VSE Raises 2026 Revenue Outlook After Record Quarter

The Tip Desk · November 10, 2026 · 3 min read

Third-quarter revenue reached a record $541.0 million as Precision Aviation Group contributed a full quarter, and the company lifted full-year growth guidance to 65%–66.5%.

VSE Corporation (VSEC), a provider of aviation aftermarket distribution and repair services, reported record third-quarter revenue of $541.0 million, up 91.2% from a year earlier, and raised its full-year 2026 outlook after Precision Aviation Group contributed a full quarter.

Organic revenue growth was approximately 17%, led by commercial aviation engine aftermarket activity. Acquisitions contributed the remaining roughly 74 percentage points, including the first complete quarter of PAG, which VSE closed on May 5, 2026 in a transaction valued at about $2.025 billion.

GAAP net income from continuing operations was $47.3 million, compared with $3.6 million in the third quarter of 2025. Diluted GAAP earnings were $1.49 a share. Net income margin expanded about 750 basis points to 8.7%.

Adjusted EBITDA from continuing operations reached a record $107.2 million, up 126.3% from $47.4 million. Adjusted EBITDA margin expanded about 310 basis points to a record 19.8%. Adjusted net income from continuing operations was $63.8 million, and adjusted diluted EPS was $2.01.

The company said margin expansion was driven primarily by a greater mix of higher-margin engine products and repair activity, synergies from previously acquired businesses, and contributions from recent acquisitions. Repair revenue increased 197.6% and distribution revenue increased 26.7% versus the prior-year period. Services revenue was $318.0 million and products revenue was $223.0 million, versus $106.9 million of services and $176.0 million of products a year earlier.

President and Chief Executive Officer John Cuomo said broad-based demand, led by engine aftermarket activity in repair and distribution, drove core performance alongside contributions from recent acquisitions. He said the company expanded proprietary engine repair capabilities through the August 31 acquisition of Atech Turbine Components, an MRO provider focused on complex hot-section components primarily for Pratt & Whitney Canada platforms. Atech adds repair approvals covering more than 300 part numbers, including sole-source repairs for flight-critical components. VSE said it plans to expand Atech’s capacity and technical capabilities.

The company also said it advanced integration across VSE and PAG, with teams pursuing joint commercial opportunities, bringing more repair work in-house, and improving operational efficiency.

Operating cash flow was $56.0 million and free cash flow was $46.6 million in the quarter. Cash and cash equivalents totaled $65.8 million as of September 30, 2026, with $479.2 million of unused revolving commitments. Total outstanding principal borrowings were $978.8 million and net debt was $894.2 million. The adjusted net leverage ratio was approximately 2.3x, versus about 2.4x after the second quarter.

VSE now expects full-year 2026 revenue growth of 65% to 66.5%, up from a prior outlook of 61% to 64%. It now expects full-year Adjusted EBITDA margin of 18.9% to 19.1%, up from 18.7% to 19.0%. The company said the higher revenue outlook reflects strong third-quarter performance and a positive outlook for the remainder of the year, supported by continued strength in OEM and customer demand. The higher margin outlook reflects third-quarter margins, operating execution, synergies from recent acquisitions, and expectations for continued strong performance in the fourth quarter.

Chief Financial Officer Adam Cohn said the company expects strong fourth-quarter free cash flow to support continued deleveraging while maintaining flexibility to invest in organic growth and pursue disciplined acquisitions.