AeroVironment Announces Fiscal 2026 First Quarter Results

AeroVironment, Inc. (NASDAQ: AVAV) (“AeroVironment” or the “Company”) reported today financial results for the fiscal first quarter ended August 2, 2025.

First Quarter Highlights:

• Successfully closed our acquisition of BlueHalo, which contributed $235.2 million of revenue in the first quarter
• Record first quarter revenue of $454.7 million up 140% year-over-year; legacy revenue of $219.5 million up 16% year-over year
• Record first quarter backlog of $1.1 billion and bookings of $399.0 million
• Visibility of 82% to the midpoint of fiscal year 2026 revenue guidance range as of September 9, 2025

“As we complete the first quarter of our new fiscal year, we are excited by the continued strength across both our Autonomous Systems and Space, Cyber and Directed Energy segments with record revenue and backlog,” said Wahid Nawabi, AeroVironment chairman, president and chief executive officer. “With a broad and diversified portfolio of solutions, we are confident in our ability to deliver best-in-class solutions that are aligned to our customers’ highest priorities in all domains across air, land, sea, space and cyber.”

Nawabi continued, “AV is exceptionally well positioned to capture growing demand due to our innovative solutions and manufacturing capacity that can quickly scale to meet our customers’ expedited delivery timelines. Our continued strong results underscore our confidence in the future of AV, and we are optimistic about the growth opportunities that lie ahead as we redefine the future of defense.”

FISCAL 2026 FIRST QUARTER RESULTS

Revenue for the first quarter of fiscal 2026 was $454.7 million, an increase of 140% as compared to $189.5 million for the first quarter of fiscal 2025, due to higher product sales of $154.0 million and higher service revenue of $111.2 million. The acquisition of BlueHalo on May 1, 2025 contributed to $123.7 million and $111.5 million of the current quarter product and service revenue, respectively. From a segment standpoint, Autonomous Systems (“AxS”) recorded revenue of $285.3 million and Space, Cyber and Directed Energy (“SCDE”) recorded revenue of $169.4 million.

Gross margin for the first quarter of fiscal 2026 was $95.1 million, an increase of 17% as compared to $81.5 million for the first quarter of fiscal 2025, reflecting higher product margin of $8.9 million and higher service gross margin of $4.8 million. Gross margin in the fiscal 2026 first quarter was negatively impacted by $37.4 million of intangible amortization expense and other related non-cash purchase accounting expenses in the first quarter of fiscal 2026, as compared to $3.7 million in the first quarter of fiscal 2025. As a percentage of revenue, gross margin fell to 21% from 43%, primarily due to increased amortization and other non-cash purchase accounting expenses and an increase in the proportion of service revenue resulting from the BlueHalo acquisition.

Loss from operations for the first quarter of fiscal 2026 was $(69.3) million as compared to income from operations of $23.1 million for the first quarter of last fiscal year. The current quarter was negatively impacted by $79.7 million of intangible amortization and other related non-cash purchase accounting expenses in the first quarter of fiscal 2026 as compared to $4.8 million in the first quarter of fiscal 2025. The decrease year-over-year was primarily due to an increase in selling, general and administrative (“SG&A”) expense of $97.5 million, which includes an increase of $41.2 million of intangible amortization, an increase of $23.7 million of acquisition related expenses and incremental headcount resulting from our acquisition of BlueHalo, which closed on May 1, 2025, and an increase in research and development (“R&D”) expense of $8.5 million, partially offset by an increase in gross margin of $13.7 million.

Other loss, net, for the first quarter of fiscal 2026 was $15.1 million, as compared to $0.5 million for the first quarter of fiscal 2025. The increase year-over-year was primarily due to an increase in interest expense related to the term and revolver facility loans obtained in conjunction with the BlueHalo acquisition on May 1, 2025 and subsequently settled with proceeds from the issuances of convertible notes and equity in July 2025.

Benefit from income taxes for the first quarter of fiscal 2026 was $(15.2) million, as compared to provision for income taxes of $1.5 million for the first quarter of last fiscal year. The decrease year-over-year was primarily due to the loss before income taxes.

Net loss for the first quarter of fiscal 2026 was $(67.4) million, or $(1.44) per diluted share, as compared to net income of $21.2 million, or $0.75 per diluted share, in the prior-year period, respectively. The current quarter was negatively impacted by $79.7 million, or $1.34 per diluted share, of intangible amortization and other related non-cash purchase accounting expenses in the first quarter of fiscal 2026 as compared to $4.8 million, or $0.13 per diluted share, in the first quarter of fiscal 2025.

Non-GAAP adjusted EBITDA for the first quarter of fiscal 2026 was $56.6 million and non-GAAP earnings per diluted share were $0.32, as compared to $37.2 million and $0.89, respectively, for the first quarter of fiscal 2025.

BACKLOG

As of August 2, 2025, funded backlog (defined as remaining performance obligations under firm orders for which funding is currently appropriated to us under a customer contract) was $1.1 billion, as compared to $726.6 million as of April 30, 2025. Bookings (defined as firm orders entered into) during the quarter ending August 2, 2025 were $399.0 million. We have visibility of 80% of fiscal year 2026 revenue.

FISCAL 2026 — OUTLOOK FOR THE FULL YEAR

For fiscal year 2026, the Company continues to expect revenue of between $1.9 billion and $2.0 billion, net loss of between $(77) million and $(72) million, non-GAAP adjusted EBITDA of between $300 million and $320 million, loss per diluted share of between $(1.63) and $(1.53) and non-GAAP earnings per diluted share, which excludes amortization of intangible assets, other non-cash purchase accounting expenses and equity securities investments gains or losses, of between $3.60 and $3.70.

The foregoing estimates are forward-looking and reflect management’s view of current and future market conditions, subject to certain risks and uncertainties, including certain assumptions with respect to our ability to efficiently and on a timely basis integrate acquisitions, obtain and retain government contracts, changes in the timing and/or amount of government spending, react to changes in the demand for our products and services, activities of competitors, changes in the regulatory environment, and general economic and business conditions in the United States and elsewhere in the world. Investors are reminded that actual results may differ materially from these estimates and investors should review all risks related to achievement of the guidance reflected under “forward-looking statements” below and in the Company’s filings with the Securities and Exchange Commission.

CONFERENCE CALL AND PRESENTATION

In conjunction with this release, AeroVironment, Inc. will host a conference call today, Tuesday, September 9, 2025, at 4:30 pm Eastern Time that will be webcast live. Wahid Nawabi, chairman, president and chief executive officer, Kevin P. McDonnell, executive vice president and chief financial officer and Denise Pacioni, investor relations director, will host the call.

Investors may access the call by registering via the following participant registration link up to ten minutes prior to the start time.

Participant registration URL: https://register-conf.media-server.com/register/BIf4109420eefa4372bb704709cbb246df

Investors may also listen to the live audio webcast via the Investor Relations page of the AeroVironment, Inc. website, http://investor.avinc.com. Please allow 15 minutes prior to the call to download and install any necessary audio software.

A supplementary investor presentation for the first quarter fiscal year 2026 can be accessed at https://investor.avinc.com/events-and-presentations.

Audio Replay

An audio replay of the event will be archived on the Investor Relations section of the Company's website at http://investor.avinc.com.

ABOUT AEROVIRONMENT, INC.

AeroVironment (“AV”) (NASDAQ: AVAV) is a defense technology leader delivering integrated capabilities across air, land, sea, space, and cyber. The company develops and deploys autonomous systems, precision strike systems, counter-UAS technologies, space-based platforms, directed energy systems, and cyber and electronic warfare capabilities—built to meet the mission needs of today’s warfighter and tomorrow’s conflicts. With a national manufacturing footprint and a deep innovation pipeline, AV delivers proven systems and future-defining capabilities with speed, scale, and operational relevance. For more information visit: www.avinc.com.

FORWARD-LOOKING STATEMENTS

This press release contains "forward-looking statements" as that term is defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements, and may contain words such as “will,” “believe,” “anticipate,” “expect,” “estimate,” “intend,” “project,” “plan,” or words or phrases with similar meaning. Forward-looking statements are based on current expectations, forecasts and assumptions that involve risks and uncertainties, including, but not limited to, economic, competitive, governmental and technological factors outside of our control, that may cause our business, strategy or actual results to differ materially from the forward-looking statements.

Factors that could cause actual results to differ materially from the forward-looking statements include, but are not limited to, the impact of our ability to successfully close and integrate acquisitions into our operations and avoid disruptions from acquisition transactions that will harm our business; the recording of goodwill and other intangible assets as part of acquisitions that are subject to potential impairments in the future and any realization of such impairments; any actual or threatened disruptions to our relationships with our distributors, suppliers, customers and employees, including shortages in components for our products, including due to restrictions and sanctions imposed by foreign governments; the ability to timely and sufficiently integrate international operations into our ongoing business and compliance programs; reliance on sales to the U.S. government, including uncertainties in classification, pricing or potentially burdensome imposed terms for certain types of government contracts; availability of U.S. government funding for defense procurement and R&D programs; our ability to win U.S. and international government R&D and procurement programs, including foreign military financing aid; changes in the timing and/or amount of government spending, including due to continuing resolutions and/or changing government priorities; adverse impacts of a U.S. government shutdown; our ability to realize the anticipated benefits of the BlueHalo transaction; our ability to execute contracts for anticipated sales, perform under such contracts and other existing contracts and obtain new contracts; risks related to our international business, including compliance with export control laws; the extensive and increasing regulatory requirements governing our contracts with the U.S. government and international customers; the consequences to our financial position, business and reputation that could result from failing to comply with such regulatory requirements; unexpected technical and marketing difficulties inherent in major research and product development efforts; the impact of potential security and cyber threats or the risk of unauthorized access to and resulting misuse of our, our customers’ and/or our suppliers’ information and systems; failure to remain a market innovator, to create new market opportunities or to expand into new markets; our ability to increase production capacity to support anticipated growth; unexpected changes in significant operating expenses, including components and raw materials; failure to develop new products or integrate new technology into current products; any increase in litigation activity or unfavorable results in legal proceedings, including pending class actions, or litigation that may arise from our recent acquisition of BlueHalo; our ability to respond and adapt to legal, regulatory and government budgetary changes; our ability to comply with the covenants in our loan documents, outstanding convertible notes or merger agreement with BlueHalo; our ability to attract and retain skilled employees, including retention of BlueHalo employees; the impact of inflation; and general economic and business conditions in the United States and elsewhere in the world; and the failure to establish and maintain effective internal control over financial reporting. For a further list and description of such risks and uncertainties, see the reports we file with the Securities and Exchange Commission. We do not intend, and undertake no obligation, to update any forward-looking statements, whether as a result of new information, future events or otherwise.

NON-GAAP MEASURES

In addition to the financial measures prepared in accordance with generally accepted accounting principles (GAAP), this earnings release also contains non-GAAP financial measures. See in the financial tables below the calculation of these measures, the reasons why we believe these measures provide useful information to investors, and a reconciliation of these measures to the most directly comparable GAAP measures.

Statement Regarding Non-GAAP Measures

The non-GAAP measures set forth above should be considered in addition to, and not as a replacement for or superior to, the comparable GAAP measures, and may not be comparable to similarly titled measures reported by other companies. Management believes that these measures provide useful information to investors by offering additional ways of viewing our results that, when reconciled to the corresponding GAAP measures, help our investors to understand the long-term profitability trends of our business and compare our profitability to prior and future periods and to our peers. In addition, management uses these non-GAAP measures to evaluate our operating and financial performance.

Non-GAAP Earnings per Diluted Share

We exclude acquisition-related expenses, amortization of acquisition-related intangible assets, equity method investment gains and losses, equity securities investments gains or losses, goodwill impairment and one-time non-operating items because we believe this facilitates more consistent comparisons of operating results over time between our newly acquired and existing businesses, and with our peer companies. We believe, however, that it is important for investors to understand that such intangible assets contribute to revenue generation and that intangible asset amortization will recur in future periods until such intangible assets have been fully amortized.

Adjusted EBITDA (Non-GAAP)

Adjusted EBITDA is defined as net income before interest income, interest expense, income tax expense (benefit) and depreciation and amortization, adjusted for the impact of certain other non-cash items, including amortization of implementation of cloud computing arrangements, stock-based compensation, acquisition related expenses, equity method investment gains or losses, equity securities investments gains or losses, goodwill impairment and one-time non-operating gains or losses. We present Adjusted EBITDA, which is not a recognized financial measure under U.S. GAAP, because we believe it is frequently used by analysts, investors and other interested parties to evaluate companies in our industry. We believe this facilitates more consistent comparisons of operating results over time between our newly acquired and existing businesses, and with our peer companies. We believe, however, that it is important for investors to understand that such intangible assets contribute to revenue generation, intangible asset amortization will recur in future periods until such intangible assets have been fully amortized and that interest and income tax expenses will recur in future periods. In addition, Adjusted EBITDA may not be comparable to similarly titled measures used by other companies in our industry or across different industries.

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"Our continued strong results underscore our confidence in the future of AV, and we are optimistic about the growth opportunities that lie ahead as we redefine the future of defense."