V2X exceeded the expected earnings of $1.07 per share by delivering $1.29, resulting in a surprise of +20.56% [12]. - Over the past four quarters, V2X has surpassed consensus EPS estimates three times [13]. Industry Comparison - Another player in the technology services industry, Block (XYZ), is expected to report earnings of $0.83 per share, marking a year-over-year increase of 84.4%, with revenues projected at $6.23 billion, up 8% [17]. - Block's consensus EPS estimate has been revised 1.3% lower in the last 30 days, but a higher Most Accurate Estimate has led to an Earnings ESP of 4.24%, suggesting a likely earnings beat [18].

Core Insights - V2X Inc. has secured a position on the GSA's OASIS+ contract across all eight domains, reinforcing its status as a leading provider of integrated mission solutions for the U.S. Government [1][2] - The OASIS+ contract is designed to enhance procurement efficiency and transparency, allowing federal agencies to access high-quality professional services with increased flexibility [1][2] - V2X is one of only 10 companies awarded across all OASIS+ domains, highlighting its extensive capabilities in supporting complex government missions [2][3] Company Overview - V2X specializes in integrating physical and digital environments, focusing on enhancing readiness, optimizing resource management, and improving security [4] - The company employs approximately 16,000 professionals globally and leverages AI and machine learning to address contemporary challenges across various operational domains [4] Service Areas - V2X provides a comprehensive suite of services, including: - Technical and Engineering - Research and Development - Intelligence Services - Environmental Services - Facilities Management - Logistics - Management and Advisory Services - Enterprise Solutions [6]

Group 1 - The article discusses the performance of V2X (NYSE: VVX) stock, which has declined approximately 3% since a buy rating was reiterated in August [1] - The investing group, The Aerospace Forum, aims to identify investment opportunities in the aerospace, defense, and airline sectors, leveraging data analytics for informed analysis [1] - The analyst, with a background in aerospace engineering, provides context to industry developments and their potential impact on investment strategies [1] Group 2 - The article emphasizes the importance of data-informed analysis in driving investment ideas within the aerospace and defense industry [1]

Company Overview - V2X, Inc. is a leading provider of global mission solutions, focusing on integrating physical and digital environments to enhance mission readiness and security [4] - The company employs approximately 16,000 professionals and leverages AI and machine learning to address challenges across various operational domains [4] Financial Results Announcement - V2X will report its fourth quarter and full year 2024 financial results on February 24, 2025, after market close [1] - A conference call with senior management will take place at 4:30 p.m. ET on the same day [1] Conference Call Details - U.S.-based participants can join the conference call by dialing 877-300-8521, while international participants can call 412-317-6026 [2] - A live webcast and accompanying slide presentation will be available on the V2X website [2] Replay Information - A replay of the conference call will be accessible on the V2X website for one year following the call [3] - Telephonic replay will be available until March 10, 2025, with specific numbers for domestic and international callers [3]