here on time. My name is Joe Thornton. I'm a managing director with Wells Fargo Investment Banking. With me today is Mike Smith, who leads investor relations, treasury, and corporate development for V2X. Appreciate you all spending time with us. Just to get started, maybe Mike, if you want to give investors, folks who are newer to the story, an overview of who V2X is, what you do, what you do for customers, and then your position within the broader ecosystem and defense.

Thanks, Joe. Thanks for having us here today, everybody. Apologies should be our CEO, Jeremy, up here this morning, but flight issues last night and plane maintenance did not allow that to happen. I got diverted through Detroit, actually, and fortunately made my way down here, didn't have to sell shower curtain rings or anything, so that was good. But sure, in terms of V2X here, we're essentially a mission enabler. So we've got here up on the slide, and that should be in blue. I'm not quite sure why it's coming across that way. We engineer, so think about that in terms of sort of rapid prototyping. That's done out of our million square foot facility in Indianapolis. We modernize, so think about that being weapon systems upgrades. We make ready. think about training systems right enhancing readiness and then we operate and what does operate mean well that means keeping for example the Aegis Assure facilities and infrastructure operationally and and ready around the globe here now what I tell you is we're very proud of that kind of end-to-end capability set that we vertically integrate. Not a lot of companies, I tell you, really possess that ability to serve the entire lifecycle.

There are many companies, for example, that can they can do model and sim, design, maybe kick out a prototype here and there, but really they don't have the capability to take it a step further into manufacturing, worldwide deployment, and logistical support that's what v2x can do and can deliver great thank you for that Mike there's certainly a lot of headlines around what's going on globally related to defense obviously global conflicts can you talk a little bit about how that translates into budget and how this policy environment translates to your business and how are you positioned relative to where some of the budgets where some of the budgets are going.

Sure, we are, we say, I mean, I know a lot of companies say they're well positioned, but I think the numbers speak for themselves with us when you see the growth rates, when you see the backlog and those capabilities that we talked about. When you look at the budgets, you see it heavily emphasizing readiness, modernization, industrial base reinvigoration, expanded force readiness, all those sorts of things. and we think that that is core to the capabilities that we provide those are all in our swim lanes i think that's reflective in some of the awards that we've won we can talk about some of those uh the pipeline that we've built um and you know we can get kind of to that but and on on those points for example readiness is is a big push here uh we were recently awarded a 4.3 billion dollar contract to support the T-6 aircraft, right? That's a pivotal, instrumental sort of training mission. We booked about $3.3 billion of that in the first quarter into our backlog. That's a nine-year program, right? And think about that. It's readiness. It's maintaining that aircraft. What was great about that win is that win came from the readiness that we provided to another customer on a different aircraft. They saw the levels that we could provide that they wanted to get for the T-6. That's what allowed us to go pursue and win that. So that's what we're doing for readiness. We also think that we can expand that, what we're doing for the T-6, into call it other large aircraft pursuits with new customers and platforms. Modernization is a big priority for the Department of War these days. And we've been fortunate to win some work there and be well positioned for that. So, for example, we were awarded a contract, an expanded contract, to integrate advanced infrared countermeasures on the KC-130Js. We're doing that out of our Crestview facility in Florida. We also were awarded recently an $87 million IDIQ to provide critical components for the F-18 aircraft that's being done out of our Indy facility. And that F-18 program, think about carriage systems, launchers, racks, that's what we're providing as these aircraft become more and more advanced. And we can expand that and grow that into, you know, think about unmanned aircraft and fleets and whatnot. Finally, the DOW is really pushing hard to get tech and get capabilities into the warfighter's hand at speed. and that's what we're working on in terms of the rapid prototyping aspect of our business and kind of case in point on that was our Tempest family of systems I think you're familiar with that Joe we unveiled this at the AUSA in October of 2025 Tempest is our counter unmanned systems platform designed for class two and class three it went from a white sheet of paper to essentially a prototype and fielded in a matter of months. And now the customers, there's multiple customers that are interested for multiple, as you can imagine, theaters and regions with different effectors and capabilities, so it truly is developing from the Tempest into this additional family of systems. So that's a little bit about how we're positioned and some of the capabilities that we're driving to our customers today.

Well, I'm glad you took us through some of your recent wins, because I wanted to go to growth next, and I think growth has been an exciting part of the story here. After Q1, you had backlog, approaching $14 billion. You announced a trailing 12-month book-to-bill of 1.5 times. You talked us through some of the duration of your new contract wins. What kind of revenue visibility do you feel like you have over the next few years to support sustained growth on the top line?

Yeah, that's a great question. and we feel very fortunate. If Jeremy were here today, he'd tell you a couple things. First, there's a great sort of what he calls a recompete holiday that we're in. We have very little recompetes, and that's really allowing us to channel a ton of effort into new business capture and growth. And you're seeing that with the wins that we've posted. For example, WTRS, that's Warfighter Training. We kind of phased that in the second half of last year. You're seeing that contribute to the growth in the portfolio this year as well. So WTRS, that's actually the largest and the premier training contract for the Army. So again, that's a readiness play there. We also have F-16 for Iraq. So we've diversified the company outside of just call it, you know, Department of War into foreign military sales. They take a little bit longer, but we've been successful at that and that's a prime example of our vertical integration where not only for those F-16s for Iraq are we doing sort of the infrastructure around those F-16s supporting the operations and where they are at. We are also actually modernizing or I would say keeping those F-16s ready. Those are two separate contracts previously done by two separate contractors. V2X possesses the capability to do that all. So we were able to bring that to the Iraq customer. They were like, hey, this is great. We love it. And now you can think the next step we're planning to take is one step further modernizing those F-16s with what we provide here in the U.S. like, you know, digital cockpit display upgrades, things like that. So F-16 Iraq, WTRS, the T6 awards, those are all sort of examples of what we've been able to do and how we're positioning what we're winning. And I think if Jeremy were here, he'd tell you what he's really excited about is, you know, where that 30% sort of increase in business development, right, in bid volume that we're doing this year. He's excited about where that's going. Again, we were able to kind of take advantage of the recompete holiday, push forward on the growth. We did that in 2025. We're doing it again in 2026. And you're seeing that manifested in these awards here that we've seen.

Yeah, and I'm glad you hit on the 30% of bid volume growth, because that obviously drives further growth beyond what you've already won. Where are you seeing the demand to drive that increase in bid volume? Is it coming from one or two specific areas, or is it broadly across the portfolio?

It's across the portfolio. And that's the great thing about having a diversified portfolio like we do, right? This end-to-end mission enablement is it's balanced. It's training, it's operations, it's readiness, it's modernization. So we're seeing that come across the entire portfolio and we're introducing additional capabilities when we're pursuing opportunities as well. So it's coming widely across the business, and we're excited about that. And, you know, I think there's opportunities for us when we look at other sorts of aircraft support, when we look at where we could take the Tempest family systems on the counter on man side, think about class one, you know, things like that. We're very, very excited about the future.

Perfect. And as far as customer demand, you've always had a very stable base within the DOW or DOD. In the first quarter, I think customers outside of that core were almost 20 percent or a little bit more than 20 percent. Is that diversification intentional? Is international a place that you're looking to go further? Maybe talk about further opportunities to diversify your customer base if that's what you want to do.

I mean, this was very deliberate for us to do that, to further diversify the portfolio. So we're not only just expanding and diversifying across customer sets, we're doing across geographies as well. And we talked about budget alignment, right? Readiness, modernization, but also we think about geographic positioning and how that aligns to the budgets, right? Pacific deterrence initiative. Our position in Indopaycom today is bigger in terms of revenue than what we were doing in Europe. Just a handful of years ago, our Europe revenue was bigger than our Indopaycom revenue. Today, it's flipped. Our Indopaycom revenue is 60% higher. And in terms of opportunities, we see a ton of opportunity for Indopaycom to expand with where we see the threat environment, where the DOW is, you know, really looking. And this spans, I would say, probably multiple administrations as well, right, as we look at that theater. So it's customers that were very deliberate that we've been expanding on. And we did that, as you saw, this last quarter with the, quote, unquote, other customer set expanding quite significantly. and when we look at that customer base there's I'd say late last year we did the kinetic cyber deal that was with an intelligence community customer we think there's a more opportunity with the intelligence community as well to further enhance our positioning in that in that client set and also as I mentioned with FMS so those are a couple areas sure I'm gonna get a in a second and I know folks are probably excited to talk about that, but you've hit on a few times the position of the platform today

being very different than it was, let's call it three years ago. Obviously Jeremy's been in his seat for two years. You've been post Vectris, Vertex merger for longer than that. What have been some of, and you've been here the whole time, right? Yes, you've seen the journey of the company. How do you look back on that? What are your key takeaways from the path of the company and then what are you most excited about going forward?

Sure. It's been a great journey. It's been a great ride. And that's why I've been here this entire time. This company has the ability to punch above its weight. And I think that's what Jeremy saw when he came in two years ago. He saw the capabilities that we have. He saw the geographic footprint that we have. You know, and that client-customer intimacy, which I would tell you is second to none and that presence is everything it enables us to be that trusted partner to deliver solutions that matter so to i think that's what jeremy saw was a company that was able to punch a punch above its weight class he came in he put a couple things in the into place first was to optimize our core for on contract growth the second was to leverage our capabilities into adjacent markets i think you've seen that with the wins that we've announced uh with the pipeline and the bids that we've put in. The third thing that we did was extend our offerings, and that was exemplified with the Tempest family of systems that we've talked about. And the fourth thing was strategically investing, both internally and externally. So, we've invested internally in our own I-RAD. We've also partnered with some of the best in the industry and also outside of industry when we think about tech and acquired as well. We talked about the cyber acquisition as well. So those are some of the things that Jeremy's done in the last couple years and I got to tell you I'm just as excited today as I was back then when you think about where this business has come and the capability set It has today and the missions that it's supporting. It's really great.

Yeah Speaking of things that people are excited about AI is certainly a topic that everyone wants to discuss. Yeah And so would love for you to give a bit of an overview again for those that aren't familiar with what you're doing via your previous public announcements around AI. Is it offensive for you? Is it defensive in terms of providing for customers or protecting against other competitors? How do you think about leveraging AI in your business?

Sure, we look at it two ways, sort of two aspects to AI. First is, what can we do internally more efficiently? We're using it for our employees as a force multiplier, right? I mean, I'm using it in Treasury, in banking, in M&A. I'm sure you guys are using it as well, just to be more efficient with our outcomes. So, there's that internal aspect of it, and it's really taken ground here. The employees are using it more and more every single day to improve our operations. We've got three AI platforms that are operating on our enterprise IT today, which is great. It's rapidly adopting across the employee base, as I mentioned. So, there's that perspective. Then there's a customer perspective, right? And for us, it's about bringing, how can we make the customer's mission more successful, right? How can we team with the best? We don't need to make AI. We'll let the other folks do that. How do we introduce AI to enhance their mission outcomes? So that's partnering with Google. It's partnering with Amazon that, you know, when you think about smart warehousing, nobody can touch Amazon. You think about NVIDIA. It's partnering with these companies to bring the best of breed to their missions. Now, what's great about what we can offer is that presence, that intimacy that I mentioned, is we know what's going to work and what's not going to work because the decades of operational experience we have in multiple geographies, right? So the mission that you're going to plan for in Indo-Paycom is not the same mission you're going to plan for in Centcom or Ucom or Northcom, right? So we bring that expertise, what's going to work, what's not going to work, and help bring that solution set to the customers, that's how we're leveraging AI and we're doing it now with our sort of, if you will, aviation readiness, right? So how do we take unstructured data, enhance aviation readiness, think about the supply chains. You know, those aircraft can't be downed, they've got to be ready. And we think there's opportunity to enhance readiness and enhance the supply chains with And so let me marry that with financial results.

You got a really strong Q1. margins are up into the mid 7% range which has been a focus for the business historically you've executed really really well are there levers to push that higher with the business today what are some of those levers what's your what's your vision for the future from a margin profile perspective yeah we're very happy with the first quarter results 23% top-line growth just just excellent excellent and solid performance and great job to teams on that.

The margins, we are controlling all the elements possible that we can control for expansion. The thing to keep in mind is that about 60% of our revenue comes from cost plus contracts, right? So that is somewhat, somewhat governs and limits the margin that you can earn. Now we've been working with our customers to move more and more work to fixed price and we think that our type of work is primed for that, right? We're not doing development work. We're not writing code. So the things that we're doing, we've done for a long period of time, and we think it is definitely applicable to a fixed price environment. And more so, the administration just put out an executive order, you know, talking about the greater usage of fixed price contracting for contracts. And we think that's also hopefully going to bode well for that movement to fixed price contracting, or more movement to fixed price contracting, which which will help the margin profile of the business the longer term. Also, I point out the recent wins that we've talked about, the WTRS, the F-16, T6, even though T6 is a fixed price contract, these are generally going to be higher margin over their lifetimes, right? And we've run all this new work, so it takes some time to ramp up. Usually margins start a little bit lower, they ramp as they go along, and that's what we'd expect from these recent wins from us as well. So we do think there's, you know, some upside over time in the margin profile of the business. But we've been, what's been great is that we've been extremely consistent throughout various, throughout various, call it economic and political cycles, right? When you think about the top line growth, when you think about the margin, when you think about what's, what we've had in terms of does, shutdowns, CRs, the business has performed very well throughout all of those, throughout all of those events.

No, the financial profile has been incredibly resilient, and I think part is also, you talked about the long-term duration of the contracts, the contractual nature of the business, it's been incredibly resilient. So, you know, it's been, 25 was a rough year for the sector, I think broadly, you performed really, really well throughout that. Not a lot of strategic activity, though, compared to other years in terms of M&A. So, you've been able to take net leverage down to just north of two times. I know you're targeting sub two times at the end of the year. How are you thinking about capital deployment going forward, you know, whether it's organic investment, M&A, returning capital to shareholders, let me jump into that a little bit.

Thanks for acknowledging that. I mean, that was a lot of hard work, right? So we went from a balance sheet that was four times levered to, like you said, just a touch over two at the end of the year, and then we'll be below two at the end of this year. You know, so every year we've kind of been doing a call it a third to a half a turn net leverage reduction. And that's a testament to the high free cash flow low capex nature of this business. When we look forward, our capital allocation strategy is really focused on just investing for growth and resilience as well as what's going to drive the highest returns for shareholders. Our balance sheet gives us the, you know, this is Jeremy's word, optionality, right, to do those things now. Last year, you know, we had bought back a little bit of stock, you know, we also did that acquisition, the cyber acquisition as well. And this year we're in a position to do more in terms of deployment of capital, both internally and externally. We've talked about our leverage range being, call it, two to three times. We would consider probably moving a little bit above three if it was for the right thing. And we had clear line of sight to get below that in a very short period of time. And you asked kind of where we would focus, like what our opportunity set would look like. We did spend some time on the first quarter call talking about that in terms of the areas that we would want to pursue and invest. And that looks like, you know, call it, you heard me talk about the counter UAS solution that we have, right? The Tempest. So really building out more so on that. Platform modernization, certainly something there, electronic warfare capabilities. These are areas we think we could, you know, shore up, enhance, you know, from an organic and inorganic perspective. But I don't think you're going to see from us, you know, a hard turn into something that we're not, it's not necessarily core.

Sure. Are you seeing more activity in your M&A pipeline today, let's say relative to a year ago?

Yes, absolutely. There's the environment's pretty good right now for M&A in terms of there's a lot of things that it seems are in market, coming to market. I think there was some pause with Doge and everything else. Now I think people are back at it. There was some uncertainty with shutdown, but it seems like, you know, things are kind of back on in terms of, you know, sell side that we're seeing. and other business owners, founders, et cetera, wanting to entertain the possibility of an exit. So we are seeing strength in the M&A pipeline. There are a ton of opportunities out there, and obviously we're evaluating, we're scrutinizing as we should.

Great, yeah, and look, this is a sector that continually supports M&A as a well-known growth engine for businesses. And so I think, you know, as you look forward with more targets come more opportunities as you've talked about.

We think so. And, you know, we think, you know, what we would be doing, what we'd be looking at would have similar characteristics to what we have today in terms of high free cash flow, low capex, right? That's really generating this cash flywheel that we think is really generating value for shareholders.

Yeah, and so as you look forward, we've talked a little bit about some of the policy changes and you spoke about Doge. As you look to the midterms, maybe even further out to 2028, how do you consider the strength of your portfolio with potentially some changes within the government and changes within policy?

Sure, I think go back to that diversification, right? So even if the budget shifts, we're still in theaters, we're still in locations, we're still geographically diversified. Presence matters and that's what we can offer, right? So despite the, if you go back, look at different budgetary environments, we've done well in And, you know, generally in the U.S., most of our funding comes from the operations and maintenance budget, which is $430 billion. That's plenty of total addressable market, and it's a good temp for us to grow. So we feel really good about that, especially here in the U.S. Outside of the U.S., what we've been very successful at is, again, leveraging that presence to get foreign military sales. Iraq was a key one for us, Saudi Arabia was another one for us, and we see that continuing as we push forward. So that'll further diversify us for economic and budgetary cycles and enhance the resilience and durability of the portfolio from that perspective as well.

I'm just doing a quick time check. I know we're, we started a little bit late. If any questions from the audience, Mike's happy to answer a few questions here. Otherwise, we'll jump to closing remarks. Anything from folks out there?

I'm just curious, how much does the material cost and other positive increase in the fraction tax and all? See if it will pinch.

Yeah, that's a great question. The question was around, you know, inflation and material costs and how that impacts our business. I think when you saw tariffs and everything, if you go back and look at the business, we didn't really, we didn't see an impact on that. 60% of our business is cost plus, which means we pass the cost on in our contracting mechanisms. Additionally, when we're procuring materials, if it's a wing or an engine, for example, there are sort of built-in protections for, you know, escalation costs associated with that in cases as well. So in rising price environments for raw materials, you've not really seen that impact us historically. And we've also been pretty good from a labor perspective as well, not necessarily impacting the business. I mean, what's great is we've had, from a labor perspective, out in Indianapolis, I talked about that being our, you know, a million square foot of manufacturing center of excellence, rapid prototyping. We opened up the internship program, and I think we had 2,000 applicants for interns in there, which is great, because heck, we can use them. So just sort of a testament here of people wanting to get involved and support the cause and whatnot, and we definitely welcome some of those folks in for the summer. We're looking forward to them continuing their career with us as well.

If nothing else, Mike, closing remarks, and a thing you'd like to leave the audience with.

Thanks, Joe. Appreciate it. Thanks to the Wells Fargo team for hosting here for the conference today. We're very excited. Very excited where the company is today, where it's going in the future. I think you can see from our results that that we you know we are a premier sort of mission solutions provider and we look forward to delivering more and more great it's been exciting to watch the journey so thanks thanks everybody thank you guys