VSE Corporation Reports 26% Revenue Growth to $1.08 Billion for Fiscal Year 2024

VSE Corporation reported a significant increase in its financial performance for the fiscal year ending December 31, 2024, with total revenues reaching $1.08 billion, a 26% increase from $860.5 million in 2023. The Aviation segment, which accounted for approximately 73% of total revenues, saw a 45% increase in revenue to $786.3 million, driven by strong demand for aftermarket parts and maintenance, repair, and overhaul (MRO) services. In contrast, the Fleet segment experienced a revenue decline of 7%, totaling $293.9 million, primarily due to a 30% decrease in revenues from the United States Postal Service (USPS) as it transitioned to a new fleet management system.

Despite the revenue growth, VSE's operating income decreased by 7% to $81.4 million, attributed to increased corporate costs, including lease abandonment and restructuring charges totaling $12.2 million and $4.2 million, respectively. Net income from continuing operations also fell by 15% to $36.5 million, reflecting higher interest expenses and a decrease in operating income from the Fleet segment. The effective tax rate for continuing operations improved to 21.5% from 24.2% in the previous year, primarily due to a favorable excess stock tax deduction.

Strategically, VSE has made significant moves to enhance its market position, including the acquisition of Turbine Controls, Inc. in April 2024 and Kellstrom Aerospace Group, Inc. in December 2024. These acquisitions are expected to bolster VSE's capabilities in the aviation aftermarket and expand its global footprint. The company also completed two public offerings in 2024, raising a total of $325.8 million, which was used to repay debt and finance acquisitions. Following the sale of its Federal and Defense segment, VSE is now focused on its core Aviation and Fleet segments, with plans to divest the Fleet segment in 2025 for up to $230 million.

Operationally, VSE employed approximately 1,400 individuals as of December 31, 2024, and reported a notable increase in customer engagement metrics, particularly in the Aviation segment, which ramped up several multi-year distribution and repair programs. The company is also expanding its geographic reach, particularly in Europe, the Middle East, and Africa, through new distribution agreements. Looking ahead, VSE anticipates continued growth driven by its strategic acquisitions and the expansion of its service offerings, although it remains cautious of potential economic and geopolitical risks that could impact demand in the aviation and fleet markets.