V2X details its product push and modernization approach

Gettyimages.com / Yuichiro Chino

In talking with investors, CEO Chuck Prow describes how a router that one of V2X's heritage businesses designed for helicopter pilots is part of the company's larger vision for supporting platforms.

Now in year two following the merger that made it, V2X is undertaking a product play of sorts with the goal of further extending the company's technology footprint and presence on larger platforms.

V2X's push to drive growth in its modernization and sustainment line can be seen through the lens of its Gateway Mission Router 1000, a multi-domain router that heritage business Vertex developed to give helicopter pilots more situational awareness.

During V2X's fourth quarter and year-end earnings call Tuesday, chief executive Chuck Prow told investors the company has a proposal into the Army for a sole-source contract to build up to 3,000 of the routers.

At one time, the Indianapolis facility that houses production of the GMR 1000 was affected by an organizational conflict-of-interest that put a ceiling on the growth prospects. Prow told analysts that the untethering of that facility from the OCI has helped create the opportunity.

"This whole suite of engineered solutions, GMR 1000 being one, is our really great engineers and capabilities in Indianapolis working with both new and existing platforms, (and) in this case, a router and hardening those capabilities in such a way that they can be used for new and innovative military missions," Prow said.

Prow was much more cryptic with analysts with respect to a second initiative under the realm of new defense systems being made by V2X. He gave no specifics about it, other than that it went from inception to fielding in less than one year.

But he did put that unnamed initiative into the larger context of how V2X takes its approach to technology.

"We are taking existing platforms, some of them older, some of them more recent, and we are engineering ways for the older platforms to either work together and/or to extend their capabilities," Prow said.

"It's a really important part of our business because we can now approach both the military (and) intelligence communities, as well as prime contractors, with new and different ways of extending life cycles and/or improving capabilities of, in many cases, platforms that have been out there for a long, long time," he said.

V2X reported pro forma revenue of $3.96 billion for the full year of 2023 and $293.9 million in adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) to represent a 7.4% margin. Total backlog stood at $12.8 billion at the year's end.

The company's initial outlook for 2024 has revenue in the range of $4.1 billion-to-$4.2 billion and adjusted EBITDA of $300 million-to-$315 million.