VSE (VSEC) Q3 2026 earnings summary

Executive summary

• Record Q3 revenue of $541.0M, up 91.2% YoY, with ~17% organic growth; adjusted EBITDA reached $107.2M and adjusted EBITDA margin hit a record 19.8%.

• Strong engine aftermarket demand, acquisition contributions and margin expansion supported higher FY2026 revenue-growth and adjusted EBITDA margin guidance.

Financial highlights

• Q3 operating income was $77.5M versus $10.1M YoY; net income from continuing operations was $47.3M versus $3.6M.

• Adjusted net income rose 128.4% to $63.8M; adjusted diluted EPS increased 48.9% to $2.01, versus GAAP diluted EPS of $1.49.

• Operating cash flow was $56.0M and free cash flow was $46.6M, after $9.4M of capital expenditures.

• Nine-month revenue was $1.315B, up 62.1%; operating income was $159.2M and continuing-operations net income was $104.8M.

Outlook and guidance

• FY2026 revenue-growth guidance increased to 65%-66.5% from 61%-64%; adjusted EBITDA margin guidance rose to 18.9%-19.1% from 18.7%-19.0%.

• Growth drivers include commercial engine aftermarket strength, distribution awards, expanded repair capabilities and acquisitions; margin support includes synergies, operating leverage and MRO utilization.

• FY2026 assumptions include net interest expense of $36M-$38M, D&A of $96M-$100M, tax rate of ~25%, stock-based compensation of $18M-$19M and capex of 2%-2.25% of sales.

• Strong Q4 free cash flow is expected to support deleveraging while preserving capacity for organic investment and disciplined acquisitions.