What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2026-05-04 compared with 2025-11-03 · 92 added, 158 removed, 215 unchanged (54% of the section changed)

6 unchanged sentences

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.

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.

V2X is a leading provider of critical mission solutions primarily to defense customers globally.

The Company operates as one segment and offers a broad suite of capabilities including multi-domain high impact readiness, integrated supply chain management, assured communications, mission solutions, and platform renewal and modernization to national security, defense, civilian and international customers.

Our primary customer is the U.S.

Department of War (DoW), also known as the Department of Defense under 10 U.S.C.

For the nine months ended September 26, 2025 and September 27, 2024, the Company had total revenue of $3.3 billion and $3.2 billion, respectively, the substantial majority of which was derived from U.S.

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 nine months ended September 26, 2025 and September 27, 2024, we generated approximately 41% and 42%, respectively, of our total revenue from the U.S.

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.

Executive Summary

Our revenue increased $85.5 million, or 8%, for the three months ended September 26, 2025 as compared to the three months ended September 27, 2024.

Revenue increased primarily due to the ramp up of several programs.

Revenue from our programs in the U.S.

and Europe increased by $79.8 million and $9.1 million, respectively, partially offset by a decrease in revenue from our programs in the Middle East and Asia of $1.9 million and $1.5 million, respectively, during the three months ended September 26, 2025 as compared to the three months ended September 27, 2024.

Operating income for the three and nine months ended September 26, 2025 was $55.7 million and $142.9 million, respectively, an increase of $5.8 million and $35.3 million, or 12% and 33%, respectively, compared to the three and nine months ended September 27, 2024.

Operating income increased primarily due to the ramp up of several programs, the conclusion of a non-recurring contractual commitment, decreased Selling, General, & Administrative (SG&A) expenses, and favorable contract mix.

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.

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.

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.

5 unchanged sentences

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 and nine months ended September 26, 2025, compared to the three and nine months ended September 27, 2024, are contained in the " Discussion of Financial Results " section.

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.

Significant Contracts

1 unchanged sentence

% of Total Revenue

Nine Months Ended

September 26, September 27,

Three Months Ended

April 3, March 28,

Contract Name 2026 2025

Logistics Civil Augmentation Program (LOGCAP) V - Kuwait Task Order 7.4% 11.5%

T-45 7.8% 10.1%

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, 2026.

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 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 Kuwait Task Order 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 $333.9 million and $328.8 million of revenue for the nine months ended September 26, 2025 and September 27, 2024, respectively.

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.

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.

Backlog represents revenue we expect to recognize in the future as work is performed for remaining performance obligations for our contracts.

13 unchanged sentences

The following is a summary of funded and unfunded backlog:

September 26, December 31,

April 3, December 31,

(In millions) 2026 2025

3 unchanged sentences

Funded orders (different from funded backlog) represent orders for which funding was received during the period.

We received funded orders of $3.3 billion during the nine months ended September 26, 2025, which was a decrease of $0.1 billion compared to the nine months ended September 27, 2024.

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.

Economic Opportunities, Challenges and Risks

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.

6 unchanged sentences

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 DoW FY 2026 budget request is approximately $962 billion, including both discretionary appropriations and mandatory funding contained in the One Big Beautiful Bill Act (OBBBA).

The OBBBA was signed into law by the President on July 4th, 2025, and allocates approximately $150 billion in appropriations to support defense and national security priorities.

Of the $150 billion in OBBBA appropriations, approximately $113 billion is mandatory funding aligned to the FY 2026 DoW budget.

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.

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.

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 FY 2026 appropriations for the U.S.

government were not enacted by September 30, 2025, resulting in a U.S.

federal government shutdown that began on October 1, 2025, and continues through the date of this filing.

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.

On April 21, 2026, the DoW released the President's FY 2027 defense budget which requests $1.45 trillion in total budgetary resources.

While the FY 2027 budget request reflects a significant increase from FY 2026 levels, it has not yet been passed as law and 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.

1 unchanged sentence

Those actions remain uncertain and could result in impacts to our current and future financial performance and business prospects.

Per federal guidelines, we are continuing to perform work on existing contracts that have been funded with appropriations from prior years.

While not currently the case, we may be expected to operate for some period of time on certain U.S.

government contracts even if the U.S.

government customer is unable to make timely payments.

To date, the Company has not experienced a material impact from the government shutdown.

However, if the U.S.

federal government shutdown continues for an extended period it could result in significant consequences for our company, employees, customers, suppliers and our industry and could result in material impacts to our financial position, results of operations, bookings, backlog, and/or collections and cash flows.

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.

10 unchanged sentences

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.

4 unchanged sentences

Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2025, and updated, as necessary, on subsequent Quarterly Reports on Form 10-Q, and the matters identified under the caption “Forward-Looking Statement Information" herein.

Secondary Public Offerings

On May 15, 2025, we entered into an underwriting agreement (the May 2025 Underwriting Agreement), by and among the Company, Vertex Aerospace Holdco LLC (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.

On August 8, 2025, we entered into an underwriting agreement (the August 2025 Underwriting Agreement), by and among the Company, the Selling Shareholder and the Underwriter, relating to the public offering (the August 2025 Offering) of 2,000,000 shares of common stock by the Selling Shareholder.

The August 2025 Offering closed on August 11, 2025.

In connection with the August 2025 Offering, we purchased from the Underwriter 200,000 shares of common stock that were subject to the August 2025 Offering at a price per share equal to the price per share paid by the Underwriter to the Selling Shareholder in the August 2025 Offering.

We did not sell any securities in the August 2025 Offering and did not receive any proceeds from the sale of the shares offered by the Selling Shareholder.

In addition, on September 11, 2025, the Selling Shareholder sold 1,700,000 shares of common stock pursuant to Rule 144 of the Securities Act (the September 2025 Rule 144 Sale).

As a result of the reduced percentage ownership of 25.7% resulting from the September 2025 Rule 144 Sale and in accordance with the terms of the V2X Shareholders Agreement dated July 22, 2022 between the Selling Shareholder and the Company (the Shareholders Agreement), one director designated by the Selling Shareholder and certain of its affiliates is obligated to resign from the Board of Directors (the Board) of the Company effective no later than the Company's 2026 Annual Meeting of Shareholders (the 2026 Annual Meeting).

We did not sell any securities in the September 2025 Rule 144 Sale and did not receive any proceeds from the sale of the shares sold by the Selling Shareholder.

On September 4, 2024, we entered into an underwriting agreement (the 2024 Underwriting Agreement), by and among the Company, the Selling Shareholder and Goldman Sachs & Co.

LLC, Morgan Stanley & Co.

LLC and Robert W.

Incorporated, as representatives to several underwriters named therein (the 2024 Underwriters), relating to the public offering of 2,000,000 shares of common stock by the Selling Shareholder (the 2024 Secondary Offering) and up to 300,000 additional shares of common stock (the Option Shares) by the Selling Shareholder at the 2024 Underwriters’ option at any time on or before the 30th day after the date of the 2024 Underwriting Agreement (the Option, and together with the 2024 Secondary Offering, the 2024 Offering).

The 2024 Secondary Offering closed on September 6, 2024.

The Company did not sell any securities in the 2024 Secondary Offering and did not receive any proceeds from the sale of the shares offered by the Selling Shareholder.

On September 11, 2024, the 2024 Underwriters notified the Company and the Selling Shareholder that they had elected to exercise the Option in full.

The offering of the Option Shares closed on September 12, 2024.

All of the Option Shares were sold by the Selling Shareholder.

The Company did not receive any of the proceeds from the sale of the Option Shares by the Selling Shareholder in the offering.

During the three and nine months ended September 26, 2025, we incurred costs of $0.1 million and $0.3 million, respectively, in connection with the secondary offerings.

During both the three and nine months ended September 27, 2024, we incurred costs of $0.6 million in connection with the 2024 Offering.

These are accounting and legal fees, and the costs are included within selling, general, and administrative expenses on our Condensed Consolidated Statement of Income.

DISCUSSION OF FINANCIAL RESULTS

Three months ended September 26, 2025, compared to three months ended September 27, 2024

Three months ended April 3, 2026 compared to three months ended March 28, 2025

Selected financial highlights are presented in the following table:

Three Months Ended Change

September 26, September 27,

(In thousands, except for percentages) 2025 2024 $ %

Revenue $ 1,167,137 $ 1,081,656 $ 85,481 7.9 %

Cost of revenue 1,072,632 990,220 82,412 8.3 %

% of revenue 91.9 % 91.5 %

Selling, general, and administrative expenses 38,836 41,549 (2,713) (6.5) %

% of revenue 3.3 % 3.8 %

Operating income 55,669 49,887 5,782 11.6 %

Operating margin 4.8 % 4.6 %

Interest expense, net (19,961) (27,152) 7,191 (26.5) %

Other expense, net (2,962) (3,198) 236 (7.4) %

Income from operations before income taxes 32,746 19,537 13,209 67.6 %

% of revenue 2.8 % 1.8 %

Income tax expense 8,141 4,486 3,655 81.5 %

Effective income tax rate 24.9 % 23.0 %

Net income $ 24,605 $ 15,051 $ 9,554 63.5 %

Revenue increased $85.5 million, or 7.9%, for the three months ended September 26, 2025 as compared to the three months ended September 27, 2024 primarily driven by the ramp up of several programs.

Revenue from our programs in the U.S.

Cost of Revenue

Cost of revenue increased $82.4 million, or 8.3%, for the three months ended September 26, 2025 as compared to the three months ended September 27, 2024, primarily driven by the increase in revenue.

Selling, General, & Administrative Expenses

SG&A expenses decreased $2.7 million, or 6.5%, for the three months ended September 26, 2025 as compared to the three months ended September 27, 2024, primarily due to lower integration-related costs.

Operating Income

Operating income increased $5.8 million, or 11.6%, for the three months ended September 26, 2025 as compared to the three months ended September 27, 2024.

Operating income as a percentage of revenue was 4.8% for the three months ended September 26, 2025, compared to 4.6% for the three months ended September 27, 2024, primarily driven by the ramp up of several programs and decreased SG&A expenses.

Aggregate cumulative adjustments increased operating income by $2.5 million and $17.3 million for the three months ended September 26, 2025 and September 27, 2024, respectively.

The aggregate cumulative adjustments for the three months ended September 26, 2025 and September 27, 2024 related to changes in contract terms, program performance, customer changes in scope of work and changes to estimates in the reported period.

Nine months ended September 26, 2025, compared to nine months ended September 27, 2024

Selected financial highlights are presented in the following table:

Nine Months Ended Change

September 26, September 27,

April 3, March 28,

(In thousands, except for percentages) 2026 2025 $ %

14 unchanged sentences

Net income $ 18,925 $ 8,107 $ 10,818 133.4 %

Revenue increased $97.0 million, or 3.1%, for the nine months ended September 26, 2025 as compared to the nine months ended September 27, 2024, primarily driven by the ramp up of several programs.

Revenue from programs located in the U.S.

increased by $166.0 million, partially offset by a decrease in revenue from programs located in the Middle East and Asia of $67.6 million and $2.2 million, respectively.

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.

Cost of Revenue

Cost of revenue increased $64.2 million, or 2.2%, for the nine months ended September 26, 2025 as compared to the nine months ended September 27, 2024, primarily driven by the increase in revenue.

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.

Selling, General, & Administrative Expenses

SG&A expenses decreased $2.5 million, or 1.9%, for the nine months ended September 26, 2025 as compared to the nine months ended September 27, 2024, primarily due to lower integration-related costs, partially offset by the timing of expenses.

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.

Operating Income

Operating income increased $35.3 million, or 32.8%, for the nine months ended September 26, 2025 as compared to the nine months ended September 27, 2024.

Operating income as a percentage of revenue was 4.4% for the nine months ended September 26, 2025, compared to 3.4% for the nine months ended September 27, 2024.

The increase in operating income was primarily driven by the ramp up of several programs, the conclusion of a non-recurring contractual commitment, decreased SG&A expenses, and favorable contract mix.

Aggregate cumulative adjustments increased operating income by $8.1 million and $18.5 million for the nine months ended September 26, 2025 and September 27, 2024, respectively.

The aggregate cumulative adjustments for the nine months ended September 26, 2025 and September 27, 2024 related to changes in contract terms, program performance, customer changes in scope of work and changes to estimates in the reported period.

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.

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.

Loss on Extinguishment of Debt

The Company recorded a $2.5 million loss on extinguishment of debt for the nine months ended September 26, 2025 and a $2.0 million loss on extinguishment of debt for the nine months ended September 27, 2024.

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.

Interest Expense, Net

Interest expense, net for the three and nine months ended September 26, 2025 and September 27, 2024 was as follows:

Three Months Ended Change Nine Months Ended Change

September 26, September 27, September 26, September 27,

Interest expense, net for the three months ended April 3, 2026 and March 28, 2025 was as follows:

Three Months Ended Change

April 3, March 28,

(In thousands, except for percentages) 2026 2025 $ %

4 unchanged sentences

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 $23.3 million for the nine months ended September 26, 2025 compared to the nine months ended September 27, 2024 primarily due to a decrease in our debt balance and reduced interest rates resulting from both the January 2, 2025 amendment to the First Lien Credit Agreement and the March 31, 2025 amendment to the 2023 Credit Agreement.

For further discussion of these amendments see Note 5, Debt , in the Notes to Condensed Consolidated Financial Statements.

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.

Other Expense, Net

During the three and nine months ended September 26, 2025, we incurred purchase discount fees, net of servicing fees, of $3.0 million and $8.1 million, respectively, related to the sale of accounts receivable through the MARPA Facility.

During the three and nine months ended September 27, 2024, we incurred purchase discount fees, net of servicing fees, of $3.2 million and $7.4 million, respectively, related to the sale of accounts receivable through the MARPA Facility.

In addition, during the nine months ended September 27, 2024, we incurred a $2.2 million impairment charge on a non-operating, long-lived asset, primarily due to a decreased fair market value.

During the three and nine months ended September 26, 2025, there were no impairment charges on non-operating, long-lived assets.

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.

Income Tax Expense

We recorded income tax expense of $8.1 million and $4.5 million for the three months ended September 26, 2025 and September 27, 2024, respectively.

Our effective income tax rates for the three months ended September 26, 2025 and September 27, 2024, were 24.9% and 23.0%, respectively.

For the nine months ended September 26, 2025 and September 27, 2024, the Company recorded income tax expense of $17.2 million and $2.9 million, representing effective income tax rates of 23.7% and 23.1%, 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.

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.

LIQUIDITY AND CAPITAL RESOURCES

The FY 2026 appropriations for the U.S.

government were not enacted by September 30, 2025, resulting in a U.S.

federal government shutdown that began on October 1, 2025, and continues through the date of this filing.

We are monitoring potential impacts, which could include consequences to collections and cash flows if the shutdown extends for a prolonged period of time.

See "Economic Opportunities, Challenges and Risks ” for further information.

Outside of the aforementioned, 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.

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.

2 unchanged sentences

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 2025 Revolver and MARPA Facility are available to satisfy short-term working capital requirements.

When necessary, our revolving credit facility and MARPA Facility are available to satisfy short-term working capital requirements.

See Note 5, Debt, and Note 12, Sale of Receivable, in the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for further discussion.

If cash flows from operations are less than expected, we may need to access the long-term or short-term capital markets.

1 unchanged sentence

(i) our credit ratings, (ii) the liquidity of the overall capital markets, (iii) the current state of the economy, and (iv) uncertainties in the U.S.

government defense budget and their ability to fund contracts, including those uncertainties arising from a prolonged U.S.

government defense budget and their ability to fund contracts, including those uncertainties arising from a potential U.S.

government shutdown.

2 unchanged sentences

See Note 5, Debt , in the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for further discussion.

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.

As of September 26, 2025, the carrying value of the First Lien Credit Agreement was $895.3 million, excluding deferred discount and unamortized deferred financing costs of $25.2 million.

The estimated fair value of the First Lien Credit Agreement as of September 26, 2025 was $895.3 million.

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).

As of September 26, 2025, there were no outstanding borrowings and $24.1 million of outstanding letters of credit under the 2025 Revolver.

Availability under the 2025 Revolver was $475.9 million as of September 26, 2025.

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 September 26, 2025, the fair value of the 2025 Revolver approximated the carrying value because the debt bears a floating interest rate.

As of September 26, 2025, the carrying value of the 2025 Term Loans was $236.0 million, excluding unamortized deferred financing costs of $1.8 million.

The estimated fair value of the 2025 Term Loans as of September 26, 2025 was $235.4 million.

As of April 3, 2026, the fair value of the 2025 Revolver approximated the carrying value because the debt bears a floating interest rate.

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).

Debt, in the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for further discussion.

The cash presented on the Condensed Consolidated Balance Sheets consists of cash held by our wholly owned U.S.

and international subsidiaries.

Approximately $33.9 million of our $182.3 million in cash, cash equivalents and restricted cash as of September 26, 2025 is held by foreign subsidiaries and is not available to fund U.S.

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.

9 unchanged sentences

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 September 26, 2025 and December 31, 2024, respectively.

DSO was 57 days as of both April 3, 2026 and December 31, 2025.

The following table sets forth net cash (used in) provided by operating activities, investing activities and financing activities:

Nine Months Ended

September 26, September 27,

Three Months Ended

April 3, March 28,

(in thousands) 2026 2025

5 unchanged sentences

1 Impact on cash balances due to changes in foreign exchange rates.

Net cash used in operating activities of $27.5 million for the nine months ended September 26, 2025 consisted of net cash outflows in working capital accounts of $180.6 million and other long-term assets and liabilities of $10.9 million, partially offset by non-cash net income adjusting items (primarily consisting of depreciation and amortization) of $91.9 million, net proceeds from the sale of receivables through the MARPA Facility of $17.0 million, and net income of $55.1 million.

Net cash provided by operating activities of $31.1 million for the nine months ended September 27, 2024, consisted of non-cash net income adjusting items (primarily consisting of depreciation and amortization) of $110.8 million, proceeds from the sale of receivables through the MARPA Facility of $70.7 million, and net income of $9.7 million, partially offset by net cash outflows in working capital accounts of $119.7 million and other long-term assets and liabilities of $40.3 million.

Net cash used in investing activities for the nine months ended September 26, 2025 consisted of $27.5 million for the acquisition of a business and $7.4 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 nine months ended September 27, 2024 consisted of $16.9 million for the acquisition of businesses and $10.7 million of net capital expenditures for the purchase of software and hardware, vehicles and equipment related to ongoing operations.

Net cash used in financing activities during the nine months ended September 26, 2025 primarily consisted of revolver repayments of $459.0 million, purchases of treasury stock of $10.0 million, repayments of long-term debt of $7.5 million, payments for debt issuance costs of $3.9 million, and payments for employee withholding taxes on stock-based compensation of $3.0 million, partially offset by proceeds from the revolver of $459.0 million.

Net cash used in financing activities during the nine months ended September 27, 2024 primarily consisted of revolver repayments of $1.0 billion, payments for employee withholding taxes on share-based compensation of $8.0 million, repayments of long-term debt of $7.7 million, and payments for debt issuance costs of $1.2 million, partially offset by proceeds from the revolver of $1.0 billion.

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.

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.

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.

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 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.

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.

Capital Resources

As of September 26, 2025, we held cash, cash equivalents and restricted cash of $182.3 million, which included approximately $33.9 million held by foreign subsidiaries, and had $475.9 million of available borrowing capacity under the 2025 Revolver.

We believe that our cash, cash equivalents and restricted cash as of September 26, 2025, 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.

Further discussion on the U.S.

federal government shutdown is contained in " Liquidity ."

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.

Contractual Obligations

As of September 26, 2025, commitments to make future payments under long-term contractual obligations were as follows:

As of April 3, 2026, commitments to make future payments under long-term contractual obligations were as follows:

Payments Due by Period

6 unchanged sentences

Total $ 1,438,186 $ 90,790 $ 191,486 $ 1,151,560 $ 4,350

¹ Includes unused funds fee and is based on the September 26, 2025 interest rate and outstanding balance.

¹ Includes unused funds fee and is based on the April 3, 2026 interest rate and outstanding balance.

CRITICAL ACCOUNTING POLICIES, ESTIMATES AND JUDGMENTS

3 unchanged sentences

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.

We believe that the assumptions and estimates associated with revenue recognition 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, 2025.

23 unchanged sentences

changes in U.S.

or international government defense budgets, including potential changes from the U.S.

president and administration and impacts from the current U.S.

government shutdown;

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;

15 unchanged sentences

geopolitical risk, including as a result of recent global hostilities and tariffs;

our subcontractors' performance;

our suppliers' performance;

economic and capital markets conditions;

7 unchanged sentences

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;

risks and uncertainties relating to integrating and refining internal control systems, including enterprise resource planning and business systems;

changes in GAAP;

2 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis