VSE Corp (VSEC.O): Strong Quarter Reinforces Fundamentals; Investor Day the Next Catalyst

VSE Corp reported third quarter revenue of $541mn, up 91% year over year, including 17% organic growth, with comparable organic growth across MRO and distribution. Commercial engine aftermarket demand remained the strongest driver, with growth approaching 20% in certain businesses, followed by double-digit growth in business and general aviation engines, while non-engine activities grew high single digits to low double digits. Adjusted EBITDA increased 126% to $107mn with margins expanding 310bps to a record 19.8%, the majority of which came from the core business rather than PAG, reflecting favorable engine aftermarket mix, operating leverage, in-sourcing initiatives and integration synergies. PAG integration is tracking at or ahead of schedule, with synergy capture exceeding initial expectations. Free cash flow reached $47mn, roughly 44% conversion, leverage declined to 2.3x, and management raised fiscal 2026 revenue and margin guidance. Attention now turns to the December 9 Investor