Item 2. Management’s Discussion and Analysis
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion of our financial condition and results of operations should be read in conjunction with the unaudited Condensed Consolidated Financial Statements and notes thereto included in this Quarterly Report on Form 10-Q as well as the audited Consolidated Financial Statements and notes thereto and the information under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in the Company's Annual Report on Form 10-K for the year ended December 31, 2024. This Quarterly Report provides additional information regarding the Company, our services, industry outlook and forward-looking statements that involve risks and uncertainties. The forward-looking statements are not historical facts, but rather are based on current expectations, estimates, assumptions and projections about our industry, business and future financial results. Our actual results could differ materially from the results contemplated by these forward-looking statements. See "Forward-Looking Statement Information" for further information. Amounts presented in and throughout this Item 2 are rounded and, as such, rounding differences could occur in period over period changes and percentages reported.
Overview
V2X is a leading provider of critical mission solutions primarily to defense clients globally. The Company operates as one segment and offers a broad suite of capabilities including multi-domain high impact readiness, integrated supply chain management, mission solutions, and platform renewal and modernization to national security, defense, civilian and international customers.
Our primary customer is the U.S. Department of Defense (DoD). For both the three months ended March 28, 2025 and March 29, 2024, the Company had total revenue of $1.0 billion, the substantial majority of which was derived from U.S. government customers. For the three months ended March 28, 2025 and March 29, 2024, the Company generated approximately 44% and 43%, respectively, of our total revenue from the U.S. Army.
Executive Summary
Our revenue increased $5.4 million, or 0.5%, for the three months ended March 28, 2025 as compared to the three months ended March 29, 2024, primarily due to organic growth. Revenue from our programs in the U.S. and Asia increased by $32.8 million and $7.2 million, respectively, partially offset by decreases in revenue from our programs in the Middle East and Europe of $25.0 million and $9.6 million, respectively.
Operating income for the three months ended March 28, 2025 was $34.3 million, an increase of $4.0 million or 13.1%, compared to the three months ended March 29, 2024. Operating income increased primarily due to changes in aggregate cumulative adjustments, as further described below.
During the performance of long-term contracts, estimated final contract prices and costs are reviewed periodically, and revisions are made as required, which are recorded as changes in revenue and cost of revenue in the periods in which they are determined. Additionally, the fees under certain contracts may be increased or decreased in accordance with cost or performance incentive provisions which measure actual performance against established targets or other criteria. These incentive fees or penalties are included in revenue when there is sufficient information to reasonably assess anticipated contract performance. Amounts representing contract change orders or limitations in funding on contracts are recorded only if it is probable a claim will result in additional contract revenue and the amounts can be reliably estimated. Changes in estimated revenue, cost of revenue and the related effect to operating income are recognized using cumulative adjustments, which recognize in the current period the cumulative effect of the changes on current and prior periods based on a contract's percentage of completion. Cumulative adjustments are driven by changes in contract terms, program performance, customer scope changes and changes to estimates in the reported period. These changes can increase or decrease operating income depending on the dynamics of each contract.
Further details related to consolidated financial results for the three months ended March 28, 2025, compared to the three months ended March 29, 2024, are contained in the "Discussion of Financial Results" section.
Significant Contracts
The following table reflects contracts that accounted for more than 10% of total revenue:
% of Total Revenue
Three Months Ended
March 28, March 29,
Contract Name 2025 2024
Logistics Civil Augmentation Program (LOGCAP) V - Kuwait Task Order 11.5% 11.0%
T-45 10.1% 7.9%
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Revenue associated with a contract will fluctuate based on increases or decreases in the work being performed on the contract, award fee payment assumptions, and other contract modifications within the term of the contract resulting in changes to the total contract value.
The LOGCAP V - Kuwait Task Order is currently exercised through June 30, 2025, with one additional twelve-month option and one six-month option through December 31, 2026. The task ord er provides services to support the Geographical Combatant Commands and Army Service Component Commands throughout the full range of military operations in the Kuwait region. The LOGCAP V - Kuwait Task Order contributed $116.9 million a nd $110.7 million of revenue for the three months ended March 28, 2025 and March 29, 2024 , respectively. On April 17, 2025, the U.S. Department of the Army announced that it will extend the current period of performance for the various task orders under the LOGCAP V, including the Kuwait Task Order, which is scheduled to extend through June 2030.
The T-45 contract is currently exercised through December 31, 2025, with three additional twelve-month options and one six-month option through June 30, 2029. The contract provides services to support and maintain all Navy T-45 aircraft, aircraft systems, and related support equipment in support of flight, test and evaluation operations. The T-45 contract contributed $103.0 million and $79.4 million of revenue for the three months ended March 28, 2025 and March 29, 2024, respectively.
Backlog
Total backlog includes remaining performance obligations, consisting of both funded backlog (firm orders for which funding is contractually authorized and appropriated by the customer) and unfunded backlog (firm orders for which funding is not currently contractually obligated by the customer and unexercised contract options). 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. The value of the backlog is based on anticipated revenue levels over the anticipated life of the contract. Actual values may be greater or less than anticipated. Total backlog is converted into revenue as work is performed. The level of order activity related to programs can be affected by the timing of government funding authorizations and their project evaluation cycles. Year-over-year comparisons could, at times, be impacted by these factors, among others.
Our contracts are multi-year contracts and typically include an initial period of one year or less with annual one-year or less option periods for the remaining contract period. The number of option periods vary by contract, and there is no guarantee that an option period will be exercised. The right to exercise an option period is at the sole discretion of the U.S. government when we are the prime contractor or of the prime contractor when we are a subcontractor. The U.S. government may also extend the term of a program by issuing extensions or bridge contracts, typically for periods of one year or less.
We expect to recognize a substantial portion of our funded backlog as revenue within the next 12 months. However, the U.S. government or the prime contractor may cancel any contract at any time through a termination for convenience. Most of our contracts have terms that would permit recovery of all or a portion of our incurred costs and fees for work performed in the event of a termination for convenience.
The following is a summary of funded and unfunded backlog:
March 28, December 31,
(In millions) 2025 2024
Funded backlog $ 2,219 $ 2,251
Unfunded backlog 9,679 10,251
Total backlog $ 11,898 $ 12,502
Funded orders (different from funded backlog) represent orders for which funding was received during the period. We received funded orders of $984.4 million during the three months ended March 28, 2025, which was an increase of $124.0 million compared to the three months ended March 29, 2024.
Economic Opportunities, Challenges and Risks
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. However, 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 DoD budget remains the largest in the world and management believes the Company's addressable portion of the DoD budget offers substantial opportunity for growth.
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The U.S. government's Fiscal Year (FY) begins on October 1 and ends on September 30. On March 15, 2025, the President signed into law the Full-Year Continuing Appropriations and Extensions Act 2025 to continue funding the government through FY 2025. The FY 2025 Continuing Resolution (CR) is generally similar to the FY 2024 funding levels but includes a $6 billion increase in defense spending and certain reductions in non-defense spending compared to FY 2024. The DoD FY 2025 base budget equals approximately $831.5 billion with the spending increase. Additionally, the FY 2025 CR provides the DoD with the flexibility to allocate funding, including authority to start new programs, assuming certain requirements are met. However, government operations under the FY 2025 CR could have potential impacts on the timing and award of new programs and contracts.
The Administration’s FY 2026 budget request is expected to be submitted to Congress in the coming months and will kick off the FY 2026 defense authorization and appropriations legislative process. Congress will need to approve or revise the FY 2026 budget request through enactment of appropriations and other legislation, which would require final approval from the President to become law.
We anticipate the federal budget will continue to be subject to debate and compromise shaped by, among other things, heightened political tensions, Congress, the debt ceiling, the global security environment, inflationary pressures, and other macroeconomic conditions. The result may shift funding priorities, which could have material impacts on our programs and defense spending broadly. Additionally, the Administration is assessing government-wide procurement, staffing, and support activities, including the evaluation of mission priorities, acquisition methods, contract performance, and other factors, which could result in potential actions. Those actions remain uncertain and could result in impacts to our current and future financial performance and business prospects.
While it is difficult to predict the specific course of future defense budgets, V2X believes the core functions the Company performs are mission-essential and spending to maintain readiness, improve performance, increase service life, lower cost, and modernize capabilities will continue to be a U.S. government priority. The Company's focus is on providing integrated solutions across the mission lifecycle that encompass (i) high impact readiness; (ii) integrated supply chain management; (iii) assured communications; (iv) mission solutions, including rapid response contingency efforts; and (v) platform renewal and modernization. The Company believes its capabilities enhance mission effectiveness, extend utility, lower cost, and improve security and mission outcomes. While customers may reduce the level of services required from us, the Company does not currently anticipate the complete elimination of these services, and the Company continues to focus on contract expansion and capturing new business opportunities.
However, business conditions have become more challenging and uncertain due to macroeconomic 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. 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.
The information provided above does not represent a complete list of trends and uncertainties that could impact the Company's business in either the near or long-term and should be considered along with the risk factors identified in Part I, "Item 1A. Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2024, and updated, as necessary, on subsequent Quarterly Reports on Form 10-Q, and the matters identified under the caption “Forward-Looking Statement Information" herein.
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DISCUSSION OF FINANCIAL RESULTS
Three months ended March 28, 2025, compared to three months ended March 29, 2024
Selected financial highlights are presented in the following table:
Three Months Ended Change
March 28, March 29,
(In thousands, except for percentages) 2025 2024 $ %
Revenue $ 1,015,923 $ 1,010,564 $ 5,359 0.5 %
Cost of revenue 937,820 940,290 (2,470) (0.3) %
% of revenue 92.3 % 93.0 %
Selling, general, and administrative expenses 43,805 39,943 3,862 9.7 %
% of revenue 4.3 % 4.0 %
Operating income 34,298 30,331 3,967 13.1 %
Operating margin 3.4 % 3.0 %
Loss on extinguishment of debt (2,214) — (2,214) *
Interest expense, net (19,719) (27,574) 7,855 (28.5) %
Other expense, net (2,295) (1,633) (662) 40.5 %
Income from operations before income taxes 10,070 1,124 8,946 795.9 %
% of revenue 1.0 % 0.1 %
Income tax expense (benefit) 1,963 (20) 1,983 (9915.0) %
Effective income tax rate 19.5 % (1.8) %
Net income $ 8,107 $ 1,144 $ 6,963 608.7 %
*Percentage change is not meaningful.
Revenue
Revenue increased $5.4 million, or 0.5%, for the three months ended March 28, 2025 as compared to the three months ended March 29, 2024 primarily due to organic growth. Revenue from our programs in the U.S. and Asia increased by $32.8 million and $7.2 million, respectively, partially offset by decreases in revenue from our programs in the Middle East and Europe of $25.0 million and $9.6 million, respectively.
Cost of Revenue
Cost of revenue decreased $2.5 million, or 0.3%, for the three months ended March 28, 2025 as compared to the three months ended March 29, 2024, primarily driven by changes in contract mix.
Selling, General, & Administrative (SG&A) Expenses
SG&A expenses increased $3.9 million, or 9.7%, for the three months ended March 28, 2025 as compared to the three months ended March 29, 2024, primarily due to timing of expenses.
Operating Income
Operating income increased $4.0 million, or 13.1%, for the three months ended March 28, 2025 as compared to the three months ended March 29, 2024. Operating income as a percentage of revenue was 3.4% for the three months ended March 28, 2025, compared to 3.0% for the three months ended March 29, 2024 primarily driven by changes in aggregate cumulative adjustments.
Aggregate cumulative catch-up adjustments increased operating income by $4.2 million and $0.5 million for the three months ended March 28, 2025 and March 29, 2024, respectively. The aggregate cumulative catch-up adjustments for the three months ended March 28, 2025 and March 29, 2024 related to changes in contract terms, program performance, customer changes in scope of work and changes to estimates in the reported period.
Loss on Extinguishment of Debt
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.
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Interest Expense, Net
Interest expense, net for the three months ended March 28, 2025 and March 29, 2024 was as follows:
Three Months Ended Change
March 28, March 29,
(In thousands, except for percentages) 2025 2024 $ %
Interest income $ 237 $ 290 $ (53) (18.3) %
Interest expense (19,956) (27,864) 7,908 (28.4) %
Interest expense, net $ (19,719) $ (27,574) $ 7,855 (28.5) %
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 $7.9 million for the three months ended March 28, 2025 compared to the three months ended March 29, 2024 primarily due to a decrease in our debt balance and reduced interest rates resulting from the January 2, 2025 Amendment to the First Lien Credit Agreement. For further discussion of the Amendment see Note 5, Debt , in the Notes to Condensed Consolidated Financial Statements.
Other Expense, Net
During the three months ended March 28, 2025, we incurred purchase discount fees and other expenses of $2.5 million, 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.
Income Tax Expense (Benefit)
We recorded income tax expense of $2.0 million and income tax benefits which were not material for the three months ended March 28, 2025 and March 29, 2024, respectively. Our effective income tax rates for the three months ended March 28, 2025 and March 29, 2024, were 19.5% and (1.8)%, respectively. The effective income tax rates vary from the federal statutory rate of 21.0% mainly due to state and foreign taxes, disallowed compensation deduction under Internal Revenue Code Section 162(m), offset by available deductions not reflected in book income, and income tax credits.
LIQUIDITY AND CAPITAL RESOURCES
Liquidity
We are not aware of any known trends, demands, commitments, events or uncertainties that will result in, or that are reasonably likely to result in, a material decrease in our liquidity. In addition, other than items discussed, there are no known material trends, favorable or unfavorable, in our capital resources and no expected material changes in the mix of such resources.
Our major source of funding for 2025 and beyond will be our operating cash flow, our existing balances of cash and cash equivalents and proceeds from any issuances of debt. We believe we have sufficient liquidity to fund operations, acquisitions, capital expenditures and scheduled debt repayments. We expect to fund our ongoing working capital, capital expenditure and financing requirements and pursue additional growth through new business development and potential acquisition opportunities by using cash flows from operations, cash on hand, credit facilities, and access to capital markets. When necessary, the 2023 Revolver and MARPA Facility are available to satisfy short-term working capital requirements.
If cash flows from operations are less than expected, we may need to access the long-term or short-term capital markets. Although we believe our current financing arrangements will permit financing of our operations on acceptable terms and conditions, access to and the availability of financing on acceptable terms and conditions in the future will be impacted by many factors, including but not limited to: (i) our credit ratings, (ii) the liquidity of the overall capital markets, and (iii) the current state of the economy. We cannot provide assurance that such financing will be available on acceptable terms or that such financing will be available at all.
On January 2, 2025, 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 $899.8 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 as in effect immediately prior to the amendment (the Existing Term Loans). See Note 5, Debt , in the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for further discussion.
As of March 28, 2025, the carrying value of the First Lien Credit Agreement was $899.8 million, excluding deferred discount and unamortized deferred financing costs of $27.7 million. The estimated fair value of the First Lien Credit Agreement as of March 28, 2025 was $887.4 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).
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As of March 28, 2025, there were no outstanding borrowings and $22.3 million of outstanding letters of credit under the 2023 Revolver. Availability under the 2023 Revolver was $477.7 million as of March 28, 2025. Unamortized deferred financing costs related to the 2023 Revolver of $2.9 million are included in other non-current assets in the Condensed Consolidated Balance Sheets. As of March 28, 2025, the fair value of the 2023 Revolver approximated the carrying value because the debt bears a floating interest rate.
As of March 28, 2025, the carrying value of the 2023 Term Loan was $239.1 million, excluding unamortized deferred financing costs of $1.5 million. The estimated fair value of the 2023 Term Loan as of March 28, 2025 was $235.8 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).
The cash presented on the Condensed Consolidated Balance Sheets consists of U.S. and international cash from wholly owned subsidiaries. Approximately $35.8 million of our $169.1 million in cash, cash equivalents and restricted cash as of March 28, 2025 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.
Sources and Uses of Liquidity
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.
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 wa s 58 and 57 d ays as of March 28, 2025 and December 31, 2024, respectively.
The following table sets forth net cash (used in) provided by operating activities, investing activities and financing activities:
Three Months Ended
March 28, March 29,
(in thousands) 2025 2024
Operating activities $ (95,464) $ (57,226)
Investing activities (2,609) (24,709)
Financing activities (3,799) 46,461
Foreign exchange 1
2,613 (1,519)
Net change in cash, cash equivalents and restricted cash $ (99,259) $ (36,993)
1 Impact on cash balances due to changes in foreign exchange rates.
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 items 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.
Net cash used in operating activities for the three months ended March 29, 2024 primarily consisted of net cash outflows in working capital accounts of $119.8 million and net cash outflows in other long-term assets and liabilities of $8.0 million, partially offset by cash inflows from non-cash net income items of $35.8 million, cash inflows from the sale of receivables through the MARPA Facility of $33.7 million and net income of $1.1 million.
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.
Net cash used in investing activities for the three months ended March 29, 2024 consisted of $16.9 million for the acquisition of businesses and $7.8 million of capital expenditures for the purchase of software and hardware, vehicles and equipment related to ongoing operations.
Net cash used in financing activities during 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.
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Net cash provided by financing activities during the three months ended March 29, 2024 consisted of proceeds from the revolver of $375.3 million, partially offset by revolver repayments of $319.3 million, payments for employee withholding taxes on stock-based compensation of $5.7 million, and repayments of long-term debt of $3.8 million.
Capital Resources
As of March 28, 2025, we held cash, cash equivalents and restricted cash of $169.1 million, which included $35.8 million held by foreign subsidiaries, and had $477.7 million of available borrowing capacity under the 2023 Revolver. We believe that our cash, cash equivalents and restricted cash as of March 28, 2025, as supplemented by cash flows from operations, the 2023 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.
Contractual Obligations
As of March 28, 2025, commitments to make future payments under long-term contractual obligations were as follows:
Payments Due by Period
Less than 1 year More than 5 Years
(In thousands) Total 1 - 3 Years 3 - 5 Years
Leases $ 48,912 $ 9,938 $ 21,422 $ 11,548 $ 6,004
Principal payments on First Lien Credit Agreement¹ 899,770 8,997 17,996 17,996 854,781
Principal payments on 2023 Credit Agreement¹ 239,063 10,938 25,000 203,125 —
Interest on First Lien and 2023 Credit Agreements 383,292 78,782 150,576 115,189 38,745
Total $ 1,571,037 $ 108,655 $ 214,994 $ 347,858 $ 899,530
¹ Includes unused funds fee and is based on the March 28, 2025 interest rate and outstanding balance.
CRITICAL ACCOUNTING POLICIES, ESTIMATES AND JUDGMENTS
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Estimates are revised as additional information becomes available. Management believes that the accounting estimates employed, and the resulting balances, are reasonable; however, actual results in these areas could differ from management's estimates under different assumptions or conditions.
We believe that the assumptions and estimates associated with revenue recognition, goodwill impairment, intangible assets and income taxes have the greatest potential impact on our financial statements because they are inherently uncertain, involve significant judgments, and include areas where different estimates reasonably could materially impact the financial statements. There have been no material changes in the critical accounting policies and estimates from those discussed in our Annual Report on Form 10-K for the year ended December 31, 2024.
New Accounting Pronouncements
Refer to Part I, Item 1, Note 2 , Recent Accounting Standards Update in the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for information regarding accounting pronouncements and accounting standards updates.
FORWARD-LOOKING STATEMENT INFORMATION
This Quarterly Report on Form 10-Q and certain information incorporated herein by reference contain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act), and Section 27A of the Securities Act of 1933, as amended (the Securities Act), and the Private Securities Litigation Reform Act of 1995 and, as such, may involve risks and uncertainties. All statements included or incorporated by reference in this report, other than statements that are purely historical, are forward-looking statements. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “could,” “potential,” “continue” or similar terminology. These statements are based on the beliefs and assumptions of our management based on information currently available to management. Forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties that could cause actual results to differ materially from the results contemplated by the forward-looking statements.
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The forward-looking statements included or incorporated by reference in this report are subject to additional risks and uncertainties further identified and discussed in Part I, "Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2024, and updated, as necessary, on subsequent quarterly reports on Form 10-Q and are based on information available to us on the filing date of this report. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this report. New risks and uncertainties arise from time to time, and we cannot predict those events or how they may affect us.
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 from the U.S. president and administration; government regulations and compliance therewith, including changes to the DoD 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 subcontractors' 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, post-merger; 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, 2024 and described from time to time in our future reports filed with the SEC.