V2X, Inc.
For the period ended Jul 3, 2026. Filed Aug 3, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jul 3, 2026 · Filed Aug 3, 2026
VVX$76.14+2.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-04-03; filed 2026-05-04.
0001601548-26-000025
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-07-03; filed 2026-08-03.
0001601548-26-000038
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 83 previous paragraphs and 99 current paragraphs.
46 unchanged; 34 reworded; 16 added; 3 removed; 0 previous and 3 current paragraphs rearranged.
Tables are not compared: 6 previous and 7 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (16)
Current report
Secondary Public Offerings
Current report
On May 7, 2026, we entered into an underwriting agreement (the May 2026 Underwriting Agreement), by and among the Company, Vertex Aerospace Holdco LLC (the Selling Shareholder), and Morgan Stanley & Co. LLC, as the sole underwriter (the May 2026 Underwriter), relating to the public offering (the May 2026 Offering) of 2,004,569 shares of common stock by the Selling Shareholder. The May 2026 Offering closed on May 11, 2026. The Company did not sell any securities in the May 2026 Offering and did not receive any proceeds from the sale of the shares offered by the Selling Shareholder. Following the May 2026 Offering, the Selling Shareholder no longer owns any shares of common stock. An entity affiliated with the Selling Shareholder continued to beneficially own 375,420 shares, or approximately 1.2%, of the Company’s outstanding common stock immediately after giving effect to the May 2026 Offering.
Current report
On May 15, 2025, we entered into an underwriting agreement (the May 2025 Underwriting Agreement), by and among the Company, the Selling Shareholder and RBC Capital Markets, LLC, as underwriter (the Underwriter), relating to the public offering (the May 2025 Offering) of 2,000,000 shares of common stock by the Selling Shareholder and up to 300,000 additional shares of common stock at the Underwriter’s option at any time on or before the 30th day after the date of the prospectus supplement dated May 15, 2025 (the May 2025 Option). The May 2025 Offering closed on May 19, 2025. The Selling Shareholder elected not to exercise the May 2025 Option. The Company did not sell any securities in the May 2025 Offering and did not receive any proceeds from the sale of the shares offered by the Selling Shareholder.
Current report
SG&A expenses increased by $12.9 million, or 30.1%, for the three months ended July 3, 2026 as compared to the three months ended June 27, 2025, primarily driven by higher operating costs associated with revenue growth, non-recurring integration initiatives, and expenses incurred to evaluate potential merger and acquisition opportunities as part of the Company's capital allocation strategy.
Current report
Six months ended July 3, 2026, compared to six months ended June 27, 2025
Current report
Revenue
Current report
Revenue increased $416.5 million, or 19.9%, for the six months ended July 3, 2026 as compared to the six months ended June 27, 2025 primarily driven by program ramp ups in global training and aerospace along with $200.9 million attributed to discrete activities to support a national security mission. Revenue from our programs located in the U.S., Asia, Europe, and the Middle East increased by $398.3 million, $9.9 million,$8.1 million, and $0.2 million, respectively.
Current report
Cost of Revenue
Current report
Cost of revenue increased $375.0 million, or 19.5%, for the six months ended July 3, 2026 as compared to the six months ended June 27, 2025, consistent with the increase in revenue.
Current report
Selling, General, & Administrative Expenses
Current report
SG&A expenses increased $30.8 million, or 35.6%, for the six months ended July 3, 2026 as compared to the six months ended June 27, 2025, primarily driven by higher operating costs associated with revenue growth, non-recurring integration initiatives, and expenses incurred to evaluate potential merger and acquisition opportunities as part of the Company's capital allocation strategy.
Current report
Operating Income
Current report
Operating income increased $10.7 million, or 12.2%, for the six months ended July 3, 2026 as compared to the six months ended June 27, 2025. Operating income as a percentage of revenue was 3.9% for the six months ended July 3, 2026, compared to 4.2% for the six months ended June 27, 2025. The increase in operating income was primarily driven by the ramp up of several programs, as described above, partially offset by increased SG&A and corporate expenses.
Current report
Loss on Extinguishment of Debt
Current report
On March 31, 2025, the 2023 Credit Agreement was amended to provide, among other things, a new tranche of term loans in an aggregate original principal amount of $237.5 million (the 2025 Term Loans), which replace or refinance in full all the existing term loans outstanding under the 2023 Credit Agreement in effect immediately prior to the amendment. The 2023 Credit Agreement was further amended to provide a new tranche of revolving credit commitments in an aggregate original principal amount of $500.0 million (the 2025 Revolver), which replace or refinance in full all the existing revolving credit loans and commitments outstanding under the 2023 Credit Agreement in effect immediately prior to the amendment. See Note 5, Debt, in the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for further discussion.
Current report
On May 29, 2026, the First Lien Credit Agreement was amended to provide, among other things, a new tranche of term loans in an aggregate original principal amount of $868.5 million (the New Term Loans), in which the New Term Loans replace or refinance in full all the existing term loans outstanding under the First Lien Term Tranche in effect immediately prior to the amendment (the Existing Term Loans). The loans under the First Lien Credit Agreement, as amended (the First Lien Credit Agreement), amortize in an amount equal to approximately $2.2 million per quarter through September 30, 2030, with the balance of $829.4 million due on December 6, 2030. The replacement of the Existing Term Loans with the New Term Loans resulted in a loss on extinguishment of debt of $1.7 million in the Condensed Consolidated Statement of Income for the six months ended July 3, 2026. See Note 5, Debt, in the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for further discussion.
Removed paragraphs (3)
Previous report
The T-45 Navy and Marine program is currently exercised through December 31, 2026, with two additional twelve-month options and one six-month option through June 30, 2029. The program provides critical organizational, intermediate, and depot-level maintenance for the T-45 Goshawk trainer aircraft, ensuring readiness through complex repairs, upgrades, and sustainment, including managing the logistics for its 29 unique configurations and supporting its life extension services. The T-45 contract contributed $98.2 million and $103.0 million of revenue for the three months ended April 3, 2026 and March 28, 2025, respectively.
Previous report
Annual appropriations for FY 2026 were not completed on time and, as such, on October 1, 2025, the U.S. government entered a shutdown, which ended on November 12, 2025. While we did not experience a material impact from the U.S. government shutdown, if the shutdown had continued for an extended period of time, it could have resulted in significant consequences for our Company, employees, customers, suppliers and our industry. It could have also resulted in material impacts to our financial position, results of operations, bookings, backlog, and/or collections and cash flows. On February 3, 2026, the President signed into law, H.R. 7148, the “Consolidated Appropriations Act, 2026,” to end a partial government shutdown and fund the DoW and other federal agencies through FY 2026. The defense funding bill includes approximately $839 billion in appropriations, which is approximately $8 billion above the Pentagon’s budget request.
Previous report
SG&A expenses increased by $17.9 million, or 40.9%, for the three months ended April 3, 2026 as compared to the three months ended March 28, 2025, consistent with revenue growth, as well as reflecting certain non-recurring growth and integration initiatives.
Reworded paragraphs (34)
Previous wording
Our primary customer is the U.S. Department of War (DoW), also known as the Department of Defense under 10 U.S.C. § 111(a). For the three months ended April 3, 2026 and March 28, 2025, the Company had total revenue of $1.3 billion and $1.0 billion, respectively, the substantial majority of which was derived from U.S. government customers. For the three months ended April 3, 2026 and March 28, 2025, we generated approximately 35% and 44%, respectively, of our total revenue from the U.S. Army.
Current wording
Our primary customer is the U.S. Department of War (DoW), also known as the Department of Defense under 10 U.S.C. § 111(a). For the six months ended July 3, 2026 and June 27, 2025, the Company had total revenue of $2.5 billion and $2.1 billion, respectively, the substantial majority of which was derived from U.S. government customers. For the six months ended July 3, 2026 and June 27, 2025, we generated approximately 34% and 43%, respectively, of our total revenue from the U.S. Army.
Previous wording
Our revenue increased by $238.2 million, or 23%, for the three months ended April 3, 2026 as compared to the three months ended March 28, 2025. Revenue increased primarily due to program ramp ups in global training and mission readiness. Revenue from our programs in the U.S., Europe, and Asia increased by $233.1 million, $9.0 million, and $0.1 million, respectively, partially offset by a decrease in revenue from our programs in the Middle East of $4.0 million during the three months ended April 3, 2026 as compared to the three months ended March 28, 2025.
Current wording
Our revenue increased by $178.3 million, or 16.5%, for the three months ended July 3, 2026 as compared to the three months ended June 27, 2025. Revenue increased primarily due to program ramp ups in global training and aerospace along with $101.6 million attributed to discrete activities to support a national security mission. Revenue from our programs in the U.S., Asia, and the Middle East increased by $165.1 million, $9.8 million, and $4.2 million, respectively, partially offset by a decrease in revenue from our programs in Europe of $0.8 million during the three months ended July 3, 2026 as compared to the three months ended June 27, 2025.
Previous wording
Operating income for the three months ended April 3, 2026 was $44.1 million, an increase of $9.8 million or 29%, compared to the three months ended March 28, 2025. Operating income increased primarily due to the ramp up of several programs, partially offset by increased SG&A expenses.
Current wording
Operating income for the three and six months ended July 3, 2026 was $53.8 million and $97.9 million, respectively, an increase of $0.9 million and $10.7 million, or 1.6% and 12.2%, respectively, compared to the three and six months ended June 27, 2025. Operating income increased primarily due to the ramp up of several programs, partially offset by increased Selling, General and Administrative expenses (SG&A) and corporate expenses.
Previous wording
Further details related to consolidated financial results for the three months ended April 3, 2026, compared to the three months ended March 28, 2025, are contained in the "Discussion of Financial Results" section in this Quarterly Report on Form 10-Q.
Current wording
Further details related to consolidated financial results for the three and six months ended July 3, 2026, compared to the three and six months ended June 27, 2025, are contained in the "Discussion of Financial Results" section in this Quarterly Report on Form 10-Q.
Previous wording
The LOGCAP V - Kuwait Task Order is exercised through June 30, 2026 and provides services to support the Geographical Combatant Commands and Army Service Component Commands throughout the full range of military operations in the Kuwait region. On April 14, 2026, the U.S. Department of the Army notified the Company of its intent to modify the scope of work performed under this task order beyond the current performance period of June 30, 2026, which could result in a reduction in the work being performed under the task order. The Company is in discussions with the U.S. Department of the Army on the level of support that will be needed in the region for the remainder of the year and beyond. We are not currently able to determine the impact that such modifications may have on our financial performance, if any. Our total backlog related to this task order was $529.3 million as of April 3, 2026. The LOGCAP V - Kuwait Task Order contributed $92.9 million and $116.9 million of revenue for the three months ended April 3, 2026 and March 28, 2025, respectively.
Current wording
The LOGCAP V - Kuwait Task Order was exercised through June 30, 2026 and provides services to support the Geographical Combatant Commands and Army Service Component Commands throughout the full range of military operations in the Kuwait region. On May 12, 2026, the U.S. Department of the Army notified the Company of its decision to reduce the scope of work being performed under this task order and to extend the contract with respect to the revised scope for an additional six months to December 31, 2026. The LOGCAP V - Kuwait Task Order contributed $182.4 million and $229.1 million of revenue for the six months ended July 3, 2026 and June 27, 2025, respectively. As a result of this modification, the Company reduced its backlog by $414.6 million. The Company continues to work with the U.S. Department of the Army to support them in the region, including through the current extension of the original task order for $22.6 million until the end of 2026, as well as through other contract vehicles. Management does not currently expect the reduction in scope of the LOGCAP V - Kuwait Task Order to have a material adverse effect on the Company's financial condition or results of operations, including revenue due to other programs ramp up as reflected in "Discussion of Financial Results"section.
Previous wording
Backlog represents revenue we expect to recognize in the future as work is performed for remaining performance obligations for our contracts. Backlog includes funded amounts (funding is contractually authorized and appropriated by the customer) and unfunded amounts (amounts not currently contractually obligated by the customer). Total backlog excludes potential orders under IDIQ contracts and contracts awarded to us that are being protested by competitors with the GAO or in the COFC for which a stop work order has been received by the Company. Actual backlog values may vary due to the level of order activity related to programs, the timing of government funding authorizations or de-obligations of funding. Year-over-year comparisons could, at times, be impacted by these factors, among others.
Current wording
Backlog represents revenue we expect to recognize in the future as work is performed for remaining performance obligations for our contracts. Backlog includes funded amounts (funding is contractually authorized and appropriated by the customer) and unfunded amounts (amounts not currently contractually obligated by the customer, including unexercised options when the exercise of those options is considered probable). Total backlog excludes potential orders under IDIQ contracts and contracts awarded to us that are being protested by competitors with the GAO or in the COFC for which a stop work order has been received by the Company. Actual backlog values may vary due to the level of order activity related to programs, the timing of government funding authorizations or de-obligations of funding. Year-over-year comparisons could, at times, be impacted by these factors, among others.
Previous wording
Funded orders (different from funded backlog) represent orders for which funding was received during the period. We received funded orders of $1.2 billion during the three months ended April 3, 2026, which was an increase of $256.9 million compared to the three months ended March 28, 2025.
Current wording
Funded orders (different from funded backlog) represent orders for which funding was received during the period. We received funded orders of $2.7 billion during the six months ended July 3, 2026, which was an increase of $540.2 million compared to the six months ended June 27, 2025.
Previous wording
The U.S. government’s investment in services and capabilities in response to changing security challenges creates a complex and fluid business environment for V2X and other firms in this market. The U.S. continues to face substantial fiscal and economic challenges in addition to a varying political environment which could affect funding. The pace and depth of U.S. government acquisition reform and cost savings initiatives, combined with increased industry competitiveness to win long-term positions on key programs, could add pressure to revenue levels and profit margins. However, the Company expects the U.S. government will continue to place a high priority on national security and will continue to invest in affordable solutions. V2X believes that its capabilities should help its clients increase efficiency, reduce costs, improve readiness, and strengthen national security and, as a result, continue to allow for long-term profitable growth in the business. Further, the DoW budget remains the largest in the world and management believes the Company's addressable portion of the DoW budget offers substantial opportunity for growth.
Current wording
The U.S. government’s investment in services and capabilities in response to changing security challenges creates a complex and fluid business environment for V2X and other firms in this market. The U.S. continues to face substantial fiscal and economic challenges in addition to a varying political environment which could affect funding. The pace and depth of U.S. government acquisition reform and cost savings initiatives, combined with increased industry competitiveness to win long-term positions on key programs, could add pressure to revenue levels and profit margins. However, the Company expects the U.S. government will continue to place a high priority on national security and will continue to invest in affordable solutions. V2X believes that its capabilities should help its clients increase efficiency, reduce costs, improve readiness, and strengthen national security and, as a result, continue to allow for long-term profitable growth in the business. Further, the DoW budget remains the largest defense budget in the world and management believes the Company's addressable portion of the DoW budget offers substantial opportunity for growth.
Previous wording
The U.S. government's Fiscal Year (FY) begins on October 1 and ends on September 30. The DoW FY 2026 base budget request is approximately $848 billion, which does not include the mandatory funding contained in the OBBBA. The OBBBA was signed into law by the President on July 4th, 2025, and allocates approximately $150 billion in mandatory funds to support defense and national security priorities. Of the $150 billion in OBBBA appropriations, approximately $113 billion was aligned to the FY 2026 DoW budget. See Note 9, Income Taxes, in the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for further discussion relating to the OBBBA.
Current wording
The U.S. government's Fiscal Year (FY) begins on October 1 and ends on September 30. On February 3, 2026, the President signed into law, H.R. 7148, the "Consolidated Appropriations Act, 2026," to end a partial government shutdown and fund the DoW and other federal agencies through FY 2026. The defense funding bill includes approximately $839 billion in appropriations. The OBBBA was signed into law by the President on July 4th, 2025, and allocates approximately $150 billion in mandatory funds to support defense and national security priorities that are available to be obligated through September 30, 2029. See Note 9, Income Taxes, in the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for further discussion relating to the OBBBA.
Previous wording
However, business conditions have become more challenging and uncertain due to macroeconomic and geopolitical conditions, including inflation and rising interest rates, as well as recent international events. For example, global hostilities could create additional demand for our products and services; however, any such demand, and the timing and extent of any incremental contract activity resulting from that demand, remains uncertain. Additionally, we continue to closely monitor impacts to our business and operations in the Middle East, and the region at large due to the conflict in Iran. Further, given the current level of inflation and geopolitical factors, the Company is monitoring the impact of rising costs on its active and future contracts and its financial results, and actively evaluating opportunities for cost reductions and deleveraging. The Company’s earnings and profitability may vary materially depending on the total mix of contracts. To date, the Company has not experienced broad-based increases from inflation or geopolitical hostilities, including as a result of tariffs, in the costs of its fixed-price and time and materials contracts that are material to the business. However, if the geopolitical conditions worsen or if the Company experiences greater than expected inflation in its supply chain and labor costs, then profit margins, and in particular, the profit margin from fixed-price and time and materials contracts, which represent a substantial portion of its contracts, could be adversely affected.
Current wording
However, business conditions have become more challenging and uncertain due to macroeconomic and geopolitical conditions, including inflation and rising interest rates, as well as recent international events. For example, global hostilities could create additional demand for our products and services; however, any such demand, and the timing and extent of any incremental contract activity resulting from that demand, remains uncertain. Additionally, global hostilities could also impact our ability to deliver our products and services to customers. Further, we continue to closely monitor impacts to our business and operations in the Middle East, and the region at large due to the conflict in Iran. In addition, given the current level of inflation and geopolitical factors, the Company is monitoring the impact of rising costs on its active and future contracts and its financial results, and actively evaluating opportunities for cost reductions and deleveraging. The Company’s earnings and profitability may vary materially depending on the total mix of contracts. To date, the Company has not experienced broad-based increases from inflation or geopolitical hostilities, including as a result of tariffs, in the costs of its fixed-price and time and materials contracts that are material to the business. However, if the geopolitical conditions worsen or if the Company experiences greater than expected inflation in its supply chain and labor costs, then profit margins, and in particular, the profit margin from fixed-price and time and materials contracts, which represent a substantial portion of its contracts, could be adversely affected.
Previous wording
Revenue increased by $238.2 million, or 23.4%, for the three months ended April 3, 2026 as compared to the three months ended March 28, 2025 primarily driven by program ramp ups in global training and mission readiness. Revenue from our programs in the U.S., Europe, and Asia increased by $233.1 million, $9.0 million, and $0.1 million, respectively, partially offset by a decrease of $4.0 million in revenue from our programs in the Middle East.
Current wording
Revenue increased by $178.3 million, or 16.5%, for the three months ended July 3, 2026 as compared to the three months ended June 27, 2025 primarily driven by program ramp ups in global training and aerospace along with $101.6 million attributed to discrete activities to support a national security mission. Revenue from our programs in the U.S., Asia, and the Middle East increased by $165.1 million, $9.8 million, and $4.2 million, respectively, partially offset by a decrease of $0.8 million in revenue from our programs in Europe.
Previous wording
Cost of revenue increased by $210.5 million, or 22.4%, for the three months ended April 3, 2026 as compared to the three months ended March 28, 2025, consistent with the increase in revenue.
Current wording
Cost of revenue increased by $164.5 million, or 16.7%, for the three months ended July 3, 2026 as compared to the three months ended June 27, 2025, consistent with the increase in revenue.
Previous wording
Operating income increased $9.8 million, or 28.5%, for the three months ended April 3, 2026 as compared to the three months ended March 28, 2025. Operating income as a percentage of revenue was 3.5% for the three months ended April 3, 2026, compared to 3.4% for the three months ended March 28, 2025. The increase in operating income was primarily driven by the ramp up of several programs, partially offset by increased SG&A expenses.
Current wording
Operating income increased $0.9 million, or 1.6%, for the three months ended July 3, 2026 as compared to the three months ended June 27, 2025. Operating income as a percentage of revenue was 4.3% for the three months ended July 3, 2026, compared to 4.9% for the three months ended June 27, 2025. The increase in operating income was primarily driven by the ramp up of several programs, as described above, partially offset by increased SG&A and corporate expenses.
Previous wording
Aggregate cumulative adjustments decreased operating income by $1.1 million for the three months ended April 3, 2026 and increased operating income by $4.2 million for the three months ended March 28, 2025. The aggregate cumulative adjustments for the three months ended April 3, 2026 and March 28, 2025 related to changes in contract terms, program performance, customer changes in scope of work and changes to estimates in the reported period.
Current wording
Aggregate cumulative adjustments increased operating income by $1.8 million for the three months ended July 3, 2026 and $1.4 million for the three months ended June 27, 2025. The aggregate cumulative adjustments for the three months ended July 3, 2026 and June 27, 2025 related to changes in contract terms, program performance, customer changes in scope of work and changes to estimates in the reported period.
Previous wording
The Company recorded a $2.2 million loss on extinguishment of debt for the three months ended March 28, 2025. For further discussion see Note 5, Debt, in the Notes to Condensed Consolidated Financial Statements.
Current wording
The Company recorded a $1.7 million loss on extinguishment of debt for the three months ended July 3, 2026 and a $0.3 million loss on extinguishment of debt for the three months ended June 27, 2025. For further discussion see Note 5, Debt, in the Notes to Condensed Consolidated Financial Statements.
Previous wording
Interest expense, net for the three months ended April 3, 2026 and March 28, 2025 was as follows:
Current wording
Interest expense, net for the three and six months ended July 3, 2026 and June 27, 2025 was as follows:
Previous wording
Interest income is related to interest earned on cash and cash equivalents. Interest expense is related to borrowings under our senior secured credit facilities, with the amortization of debt issuance costs, and derivative instruments used to hedge a portion of exposure to interest rate risk. Interest expense, net decreased $1.6 million for the three months ended April 3, 2026 compared to the three months ended March 28, 2025 primarily due to a decrease in our debt balance. For further discussion of these amendments see Note 5, Debt, in the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.
Current wording
Interest income is related to interest earned on cash and cash equivalents. Interest expense is related to borrowings under our senior secured credit facilities, with the amortization of debt issuance costs, and derivative instruments used to hedge a portion of exposure to interest rate risk. Interest expense, net decreased $5.5 million for the six months ended July 3, 2026 compared to the six months ended June 27, 2025 primarily due to a decrease in our debt balance and increase in interest income. For further discussion of these amendments see Note 5, Debt, in the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.
Previous wording
During the three months ended April 3, 2026 and March 28, 2025, we incurred purchase discount fees, net of servicing fees, of $2.4 million and $2.5 million, respectively, related to the sale of accounts receivable through the MARPA Facility. For a discussion of the MARPA Facility, see Note 12, Sale of Receivables, in the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.
Current wording
During the three and six months ended July 3, 2026, we incurred purchase discount fees, net of servicing fees, of $2.2 million and $4.6 million, respectively, related to the sale of accounts receivable through the MARPA Facility. During the three and six months ended June 27, 2025, we incurred purchase discount fees, net of servicing fees, of $2.6 million and $5.1 million, respectively, related to the sale of accounts receivable through the MARPA Facility. For a discussion of the MARPA Facility, see Note 12, Sale of Receivables, in the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.
Previous wording
We recorded income tax expense of $4.6 million and $2.0 million for the three months ended April 3, 2026 and March 28, 2025, respectively. Our effective income tax rate for both the three months ended April 3, 2026 and March 28, 2025, was 19.5%. The effective income tax rates vary from the federal statutory rate of 21.0% mainly due to state and foreign taxes, Net CFC Tested Income (NCTI), disallowed compensation deduction under Internal Revenue Code Section 162(m), offset by foreign derived intangible income deduction, available deductions not included in book income and income tax credits.
Current wording
We recorded income tax expense of $7.7 million and $7.1 million for the three months ended July 3, 2026 and June 27, 2025, respectively, representing effective income tax rates of 23.1% and 24.0%, respectively. For the six months ended July 3, 2026 and June 27, 2025, we recorded income tax expense of $12.3 million and $9.0 million, respectively, representing effective income tax rates of 21.6% and 22.8%, respectively. The effective income tax rates vary from the federal statutory rate of 21.0% mainly due to state and foreign taxes, Net CFC Tested Income (NCTI), disallowed compensation deduction under Internal Revenue Code Section 162(m), offset by foreign derived intangible income deduction, available deductions not included in book income and income tax credits.
Previous wording
As of April 3, 2026, the carrying value of the First Lien Credit Agreement was $868.5 million, excluding deferred discount and unamortized deferred financing costs of $22.6 million. The estimated fair value of the First Lien Credit Agreement as of April 3, 2026 was $867.4 million. The fair value is based on observable inputs of interest rates that are currently available to us for debt with similar terms and maturities for non-public debt (Level 2).
Current wording
As of July 3, 2026, the carrying value of the First Lien Credit Agreement was $866.4 million, excluding deferred discount and unamortized deferred financing costs of $20.9 million. The estimated fair value of the First Lien Credit Agreement as of July 3, 2026 was $864.2 million. The fair value is based on observable inputs of interest rates that are currently available to us for debt with similar terms and maturities for non-public debt (Level 2).
Previous wording
As of April 3, 2026, there were no outstanding borrowings and $21.0 million of outstanding letters of credit under the 2025 Revolver. Availability under the 2025 Revolver was $479.0 million as of April 3, 2026. Unamortized deferred financing costs related to the 2025 Revolver of $3.8 million are included in other non-current assets in the Condensed Consolidated Balance Sheets. As of April 3, 2026, the fair value of the 2025 Revolver approximated the carrying value because the debt bears a floating interest rate.
Current wording
As of July 3, 2026, there were no outstanding borrowings and $14.9 million of outstanding letters of credit under the 2025 Revolver. Availability under the 2025 Revolver was $485.1 million as of July 3, 2026. Unamortized deferred financing costs related to the 2025 Revolver of $3.5 million are included in other non-current assets in the Condensed Consolidated Balance Sheets. As of July 3, 2026, the fair value of the 2025 Revolver approximated the carrying value because the debt bears a floating interest rate.
Previous wording
As of April 3, 2026, the carrying value of the 2025 Term Loans was $231.6 million, excluding unamortized deferred financing costs of $1.6 million. The estimated fair value of the 2025 Term Loans as of April 3, 2026 was $231.3 million. The fair value is based on observable inputs of interest rates that are currently available to us for debt with similar terms and maturities for non-public debt (Level 2). See Note 5. Debt, in the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for further discussion.
Current wording
As of July 3, 2026, the carrying value of the 2025 Term Loans was $220.1 million, excluding unamortized deferred financing costs of $1.5 million. The estimated fair value of the 2025 Term Loans as of July 3, 2026 was $220.2 million. The fair value is based on observable inputs of interest rates that are currently available to us for debt with similar terms and maturities for non-public debt (Level 2). See Note 5. Debt, in the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for further discussion.
Previous wording
The cash presented on the Condensed Consolidated Balance Sheets consists of cash held by our wholly owned U.S. and international subsidiaries. Approximately $53.0 million of our $208.7 million in cash, cash equivalents and restricted cash as of April 3, 2026 is held by foreign subsidiaries and is not available to fund U.S. operations unless repatriated. We do not currently expect to repatriate undistributed earnings of foreign subsidiaries. We expect our U.S. domestic cash resources will be sufficient to fund our U.S. operating activities and cash commitments for financing activities.
Current wording
The cash presented on the Condensed Consolidated Balance Sheets consists of cash held by our wholly owned U.S. and international subsidiaries. Approximately $57.1 million of our $214.3 million in cash, cash equivalents and restricted cash as of July 3, 2026 is held by foreign subsidiaries and is not available to fund U.S. operations unless repatriated. We do not currently expect to repatriate undistributed earnings of foreign subsidiaries. We expect our U.S. domestic cash resources will be sufficient to fund our U.S. operating activities and cash commitments for financing activities.
Previous wording
Cash, accounts receivable, unbilled receivables, and accounts payable are the principal components of the Company's working capital and are generally driven by revenue with other short-term fluctuations related to payment practices by customers, sales of accounts receivable through the MARPA Facility and the timing of billings. Our receivables reflect amounts billed to customers, as well as the revenue that was recognized in the preceding month, which is normally billed the month following each balance sheet date.
Current wording
Cash, accounts receivable, unbilled receivables, and accounts payable are the principal components of the Company's working capital and are generally driven by revenue with other short-term fluctuations related to payment practices by customers, sales of accounts receivable through the MARPA Facility and the timing of billings. Our receivables reflect amounts billed to customers, as well as the revenue that was recognized in the preceding month, which is normally billed the month following each balance sheet date. On May 28, 2026, the Government of Greenland drew $4.3 million on a letter of credit held by the Company related to prior year tax claims, which the Company has appealed. The Company has recorded this withdrawal by the Government of Greenland as receivables on the Company's Condensed Consolidated Balance Sheets as management currently believes that there is reasonable likelihood of this amount being recoverable.
Previous wording
Accounts receivable balances can vary significantly over time and are impacted by revenue levels and the timing of payments received from customers. Days sales outstanding (DSO) is a metric used to monitor accounts receivable levels. We determine our DSO by calculating the number of days necessary to exhaust our ending accounts receivable balance based on our most recent historical revenue. DSO was 57 days as of both April 3, 2026 and December 31, 2025.
Current wording
Accounts receivable balances can vary significantly over time and are impacted by revenue levels and the timing of payments received from customers. Days sales outstanding (DSO) is a metric used to monitor accounts receivable levels. We determine our DSO by calculating the number of days necessary to exhaust our ending accounts receivable balance based on our most recent historical revenue. DSO was 56 and 57 days as of July 3, 2026 and December 31, 2025, respectively.
Previous wording
The following table sets forth net cash (used in) provided by operating activities, investing activities and financing activities:
Current wording
The following table sets forth net cash used in operating activities, investing activities and financing activities:
Previous wording
Net cash used in operating activities for the three months ended April 3, 2026 consisted of net cash outflows from the sale of receivables through the MARPA Facility of $102.0 million, net cash outflows in working capital accounts of $74.5 million and net cash outflows in other long-term assets and liabilities of $7.3 million, partially offset by non-cash net income adjusting items (primarily consisting of depreciation and amortization) of $34.9 million and net income of $18.9 million.
Current wording
Net cash used in operating activities for the six months ended July 3, 2026 consisted of net cash outflows from the sale of receivables through the MARPA Facility of $142.9 million and net cash outflows in working capital accounts of $85.0 million, partially offset by non-cash net income adjusting items (primarily consisting of depreciation and amortization) of $74.4 million, net income of $44.5 million, and net cash inflows in other long-term assets and liabilities of $0.6 million.
Previous wording
Net cash used in operating activities for the three months ended March 28, 2025 consisted of net cash outflows in working capital accounts of$159.6 million and net cash outflows in other long-term assets and liabilities of $3.5 million, partially offset by cash inflows from non-cash net income adjusting items (primarily consisting of depreciation and amortization) of $31.4 million, cash inflows from the sale of receivables through the MARPA Facility of $28.2 million, and net income of $8.1 million.
Current wording
Net cash used in operating activities for the six months ended June 27, 2025 consisted of net cash outflows in working capital accounts of $161.7 million and net cash outflows in other long-term assets and liabilities of $7.8 million, partially offset by non-cash net income adjusting items (primarily consisting of depreciation and amortization) of $63.0 million, net income of $30.5 million and cash inflows from the sale of receivables through the MARPA Facility of $9.0 million.
Previous wording
Net cash used in investing activities for the three months ended April 3, 2026 consisted of $2.3 million of net capital expenditures for the purchase of software and hardware, vehicles and equipment related to ongoing operations.
Current wording
Net cash used in investing activities for the six months ended July 3, 2026 consisted of $3.4 million of net capital expenditures for the purchase of software and hardware, vehicles and equipment related to ongoing operations.
Previous wording
Net cash used in investing activities for the three months ended March 28, 2025 consisted of$2.6 million of net capital expenditures for the purchase of software and hardware, vehicles and equipment related to ongoing operations.
Current wording
Net cash used in investing activities for the six months ended June 27, 2025 consisted of $5.1 million of net capital expenditures for the purchase of software and hardware, vehicles and equipment related to ongoing operations.
Previous wording
Net cash used in financing activities for the three months ended April 3, 2026 primarily consisted of repayments of long-term debt of $23.7 million and payments for employee withholding taxes on stock-based compensation of 4.8 million.
Current wording
Net cash used in financing activities for the six months ended July 3, 2026 primarily consisted of repayments of long-term debt of $37.4 million, payments for employee withholding taxes on stock-based compensation of $5.3 million and payments for debt issuance costs of $1.2 million.
Previous wording
Net cash used in financing activities for the three months ended March 28, 2025 consisted of revolver repayments of$141.0 million, payments for employee withholding taxes on stock-based compensation of $2.7 million, and payments for debt issuance costs of $1.2 million, partially offset by proceeds from the revolver of $141.0 million.
Current wording
Net cash used in financing activities for thesix months ended June 27, 2025 consisted ofrevolver repayments of $319.0 million, payments for debt issuance costs of $3.9 million, repayments of long-term debt of $3.8 million and payments for employee withholding taxes on stock-based compensation of $3.0 million, partially offset by proceeds from the revolver of $319.0 million.
Previous wording
As of April 3, 2026, we held cash, cash equivalents and restricted cash of $208.7 million, which included approximately $53.0 million held by foreign subsidiaries, and had $479.0 million of available borrowing capacity under the 2025 Revolver. We believe that our cash, cash equivalents and restricted cash as of April 3, 2026, as supplemented by operating cash flows, the 2025 Revolver, and the MARPA Facility will be sufficient to fund our anticipated operating costs, capital expenditures, and current debt repayment obligations for at least the next 12 months.
Current wording
As of July 3, 2026, we held cash, cash equivalents and restricted cash of $214.3 million, which included approximately $57.1 million held by foreign subsidiaries, and had $485.1 million of available borrowing capacity under the 2025 Revolver. We believe that our cash, cash equivalents and restricted cash as of July 3, 2026, as supplemented by operating cash flows, the 2025 Revolver, and the MARPA Facility will be sufficient to fund our anticipated operating costs, capital expenditures, and current debt repayment obligations for at least the next 12 months.
Previous wording
We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. In addition, forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from the Company's historical experience and our present expectations or projections. These risks and uncertainties include, but are not limited to: our ability to submit proposals for and/or win all potential opportunities in our pipeline; our ability to retain and renew our existing contracts; our ability to compete with other companies in our market; security breaches, cyber-attacks or cyber intrusions, and other disruptions to our information technology and operation; our mix of cost-plus, cost-reimbursable, firm-fixed-price and time-and-materials contracts; maintaining our reputation and relationship with the U.S. government; protests of new awards; economic, political and social conditions in the countries in which we conduct our businesses; changes in U.S. or international government defense budgets, including potential changes or uncertainty arising from the U.S. president and administration; government regulations and compliance therewith, including changes to the DoW procurement process; changes in technology; our ability to protect our intellectual property rights; governmental investigations, reviews, audits and cost adjustments; contingencies related to actual or alleged environmental contamination, claims and concerns; delays in completion of the U.S. government budget; our success in extending, deepening, and enhancing our technical capabilities; our success in expanding our geographic footprint or broadening our customer base; our ability to realize the full amounts reflected in our backlog; impairment of goodwill; misconduct of our employees, subcontractors, agents, prime contractors and business partners; our ability to control costs; our level of indebtedness; terms of our credit agreements; inflation and interest rate risk; geopolitical risk, including as a result of recent global hostilities and tariffs; our suppliers' performance; economic and capital markets conditions; our ability to maintain safe work sites and equipment; our ability to retain and recruit qualified personnel; our ability to maintain good relationships with our workforce and unions; our teaming relationships with other contractors; changes in our accounting estimates; the adequacy of our insurance coverage; volatility in our stock price; changes in our tax provisions or exposure to additional income tax liabilities; risks and uncertainties relating to integrating and refining internal control systems, including enterprise resource planning and business systems; changes in GAAP; and other factors described in Part I, "Item 1A. Risk Factors” and elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2025 and described from time to time in …
Excerpt shortened here; the source contains the full paragraph.
Current wording
We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. In addition, forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from the Company's historical experience and our present expectations or projections. These risks and uncertainties include, but are not limited to: our ability to submit proposals for and/or win all potential opportunities in our pipeline; our ability to retain and renew our existing contracts; our ability to compete with other companies in our market; security breaches, cyber-attacks or cyber intrusions, and other disruptions to our information technology and operation; our mix of cost-plus, cost-reimbursable, firm-fixed-price and time-and-materials contracts; maintaining our reputation and relationship with the U.S. government; protests of new awards; economic, political and social conditions in the countries in which we conduct our businesses; changes in U.S. or international government defense budgets, including potential changes or uncertainty arising from the U.S. president and administration; government regulations and compliance therewith, including changes to the DoW procurement process; changes in technology; our ability to protect our intellectual property rights; governmental investigations, reviews, audits and cost adjustments; contingencies related to actual or alleged environmental contamination, claims and concerns; delays in completion of the U.S. government budget; our success in extending, deepening, and enhancing our technical capabilities; our success in expanding our geographic footprint or broadening our customer base; our ability to realize the full amounts reflected in our backlog; impairment of goodwill; misconduct of our employees, subcontractors, agents, prime contractors and business partners; our ability to control costs; our level of indebtedness; terms of our credit agreements; inflation and interest rate risk; geopolitical risk, including as a result of recent global hostilities and tariffs; our suppliers' performance; economic and capital markets conditions; our ability to maintain safe work sites and equipment; our ability to retain and recruit qualified personnel; our ability to maintain good relationships with our workforce and unions; our teaming relationships with other contractors; changes in our accounting estimates; the adequacy of our insurance coverage; volatility in our stock price; changes in our tax provisions; our expectation with respect to the resolution of certain tax claims or exposure to additional income tax liabilities; risks and uncertainties relating to integrating and refining internal control systems, including enterprise resource planning and business systems; changes in GAAP; and other factors described in Part I, "Item 1A. Risk Factors” and elsewhere in our Annual Report on Form 10-K fo…
Excerpt shortened here; the source contains the full paragraph.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
Selected financial highlights are presented in the following table:
Current report — wording carried from elsewhere
Aggregate cumulative adjustments increased operating income by $0.7 million and $5.6 million for the six months ended July 3, 2026 and June 27, 2025, respectively. The aggregate cumulative adjustments for the six months ended July 3, 2026 and June 27, 2025 related to changes in contract terms, program performance, customer changes in scope of work and changes to estimates in the reported period.
Current report — wording carried from elsewhere
The Company recorded a $1.7 million loss on extinguishment of debt for the six months ended July 3, 2026 and a $2.5 million loss on extinguishment of debt for the six months ended June 27, 2025. For further discussion see Note 5, Debt, in the Notes to Condensed Consolidated Financial Statements.