Key Takeaways:
AeroVironment Inc. reported fiscal first-quarter adjusted earnings of $0.59 a share, nearly double the $0.30 Wall Street consensus, sending the drone maker's stock up 4.05% to $146.50 in after-hours trading.
"This past quarter was a great start to our fiscal year 2027," Chief Executive Officer Wahid Nawabi said on the company's earnings call, citing record revenue, record funded backlog and multiple contract wins.
Revenue for the quarter ended July 2026 reached a record $480.5 million, topping the $459.9 million consensus by 4.5% and rising 5.7% from a year earlier, according to the company's Sept. 9 release. Adjusted EPS climbed 84% from $0.32 in the prior-year quarter. Adjusted EBITDA was $53 million, or 11% of revenue, and adjusted gross margin widened to 30% from 29%.
Bookings totaled $683 million for a book-to-bill ratio of 1.4 times, and trailing 12-month bookings exceeded $3 billion. Funded backlog rose 23% from the prior quarter to $1.5 billion, while unfunded backlog of $1.4 billion brought total backlog to about $2.8 billion. The Autonomous Systems segment generated $346 million, or 72% of revenue, up 21% year over year, led by a 71% jump in Uncrewed Aircraft Systems sales to $120 million. The Space, Cyber and Directed Energy segment fell 21% to $134.5 million after the March termination of the SCAR contract, which had contributed $32 million a year earlier.
The quarter's largest award was a nearly $465 million U.S. Army contract for the LOCUST directed-energy system under the Enduring High Energy Laser program, which Nawabi described as the first production contract for directed-energy systems in U.S. military history. AeroVironment also won a $500 million sole-source IDIQ for its Titan MS radio-frequency counter-drone platform, including an initial $80 million award tied to the Golden Dome initiative, plus a $117 million P550 award under the Army's Long Range Reconnaissance program and a $51 million Switchblade 600 contract.
Management reaffirmed fiscal 2027 revenue guidance of $2.125 billion to $2.225 billion, adjusted EBITDA of $305 million to $325 million, and adjusted EPS of $3.02 to $3.34. The company expects a 45-55 revenue split between the first and second halves, with roughly one-third of adjusted EBITDA in the first half. Capital spending is projected at 12% to 14% of revenue, keeping free cash flow negative for the year after a $36 million outflow in the first quarter.
The stock closed the regular session at $140.80, down 5.36%, before the after-hours rebound. Shares have traded near the low end of a 52-week range of $135.20 to $417.86, and Zacks carries a Rank #4 (Sell) on the name after a 24.1% one-month decline.
The beat leaves the shares still about 3.1% below the prior close, and the reaffirmed rather than raised outlook limits the near-term re-rating case. Investors will watch whether Congress approves the next federal budget, which management flagged as the main timing risk to awards, and whether LOCUST margins scale toward Autonomous Systems levels as Albuquerque production ramps.
This article is for informational purposes only and does not constitute investment advice.
