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SEC filingVSE Corporation reported record Q1 2026 revenue of $324.6M, up 26.8% YoY, and updated full-year guidance to include the Precision Aviation Group acquisition.
VSE Corporation reported a record first quarter for 2026, with total revenues of $324.6 million, a 26.8% increase year-over-year. The growth was driven by strong commercial engine aftermarket activity, execution of new distribution agreements, and contributions from recent acquisitions. GAAP net income from continuing operations surged 108.0% to $29.1 million, while diluted EPS rose 55.2% to $1.04. On a non-GAAP basis, adjusted EBITDA increased 37.4% to $55.4 million, with margin expanding approximately 130 basis points to 17.1%, reflecting a favorable mix shift toward higher-margin products and repair services, as well as synergy realization from acquisitions.
Management highlighted organic revenue growth of 15% in the quarter, led by the distribution business. The company also advanced key OEM programs and expanded MRO capacity. Subsequent to quarter end, VSE completed two strategic acquisitions: NorthStar Technologies on April 1, 2026, which enhances engine MRO and logistics capabilities in business and general aviation, and Precision Aviation Group (PAG) on May 5, 2026, for $2.025 billion. PAG significantly expands VSE's scale, adds proprietary solutions, and strengthens its position across commercial, business aviation, rotorcraft, OEM, and defense markets.
To fund the PAG acquisition, VSE completed follow-on equity and tangible equity unit offerings and refinanced its debt, entering into a new $900 million Term Loan B and an upsized $500 million revolving credit facility. Pro forma for the acquisition, adjusted net leverage is expected to be below 3.0x and to improve through the year.
VSE updated its full-year 2026 guidance to include PAG, now expecting revenue growth of 57% to 61% (previously 19% to 23%) and adjusted EBITDA margin of 18.1% to 18.5% (previously 16.8% to 17.3%). The guidance reflects no change in expectations for the underlying business. The company's strong cash position of $1.24 billion as of March 31, 2026, was largely used to fund the PAG acquisition at closing.