Aviation and fleet aftermarket services provider VSE Corporation (NASDAQ: VSEC) reported Q4 CY2025 results beating Wall Street’s revenue expectations, but sales were flat year on year at $301.2 million. Its non-GAAP profit of $1.16 per share was 29.9% above analysts’ consensus estimates.

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“2025 was an exceptional and transformational year for VSE,” said John Cuomo, President and Chief Executive Officer of VSE Corporation.

Company Overview

With roots dating back to 1959 and a strategic focus on extending the life of transportation assets, VSE Corporation (NASDAQ: VSEC) provides aftermarket parts distribution and maintenance, repair, and overhaul services for aircraft and vehicle fleets in commercial and government markets.

Revenue Growth

Reviewing a company’s long-term sales performance reveals insights into its quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Luckily, VSE Corporation’s sales grew at an impressive 10.9% compounded annual growth rate over the last five years. Its growth beat the average industrials company and shows its offerings resonate with customers, a helpful starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. VSE Corporation’s annualized revenue growth of 13.7% over the last two years is above its five-year trend, suggesting its demand was strong and recently accelerated.

This quarter, VSE Corporation’s $301.2 million of revenue was flat year on year but beat Wall Street’s estimates by 4.2%.

Looking ahead, sell-side analysts expect revenue to grow 29.7% over the next 12 months, an improvement versus the last two years. This projection is eye-popping and indicates its newer products and services will catalyze better top-line performance.

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Operating Margin

Operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses – everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies with different levels of debt and tax rates because it excludes interest and taxes.

VSE Corporation was profitable over the last five years but held back by its large cost base. Its average operating margin of 7.1% was weak for an industrials business. This result isn’t too surprising given its low gross margin as a starting point.

On the plus side, VSE Corporation’s operating margin rose by 5.2 percentage points over the last five years, as its sales growth gave it immense operating leverage.

This quarter, VSE Corporation generated an operating margin profit margin of 10.8%, up 1.6 percentage points year on year. The increase was a welcome development and shows its expenses recently grew slower than its revenue, leading to higher efficiency.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

VSE Corporation’s EPS grew at a remarkable 13.8% compounded annual growth rate over the last five years, higher than its 10.9% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

We can take a deeper look into VSE Corporation’s earnings to better understand the drivers of its performance. As we mentioned earlier, VSE Corporation’s operating margin expanded by 5.2 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its higher earnings; interest expenses and taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

For VSE Corporation, its two-year annual EPS growth of 6.8% was lower than its five-year trend. This wasn’t great, but at least the company was successful in other measures of financial health.

In Q4, VSE Corporation reported adjusted EPS of $1.16, up from $0.90 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects VSE Corporation’s full-year EPS of $3.90 to grow 10.9%.

Key Takeaways from VSE Corporation’s Q4 Results

It was good to see VSE Corporation beat analysts’ EPS expectations this quarter. We were also excited its EBITDA outperformed Wall Street’s estimates by a wide margin. Zooming out, we think this was a good print with some key areas of upside. The stock remained flat at $219.44 immediately after reporting.

Is VSE Corporation an attractive investment opportunity right now? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here (it’s free).