V2X Secures $170 Million DEA Contract, Bolstering National Security and Drug Trafficking Prevention

V2X, Inc. (NYSE: VVX), a leading provider of innovative solutions for critical missions, has been awarded a $170 million contract by the Drug Enforcement Administration (DEA) to support its fleet of over 100 aircraft. This five-year contract, announced on December 30, 2024, reinforces V2X's commitment to enabling the DEA's vital mission against the war on drugs and protecting national security.

The contract, valued at $170 million, will provide V2X with stable, predictable revenue streams, averaging approximately $34 million annually. This substantial win represents around 11.5% of the company's current market capitalization, demonstrating V2X's ability to secure large, high-value contracts. The contract's focus on maintaining specialized aircraft suggests high-margin work requiring specialized expertise in aviation maintenance and logistics, with favorable payment terms and strong profit margins ranging from 8% to 12%.

V2X's 27-year history supporting the DEA's aviation program since 1997 has created significant barriers to entry for competitors and positions the company advantageously in the competitive landscape. The five-year commitment provides important backlog stability and enhances V2X's credentials for pursuing similar contracts with other federal agencies. The timing of this contract is particularly favorable, given the increased federal focus on border security and drug interdiction efforts.



The contract renewal carries strategic significance beyond its monetary value. The DEA's aviation fleet maintenance requirements involve specialized technical expertise that few contractors can provide. This established relationship with the DEA could lead to additional scope expansion opportunities as mission requirements evolve, further driving revenue growth. The contract also provides valuable past performance credentials for upcoming competitive bids in the federal aviation services space.

V2X will track and measure the operational readiness of the DEA's aircraft fleet by providing maintenance and support services, ensuring the aircraft are in a state of readiness to perform their missions. The company will use metrics such as operational readiness, mission completion rate, turnaround time, pilot development and training, and customer satisfaction to evaluate the effectiveness of its support services in enhancing the DEA's mission capabilities.

In conclusion, V2X's $170 million DEA contract is expected to have a positive impact on the company's revenue growth trajectory over the next five years, providing stable, predictable revenue streams and enhancing its backlog stability. The contract's high-margin work and favorable payment terms will contribute to V2X's profitability, while the established relationship with the DEA offers opportunities for scope expansion and additional contracts. By leveraging its decades of experience and innovative solutions, V2X will continue to support critical missions and enhance national security.