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V2X raises its adjusted cash forecast

Revenue rose 9% in the third quarter, while nine-month operating cash flow was negative. V2X's higher cash forecast uses an adjusted measure.

V2X raised its full-year 2026 guidance across all metrics on Nov. 2. Third-quarter revenue was $1.27 billion, up 9% from a year earlier.1 President and CEO Jeremy C. Wensinger attributed the guidance increase to year-to-date performance, backlog and existing demand signals.1

V2X's cash adjustments turn a nine-month outflow positive

Nine months ended October 2, 2026; USD thousands; GAAP and adjusted measures

−$41,041Operating cash flow (GAAP)
$111,538Adjusted operating cash flow (non-GAAP)

Adjusted operating cash flow excludes M&A payments and related costs and MARPA facility activity.

Source: V2X third-quarter 2026 results, SEC Exhibit 99.1. As of November 2, 2026.

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V2X states its cash forecast on an adjusted basis, and the adjustments change the picture of its year so far. Operations generated $67.3 million in the third quarter. For the nine months through Oct. 2, operations used $41.0 million. Adjusted operating cash flow for that period was positive $111.5 million.1

The adjustments added back $141.1 million of activity under a facility V2X calls MARPA, which the release does not describe. They also added back $11.5 million of mergers and acquisitions, integration and related payments.1

V2X now forecasts full-year adjusted operating cash flow of $175 million to $195 million.1

By our calculation, V2X's revised forecast implies approximately $63.5 million to $83.5 million in fourth-quarter adjusted operating cash flow. Even the low end exceeds the third quarter's adjusted $61.8 million.1

Sources (1)
  1. V2X Exhibit 99.1, third quarter 2026 results (SEC 8-K, Nov. 2, 2026) www.sec.gov
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Industry · Unmanned systems

Kratos plans a turbojet production ramp ahead of expected sales

Kratos targets up to 3,000 engines produced in 2027. It forecasts about 1,500 sold, with cash flow estimates including working capital for the ramp.

Kratos plans to increase turbojet production to address expected customer demand for jet engines for small cruise missiles and drones. Its 2027 forecast assumes about 1,500 engines sold, with most deliveries in the second half.1

Kratos plans turbojet production ahead of forecast sales

Turbojet engines, 2027: company production target and sales forecast

Planned productionUp to 3,000
Forecast salesApproximately 1,500

Kratos forecasts the significant majority of engine deliveries in the second half of 2027.

Source: Kratos third-quarter 2026 results. As of Nov. 5, 2026.

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Kratos's fiscal 2026 and 2027 cash flow estimates include working capital for materials, components and equipment to increase production of turbojet engines up to 3,000 engines produced in 2027.1

Third-quarter 2026 revenue grew 35.7% year over year. Organic growth, excluding the current-year contribution from acquisitions, was 23.2%. Turbine Technologies posted 27.1% organic revenue growth.1

Growth is already absorbing cash. Third-quarter 2026 operations used $5.2 million, which Kratos attributed primarily to receivables growth, alongside inventory increases tied to production ramps and development investments.1

For full year 2026, Kratos forecasts free cash flow use of $110 million to $120 million. It forecasts capital expenditures of $100 million to $110 million. It expects investments in inventory, property, plant, equipment and facilities to continue at least throughout fiscal 2027.1

Kratos raised $1,348.4 million from common stock issuance, net of issuance costs, in the first nine months of fiscal 2026. It ended the quarter with $1,404.3 million in cash and cash equivalents.1

Separately, third-quarter Unmanned Systems revenue fell to $74.6 million from $87.2 million a year earlier. Kratos attributed the decline to a prior-year shipment of Valkyries to an international customer that generated $16.1 million.1

Kratos says continuing resolutions typically restrict production-rate increases and new program starts. Its guidance assumes a continuing resolution into its first fiscal quarter of 2027. If it extends beyond March 31, 2027, the company says it will need to reassess its initial forecast for that year.1

Sources (1)
  1. Kratos Reports Third Quarter 2026 Financial Results, Nov. 5, 2026 ir.kratosdefense.com
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Industry · Submarines

Rolls-Royce's submarine reactor business plans large-component prototyping at a Derby technology park

Rolls-Royce expects the Derby technology park to expand capacity supporting submarine programmes while allowing its Raynesway site to focus on delivery.

Rolls-Royce Submarines announced a partnership on Nov. 6 with INFINITY, a private company creating a technology park in Derby, to develop large-scale prototypes of advanced defence components.1

Rolls-Royce Submarines announced a strategic partnership with INFINITY

aimed at developing large-scale prototypes of advanced defence components

technology park in Derbyfull-scale prototypingplanned

digital engineering, testing and validation, skills development and supply chain collaboration

technologies and processes includinghot isostatic pressingplanned

power beam welding and additive manufacturing

Rolls-Royce release, 6 November 2026

Sources
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Lee Warren, engineering and technology director at Rolls-Royce Submarines, said the park would allow the company to focus on delivery at Raynesway while developing advanced manufacturing techniques at purpose-built facilities. Warren tied the need to explore new technologies to the business's growth to meet demand for naval nuclear propulsion work. That includes increasing its manufacturing pace and providing reactors to Australia under the AUKUS agreement.1

The planned capabilities include hot isostatic pressing, power beam welding and additive manufacturing. Rolls-Royce expects these to provide greater control over manufacturing large, strategically important components for markets including fission, fusion, defence and aerospace.1

The Rolls-Royce Nuclear Skills Academy already operates on the 200-acre site, where the company will work with INFINITY to develop the additional capabilities. The park is intended to bring full-scale prototyping, digital engineering, testing and validation, skills development and supply chain collaboration together on one site.1

Rolls-Royce Submarines designs, manufactures and supports the pressurised water reactors powering every Royal Navy submarine. It currently supplies reactor plant and associated components for the Astute and Dreadnought build programmes.1

Rolls-Royce expects the new capabilities to shorten development cycles and expand the industrial capacity available to support submarine programmes. The announcement gives no timetable for bringing those capabilities into use.1

Sources (1)
  1. Rolls-Royce: Rolls-Royce Submarines partners with INFINITY to develop new capabilities for UK defence, Nov. 6, 2026 www.rolls-royce.com
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