VSE Corporation reported fourth‑quarter 2025 revenue of $301.2 million, a 32% year‑over‑year increase that lifted the company’s aviation‑aftermarket revenue to a record $301.2 million. Adjusted earnings per share of $1.16 beat consensus estimates by $0.27, a 30% upside, while GAAP EPS of $0.98 also surpassed expectations by $0.09. Operating income rose to $59 million, and adjusted EBITDA for the quarter reached $51.8 million, reflecting a margin expansion to 17.8% for the aviation segment. Operating cash flow of $38 million and free cash flow of $31 million underscored the company’s strong liquidity position, and the year‑end net leverage ratio remained at 1.1x.
The growth was driven by the aviation segment, which generated $301.2 million in revenue—up 32% from $227.4 million in Q4 2024. Distribution revenue increased 37% and repair revenue grew 24% year‑over‑year, while the segment’s operating income climbed to $43.5 million from $29.2 million in the prior year. Consolidated operating income for Q4 2025 was $59 million, and adjusted EBITDA of $51.8 million represented a 17.8% margin for the aviation segment, compared with a 16.4% full‑year margin of $182.9 million.
Full‑year 2025 results showed revenue of $1.112 billion, up 41% from $1.08 billion in 2024. Adjusted EPS of $3.92 beat estimates by $1.09, while GAAP EPS of $2.52 exceeded expectations by $0.63. Adjusted EBITDA for the year was $182.9 million, a 16.4% margin, and operating cash flow reached $38 million with free cash flow of $31 million. The company’s balance sheet remained strong, with a net leverage ratio of 1.1x at year‑end.
John Cuomo, VSE’s President and CEO, said, “2025 was an exceptional and transformational year for VSE.” He added that the company sharpened its portfolio through the divestiture of its Fleet segment, expanded engine and component capabilities through complementary acquisitions, advanced key OEM programs, increased MRO capacity, and accelerated integration activities across the platform. CFO Adam Cohn noted, “Our 2025 performance was driven by above‑market revenue growth, expanding margins, and strong cash generation.” Management also cautioned that extended material lead times and capacity constraints in MRO services remain challenges, but ongoing investments in facilities and workforce expansion should alleviate these bottlenecks through 2026.
VSE reiterated its confidence in the aviation aftermarket, citing continued momentum and the upcoming completion of the Precision Aviation Group (PAG) acquisition. The PAG deal, valued at $2.025 billion in cash and equity, is expected to close in the second quarter of 2026 and is projected to add over $15 million in annualized synergies. For 2026, VSE guided full‑year revenue growth of 19% to 23% and an adjusted EBITDA margin of 16.8% to 17.3%, explicitly excluding the PAG acquisition. The guidance reflects management’s belief that demand will remain robust while the company continues to benefit from pricing power and operational leverage.
Analysts have revised earnings estimates upward following the results, reflecting confidence in VSE’s continued growth trajectory and margin expansion.
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