V2X's Q1 2025 Earnings Call: Unpacking Contradictions in Book-to-Bill, EBITDA Margins, and Middle East Trends

International book-to-bill and capital deployment, 2025 EBITDA margin outlook, impact of contract extensions on leverage, recompetes, and Middle East revenue trends are the key contradictions discussed in V2X's latest 2025Q1 earnings call.



Revenue and Regional Growth:
- V2X reported $1.02 billion in revenue for Q1 2025, driven by a 10% year-over-year increase in the Indo-Pacific region.
- The growth was attributed to increased customer requirements for improving deterrence, enhancing readiness, and strengthening national security.

Adjusted EBITDA and Profitability:
- The company achieved adjusted EBITDA of $67 million, consistent with their anticipated quarterly cadence, resulting in a margin of 6.6%.
- This stability was supported by the company's full life cycle mission-driven solutions and customer confidence in their capabilities.

Bid Volume and New Opportunities:
- V2X plans to submit 50% more bids this year compared to 2024, with five opportunities valued at or above $1 billion anticipated in the next 12 months.
- The increase in bid volume reflects the company's strategic focus on leveraging its capabilities for new opportunities, focusing on larger, multidimensional programs.

Capital Structure and Cash Flow:
- V2X maintained a strong liquidity profile with approximately $650 million, enhanced by cash interest expense reductions, supporting a leverage ratio improvement to 2.98.
- The company expects adjusted net cash provided by operating activities to be in the range of $150 million to $170 million for the year, indicating over 100% adjusted net income conversion.