Sales soar but goodwill hit weighs on AeroVironment (NASDAQ: AVAV) results
Rhea-AI Filing Summary
AeroVironment reported a GAAP loss in its fiscal 2026 third quarter despite very strong revenue growth. Revenue reached $408.0 million, up 143% from $167.6 million a year earlier, driven by higher product and service sales, including contributions from the BlueHalo acquisition. Gross margin was $98.8 million, or 24% of revenue.
The company recorded a $151.3 million goodwill impairment in its Space reporting unit after a stop‑work order on the BADGER phased array antenna agreement supporting the SCAR program, leading to a net loss of $(156.6) million, or $(3.15) per diluted share. Non‑GAAP earnings per diluted share were $0.64, with adjusted EBITDA of $44.5 million, up from $21.8 million.
Funded backlog was $1.1 billion as of January 31, 2026. For fiscal 2026, AeroVironment now expects revenue between $1.85 billion and $1.95 billion, adjusted EBITDA between $265 million and $285 million, and non‑GAAP earnings per diluted share of $2.75–$3.10. Separately, the U.S. Government indicated it intends to terminate the BADGER SCAR agreement for convenience, while allowing the company to compete for future SCAR work; AeroVironment plans to continue investing in BADGER as a commercial product.
Positive
- Revenue acceleration and scale: Fiscal Q3 2026 revenue reached $408.0 million, a 143% increase versus $167.6 million in the prior-year quarter, with contributions from higher product and service sales and the BlueHalo acquisition.
- Improving underlying profitability: Non‑GAAP adjusted EBITDA rose to $44.5 million in Q3 2026 from $21.8 million a year earlier, and funded backlog reached $1.1 billion as of January 31, 2026, supporting future revenue visibility.
- Robust full-year outlook: For fiscal 2026, management now projects revenue of $1.85–$1.95 billion, adjusted EBITDA of $265–$285 million, and non‑GAAP EPS of $2.75–$3.10, indicating confidence in demand and integration of recent acquisitions.
Negative
- Large goodwill impairment and GAAP loss: A $151.3 million goodwill impairment in the Space reporting unit, tied to reduced BADGER SCAR revenue expectations and higher investment needs, drove a Q3 2026 net loss of $(156.6) million, or $(3.15) per diluted share.
- SCAR program setback: The U.S. Government informed AeroVironment it intends to terminate the BADGER phased array antenna Other Transaction Agreement for the SCAR program for convenience, introducing uncertainty around future Space segment revenue from this specific program.
- Margin pressure from mix and acquisition effects: Q3 2026 gross margin percentage declined to 24% from 38% a year earlier, reflecting a higher proportion of service revenue following the BlueHalo acquisition and increased amortization and other non‑cash purchase accounting expenses.
Insights
Strong top-line and guidance, but goodwill hit and contract setback keep risk balanced.
AeroVironment posted fiscal Q3 2026 revenue of $408.0 million, up 143% year over year, with both product and service lines growing and BlueHalo contributing meaningfully. Non‑GAAP adjusted EBITDA rose to $44.5 million from $21.8 million, showing underlying profitability despite integration and scaling costs.
However, a $151.3 million goodwill impairment in the Space reporting unit drove a net loss of $(156.6) million. This followed a stop‑work order on the BADGER phased array SCAR agreement, and the U.S. Government now plans a termination for convenience, although AeroVironment may still compete for future SCAR work. These events highlight concentration and program‑specific risk in the Space portfolio.
Management’s fiscal 2026 outlook remains ambitious: revenue of $1.85–$1.95 billion, adjusted EBITDA of $265–$285 million, and non‑GAAP EPS of $2.75–$3.10. Combined with funded backlog of $1.1 billion as of January 31, 2026, this suggests strong demand and confidence in integration of BlueHalo and ongoing defense programs, even as investors weigh the impact of the impairment and SCAR agreement termination.
8-K Event Classification
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
(Exact name of registrant as specified in its charter)
|
| |||
(State or other jurisdiction of |
| (Commission File Number) |
| (I.R.S. Employer Identification No.) |
incorporation or organization) |
|
|
|
|
|
| |
| ||
(Address of Principal Executive Offices) |
| (Zip Code) |
Registrant’s telephone number, including area code: (
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition
On March 10, 2026, AeroVironment, Inc. (the “Company”) issued a press release announcing second quarter results for the period ended January 31, 2026, a copy of which is attached hereto as Exhibit 99.1.
Item 7.01. Regulation FD Disclosure
The information under Item 2.02 above is incorporated herein by reference.
Attached as Exhibit 99.2 hereto is a presentation containing additional information regarding the Company’s third quarter fiscal 2026 financial results for the period ended January 31, 2026. A copy of the presentation is also available on the investor relations section of the Company’s website at https://investor.avinc.com/events-and-presentations. The information contained on the Company’s website is not incorporated by reference into, and does not form a part of, this Current Report on Form 8-K.
The information in this Current Report on Form 8-K, including the exhibits, is furnished pursuant to Items 2.02 and 7.01 and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing of AeroVironment, Inc. under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof, except as shall be expressly set forth by specific reference in such filing.
Item 8.01. Other Events
On March 10, 2026, during the course of negotiations between the Company and the U.S. Government regarding the Company’s Other Transaction Agreement (the “Agreement”) for the delivery of BADGER phased array antenna systems to support the Satellite Communication Augmentation Resource (“SCAR”) program, the U.S. Government informed the Company that it now intends to proceed with a termination for convenience of the Agreement, while providing the Company with the opportunity to compete for work under the SCAR program in the future. The Company intends to continue to invest in the BADGER product line by developing a commercial product to address the phased array antennae market.
In addition to historic information, this report, including the exhibits, contains forward-looking statements regarding events, performance and financial trends. Various factors could affect future events and results and could cause actual results to differ materially from those expressed in or implied by the forward-looking statements. Some of those factors are identified in the exhibits, and in our periodic reports filed with the Securities and Exchange Commission.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits.
Exhibit |
|
|
Number |
| Description |
99.1 |
| Press release issued by AeroVironment, Inc., dated March 10, 2026. |
99.2 | Presentation regarding AeroVironment, Inc.’s third quarter fiscal 2026 financial results dated March 10, 2026. | |
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
2
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| AEROVIRONMENT, INC. | |
|
|
|
|
|
|
Date: March 10, 2026 | By: | /s/ Wahid Nawabi |
|
| Wahid Nawabi |
|
| Chairman, President and Chief Executive Officer |
3
Exhibit 99.1
AeroVironment Announces Fiscal 2026 Third Quarter Results
ARLINGTON, VA, March 10, 2026 — AeroVironment, Inc. (NASDAQ: AVAV) (“AeroVironment” or the “Company”) reported today financial results for the fiscal third quarter ended January 31, 2026.
Third Quarter Highlights:
| ● | Third quarter revenue of $408.0 million |
| ● | Bookings of $2.1 billion and book-to-bill ratio of 1.6 for the first nine months of the fiscal year |
| ● | Record funded backlog of $1.1 billion |
“While our third quarter results were impacted by revenue timing and adjustments in our Space business, demand for our unique solutions remains robust,” said Wahid Nawabi, AeroVironment chairman, president and chief executive officer. “Strong order flow and growth in funded backlog during the quarter are setting the stage for record fourth quarter revenue and a solid start to fiscal year 2027. We are executing with discipline, scaling manufacturing ahead of demand and accelerating the commercialization of our platforms to improve profitability and time to market. We believe there are tremendous opportunities ahead for AV to shape the next era of defense and we remain confident in our ability to deliver long-term shareholder value.”
FISCAL 2026 THIRD QUARTER RESULTS
Revenue for the third quarter of fiscal 2026 was $408.0 million and $1.3 billion of revenue for the first nine months of the fiscal year. Revenue for third quarter of fiscal 2026 increased 143% as compared to $167.6 million for the third quarter of fiscal 2025, due to higher product sales of $138.1 million and higher service revenue of $102.3 million. The acquisition of BlueHalo on May 1, 2025 contributed to $85.1 million and $91.4 million of the current quarter product and service revenue, respectively. From a segment standpoint, Autonomous Systems (“AxS”) recorded revenue of $278.7 million and Space, Cyber and Directed Energy (“SCDE”) recorded revenue of $129.3 million.
Gross margin for the third quarter of fiscal 2026 was $98.8 million, an increase of 56% as compared to $63.2 million for the third quarter of fiscal 2025, reflecting higher product margin of $19.1 million and higher service margin of $16.5 million. Fiscal 2026 third quarter gross margin was negatively impacted by $12.7 million of intangible amortization expense and other related non-cash purchase accounting expenses, as compared to $3.7 million in the third quarter of fiscal 2025. As a percentage of revenue, gross margin fell to 24% from 38%, primarily due to an increase in the proportion of service revenue resulting from the BlueHalo acquisition and the increased amortization and other non-cash purchase accounting expenses.
Impairment of goodwill for the third quarter of fiscal 2026 was $151.3 million. In January 2026, a stop-work order was received on the Company’s Other Transaction Agreement for the delivery of BADGER phased array antenna systems to support Space Force’s Satellite Communication Augmentation Resource (“SCAR”) program. We concluded that the stop-work order represented a trigger event that indicated the carrying value of the Space reporting unit exceeded its fair value. As a result, we updated our estimates of the long-term cash flows of the Space reporting unit to reflect the reduced revenue associated with the stop-work order as well as an increase in expected research and development and capital investments to achieve product commercialization, which is expected to result in expanded opportunities and improve long term product margins. The changes in estimates resulted in the recognition of a goodwill impairment charge of $151.3 million in the Space reporting unit.
1
Loss from operations for the third quarter of fiscal 2026 was $(179.0) million as compared to $(3.1) million for the third quarter of last fiscal year. The current quarter was negatively impacted by $43.9 million of intangible amortization and other related non-cash purchase accounting expenses as compared to $4.8 million in the third quarter of fiscal 2025. The decrease year-over-year was primarily due to the goodwill impairment of $151.3 million recorded during the third quarter of fiscal 2026 related to Space, an increase in selling, general and administrative (“SG&A”) expense of $55.6 million, which includes an increase of $30.1 million of intangible amortization expense and incremental headcount resulting from our acquisition of BlueHalo which closed on May 1, 2025, partially offset by a decrease of $3.1 million of acquisition related expenses, an increase in research and development (“R&D”) expense of $4.6 million, partially offset by an increase in gross margin of $35.6 million.
Other income, net for the third quarter of fiscal 2026 was $3.3 million, as compared to $0.7 million for the third quarter of fiscal 2025. The increase year-over-year was primarily due to an increase in interest income due to a combination of higher cash and investment balances and lower interest bearing debt balances.
Benefit from income taxes for the third quarter of fiscal 2026 was $(19.5) million, as compared to $(0.6) million for the third quarter of last fiscal year. The increase year-over-year was primarily due to the loss before income taxes, partially offset by non-deductible goodwill impairment.
Net loss for the third quarter of fiscal 2026 was $(156.6) million, or $(3.15) per diluted share, as compared to $(1.8) million, or $(0.06) per diluted share, in the prior-year period, respectively. The current quarter was negatively impacted by goodwill impairment charges of $151.3 million, or $2.95 per diluted share, and $43.9 million, or $0.70 per diluted share, of intangible amortization and other related non-cash purchase accounting expenses as compared to $4.8 million, or $0.13 per diluted share, in the third quarter of fiscal 2025.
Non-GAAP adjusted EBITDA for the third quarter of fiscal 2026 was $44.5 million and non-GAAP earnings per diluted share were $0.64, as compared to $21.8 million and $0.30, respectively, for the third quarter of fiscal 2025.
BACKLOG
As of January 31, 2026, 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.
FISCAL 2026 — OUTLOOK FOR THE FULL YEAR
For fiscal year 2026, the Company now expects revenue of between $1.85 billion and $1.95 billion, net loss of between $(218) million and $(201) million, non-GAAP adjusted EBITDA of between $265 million and $285 million, loss per diluted share of between $(4.44) and $(4.10) and non-GAAP earnings per diluted share, which excludes amortization of intangible assets, other non-cash purchase accounting expenses, goodwill impairment, equity securities investments gains or losses, and equity method income or loss of between $2.75 and $3.10.
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, March 10, 2026, 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.
2
Participant registration URL:
https://register-conf.media-server.com/register/BI42ffd1d0f4154de3b038f735824a329c
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 third 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, whether due to restrictions and sanctions imposed by foreign governments or otherwise; 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 any U.S. government shutdown; our ability to realize the anticipated benefits of the BlueHalo transaction or other acquisitions; 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 or in conjunction with 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
3
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.
– Financial Tables Follow –
4
AeroVironment, Inc.
Consolidated Statements of Operations
(In thousands except share and per share data)
| | Three Months Ended | | Nine Months Ended | | ||||||||
| | January 31, | | January 25, | | January 31, | | January 25, | | ||||
| | 2026 | | 2025 | | 2026 | | 2025 |
| ||||
| | (Unaudited) | | (Unaudited) | | ||||||||
Revenue: | | | | | | | | | | | | | |
Product sales | | $ | 277,814 | | $ | 139,753 | | $ | 916,384 | | $ | 450,488 | |
Contract services | |
| 130,231 | | | 27,883 | |
| 418,845 | | | 95,089 | |
| |
| 408,045 | | | 167,636 | |
| 1,335,229 | | | 545,577 | |
Cost of sales: | | | | | | | | | | | | | |
Product sales | |
| 199,973 | | | 81,001 | |
| 672,057 | | | 253,572 | |
Contract services | |
| 109,278 | | | 23,436 | |
| 365,155 | | | 73,701 | |
| |
| 309,251 | | | 104,437 | |
| 1,037,212 | | | 327,273 | |
Gross margin: | |
| | | | | |
| | | | | |
Product sales | | | 77,841 | | | 58,752 | | | 244,327 | | | 196,916 | |
Contract services | | | 20,953 | | | 4,447 | | | 53,690 | | | 21,388 | |
| | | 98,794 | | | 63,199 | | | 298,017 | | | 218,304 | |
Selling, general and administrative | |
| 99,414 | | | 43,788 | |
| 329,026 | | | 115,499 | |
Research and development | |
| 27,112 | | | 22,498 | |
| 96,219 | | | 75,827 | |
Impairment of goodwill | | | 151,306 | | | — | | | 151,306 | | | — | |
(Loss) income from operations | |
| (179,038) | | | (3,087) | |
| (278,534) | | | 26,978 | |
Other income (loss): | | | | | | | | | | | | | |
Interest income (expense), net | |
| 3,696 | | | (248) | |
| (9,050) | | | (1,177) | |
Other (expense) income, net | |
| (400) | | | 976 | |
| 6,912 | | | 758 | |
(Loss) income before income taxes | |
| (175,742) | | | (2,359) | |
| (280,672) | | | 26,559 | |
(Benefit from) provision for income taxes | |
| (19,486) | | | (605) | |
| (36,960) | | | 659 | |
Equity method investment (loss) income, net of tax | | | (295) | | | — | | | 2,688 | | | 1,055 | |
Net (loss) income | | $ | (156,551) | | $ | (1,754) | | $ | (241,024) | | $ | 26,955 | |
Net (loss) income per share | | | | | | | | | | | | | |
Basic | | $ | (3.15) | | $ | (0.06) | | $ | (4.94) | | $ | 0.96 | |
Diluted | | $ | (3.15) | | $ | (0.06) | | $ | (4.94) | | $ | 0.96 | |
Weighted-average shares outstanding: | | | | | | | | | | | | | |
Basic | |
| 49,741,441 | | | 28,031,901 | |
| 48,761,481 | | | 28,001,089 | |
Diluted | |
| 49,741,441 | | | 28,031,901 | |
| 48,761,481 | | | 28,171,089 | |
5
AeroVironment, Inc.
Consolidated Balance Sheets
(In thousands except share data)
| | January 31, | | April 30, | | ||
| | 2026 | | 2025 | | ||
Assets | | | | | | | |
Current assets: | | | | | | | |
Cash and cash equivalents | | $ | 289,878 | | $ | 40,862 | |
Short-term investments | | | 297,259 | | | — | |
Accounts receivable, net of allowance for credit losses of $2,213 at January 31, 2026 and $203 at April 30, 2025 | |
| 201,046 | |
| 101,967 | |
Unbilled receivables and retentions | |
| 528,557 | |
| 290,009 | |
Inventories, net | |
| 299,277 | |
| 144,090 | |
Income taxes receivable | |
| 43,031 | |
| 622 | |
Prepaid expenses and other current assets | |
| 45,199 | |
| 28,966 | |
Total current assets | |
| 1,704,247 | |
| 606,516 | |
Long-term investments | | | 61,659 | | | 31,627 | |
Property and equipment, net | |
| 158,867 | |
| 50,704 | |
Operating lease right-of-use assets | | | 91,810 | | | 31,879 | |
Deferred income taxes | |
| — | |
| 61,460 | |
Intangibles, net | | | 925,925 | | | 48,711 | |
Goodwill | | | 2,461,714 | | | 256,781 | |
Other assets | |
| 49,414 | |
| 32,889 | |
Total assets | | $ | 5,453,636 | | $ | 1,120,567 | |
Liabilities and stockholders’ equity | | | | | | | |
Current liabilities: | | | | | | | |
Accounts payable | | $ | 109,633 | | $ | 72,462 | |
Wages and related accruals | |
| 75,765 | |
| 44,253 | |
Customer advances | |
| 67,543 | |
| 15,952 | |
Current operating lease liabilities | | | 15,569 | | | 10,479 | |
Income taxes payable | | | 320 | | | 356 | |
Other current liabilities | |
| 40,489 | |
| 28,659 | |
Total current liabilities | |
| 309,319 | |
| 172,161 | |
Long-term debt | | | 727,877 | | | 30,000 | |
Non-current operating lease liabilities | | | 82,567 | | | 23,812 | |
Other non-current liabilities | | | 1,995 | | | 2,026 | |
Liability for uncertain tax positions | |
| 6,061 | |
| 6,061 | |
Deferred income taxes | | | 53,627 | | | — | |
Commitments and contingencies | | | | | | | |
Stockholders’ equity: | | | | | | | |
Preferred stock, $0.0001 par value: | | | | | | | |
Authorized shares—10,000,000; none issued or outstanding at January 31, 2026 and April 30,2025 | |
| — | |
| — | |
Common stock, $0.0001 par value: | | | | | | | |
Authorized shares—100,000,000 | | | | | | | |
Issued and outstanding shares—49,934,738 shares at January 31, 2026 and 28,267,517 shares at April 30, 2025 | |
| 6 | |
| 4 | |
Additional paid-in capital | |
| 4,244,416 | |
| 618,711 | |
Accumulated other comprehensive loss | |
| (5,514) | |
| (6,514) | |
Retained earnings | |
| 33,282 | |
| 274,306 | |
Total stockholders’ equity | | | 4,272,190 | | | 886,507 | |
Total liabilities and stockholders’ equity | | $ | 5,453,636 | | $ | 1,120,567 | |
6
AeroVironment, Inc.
Consolidated Statements of Cash Flows
(In thousands)
| | Nine Months Ended | | ||||
| | January 31, | | January 25, |
| ||
| | 2026 | | 2025 | | ||
Operating activities | | | | | | | |
Net (loss) income | | $ | (241,024) | | $ | 26,955 | |
Adjustments to reconcile net (loss) income to cash used in operating activities: | | | | | | | |
Depreciation and amortization | |
| 202,960 | |
| 27,144 | |
Impairment of goodwill | | | 151,306 | | | — | |
Gain from equity method investments | | | (2,688) | | | (1,055) | |
Amortization of debt issuance costs | | | 10,273 | | | 1,121 | |
Provision for credit losses | |
| 1,867 | |
| (64) | |
Reserve for inventory excess and obsolescence | | | 5,125 | | | 2,025 | |
Other non-cash expense, net | | | 3,543 | | | 1,810 | |
Non-cash lease expense | | | 18,889 | | | 7,379 | |
Loss (gain) on foreign currency transactions | |
| 264 | |
| (22) | |
Unrealized gain on available-for-sale equity securities, net | | | (7,446) | | | (1,187) | |
Deferred income taxes | | | (4,334) | | | — | |
Stock-based compensation | |
| 28,065 | |
| 15,518 | |
Loss on disposal of property and equipment | | | 1,149 | | | 201 | |
Amortization of debt securities | | | (661) | | | — | |
Changes in operating assets and liabilities, net of acquisitions: | | | | | | | |
Accounts receivable | |
| (19,892) | |
| (11,095) | |
Unbilled receivables and retentions | |
| (142,088) | |
| (30,172) | |
Inventories | |
| (92,721) | |
| (1,167) | |
Income taxes receivable | | | (38,646) | | | (14,738) | |
Prepaid expenses and other assets | |
| (13,287) | |
| (9,314) | |
Accounts payable | |
| (17,397) | |
| (1,359) | |
Other liabilities | | | (17,174) | | | (13,034) | |
Net cash used in operating activities | |
| (173,917) | |
| (1,054) | |
Investing activities | | | | | | | |
Acquisition of property and equipment | |
| (46,134) | |
| (14,292) | |
Contributions in equity method investments | | | (3,243) | | | (2,309) | |
Purchase of available-for-sale investments | | | (335,183) | | | — | |
Redemption of available-for-sale investments | | | 21,500 | | | | |
Acquisition of capitalized software to be sold | | | (17,275) | | | — | |
Business acquisitions, net of cash acquired | | | (844,586) | | | — | |
Net cash used in investing activities | |
| (1,224,921) | |
| (16,601) | |
Financing activities | | | | | | | |
Principal payments of term loan | | | (700,000) | | | (28,000) | |
Principal payments of revolver | | | (265,000) | | | — | |
Proceeds from long-term debt | | | 693,202 | | | — | |
Proceeds from revolver, net of creditor costs | | | 233,939 | | | 25,000 | |
Proceeds from shares issued, net of underwriter costs | | | 968,515 | | | — | |
Proceeds from convertible debt, net of underwriter costs | | | 726,944 | | | — | |
Payment of debt issuance costs | | | (2,445) | | | (1,056) | |
Payment of equity issuance costs | | | (1,388) | | | (365) | |
Holdback and retention payments for business acquisition | | | — | | | (390) | |
Tax withholding payment related to net settlement of equity awards | | | (10,900) | | | (4,064) | |
Employee stock purchase plan contributions | | | 4,355 | | | — | |
Exercise of stock options | | | — | | | 506 | |
Other | | | (12) | | | (19) | |
Net cash provided by (used in) financing activities | |
| 1,647,210 | |
| (8,388) | |
Effects of currency translation on cash and cash equivalents | | | 644 | | | (258) | |
Net increase (decrease) in cash and cash equivalents | |
| 249,016 | |
| (26,301) | |
Cash and cash equivalents at beginning of period | |
| 40,862 | |
| 73,301 | |
Cash and cash equivalents at end of period | | $ | 289,878 | | $ | 47,000 | |
Supplemental disclosures of cash flow information | | | | | | | |
Cash paid, net during the period for: | | | | | | | |
Income taxes | | $ | 4,335 | | $ | 19,342 | |
Interest | | $ | 12,535 | | $ | 1,196 | |
Non-cash activities | | | | | | | |
Issuance of common stock for business acquisition | | $ | 2,640,365 | | $ | — | |
Unrealized loss on available-for-sale investments | | $ | (15) | | $ | — | |
Change in foreign currency translation adjustments | | $ | 1,015 | | $ | (605) | |
Acquisitions of property and equipment included in accounts payable | | $ | 4,961 | | $ | 1,608 | |
7
AeroVironment, Inc.
Reportable Segment Results (Unaudited)
(In thousands)
| | Three Months Ended January 31, 2026 | |||||||
| | AxS | | SCDE | | Total | |||
Revenue | | $ | 278,744 | | $ | 129,301 | | $ | 408,045 |
| | | | | | | | | |
Segment adjusted EBITDA | | $ | 46,167 | | $ | (1,691) | | $ | 44,476 |
| | Three Months Ended January 25, 2025 | |||||||
| | AxS | | SCDE | | Total | |||
Revenue | | $ | 167,636 | | $ | — | | $ | 167,636 |
| | | | | | | | | |
Segment adjusted EBITDA | | $ | 21,766 | | $ | — | | $ | 21,766 |
AeroVironment, Inc.
Reconciliation of non-GAAP Earnings per Diluted Share (Unaudited)
| | | | | | | | | | | ||
| | Three Months Ended | | Three Months Ended | | Nine Months Ended | | Nine Months Ended | ||||
| | January 31, 2026 | | January 25, 2025 | | January 31, 2026 | | January 25, 2025 | ||||
| | | | | | | | | | | | |
(Loss) earnings per diluted share | | $ | (3.15) | | $ | (0.06) | | $ | (4.94) | | $ | 0.96 |
Amortization of acquired intangible assets and other purchase accounting adjustments | | | 0.70 | | | 0.13 | | | 2.78 | | | 0.40 |
Acquisition-related expenses | | | 0.11 | | | 0.28 | | | 0.76 | | | 0.39 |
Equity method and equity securities investments activity, net | | | 0.03 | | | (0.05) | | | (0.18) | | | (0.08) |
Goodwill impairment | | | 2.95 | | | — | | | 3.00 | | | — |
Earnings per diluted share as adjusted (non-GAAP) | | $ | 0.64 | | $ | 0.30 | | $ | 1.42 | | $ | 1.67 |
Reconciliation of non-GAAP adjusted EBITDA (Unaudited)
| | | | | | | | | | | | |
| | Three Months Ended | | Three Months Ended | | Nine Months Ended | | Nine Months Ended | ||||
(in millions) | | January 31, 2026 | | January 25, 2025 | | January 31, 2026 | | January 25, 2025 | ||||
Net (loss) income | | $ | (156.6) | | $ | (1.8) | | $ | (241.0) | | $ | 27.0 |
Interest expense, net | | | (3.7) | | | 0.2 | | | 9.1 | | | 1.2 |
Provision for income taxes | | | (19.5) | | | (0.6) | | | (37.0) | | | 0.7 |
Depreciation and amortization | | | 54.6 | | | 9.4 | | | 203.0 | | | 27.1 |
EBITDA (non-GAAP) | | | (125.2) | | | 7.2 | | | (65.9) | | | 56.0 |
Amortization of cloud computing arrangement implementation | | | 1.7 | | | 0.7 | | | 3.7 | | | 1.9 |
Stock-based compensation | | | 8.1 | | | 5.4 | | | 28.1 | | | 15.5 |
Acquisition-related expenses | | | 6.9 | | | 10.0 | | | 38.9 | | | 13.7 |
Equity method and equity securities investments activity, net | | | 1.7 | | | (1.5) | | | (10.1) | | | (2.2) |
Goodwill impairment | | | 151.3 | | | — | | | 151.3 | | | — |
Adjusted EBITDA (non-GAAP) | | $ | 44.5 | | $ | 21.8 | | $ | 146.0 | | $ | 84.9 |
8
Reconciliation of Forecast Earnings per Diluted Share (Unaudited)
| | | |
| | Fiscal year ending | |
| | April 30, 2026 | |
Forecast loss per diluted share | | $ | (4.44) - (4.10) |
Amortization of acquired intangible assets and other purchase accounting adjustments | | | 3.58 |
Acquisition-related expenses | | | 0.81 |
Equity method and equity securities investments activity, net | | | (0.19) |
Goodwill impairment | | | 2.99 |
Forecast earnings per diluted share as adjusted (non-GAAP) | | $ | 2.75 - 3.10 |
Reconciliation of 2026 Forecast and Fiscal Year 2025 Actual Non-GAAP adjusted EBITDA (Unaudited)
| | | | | | |
| | Fiscal year ending | | Fiscal year ended | ||
(in millions) | | April 30, 2026 | | April 30, 2025 | ||
Net (loss) income | | $ | (218) - (201) | | $ | 44 |
Interest expense, net | | | 7 | | | 2 |
(Benefit from) provision for income taxes | | | (25) - (22) | | | 1 |
Depreciation and amortization | | | 268 | | | 41 |
EBITDA (non-GAAP) | | | 32 - 52 | | | 88 |
Amortization of cloud computing arrangement implementation | | | 6 | | | 2 |
Stock-based compensation | | | 42 | | | 22 |
Acquisition-related expenses | | | 44 | | | 19 |
Equity method and equity securities investments activity, net | | | (10) | | | (5) |
Goodwill impairment | | | 151 | | | 18 |
Legal accrual | | | — | | | 2 |
Adjusted EBITDA (non-GAAP) | | $ | 265 - 285 | | $ | 146 |
9
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.
10
/////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////
For additional media and information, please follow us
CONTACT
Denise Pacioni
+1 805-795-4108
ir@avinc.com
https://investor.avinc.com/contact-and-faq/contact-us
11
| THIRD QUARTER FISCAL YEAR 2026 Earnings Conference Call MARCH 10, 2026 |
| [2] © 2026 AEROVIRONMENT, INC. Safe Harbor Statement This presentation 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, whether due to restrictions and sanctions imposed by foreign governments or otherwise; 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 any U.S. government shutdown; our ability to realize the anticipated benefits of the BlueHalo transaction or other acquisitions; 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 or in conjunction with 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. |
| [3] © 2026 AEROVIRONMENT, INC. AV continues to execute on expanding manufacturing capacity and shifting certain programs to commercial product solutions with improved profitability and broader market adoption Third quarter revenue of $408 million driven by strong 38% organic growth Third quarter funded backlog of $1.1 billion and total awards of $4.5 billion1 for the first nine months of FY26 setting the stage for a strong fourth quarter and start to FY27 Slightly lowering FY26 guidance with expected revenues between $1.85 billion and $1.95 billion, Adj EBITDA between $265 million and $285 million2 and Adj EPS between $2.75 and $3.102 Third Quarter Fiscal Year 2026 Key Messages 1REFER TO APPENDIX F FOR DEFINITIONS OF AWARDS, BOOKINGS, FUNDED BACKLOG AND UNFUNDED BACKLOG 2REFER TO APPENDICES D & E FOR RECONCILIATION TO FY26 GUIDANCE FOR NET LOSS BETWEEN ($218M) AND ($201M) AND GAAP EPS BETWEEN ($4.44) AND ($4.10) |
| [4] © 2026 AEROVIRONMENT, INC. Third Quarter Fiscal Year 2026 Results 1 Q3 GAAP NET LOSS WAS ($156.6M). REFER TO ADJUSTED EBITDA RECONCILIATION ON APPENDIX C. 2 Q3 GAAP EPS WAS ($3.15) PER DILUTED SHARE. REFER TO RECONCILIATION OF NON-GAAP EARNINGS PER DILUTED SHARE ON APPENDIX A. 3 GAAP SG&A WAS 24% of Q3 REVENUE. REFER TO GAAP TO NON-GAAP RECONCILIATION OF ADJUSTED SG&A ON APPENDIX G. 4 UNFUNDED BACKLOG INCLUDES A $1,493.2 MILLION OF UNEXERCISED OPTIONS RELATED TO THE SCAR PROGRAM WHICH ARE NO LONGER EXPECTED TO BE AWARDED. Metric Q3 FY26 Notes Revenue $408.0 M o 38% YoY organic revenue growth o Adjusted SG&A = 15% of revenue3 o IRAD = 7% of revenue GAAP Gross Margin $98.8 M o Record third-quarter gross margin driven by strong AxS sales Non-GAAP Adjusted EBITDA1 $44.5 M o Lower sequential adjusted EBITDA due to overall decrease in revenues caused by order timing and lower-than-anticipated SCDE contributions Non-GAAP EPS (diluted)2 $0.64 o Lower revenues due to order timing and lower-than-anticipated contributions from SCDE Funded Backlog $1.1 B o Continued strength in funded backlog driven by AxS Unfunded Backlog $3.0 B o Unfunded backlog includes $1.4 B of SCAR related work4 |
| [5] © 2026 AEROVIRONMENT, INC. $383.4 $494.1 $454.7 $472.5 $408.0 $- $100.0 $200.0 $300.0 $400.0 $500.0 $600.0 Q3 FY25 Q4 FY25 Q1 FY26 Q2 FY26 Q3 FY26 AxS $223.4 $330.6 $285.3 $301.6 $278.7 SCDE $160.0 $163.5 $169.4 $170.9 $129.3 Revenue Mix, Adjusted Profitability and Non-GAAP EPS 1 PRO FORMA FY25 QUARTERLY REVENUE (unaudited) INCLUDES BLUEHALO REVENUES FROM BEFORE ACQUISITION. 2 Q3 FY26 GAAP PRODUCT MARGIN: 28% | SERVICE MARGIN 16%. REFER TO GAAP TO NON-GAAP RECONCILIATION OF GROSS MARGIN ON APPENDIX B. 3 Q3 GAAP EPS WAS ($3.15) PER DILUTED SHARE. REFER TO RECONCILIATION OF NON-GAAP DILUTED EARNINGS PER SHARE ON APPENDIX A. Quarterly Revenue by Segment1 AxS: AUTONOMOUS SYSTEMS SCDE: SPACE, CYBER AND DIRECTED ENERGY 36% 33% 32% 13% 14% 17% 29% 27% 27% 0% 20% 40% Q1 FY26 Q2 FY26 Q3 FY26 Adj Product Margin Adj Service Margin Total Adj Gross Margin $0.30 $0.64 $- $0.20 $0.40 $0.60 $0.80 $1.00 Q3 FY25 Q3 FY26 Q3 FY26 Revenue: 68% Product | 32% Services Adjusted Gross Margin2 Non-GAAP Diluted EPS3 [$M] |
| [6] © 2026 AEROVIRONMENT, INC. Year over Year Revenue Comparison by Operating Group 1INCLUDES FY25 PRO FORMA REVENUE (unaudited) FROM BLUEHALO [$M] Pro Forma1 Q3 FY25 Actual Q3 FY26 Variance vs. Prior Year [$] Variance vs. Prior Year [%] Uncrewed Aircraft Systems $ 60 $ 90 $ 30 50.3 % Precision Strike & Defensive Systems $ 130 $ 158 $ 28 21.4 % Other $ 33 $ 31 $ [2] -7.1 % AxS TOTAL $ 223 $ 279 $ 56 24.8 % Space & Directed Energy $ 62 $ 53 $ [9] -13.9 % Cyber & Mission Systems $ 98 $ 76 $ [22] -22.5 % SCDE TOTAL $ 160 $ 129 $ [31] -19.2 % COMBINED TOTAL $ 383 $ 408 $ 25 6.4 % |
| [7] © 2026 AEROVIRONMENT, INC. Revenue Comparison by Operating Group Through End of Third Quarter 1INCLUDES FY25 PRO FORMA REVENUE (unaudited) FROM BLUEHALO [$M] Pro Forma1 Fiscal YTD Q3 FY25 Actual Fiscal YTD Q3 FY26 Variance vs. Prior Fiscal YTD[$] Variance vs. Prior Fiscal YTD[%] Uncrewed Aircraft Systems $ 249 $ 243 $ [6] -2.4 % Precision Strike & Defensive Systems $ 342 $ 515 $ 173 50.6 % Other $ 128 $ 108 $ [19] -14.8 % AxS TOTAL $ 719 $ 866 $ 148 20.6 % Space & Directed Energy $ 171 $ 200 $ 29 17.0 % Cyber & Mission Systems $ 311 $ 269 $ [42] -13.5 % SCDE TOTAL $ 482 $ 469 $ [13] -2.7 % COMBINED TOTAL $ 1,201 $ 1,335 $ 135 11.2 % |
| [8] © 2026 AEROVIRONMENT, INC. Updated Guidance: Fiscal 2026 Outlook 1 Q3 GAAP EPS OF $(3.15). REFER TO GAAP EPS RECONCILIATION ON APPENDIX A. 2 Q3 GAAP NET LOSS OF $(156.6M). REFER TO ADJUSTED EBITDA RECONCILIATION ON APPENDIX C. 3 FORECAST FULL YEAR GAAP NET LOSS BETWEEN ($218M) AND ($201M). REFER TO FORECASTED NON-GAAP ADJUSTED EBITDA RECONCILIATION ON APPENDIX E. 4 FORECAST FULL YEAR GAAP NET LOSS PER DILUTED SHARE BETWEEN (4.44) AND (4.10). REFER TO FORECASTED NON-GAAP EPS RECONCILIATION ON APPENDIX D. 5 FORECAST FULL YEAR GAAP SG&A AS A PERCENT OF REVENUE BETWEEN 22% AND 23%. REFER TO GAAP TO NON-GAAP RECONCILIATION OF ADJUSTED SG&A ON APPENDIX G. 6 GUIDANCE RANGE REPRESENTS A 12% YOY PRO FORMA REVENUE (unaudited) GROWTH TO THE MID-POINT VS. PRO FORMA FY25 REVENUE OF $1.69 BILLION. As of 03/10/2026 FY26 Q3 Results FY26 Guidance Notes / Assumptions Revenue $408.0 M $1.85 B to $1.95 B6 o Lower due to order timing and lower-than-anticipated contributions from SCDE Adjusted EBITDA 10.9% of Revenue $44.5 M2 $265 M to $285 M3 ~14.5% at mid-point3 o IRAD 6% to 7% o Adj SG&A 12% to 14% (excludes intangible amortization and deal and integration expenses) 5 o Stock based compensation of approx. $42 million for FY26 o Adj EBITDA as % of revenue = 21-24% in Q4 Non-GAAP Earnings Per Share (diluted) $0.641 $2.75 to $3.104 o Lower revenue due to order timing and lower-than-anticipated contributions from SCDE Capital Expenditures 4.7% 5% to 7% o Includes cloud implementation capital expenditures o Includes software capitalization o Includes integration-related capital expenditures Other o Deal & integration expenses $40 M - $45 M |
| [9] © 2026 AEROVIRONMENT, INC. 454.7 927.2 1,335.2 1,003.8 855.7 675.7 434.9 112.0 115.5 43.8 53.3 245.4 175.4 186.8 36.8 $- $500 $1,000 $1,500 $2,000 $2,500 Q4 FY25 (6/24/25) Q1 FY26 (9/9/25) Q2 FY26 (12/9/25) Q3 FY26 (3/10/26) Q4 FY26 Year-to-Date - FY26 Funded Backlog - FY26 Anticipated Qtr-to-Date Bookings - FY26 Anticipated Unfunded Backlog - FY26 Anticipated FY26 Revenue Visibility 1BASED ON MIDPOINT OF GUIDANCE RANGE OF $1.85 BILLION TO $1.95 BILLION. 2BASED ON MIDPOINT OF THEN CURRENT GUIDANCE RANGE OF $1.95 BILLION TO $2.00 BILLION. 3BASED ON MIDPOINT OF THEN CURRENT GUIDANCE RANGE OF $1.90 BILLION TO $2.00 BILLION. Company visibility supports revenue guidance range 70% visibility3 GUIDANCE RANGE $1.85 B - $1.95 B 82% visibility3 93% visibility2 IN MILLIONS 98% visibility1 |
| [10] © 2026 AEROVIRONMENT, INC. Q4 Major Third Quarter Contract Activity _UNCREWED AIRCRAFT SYSTEMS $13M Contract award to deliver P550s for US Army’s LRR Program Program: LRR Program: USCG RAS _AUTONOMOUS SYSTEMS $5M Contract to deliver Defender ROVs as part of Coast Guard modernization plan _CYBER & MISSION SOLUTIONS $75M Air Force task order to develop next-generation biotechnology Program: FRESH Program: Lethal Unmanned Systems _PRECISION STRIKE & DEFENSIVE SYSTEMS $186M1 Task order booking under $990M IDIQ for delivery of Switchblades to US Army Program: GENESIS _CYBER & MISSION SOLUTIONS $97M Contract to deliver generative missile simulator environment to US Army 1$186M BOOKING PART OF $990M AWARD FROM AUGUST 2024 _PRECISION STRIKE & DEFENSIVE SYSTEMS $23M FFP modified award for additional deliveries of Titan SV and spare parts Program: USMC O-CsUAS Q3 |
| FINANCIAL TABLES |
| [12] © 2026 AEROVIRONMENT, INC. Reconciliation of Non-GAAP Earnings per Diluted Share (unaudited) APPENDIX A - FINANCIAL TABLES Three months ended January 25, 2025 Three months ended January 31, 2026 Loss per diluted share $ (0.06) $ (3.15) Acquisition-related expenses $ 0.13 $ 0.11 Amortization of acquired intangible assets and other purchase accounting adjustments $ 0.28 $ 0.70 Equity Method and equity securities investments activity, net $ (0.05) $ 0.03 Goodwill impairment $ 0.00 $ 2.95 Earnings per diluted share as adjusted (non-GAAP) $ 0.30 $ 0.64 |
| [13] © 2026 AEROVIRONMENT, INC. GAAP to NON-GAAP Reconciliation of Adjusted Gross Margin APPENDIX B - FINANCIAL TABLES Products 1st Quarter FY26 2nd Quarter FY26 3rd Quarter FY26 Gross Margin $ 82,846 $ 83,640 $ 77,841 Intangible Amortization $ 31,245 $ 23,482 $ 11,022 Adjusted Gross Margin $ 114,901 $ 107,122 $ 88,863 Adj. Prod GM% 36% 33% 32% Services Gross Margin $ 12,272 $ 20,465 $ 20,953 Intangible Amortization $ 6,134 $ 764 $ 1,661 Adjusted Gross Margin $ 18,406 $ 21,229 $ 22,614 Adj. Service GM% 13% 14% 17% [$Thousands] |
| [14] © 2026 AEROVIRONMENT, INC. Net Income to EBITDA and non-GAAP Adjusted EBITDA Reconciliation APPENDIX C - FINANCIAL TABLES 1st Quarter FY26 2nd Quarter FY26 3rd Quarter FY26 Net loss from continued operations $ (67.4) $ (17.1) $ (156.6) Interest expense, net $ 17.4 $ (4.7) $ (3.7) Tax benefit $ (15.2) $ (2.3) $ (19.5) Depreciation and amortization $ 90.3 $ 58.1 $ 54.6 EBITDA (Non-GAAP) $ 25.1 $ 34.0 $ (125.2) Cloud amortization $ 0.9 $ 1.4 $ 1.7 Stock-based compensation $ 11.4 $ 8.6 $ 8.1 Acquisition-related expenses $ 23.7 $ 8.3 $ 6.9 Equity method and equity security investment activity $ (4.5) $ (7.3) $ 1.7 Goodwill Impairment $ 0.0 $ 0.0 $ 151.3 Adj. EBITDA (Non-GAAP) $ 56.6 $ 45.0 $ 44.5 [$M] |
| [15] © 2026 AEROVIRONMENT, INC. GAAP to Non-GAAP Reconciliation of Earnings per Diluted Share (Unaudited) APPENDIX D - FINANCIAL TABLES Fiscal year ended April 30, 2025 Forecast fiscal year ended April 30, 2026 Earnings (loss) per diluted share $ 1.55 $ (4.44) - (4.10) Acquisition-related expenses $ 0.54 $ 0.81 Amortization of acquired intangible assets and other purchase accounting adjustments $ 0.66 $ 3.58 Legal accrual $ 0.06 $ 0.00 Equity Method and equity securities investments activity, net $ (0.18) $ (0.19) Goodwill impairment $ 0.65 $ 2.99 Earnings per diluted share as adjusted (non-GAAP) $ 3.28 $ 2.75 - 3.10 |
| [16] © 2026 AEROVIRONMENT, INC. Reconciliation of 2026 Forecast and Fiscal Year 2025 Non-GAAP adjusted EBITDA (Unaudited) APPENDIX E - FINANCIAL TABLES [$M] Fiscal year ended April 30, 2025 Forecast fiscal year ended April 30, 2026 Net (loss) Income from continued operations $ 44 $ (218) – (201) Interest Expense, net $ 2 $ 7 Tax (benefit) / provision $ 1 $ (25) – (22) Depreciation and amortization $ 41 $ 268 EBITDA (Non-GAAP) $ 88 $ 32– 52 Cloud amortization $ 2 $ 6 Stock-based compensation $ 22 $ 42 Acquisition-related expenses $ 19 $ 44 Goodwill Impairment $ 18 $ 151 Equity method and equity security investment activity $ (5) $ (10) Legal Accrual $ 2 $ 0 Adj. EBITDA (Non-GAAP) $ 146 $ 265 – 285 |
| [17] © 2026 AEROVIRONMENT, INC. AVAV Contracting Related Definitions APPENDIX F - FINANCIAL TABLES Term Definition Q3 FY26 Results Award The total potential value of a contract at time of announcement, including all base period value, priced options, expected follow-on periods, and any anticipated modifications if they are contractually priced. Award represents the maximum economic opportunity associated with the contract but does not imply full near-term funding or customer obligation. $0.26B Bookings The value of new authorized/exercised contract awards and contract modifications received during the reporting period. Bookings typically include the total contract value for new awards and the incremental value of modifications. Bookings include authorized contract values where the customer has provided contractual authority to perform work, even if funding has not yet been obligated, but does not include the unauthorized portion of TCV. $0.37B (QTD) $2.1B (YTD)2 Funded Backlog The portion of backlog for which the customer has provided appropriated, obligated funding that the company is currently authorized to spend. Funded backlog is the most “cash-certain” portion of backlog, representing work the company can execute immediately and bill against. This is often driven by U.S. DoD funding obligations and contract increments. $1.1B Unfunded Backlog The remaining value of awarded contracts for which the customer has not yet obligated funding. These amounts reflect future expected funding—commonly tied to multi-year programs where annual appropriations, options, or increments are still pending. Unfunded backlog is typical in large defense programs and is converted to funded backlog as appropriations and task orders are executed. $3.0B1 Book-to-Bill Ratio The book-to-bill ratio measures the relationship between the value of new bookings in a given period (Fiscal YTD) and the revenue billed or recognized over that same period. Book-to-bill ratio is calculated by dividing period bookings by period revenues. 1.60 (YTD)2 1UNFUNDED BACKLOG INCLUDES A $1,493.2 MILLION OF UNEXERCISED OPTIONS RELATED TO THE SCAR PROGRAM WHICH ARE NO LONGER EXPECTED TO BE AWARDED. 2YEAR-TO-DATE TOTAL FOR THE FISCAL 9 MONTHS ENDED JANUARY 31, 2026. |
| [18] © 2026 AEROVIRONMENT, INC. GAAP to non-GAAP Reconciliation of Adjusted SG&A (Unaudited) APPENDIX G - FINANCIAL TABLES [$Thousands] 3rd Quarter FY25 3rd Quarter FY26 FY25 FY26 Full Year Forecast SG&A Reconciliation Revenue $ 167,636 $ 408,045 $ 820,627 $ 1,850,000 - 1,950,0001 Total SG&A $ 43,788 $ 99,414 $ 158,753 $ 429,000 - 434,000 Total SG&A % of Revenue 26% 24% 19% 22% - 23% Acquisition Expense $ 10,016 $ 6,890 $ 19,291 $ 40,000 - 45,000 Intangible Amortization $ 1,075 $ 31,181 $ 4,001 $ 127,000 - 130,000 Adjusted SG&A $ 32,697 $ 61,343 $ 135,461 $ 262,000 - 259,000 Adjusted SG&A % of Revenue 20% 15% 17% 13% - 14% 1BASED ON REVENUE GUIDANCE RANGE OF $1.85 TO $1.95 BILLION. |
| [19] © 2026 AEROVIRONMENT, INC. Q3 FY26 Total Unfunded Backlog Roll Forward APPENDIX H - FINANCIAL TABLES Total Unfunded Backlog [$M] Total Roll Forward Q2 FY26 Unfunded Backlog as of 11/1/2025 $ 3,034.1 Q3 FY26 Expired Unfunded Backlog $ (2.9) Q3 FY26 Orders Reducing Unfunded Backlog $ (85.0) Q3 FY26 New Unfunded Bookings $ 22.6 Total Q3 FY26 Unfunded Backlog as of 1/31/20261 $ 2,968.8 1 UNFUNDED BACKLOG INCLUDES A $1,493.2 MILLION OF UNEXERCISED OPTIONS RELATED TO THE SCAR PROGRAM WHICH ARE NO LONGER EXPECTED TO BE AWARDED. |
