Earnings

VSE Raises 2026 Outlook After Precision Aviation Close

The Tip Desk · August 5, 2026 · 3 min read

Second-quarter revenue hit a record $449.1 million as the aviation aftermarket distributor completed its largest-ever deal and lifted full-year growth guidance to 61% to 64%.

VSE Corporation (VSEC), a provider of aviation aftermarket distribution and repair services, completed the largest acquisition in its history and posted record second-quarter revenue of $449.1 million, up 65.0% from a year earlier.

The year-over-year increase accelerated from a 26.8% rise to $324.6 million in the first quarter, when the company had not yet closed Precision Aviation Group. Organic growth was approximately 14% in the second quarter, after 15% organic growth in the first quarter. PAG, Aero 3, and NorthStar also contributed to the year-over-year increase.

VSE closed its acquisition of PAG from GenNx360 Capital Partners on May 5, 2026, in a transaction valued at approximately $2.025 billion in cash and equity. The deal expands scale, global reach, proprietary content, and repair capabilities across commercial, business and general aviation, rotorcraft, OEM and defense end markets. On April 1, 2026, VSE acquired NorthStar Technologies, adding engine-related MRO, third-party logistics and engine component support; the business has been rebranded VSE Aviation Services.

Repair revenue increased 149.4% versus the prior-year period, and distribution revenue increased 17.2%. President and Chief Executive Officer John Cuomo said organic growth remained broad-based, supported by new business wins, expanded capabilities, market share gains and greater share of wallet on existing programs. He said the quarter exceeded prior expectations and represented a step toward a consolidated Adjusted EBITDA margin of more than 20% in the near future.

GAAP net income from continuing operations was $28.5 million, up 109.1% from $13.6 million a year earlier, with a GAAP net income margin of 6.4%. Diluted EPS was $0.91, up 37.9% from $0.66. Adjusted diluted EPS was $1.75, up 32.6% from $1.32. Operating income was $48.96 million.

Adjusted EBITDA from continuing operations nearly doubled to a record $86.0 million, up 98.0% from $43.5 million. Adjusted EBITDA margin reached a record 19.2%, up about 320 basis points. The margin expansion was driven primarily by a greater mix of higher-margin product and repair activity, continued synergy realization from previously acquired businesses, and contributions from PAG. Adjusted EBITDA of $86.0 million compared with $55.4 million in the first quarter, when Adjusted EBITDA had increased 37.4% year over year.

Acquisition, integration and restructuring costs were $9.05 million, versus $1.83 million a year earlier. Amortization of intangible assets was $18.45 million.

The company generated $27.6 million of operating cash flow and $18.7 million of free cash flow in the second quarter. As of June 30, 2026, cash was $75.4 million and approximately $500.0 million was available under its revolving credit facility. Total debt outstanding was $966.7 million. Net debt was $871.6 million and adjusted net leverage was approximately 2.4x at quarter end, versus net debt of $223.4 million and adjusted net leverage of 1.1x at December 31, 2025.

Cuomo said integration workstreams focused on sales-channel alignment, systems, insourcing and joint commercial opportunities, and that teams were already advancing tangible revenue and margin opportunities. Chief Financial Officer Adam Cohn said the company expects stronger free cash flow generation in the second half of 2026, providing increased financial flexibility as it executes integration priorities.

VSE is increasing full-year 2026 revenue growth guidance to 61% to 64%, from a prior outlook of 57% to 61%. It is also raising full-year 2026 Adjusted EBITDA margin guidance to 18.7% to 19.0%, from a prior outlook of 18.1% to 18.5%. The higher revenue outlook reflects strong first-half performance, continued organic growth and improved visibility into the second half, and the company is encouraged by the demand environment and customer activity.

More on VSEC

September 28, 2026 QBook Stronger demand supports expansion as pricing diverges

VSE CORP — all coverage and financials