Thank you for joining us for the V2X Fourth Quarter and Full Year 2025 Earnings Conference Call and Webcast. Today's call is being recorded. My name is Gary, and I'll be the operator for today's call. [Operator Instructions] And now I'll pass the call over to your host, Mike Smith, Vice President of Treasury, Investor Relations and Corporate Development at V2X. Please go ahead.

Thank you. Good afternoon, everyone. Welcome to the V2X Fourth Quarter and Full Year 2025 Earnings Conference Call. Joining us today are Jeremy Wensinger, President and Chief Executive Officer; and Shawn Mural, senior Vice President and Chief Financial Officer. Slides for today's presentation are available on the Investor Relations section of our website, gov2x.com. Please turn to Slide 2. During today's presentation, management will be making forward-looking statements pursuant to the safe harbor provisions of the federal securities laws. Please review our safe harbor statements in our press release and presentation materials for a description of some of the factors that may cause actual results to differ materially from the results contemplated by these forward-looking statements. The company assumes no obligation to update its forward-looking statements. In addition, in today's remarks, we will refer to certain non-GAAP financial measures because management believes such measures are useful to investors. You can find a reconciliation of these measures to the most comparable measure calculated and presented in accordance with GAAP on our slide presentation and in our earnings release filed with the SEC, both of which are available on the Investor Relations section of our website. At this time, I would like to turn the call over to Jeremy.

Thank you, Mike, and good afternoon, everyone. Thank you for joining us today. Please turn to Slide 3. Today, we'll be providing a recap of our fourth quarter and full year financials for 2025. We will also share more on our positioning and expectations for 2026. I'm pleased with the team's execution and our financial performance, which underscores the strength of our strategy and alignment with national security priorities for readiness and modernization. Looking to the future, we are focused on leading with innovation. We are continuing to prioritize investments and expanded partnerships to deliver innovative solutions that anticipate and fulfill our customer requirements. These growth priorities are further supported by the strength of our capital structure. We continue to see momentum across the business coming through contract wins in our key growth areas, and we are encouraged by the ongoing demand for our mission solutions. As we continue to execute our strategy and innovate the base, we are doing so from a strong position. Our focus on cash generation has yielded positive results. We have a strong capital structure and the flexibility to strategically deploy capital. We believe V2X is well positioned to continue delivering enhanced value for both customers and shareholders in 2026 as supported by the financial outlook we provided today. With that, let's turn to Slide 4, with more detail around the fourth quarter and full year 2025 results and the progress we've made. We reported solid top line growth and strong operating performance. In the fourth quarter, we drove record quarterly revenue, adjusted EBITDA and adjusted cash flow. This is a testament to our commitment to generate value. Revenue increased 5% year-over-year to a record $1.22 billion. For the full year, revenue grew 4% to $4.48 billion, hitting the upper end of our 2025 guidance…

Thank you, Jeremy. Good afternoon, everyone. Please turn to Slide 7. The value V2X delivers for its customers was clearly demonstrated in the fourth quarter, with notable top line growth and strong operating performance. Revenue in the fourth quarter increased 5% to $1.219 billion. Growth was primarily fueled by our training, foreign military sales and rapid prototyping programs. Adjusted EBITDA in the quarter was $88.7 million, a record for the company. Adjusted EBITDA margin was 7.3%. Interest expense in the fourth quarter was $19.6 million. Cash interest expense was $18 million, improving $4.7 million year-over-year. Net income for the quarter was $22.8 million. Adjusted net income was $49.3 million, up 16% year-over-year. Fourth quarter diluted EPS was $0.72, based on 31.6 million weighted average shares. Adjusted diluted EPS in the quarter increased approximately 17% year-over-year to a record $1.56. Adjusted operating cash flow in the fourth quarter was $172.4 million. I feel an important to highlight that the extended government shutdown did not have a material effect on our financial results in the fourth quarter, further demonstrating the enduring and mission-aligned nature of our business. Please turn to Slide 8, where I'll discuss our full year results. Revenue in 2025 increased 4% on a year-over-year basis to $4.480 billion. Adjusted EBITDA for the year was $323.3 million, exceeding the high end of our guidance range. Interest expense for the year was $79.9 million. Cash interest expense was $73.7 million, improving approximately $27 million compared to the prior year period, demonstrating our proactive repricing activities, debt pay down and cash flow generation. Net income for the year was $77.9 million. Adjusted net income was $166.8 million, increasing 20% year-over-year. Diluted EPS for the year was $2.45. Adjusted diluted EPS increased 21% year-over-year to $5.24 exceeding the high end of our range.…

Thanks, Shawn. 2025 was a great year for V2X. We are accelerating our position as a leading provider of mission capabilities. Before I turn it over to Q&A, I'd like to take a moment of appreciation for over 16,000 employees across the globe. Their execution and commitment to our customers' mission propels V2X forward, and prepares us today to take on the missions of tomorrow. With that, I'd like to open it up for questions.

[Operator Instructions] Our first question today is from Tobey Sommer with Truist.

I was wondering if you could comment on what has been the trajectory of the company's revenue and activity in the Middle East region with the shifting of resources that direction towards Iran?

Yes. Good to hear from you, Tobey. Thanks. Yes. So at this time, obviously, the situation is, I'll say, fluid. Our priority right now is to make sure everyone's safe. I'd like to think that we'll participate in whatever the outcome looks like eventually. But today, it's like I said, fairly fluid with ensuring the safety of all of our employees in the region that we have throughout that area. So we'll certainly see how things evolve as time progresses, but that's kind of where we are today.

Tobey, it's Jeremy. I think the one thing I'd add to that Shawn is right. We were highly concerned for our employees. And we have actually an activity every day that allows us to understand where everybody is. But I do think presence matters. And we talk about that all the time. I think being in the region allowing and supporting our customer in terms of what they're going to do in the region is something that's very important. Whatever happens there, I think presence matters. But the single most important thing we're doing right now, and I think everybody needs to keep this in mind, is that our employee safety and our concern for them is number one.

And how much contribution do you expect from the T-6 contract? And is that -- do you think that there will be additional legal hurdles to that transition?

And I can't speculate on legal hurdles, Tobey. I'll tell you the assumptions that we've made. So you heard what we said in the prepared remarks, we will effectively start that program on March 1, where transition will be complete. You may recall, we began executing that in the mid-third quarter through the fourth quarter, we were paused for a brief period after the first of the year. And so now we'll pick it up in March. From a planning standpoint, here's a little bit about the assumption that we've made on that. There's an inherent lag. This is a largely material receipts job for us, at least at first. And there's a 90- to 120-day type of lag. So in the guide that we gave at the midpoint, you should think it's somewhere around $140 million to $160 million of revenue for us this year.

I appreciate that. And what are you seeing in your intel business, which kind of the exposures are relatively new to you, but you had some classified work announced not too long ago. What's the trajectory of that in your guide. Is that area sort of a source of accretive growth there?

Yes. I think what we did with the QinetiQ's acquisition was positioning us well to augment what we do today. We're excited about what that business brings to us. I'm excited about the fact that it builds on a pipeline that is going to only grow. So I think that is a business that we're very excited about.

The next question is from Andre Madrid with BTIG.

So I know last year, we had -- you guys have called out 5, $1-plus billion opportunities that you were targeting. On Slide 5, I know you called out $2 billion being awarded. Is there a status update that you can give on the remaining opportunities? Are those still stuff that you're actively bidding on? Or any color there?

I think the 2 that we retired, obviously, we're thrilled about. We obviously have that plus we've added to that portfolio this year in terms of where we're bidding when we talk about a 30% increase in overall bid velocity. But yes, we're waiting on adjudication on the remaining 3 that we feel very good about. But again, we got to wait for adjudication. But again, the fact that we were able to retire 2 of them. in the fiscal year plus the [ 10-plus $100 million one ], I think those bode well for the business in terms of not only this velocity, but also our ability to win. So I think those bode well for the company.

Yes Andre, to put a fine point on it. So 1 of those was bid in the fall. 1 of the 3 was bid in the fall, 2 were captured as exactly as Jeremy said and then there's 1 to be bid this year and 1 to be bid in '27. And there's about a year lag between the time the bid goes in and any award assumption that we would have on those things, not counting any protest periods or anything like that. So very modest to any impact in '26 as a result of any of those captures. We'll be talking about those for some time to come, I suspect, but remain very happy with where we're positioned on those. Teams worked extremely hard to put together wonderful offerings and teammates.

That's very helpful. And then, I mean, pivoting -- it seems like everybody wants to talk about the Middle East, but I know you guys called out the Indo Pacific as a growth area for you throughout much of 2025. Any updates that you could provide there as to how that market is materializing?

Yes. When you look at the breakdown in the details that we provided, it was flat to slightly down, and we're seeing that, I'll say, continue into '26. So folks may recall, 20 odd-numbered years tends to be training years in the region. We didn't necessarily see that materialize to the volume that we had historically seen. Now we saw an increase in, I'll say, requests to put things in front of customers, they didn't necessarily materialize. So we'll see how things play out in '26. But as I sit here today thinking about where the growth will come from, how we're positioned. There's very good ops tempo. We're really happy with the positioning. Jeremy consistently talks about presence and there's not a month that goes by that we don't talk about opportunity sets in the region. I don't know if there's anything imminent, as I sit here today, Andre, and we think about kind of early 2026. But we'll see. It's -- we're just starting with early innings.

The next question is from Peter Arment with Baird.

Jeremy, Shawn, Mike, nice results. Jeremy, On the -- you had a really strong year in kind of ramping up the bid velocity and you talk about a big pipeline. How should we think about -- are there more like opportunities the size of the T-6 of the world? Or is this going to be more kind of the ones you mentioned where you had 10, $100-plus million awards. How should we think about just the pipeline and what you're bidding on?

No, it's a really good question, Peter, because I think we're trying to balance it. We're trying to balance what I call big game hunting with singles and doubles. And I think both of them sit in the portfolio very well. But clearly, the administration and prior administrations have kind of consolidated some of these buys into bigger buys, which at our scale allows us to compete. But again, I think the singles and doubles are just as important and I think they add to the overall value of the company. And so when I look at it, candidly, I look at big velocity as the metric. As long as I'm getting the bid volume out the door, it could be big ones, it could be small ones, it can be intermediate ones. And I think that's important to the company because I think that's what feeds the system.

That's helpful. And then just also, there were some pursuits around that you guys have had a lot of opportunities to think about contracts, maybe moving to fixed price or things of that nature. Has there been any kind of further advancing of that with the administration now kind of more, I guess, up and running with the Department of War. Are there opportunities you think you're pursuing on a fixed price basis?

Yes. I think we're seeing more fixed price opportunities than we have in the past. I don't know, Shawn, if you want to add to that. But yes, I think it's clearly an avenue for us, which we're really good at.

Customers that have historically been cost type have approached us. It hasn't translated into an award yet as fixed price, Peter. But between, I'll call it, late -- mid- to late fourth quarter and as we sit here today, we've seen a higher ops tempo with customers asking and soliciting those type of offerings from us. So we'll see how that plays out. But encouraging to see, I'll say, some more traction around getting contracts and the appropriate parties that would make that happen engage. So it's gone from more than just talk to words on paper.

And just lastly, Shawn, on the net leverage, you guys have done an incredible job, obviously, setting yourselves up. How are we thinking about kind of the go forward? Is it further reduction? Or are you looking at other pursuits on an M&A perspective?

Yes. Listen, I think we've said we'll look at all options for value creation for the shareholders. And that remains the case, Peter, right? We're extremely happy with the leverage that the company is at. And Jeremy said consistently, that opens up optionality. I think I highlighted it in the remarks, really happy to deliver $2.2 billion while deploying $40 million, $50 million of capital last year to further enhance shareholder value. So we'll see how '26 plays out, but it's a good spot for us to be in to have those options in front of us.

The next question is from Trevor Walsh with Citizens JMP.

I wanted to start with the AI partnerships with Google and AWS. Can you maybe just click in one level deeper around what those opportunities look like kind of broadly as you look at them going forward? Are they more technology-centric type of implementations with the smart warehousing? Or is it more just traditional IT system integrator type work? Just trying to get a sense of what that could look like? And then kind of relatedly, how does that maybe shift by opportunity around like what the margin contract kind of profile might be of those opportunities?

No, it's a really good question, and I appreciate you asking it. I think AWS was an opportunity for us to look at somebody who does some of the smart -- the best smart warehousing around the globe and use them on things that we do every day. I mean if you think about everywhere we are around the globe, there's a warehouse. And I think AWS is 1 of the best in the world at the ability to manage a warehouse and put their smart warehouse and capability in play. We own all the data. And what they own is the process. And so I think the combination between us and AWS and us and Google, who is clearly invested in AI is taking our data and using our data in a way that's going to enable my customer to have better outcomes, faster outcomes, better outcomes and more efficient outcomes. So I wanted to put myself in a position where I was partnered with the best in the industry to deliver these capabilities because all the data I have and I own. And so they're going to use my data to deliver better outcomes for my customer using their technology. And I think at the end, it ended up being a perfect partnership between them. If you think about AWS, Google and IBM, it was a perfect partnership for us to go with.

And there's a speed-to-market aspect here, too, right, in terms of how quickly we can deploy things you've heard us talk about the global footprint, right? So don't think about it only from a pursuit standpoint, but capability that we have that we can deploy in a broad scale today, and we'll see how things evolve. But exactly, as Jeremy said, a wonderful partnership to go forward and deliver, we think, enhanced capability to our customers at speed and at scale.

I mean we're already doing on the WTRS program, where we're giving them capability that they've never had before, and I'm looking forward to extending that to other customers.

Great. That's fantastic. Shawn, maybe just a quick follow-up then for you. On the T-6 contract, appreciate that color that you gave around the revenue. Can you maybe provide a little bit of color as well on how that's going to affect backlog? I realize the whole amount will go into backlog in Q1, as you mentioned. But could you maybe give us a sense of what would be funded or unfunded if you have like maybe a high level take just as we think about that?

I don't have the funding and unfunded portion yet. We're working through that with the customer. But if it's like other programs we have, it wouldn't shock me if it was funded annually or slightly less. In terms of the -- what we would get incrementally, that's not at all unusual in these type of programs. I do think the booking that we will take in Q4 will not be the entire value that we were awarded. There's options in there that cannot all be exercised. And I say that it's kind of one or the other from an optionality standpoint, Trevor, right? So we'll -- the team is going through that right now from a bookings and backlog practice, you should all think of this as being tying our booking to what our performance obligations on the contract to include the options will be. And that's what we'll end up in our backlog here at the end of the quarter.

The next question is from Jonathan Siegmann with Stifel.

This is actually Sebastian Rivera on the line for Jon Siegmann. Congrats on the strong print here. I guess I just wanted to start with a broader question. There's kind of been some AI existential threat jitters recently to service names and I kind of wanted to just get your glass half full view, if you will, on how AI will be a lever for the company over the short to medium term and kind of perhaps in the context of some of your recent wins and partnership announcements.

Yes. I think Sebastian that's why we lean forward with partnerships that we have. We decided that we wanted to be on with partners whose critical path was the future of AI. And I think Google is that. And I think Google also recognized that we have the information that makes AI operate. And so when I look at the transformational aspect of AI in our business, I wanted to partner with somebody who brought a tool, and I brought the data and I brought to mission capability and I want that in the context and the contract that enable that AI to work. So it was a natural partnership that occurred and I'm thrilled to have that part of the team. I'm thrilled to have Amazon part of the team. I'm thrilled to have IBM part of the team. I think our business is going to be enabled by this transformational technology because we have all the mission know-how. I mean I'm the guy on the ground. I'm the guy doing all the work. And they're going to enable me to network much better, much faster and much more efficient and delivering my customer a much better outcome. So we're excited about that.

And Sebastian, I'll say that think of this in increments, right? There's not a big bang here. There's incremental filtering, sorting, sourcing, those types of things that can be done to demonstrate speed and agility to our customers by using capabilities that already exist. And exactly as Jeremy again has said before, we have data, we have presence. So let's leverage those things and make incremental progress on this -- the adoption of these tools and capabilities as we go forward.

Yes. That's super helpful. And then on the back of the recent Shield IDIQ. Can you maybe provide some more high-level color on kind of where you see the company kind of positioning with regard to Golden Dome requirements over time, I guess, kind of beyond the COBRA DANE and COBRA KING if you have that visibility today.

I think that's going to be a long-term play. Again, I would call presence and also contract vehicles as the key to participating. Obviously, getting on the contract, having the presence on the ground, having the presence at the local facilities is everything. So as this thing evolves, our goal was to get into the mix that allow us to be a participant to enable the government to deliver Golden Dome, and we think we're well positioned to do that.

The next question is from John Godyn with Citi.

I wanted to follow up on the commentary about book-to-bill and just to make sure I understand it. The T-6 award is hitting in the first quarter. Is that correct?

Correct. Yes, we will book it. The protest was resolved here in the first quarter, and so we will reflect it in our backlog at the end of Q1.

And the pipeline, some of the commentary around that, it seems very positive and optimistic. I was curious the guidance of being above a 1x book-to-bill for the full year. Is that -- would that still be the case if we excluded the T-6 award -- or is the T6 award kind of critical in hitting the greater than 1x book-to-bill for the full year?

Yes, I'd say the T-6 award we should certainly be above 1 with the T-6. Like I said earlier, it's early innings in the year. We will see how some things played out, but we're confident that we'll be at one. There's opportunity to be well above 1, 1.4, 1.5 or more, depending on how some other things play out. But we'll see the timing of certain awards as they play out in the year. We can never -- we can never predict those things perfectly and protest factors and such. But again, feel very comfortable, where we sit today with the guide that we've put out.

I think, John, the thing I would probably burn your calories on is we bid 50% more last year than we did the year before. We're projecting to mid 30% more this year than we did last year. Our win rates are -- I'll stand them up against anybody in the industry. That's an easy way for you to think about it.

But it sounds like we need that T-6 award in the number to be above 1x book-to-bill. Is that -- am I hearing that right?

Yes, that's a fair interpretation.

And then if we just look at the full year guidance, just simple question about kind of the sensitivity or just the range around kind of low end versus high end. Maybe you guys can talk a little bit about on the revenue and the margin side, what drives the sort of midpoint versus the high end of the guide.

Yes, mostly timing of things, right? So I think we put out there we only -- we're down to about 3% of the revenue at the midpoint is up for recompete. And so timing of other new business activities or on-contract growth, things of that could sway it right relative to that ops tempo and when we might see some things materialize, we're feeling very good as we sit here today, for the line of sight we have to the total year, but specifically in the first half, and we'll see the timing of awards. But it's nothing more than that, really.

The next question is from Ken Herbert with RBC.

Just wanted to follow up maybe -- just wanted to follow up on the margin discussion. How do we think about with the T-6 and incremental bookings you're seeing this year, what's the potential to see better than sort of the flattish margins in '26? Or what are maybe the key puts and takes as we think about potential margin upside?

Yes. So I'll go to the many of our programs that start out early, and we've got several this year that are contributing to growth. They start out at margins that are somewhat dilutive to the company composite, and then they grow. And so T-6 in the early phases, we'll see. We're going to do the EAC here in Q1, and we'll see. But it wouldn't shock me if it follows the profile for most of our programs that are like that, that we tend to grow into the margins. It takes a little bit of time because what you do is you reengineer the process around delivering those industry-leading readiness rates that we have across the majority of the platforms that we have. And so you've kind of got to tear things down and then build them back up. You've got the supply base. All of those things that go into it, but we're really happy with the performance that we ultimately get. So I don't know that I look at that as being a real margin enhancement activity here in 2026. But I think we have full confidence that the team will deliver to the commitments, 100%.

Look, I think Shawn is right. I think every program kind of goes through its life cycle. But once my team gets in and they're able to get a hold of the supply chain, and they're able to get a hold of the employment base and they're able to understand what's the best-in-class way to do things, to deliver the readiness rates that we deliver. I have all confidence in that team's ability to do this. Does it take us a little bit of time to do it? Yes, because you're taking over someone else's preexisting program, but it takes us a moment to just conform it to the way we do business. And once we do, we do exceptionally well.

Yes. That's great. If I could, Jeremy, maybe just obviously, the scale of what you're bidding is up significantly, and I can appreciate then the tailwinds on the top line. Is it fair to say that the stuff you're bidding today to the extent to which you're successful on it would support sort of a structural step-up in margins over time, obviously, as the new work ramps?

I would say we're bidding work that's accretive to the overall business as a norm to do our posture going forward. That is our posture. Now to Shawn's point, well, we have programs that start out because of where we inherit something that is not accretive day 1, but it grows into itself, absolutely. But as a corporate policy and process, we are -- we have a strong conviction around growing margins.

Next question is from Noah Poponak with Goldman Sachs.

Last year and the year prior, the top line growth was stronger in the back half than the first half. I'm just curious if that holds this year or if with the much easier compares in the first half and then tougher compares in the back half if the shape of this year is different?

Yes, it is a little bit different. This year, I think it's more balanced. No, I think it's more 50-50 in terms of what that profile looks like on the revenue side.

Helpful. And Shawn, can you just walk us through the moving pieces on cash flow as you wrapped up '25, you had the -- you sort of flagged the possibility of collections related to government shutdown, ended up coming in fairly close to the low end of the original range. I guess I would have thought '26 would have maybe grown from the '25 original range and then also had that working capital catch up. Can you maybe just bridge us through that? Or just sort of where should we think of -- how should we think of converting the EBITDA to the free cash flow going forward?

Yes. Yes. So I think -- yes, you're right, '25 did come in a little bit, certainly higher than the midpoint of the guide that we gave at the $148 million, having a couple of extra days, we saw significant receipts, I'll say, right at the end. And candidly, that's why we adjusted because there was timing that was, I'll call it, somewhat unpredictable. In terms of 2026, I think when we look at -- we have an extra pay period in 2026 that is worth about $50 million. And I think when we think about net income conversion at the midpoint of the guide, we put out, we're about 115% net income conversion. So I think it's -- I think we're pretty good this year. There are some -- that we will be cash negative in the first half of the year. As always, the profile will look probably very similar to what played out in 2025.

And then just maybe zooming out and thinking about long-term growth, you have some new programs ramping this year that drives a pretty good looking growth rate relative to the industry. That has to keep growing. And then you've discussed a pretty healthy bid pipeline. Can you grow what you're forecasting this year for multiple years? Or do you start to hit just a higher base and tougher compares that drives it to decelerate from here?

No. I think we're sitting on a target-rich environment. When I look at the pipeline, we are very, very selective about what ends up in the pipeline. And it is all around our ability to capture and win and not burn unnecessary resources on something that's a flier. And so when I look at that pipeline that Roger has put together and I look at the win rates that are reflective of that, I feel very good about the fact that we can continue to grow. We are -- we have -- look, we're not touching the vast majority of what's an addressable market. And we have nothing but opportunity in front of us. We continue to build out Roger's organization in terms of growth. We continue to hire new people all the time. That is the least of my concerns about having something to grow on is trying to make sure that we're prepared for that growth. That's where my focus is.

The next question is from Mariana Perez Mora with Bank of America.

So first one on '26 guidance, could you mind discussing for the midpoint, what kind of recompete risk you are thinking about? And then like what are the major programs like that are driving this growth? Like this WTRS ramping that much or even within like you mentioned FMS and international with [indiscernible] IDIQ also expanding? Like what are the main drivers for that midpoint?

Yes, sure. So I'll give you color around what I said in the prepared remarks. So from an FMS standpoint, we're growing from a range standpoint, think of $150 million to $170 million in that area. From a training standpoint, year-over-year, we're about $130 million to $150 million. I mentioned the T-6. We do have, and I previously mentioned some Middle East mission support activities that are concluding and kind of ramping down. And so when you net all those things together, you get the midpoint year-over-year growth of about 6%. You hit on recompetes. Recompetes are about 3% today of the revenue -- projected revenue growth at the midpoint.

And then how should we think about like at the midpoint, how much is already covered by the funded backlog? And how much you guys have to still go on like get. And then as a link to that, the context or the framework for this question is, we have seen a shutdown. We are getting into a year where we'll see midterm elections later in the year, like how is the award environment and how that could affect this range for '26?

Sure. So I'll answer your question on the backlog, the revenue in backlog, although I would distinguish its total. It's not necessarily funded at this time because funded has seasonality to it when contract performance is flipped in the middle of the year and that sort of stuff. But approximately 85% of the total year's revenue is backlog today. That, of course, excludes T-6 that I mentioned earlier because we will book that in Q1. From an award cadence standpoint, I think the fourth quarter played out almost exactly as we thought in terms of where we ended up. The first quarter is playing out kind of very, very similar. We'll see how the stuff progresses throughout the year. But I'll go back even a year ago, when we play -- when 2025 played out, the booking cadence was, by and large, on plan in terms of what we saw. Will that persist for all the reasons that you just mentioned, Mariana, I don't know. But in terms of cadence, in terms of an expectation and aligned with what our internal plans have been, I think it's been pretty consistent.

Yes. I think Mariana is the way you need to think about us is persistence at the mission level requires somebody to be there. And almost entirely what we did is keeping aircraft in the air, keeping the base running delivering technology and capability, those things. And yes, they could be influenced by an election that could be influenced by budgets, whatever you want to do. But candidly, we saw very little implications associated with the government shutdown associated with the fact that every -- people want to keep aircraft in the air. People want to keep bases running. People want to have technology delivered. We saw very few implications with that. And so do I think we could be impacted by politics, absolutely. Did we see it to Shawn's point, No, everything pretty much stayed on schedule, which we were pleasantly surprised by.

All right. And last 1 from me. You mentioned throughout the call how you want to use capital deployment and partnerships to be prepared to get to, I don't know, support is like more complex and larger programs and particularly around rapid development and fielding of these new technologies. Could you mind discussing number one, if you already -- how strong is the M&A pipeline? And number two, any particular efforts that you can highlight that you are doing internally to be able to support these things and to have the best technologies?

Yes. I think 1 of the things that we're really happy about from an investment standpoint and the way things have played out for us has been some of our rapid prototyping activities, right? We talked about that last year. The team's ability to field assets go from a paper design to field an asset in a very short period of time has just been remarkable. We measure that in months or weeks in some cases, right? So that speaks to some of the investments that we've made internally as well as -- and people might not think of it this much, but we get co-investment from our customers or CRAD dollars to help support those rapid prototyping, that development work, certainly low risk to us, but speaks to our ability to get things fielded in a very timely manner that we think distinguishes us in the marketplace.

I would agree with that. But I would also tell you, Mariana, we decided in August of '24 to make fundamental shift in how we think about the next 3 to 5 years in the business. And I think when you saw the announcements that we put out, it was because we made those investments. We made those investments in the future of the company. And those investments are going to pay dividends because we believe that our ability to be effective for our customer means that we are going to deliver technology into our mission. And that is the only way in which our customer is going to benefit long term is taking advantage of what is commercially available to everybody else, and we're leveraging it into what we do today.

The next question is from Joe Gomes with NOBLE Capital.

Most of which have already been asked, but I'll throw this one out there. So lot of positives. But as you look at '26, what do you see as kind of the biggest risks for the company through achieving the '26 guidance?

Joe, it's a great question because I think it always comes down to -- we are a very responsive company. And if the customer tells us to move left, we move left. If they tell us to move right, we move right. We don't always get to see like in the Middle East, what may or may not happen. So that is not always a benefit in terms of foresight for us. But I do think that it creates opportunity for us and it has for a long time because we're so responsive. I don't view it as risks as much as it is being prepared, making sure our recruiting team is prepared, making sure that our team is prepared on the ground, making sure we're able to move when the customer needs us to move, building whatever they need us to build, making sure the aircraft is in the air. Those are things that we are very good at. I don't see the risk in '26 as much as -- it keeps me up at night is making sure we're prepared for that customer when they move at that moment's notice on those mission requirements that we're there to support them at the time and the speed at which they need us to be. That's what keeps me up at night.

The next question is from Kristine Liwag with Morgan Stanley.

Just following up on Noah's question earlier on cash flow. When we look at adjusting the operating cash divided by adjusted EBITDA, it looks like 2024 was a higher watermark 52% of that conversion versus 46% last year. And the midpoint of your guide for this year implies 47%. I guess I would have thought that this would have been trending higher, especially as the leverage comes down and you get some tailwind from interest expense. So how should we think about these metrics? Is this the right way to think about the cash generation of the business? Is there anything that's changing in the cash cycle or cash milestones that we should think about?

No, it's really just the additional payroll that we have this year, which is worth about $50 million. So if you adjust it for that on the midpoint of the guide, the conversion would be about 115% against net income. And so it's really nothing more than that.

And then does that mean for 2027 with the extra payroll for '26, you should see a higher number for that conversion for that following year. Would that be fair?

All else being equal, yes.

Great. And following up on what you said on the Middle East, you've got some contracts that are sunsetting that's factored into your guidance. Depending on how we see Iran play out this year, is there potentially more upside to that opportunity set in the region? And how do you think about potential timing or magnitude if anything does materialize?

No, no, no. It's very early. So our guide doesn't contemplate anything today because we don't have any requirements to react to, right? As we said earlier in the call, we're ensuring the safety of all of our employees in the region. Could things develop? Yes, they have in the past. And those things it would purely be speculative at this point, Kristine, to think about what that could turn into or where it might be. We know that there's a very large mobilization effort going on in the region. I think they said the highest amount since 20 -- or since 2003 in terms of assets in the region. So could there be some space for us. Yes, we have not contemplated any of it today. No.

This concludes our question-and-answer session. I would like to turn the conference back over to Jeremy Wensinger for any closing remarks.

Thank you for joining us today. I really appreciate you taking the time to share with us what we did in 2025. I'm so proud of the team. I'm proud of the 16,000-plus employees and what they do for us every day. And I appreciate your interest in V2X. And I hope that we were fulsome and clear in our remarks. So thank you so much. Take care.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.