V2X now leans on optimization to carry out its strategy

The merger that created V2X in the summer of 2022 and subsequent work to put both of the big pieces together will always be how and where this government services company's origin story begins.

But all integration processes have to end at some point in order for those newer and larger companies to move forward and reach its full potential.

During V2X's second quarter earnings call with investors Tuesday, newly-installed chief executive Jeremy Wensinger said the company's current chapter is now all about optimization and performance.

Wensinger started the CEO role on June 17 and this call represents his first public appearance as leader of V2X since taking the position. Attached here is a portion of Wensinger's opening remarks to analysts, which contain his observations so far and a glimpse at how he sees V2X's future.

McLean, Virginia-headquartered V2X can tout one key avenue for future growth and point to its origin story as key to making that happen.

In July, V2X won a potential $3.7 billion task order to deliver readiness solutions and other support for multiple defense agencies. The five-year Warfighter Training Readiness Solutions order also involves a technology insertion component to it.

Pursuits of that size, specs and scope are more of what V2X is focusing on in this new chapter of optimization and performance.

"Any time you come out of integration and you really have a chance to look at what is now the company, we see the opportunity to take the broader portfolio to the fight, and I think you see that with the most recent award for readiness," Wensinger told analysts. "I think you will see us take more of that and move forward, and it will start manifesting itself in the pipeline as we think about the total capabilities of the company and dragging them into these new opportunities."

In talking about optimization, Wensinger cited processes and procedures that extend horizontally across the company as underpinning the transition away from integration.

New tools to help employees make sense out of information on their job are one facet of that push, including the talent and supply chain aspects of V2X. As is how program managers at V2X operate their programs consistently, Wensinger said.

"Optimization to me is about giving the local teams the things they need to execute their program successfully without having to worry about systems, or a lot of things you bump into during an integration," Wensinger said. "Now you're starting to really focus on giving them everything they need to be successful at the program level that takes the program to the next level."

A second major item on V2X's agenda is its push to further advance the Gateway Mission Router, which one of the company's heritage businesses originally designed to give helicopter pilots more situational awareness.

Back in the spring, V2X had a proposal into the Army for a sole-source contract to build 3,000 more of those routers. Earlier in the summer, V2X secured that $49 million award to produce the routers can be used on aviation and ground vehicle platforms.

Wensinger told analysts the new award essentially marks the start of low-rate initial production and the goal now is to make GMR a program of record. V2X views the router as part of the Defense Department's broad network connectivity vision called JADC2.

"As it moves to a program of record, it then unleashes the fact that you have hundreds of thousands of these vehicles and aircraft that will benefit from this capability," Wensinger said.

Second quarter revenue of $1.07 billion was approximately 10% higher than the prior year period, while profit of $72.3 million represented a 6.5% year-over-year decrease in adjusted EBITDA (earnings before interest, taxes, depreciation and amortization).

V2X lifted its full-year revenue guidance to a new range of $4.17 billion-to-$4.275 billion, up from the prior $4.1 billion-to-$4.2 billion range. Adjusted EBITDA expectations remain unchanged at $300 million-to-$315 million.