AVAV - Earnings call transcript Q4 2020

Due to licensing restrictions, you must log in to view earnings call transcripts.

Steven Gitlin

Good afternoon, ladies and gentlemen, and welcome to AeroVironment's Fourth Quarter and Full Fiscal Year 2020 Earnings Call. This is Steven Gitlin, Vice President of Investor Relations for AeroVironment. At this time, all participants are in a listen-only mode.

We will conduct a question-and-answer session after management's remarks.

As a reminder, this conference is being recorded for replay purposes.

XXXX. note statements this the within Litigation Act please presented certain Private begin, Reform forward-looking contains the of we that call on information Securities Before meaning of

that Forward-looking or phrases may future statements words performance and believe, or such achievements with contain or limitation, intend, anticipate, include, any expect, results, predict, indicate estimate, or without forecast, imply words as meaning. may similar statement project, plan

but may risks not current on expectations, and and based from governmental uncertainties, statements. involve technological actual our including business, the to, are outside statements Forward-looking materially or and limited assumptions forecasts to competitive, cause economic, of that differ strategy forward-looking results factors control our that

revision is conference to contains Presentations section. this Events website time-sensitive call. at undertakes & reflect XXrd, conference the to presentation with filed in them any content our no of the of information XX-Q contained information Harbor XX-K risks, circumstances statement Company our avinc.com For the The today, on forward-looking after the to with AeroVironment's release a with earnings to or make presentation filed along we as afternoon filed this our to update reports these and today review posted on the the to remarks Safe SEC release in also accurate events obligation any and slide X-K statements and that you today This Form Form SEC and June factors the contained in occurring or Form therein. associated The further only we encourage earnings call periodic the XXXX. discussed with the risk

Officer, and Nawabi from distant a socially Mr. President Financial Senior Officer, manner today Vice McDonnell. are Chief President me Kevin Chief and in Wahid Mr. AeroVironment and Joining Executive

from begin now Nawabi. remarks will with Wahid? Wahid We

Wahid Nawabi

earnings Welcome our quarter XXXX conference Thank and full year you, Steve. fourth call. fiscal to

events. on followed. Ahmaud Breonna like have We the I events many have discuss Floyd, our too fiscal year performance, reflecting and XXXX the on on comment and we and to Taylor, spent Before time Arbery quarter recent would tragic at George others that protests strong fourth of AeroVironment

for us place stakeholders. that and seek team in enriches for our most at large. no results society or our We gender, people racism join diversity regardless political religious the business customers, belief, of or partners, AeroVironment our there race, and of believe best country contributes We other at our be Let the ethnicity, discrimination sexual to strongly to clear, is orientation, view. or business origin, talented

and to from a we take company can have to is there all contribute created citizens. to our others diversity change. However, we country determine and internal people evaluate the that ideas can and steps as to on do can to we all more committee a To positive an that inclusion extend end, justice

next global STEM, especially science, communities connectivity position that we mathematics, and of a those and help scientists. we sensor, or in for engineering are unique the technology, passion innovators, believe As leader technologies, and generation a share our with robotic software to underserved analytics influence in you, in and engineers

work even efforts, all diversify further input environment. we our our the African help of an team. underrepresented welcome plan part diverse initial increase American more groups employees and and As to our of other to outreach achieve us to We have to our inclusive

year included emphasize will call quarter also On results. Now messages X three of our I our earnings today's fiscal and presentation. shifting slide key number full to on fourth

third of a consecutive and top results growth. record year delivered profitable team line double-digit our First,

high our value ability Second, third, X our leadership we the to notable confidence our of opportunities several strong And secured long-term by and our number create fiscal opportunities. and strategic discuss included have which on have positions. progressing our key further by start earnings strengthened slide growth we achievements in fiscal XXXX fourth year. summarizing during performance will year quarter presentation I our

detailed and record and delivered results summary XXXX Full goals our diluted a before of year incredibly record questions. fiscal and revenue from fourth earnings performance I per am our XX% Kevin, produced fourth growth and million. provide and share of Steve in team deliver the year COVID-XX. impact over will increase for continuing XXXX. will year $XXX.X operations Kevin of These take fiscal efforts year Next, $XXX.X of the year. quarter financial XX% $X.XX We more to your $X.XX I fiscal to solid And proud an revenue despite a million I represent full the prior for of then of quarter their was compared year. discuss

the entered of from XXXX included fiscal by year $X.XX record We $XXX.X strong litigation funded reminder, of AeroVironment's a plans compared XXXX operations a for one-time results share. to of Across consecutive fiscal highly earnings diluted settlement one-time million, a share a a a gain backlog from year gain diluted outstanding our profitable $X.XX our Non-GAAP per settlement XXXX, team which continuing and excellent year solutions. reflect fiscal per toward for from diluted excludes our year momentum board, As litigation $X.XX share. XXXX $X.XX for of strong growth. providing per was fiscal year with of differentiated global fourth demand execution

we achievements business which our review of year will slide of I presentation. in many our highlighted in have X fiscal earnings XXXX, Now number

line offers represented economical footprint. fiscal small in products Group new total LE, introduced unmanned X of In and introduced year the October Puma X we enforce expand product which an XX% our Group and leadership position. revenue that systems capabilities aircraft we we and Our

LE them have already have and delivered Puma to for orders multiple received We customers.

the Based operation LE's product additional on this provides year. radio fiscal our we unmatched several our a offers for recorded new gaining We who Recon of the product Raven number minimizing awareness are capabilities the order the during of Mapper, interested edge contract fiscal detectability. We to from very option which end Brigades, contributed SFAB, Continuing system large our the with situational Quantix awards performance strong on or Quantix of April minimize the Puma These Recon, last Army's troops. first award before silent This totaling significant mapping while engaged Force in $XXX for announced U.S. unique actively customers for we the Quantix are unveiled fully in award at load year We and new year. in automated secured capabilities. front UAS on introductions, small to cognitive which year. include battlefield's the a Assistance line Security million revenue.

the domain August, and during unmanned Valley our Aerospace. to successfully of Customs their $X.X and with In systems protect following bid million. addition, Marine we Patrol AeroVironment's won value part up awarded UAS. to helicopters UAS for for agents. small award fiscal million Border million providing a In fleet U.S. us contract X announced in small X UAS $XX.X million the of program another to sustainment facility $XX competitive the from systems, April the border for a we potential VAPOR five-year $XXX.X the of Systems, production of or Army's our XXXX. of the AE June expanding tool FCS, transitioned IDIQ U.S. of February AE Pulse acquisition our the year manufacturing Puma our Simi In XXXX was We The border small secured patrol Army's Puma help U.S. Corp Control a Flight our follow-on contract order in secure

successfully of $XX for systems also a and We contract defense million a VAPOR on delivered XX portion existing to XX customer. the

and XX foreign total business in We of numerous our now international both contracts continents. contracts. In are follow-on solutions customers see military opportunities and multiple international multiple to that direct - - we Military sales have sales and pursuing multiple commercial sustained and customers and with international awards direct a have we commercial sales sorry with won continue other for customers. allied contract our demand sales

revenue missile our U.S. the in Miniature loitering United our Switchblade million systems international long-term orders of represents example, largest contract significant In multi-year the a of now Army Systems our adoption secured LMAMS Kingdom for with opportunity. missile Missile and and or $XXX system. product For first Aerial year line, tactical customer we is Lethal terms

establishes largest first history. This year contract very award at in it single this LMAMS of largest largest The million, award the award, valued a and Marine Army is Switchblade vehicle the Switchblade and as for solution AeroVironment's Switchblade institutionalizing LMAMS $XX making of our a multi-year is operations it contract the and a with because the period, and Corps. funding milestone into significant the planning

ourselves ongoing engagements military U.S. continue An positioning Government forces. to multiple for international approval Switchblade exports We regarding U.S. important their our of to includes position future of allies Switchblade part allies. to with exports that of

Switchblade variant more is user of success systems the As disrupting expansion year. part critical fiscal missile tactical our in we missile our the family of of larger evaluations market, of achieved that multi-billion dollar legacy during the

delivering as compared of As targets, larger on our further significant more variant effects and I've targets addressing is stated those this and before, flying capable longer larger Switchblade. original to

efforts As this missiles to a represents capability the a segment new us to TOW our TMS these Both Also these Kratos to our look we are with in of initiatives. and long in opportunity by to as variant result, for General AeroVironment follow. much Land legacy larger game-changing Systems Dynamics forward term within and such new enables line, served nature supporting Hellfire. market advance. in and continue product significant currently our This teammates address Javelin, potential years engagements

missile are well with on our way from patented business family disrupting loitering disruptive see can legacy our of you missile we our As Switchblade the progress, systems. to

We Spaceport HAPS XXXX the Moving and year test flight we XXXX. in of at the altitude altitude revenue, HAWKXX low successfully America established of high in fiscal New now HAWKXX's completed year represented testing. of test Mexico phase a facility flight for to phase next which XX% fiscal first

continues in HAPS this delivering year, run $XXX inception plan broad members America maintain potentially R&D benefits While operational creating in of of by as to program an HAPS to HAPS HAWKXX long-term a and April was represent plans. flight and of February, we of phase to toward companies, goal which the to-date and of total value testing our connectivity certification for host using to the and $XX within customer-funded a program to aerospace fiscal annual of consortia our next of Introduced transformational Hawaii the of this and successful global should represents partner The million Spaceport including opportunity founding from committed our as mid value in its our summer, providing AeroVironment series transition rate aircraft. AeroVironment our one growth Alliance a technology forward revenue. We remains next and also the testing tests it. current networks move HAPS if increased of commercial will million. telecom,

adapted global team AeroVironment COVID-XX am pandemic In very structure. leaders normal. quickly to on unprecedented rely and also brought our it months but I quickly us our the Over the was qualifies and extremely hybrid March brought the customers by they and last Company's with an people has pandemic in responded AeroVironment a business of out our as affected events. way companies, all, in uncertainty new who the the to all the support. few as to transitioned Like solutions great essential produce we work we the these proud to best

roughly productive our We company, enabled remote to to already rapidly technology agile to XX% tools workforce us which telepresence arrangement. of we a an move have implemented shifted working had Being work remotely.

were we commitments number including our social continuous only minimizing remotely, working we COVID-XX. site, those throughout against customers to on team our to the to and fight were times, execute these enhanced For our contributed did work also community. balance facilities, but safely members, strategy By of unprecedented to employees on distancing procedures continue Not the people safety during activities. to who able our we sanitization we scanning, our temperature and our unable

than line. date, front teams on Our to local quickly professionals fast medical shields, have more medical prototyping facilities X,XXX donated face and we began and producing them to the

made design lower addition, strong supporting the an parts resulted relationship has AeroVironment with engineering and count our to VITAL, in months and the an and available designed government NASA/JPL that to for innovative development two ventilator of team cost JPL In new lower are this manufacturers less proud was produce. effort. NASA have team This the we and been ventilator in part of new important commercial innovative in than much

that Additionally, combating our played we role a in in take fact the also have great products COVID-XX. pride

unmanned on In the UAS systems team. example, part operating despite fashion are positioned delivered by all areas that believe deploying example, team fight heightened remained outstanding For year in are similar or Raven an AE us objectives for multi-domain heavily In officials impacted summary, We offer of success executing plans the in the tactical our response solutions against for and Puma beyond. in safety officials public focused the value compelling our year fiscal and as traffic coronavirus this integrated, monitor and fiscal another pandemic. challenges Italy in our a AeroVironment's in to an XXXX Netherlands met results in our XXXX pandemic. the AeroVironment's year

a I year Now turn McDonnell Kevin to the financials. Kevin? summary will full the of for quarter call and over

Kevin McDonnell

XX%, Thank fiscal $XX.X of revenue quarter Revenue quarter million in was the million. an quarter the fiscal from or million The or of test and of revenue $XX includes contract his HAPS $XXX.X fiscal XXXX remarks, or increase line million. facility $XX.X Wahid. Wahid increase in of other construction for Fourth was XXXX from of and revenue in TMS by million, a revenue mentioned which major to UAS the due XX% $XX.X was fourth was as an product was of you, fourth million the the as revenue, million million million total increase $X.X $XX.X revenue services follows. of one-time or XX% or increase product $X.X was XX%, an of Small $XX.X XXXX X%. is flight

inception outline to million program total increase program. moment current contracts for of HAPS a HAPS the program under $XXX.X The contract a is $XXX.X HAPS for the status revenue the The all million or quarter. to-date take me million. Let of $XX.X from last in value the

XXXX. financial compared product as quarter margin XX%, fourth Gross from primarily performance of million quarter. the fiscal due a the revenue for to the fiscal to $XX margin the unfavorable back Turning percentage decreased fourth for was Gross $XX.X to of for of an XXXX million XX% to quarter mix.

we addition, Pulse asset increase acquisition an amortization with Aerospace fiscal of XXXX. had In intangible in expense associated in our

The the of to Looking of decrease fixed XX% for $XX.X the $XX.X of the a expense $X.X or or XXXX the in in services with due XXXX was the $X.X of quarter SG&A rest XX% for charge at of fiscal or fourth to SG&A for due decrease fiscal revenue quarter quarter R&D of fiscal R&D other on expense other net XXXX. was of revenue quarter asset of of fourth fourth of for investments. million the XXXX. primarily business, the fiscal for in XXXX. income million was income Systems fourth to Energy million compared net of The compared for SG&A of lower or income booked of quarter fiscal buyer XXXX. former million income compared statement. fourth was fiscal the fourth the to lower income revenue the $XX.X transition income $X.X million quarter quarter services XX% other XXXX coupled of fiscal interest for impairment Net for XX% fourth was $XX.X expense expense of Efficient revenue million the performed to million our our of

of a more lower portfolio as in result a strategy. We trend continue rates 'XX interest conservative expect to the interest income lower FY and

quarter associated excludes and the fourth per for per diluted continuing XXXX our Pulse operations attributable income operations continuing AV quarter diluted income Aerospace. for operations for fiscal with $X.XX amortization fourth of diluted $XX.X $X.XX terms was line per was share share from the attributable fiscal from of per continuing $X.XX. from XXXX. or XXXX intangible net bottom $X.XX $X.X or fiscal to was from of share of $X.XX XXXX diluted million operations earnings of share per diluted results, quarter of the share for diluted fourth fiscal fourth to the compared Non-GAAP share million quarter for continuing of acquisition Non-GAAP to per AV earnings In expense

product fiscal revenue or XX% in for our Aerospace. line $XX expense million TMS of million the million an Pulse Small was in margins of revenue other for as XXXX Gross HAPS service the total by or was Gross margin revenue $XXX.X million XX% to product in to contract follows. an associated X%. Now and $XXX.X fiscal acquisition $XX.X $XX.X XXXX. for fiscal was revenue, of XX% major of due by product fiscal product increase million was Fiscal an million for compared Revenue to of $XXX.X percentage full XXXX a year proportion increased offset million. fiscal to compared intangible asset fiscal our $XXX.X through $XX.X XXXX. partially of $X.X amortization fiscal or in increase or XX% XXXX was million from was and moving in XX%, total $XX.X million increase XX.X% to XXXX. was XXXX. increase is million, UAS for to results $X.X in million in revenue, Gross as revenue of million to revenue an of $XXX.X margin as did primarily to due revenue XXXX increase XX.X% increase decline from a with The

product to margins continue We as product to result expect a mix fiscal 'XX. decline in of

In million terms XXXX AV for share per continuing to XXXX. share operations $X.XX per or line, net or of compared was from $XX.X $X.XX to fiscal million attributable income bottom fiscal diluted diluted $XX.X

fiscal tax includes fiscal XXXX I litigation X.X% ended per one-time at note gain for share. XXXX the $X.XX from from in XXXX. should diluted up equal XX.X%, a However, up a fiscal to rate also that settlement

earnings and $X.XX excludes as tax per and Pulse XXXX earnings noted for $X.XX per $X.XX share acquisition was litigation XXXX a Non-GAAP fiscal of full per integration XX% the to from AV costs of We per in from fiscal share one-time the settlement Aerospace. intangible attributable operations as the expense expect above. full gain continuing well as was operations attributable excludes deal share diluted our fiscal AV for with of amortization Non-GAAP in fiscal associated share full year $X.XX year XXXX share a of rate from approximately XXXX. per diluted year for to and continuing

million, quarter and Our from fiscal backlog as increase backlog funded from fourth record - XXXX increase of of million. $XXX $XX.X $XX.X XXXX backlog XXth, third million XXXX of April the AV an quarter XXXX an was million million fiscal of an fiscal third $XXX.X the quarter of of $XXX

fourth decrease timing inventory was quarter XXXX. for quarter the revenue the inventory approximately quarter million of significant the end Turning million the to Total as our of fiscal cash, a was related to fourth from XXXX including fourth retention, in for sheet. compared outstanding The fourth at accounts in of decrease in outstanding the HAPSMobile million. joint to fiscal days fiscal XXXX of end of fourth $XXX.X XX driven in investments, in million fourth in $XXX.X XX of decrease in the of fiscal XXXX fiscal by end balance XX product $XXX.X million and the of of our end of XXXX the revenue as and receivable, Pulse fiscal fiscal QX Days amounts. $XX.X Net days at unbilled of the inclusive our XXXX. to receivables and of and of totaled of The XXXX. investment of venture. XXXX $XX.X for at unbilled receivables reflects compared equivalents XXXX. XXXX. increase the was investments Cash, the and to fourth days was receivable The approximately quarter occurred fiscal million that increase in the equivalents of fiscal $XX.X the quarter related was XX million, days for acquisition XXXX quarter of party fiscal receivables million. compared during cash days Unbilled the end well Net $XX.X $XX.X increased fiscal totaled primarily inventory was cash Aerospace accounts retentions quarter of

invested This improvements XXXX. support expenditures, approximately XX% we to capital million million to in the fiscal an $XX.X equipment Turning over in property and growth. is $X.X in of our we increase capitalized capital XXXX fiscal

in expenditures IT. capital manufacturing to the investing and expect as primarily 'XX in FY We increase result a of facilities,

expenditures in X% X% fiscal 'XX. We expect be revenue capital to of to

XXXX Page for on highlighted as visibility our fiscal supplemental the X Now of charts.

$X.X funded we that ending to million, fiscal XXXX anticipate of range. backlog fiscal the our XX% from recognize execute and $XXX.X up $XX.X today, unfunded we of in bookings that to fiscal in million of to midpoint that anticipate XXXX million of year revenue we quarter-to-date As contracts during we anticipate backlog have QX execute revenue guidance of This incrementally or of to XXXX balance $XXX.X the million. adds

call to back Now I'd Wahid. like to turn

Wahid Nawabi

Kevin. July AeroVironment's will XX, anniversary. XXXX XXth Thanks, be

celebrate we're financial chosen outstanding are our accomplishments and to-date, is getting advancing AeroVironment. we our While larger portfolio and just we delivering our future and financial opportunities. are our even excited of started the strong remains market is toward for position growth AeroVironment in results, past the leader markets,

to look and we to safer robotic envision ahead, on As work together This in we accomplished the be and air, mission and intelligent which future technologies, more we future ground its already is success today. state new water the can requires in a solutions. where the what achieving our cost-effectively team advances valuable autonomy enabling our add than in systems achieve capabilities as quicker,

X earnings have ability on financial objectives. shareholder record sheet backlog time in slide this strategy strong earnings is Currently, annual flexibility with build higher fiscal visibility confidence value. strong balance last to our described on total than of achieve gives XX% revenue and of to and presentation at and visibility we funded us XXXX Our This XX% provides year execute the our our into which long-term year. our number

fiscal defense procurement Government confidence U.S. adds year's proposed for objectives. to million this funding AeroVironment XXXX approximately our of solutions Additionally, $XX achieving year in

are customer may the macro COVID-XX an economy and longer-term in we pandemics have duration However, global of that important unknown. the effects it on it operating funding procurement to The and is note decisions on environment. and is magnitude unprecedented what impact

but its has our yet chain, significant to delays our We impact are business. beginning been in some to see not supply

contribute lower year. has in also line to timing. rate with just the remote in factors decision top delays fiscal contributed are some and rest turn work a making this This slightly us. for customers like scenarios, These grappling growth Our of our to contract expectation

environment monitor protect As to all business. and necessary and always, grow will the current actions take to our we continue

COVID-XX know, living pandemic. in with all unprecedented we times global the some As we're

XXXX on with for revenue to $X.XX of to As summarized joint This generate our and the $X.XX. XX.X% venture. HAPSMobile per million between operating diluted assumes XX% between X% expect of million of margin guidance year number and earnings slide and financial X fiscal earnings an $XXX ownership presentation, share approximately we of $XXX

which of earnings the for will revenue. non-GAAP to diluted per expect intangible account Because XX% first-half on we pandemic share, contract in prior excludes amortization timing, the be in acquired and total year the result We of assets, $X.XX percentage Based revenue as fiscal impact to of XXXX fiscal of to $X.XX. year approximately our year. on a between XXXX current mix compared plans, revenue margin gross the lower expect

between We points XX% be results expect XX% consecutive double-digit team development year. growth. our call, to and reiterate first, revenue for this main year record our today's line In fiscal research delivered in summary, and a to third of investments profitable of top

in and And third, shareholders Thank in past confidence several market-leading year hard progressing of positions. for obstacles and support our and questions. Second, our to year long-term to further customers our shareholders positioned which have these for recognizing opportunities for XXXX. results us people opportunities. and who our who by ability deliver to in missions. critical to the the a we our Company. value-creation have growth high customers each their our you place Kevin, you Steve, all and and secured strengthened fiscal team I we trust throughout member to will worked their special every our who our potential value momentum AeroVironment your to strategic Thank now take the key so continued And despite our challenges thanks of outstanding create

Steven Gitlin

Peter from question of first Our Instructions] Peter? [Operator Arment comes Baird.

Eric Ruden

Ruden afternoon. Eric on You've actually Peter for line got this the

just a quick question, my one. So

expect the a ramp-up? contract? on weighted guidance, the pieces more what a there? the just any On like Is to any Thanks. give And be there, is It there of bit it's of the to year. more back-half going just on color kind you can provide of looks just the you due that quarterly color ramp-up in can you Switchblade cadence on moving

Wahid Nawabi

first which million, and basically $XXX roughly XX% to we've the talk that your $XXX I this represent second range expect I for said Eric, obviously, guided The that about Sure. we world. between half Wahid. revenue of will on XX% the provided, of that half guidance that. is end approximately. is everything OK you the Good to million of to we and And is that, be hope the

have products diverse and based customers on the those of just type EPS we vary portfolio And the We contracts earlier well. a non-GAAP mentioned guidance always fluctuate. and GAAP timing adjusted that as very provided I that and and of EPS, that

in heavily not it's a just it's relative again, level the years, So it's sheet well loaded that's back-end I many would pretty previous loaded, argue slightly. And pretty general. to - balance

Steven Gitlin

We'll now take question at Skibitski a from Pete Pete? Alembic Global.

Pete Skibitski

be small TMS, in particular a international, after color is factor on biggest is driver follow-up I it will guess it Is UAS one fiscal it and to I I'll that? some 'XX? what start with have could just us growth more the give there you or

Wahid Nawabi

Wahid. This Good to is Pete. Sure, to you. talk

to well of the customers, for portfolio blessed as types. a now, revenue we're number diversified very a have year the have as contract of products product, quite terms of we and - In different geographies, by

tactical have to fiscal flexibility going and a is for portfolio. growth of our - us the allows missile diversified UAS and from 'XX the it to business. year come In So systems the small general, majority growth

the HAPS program being roughly the expect We of fiscal business the nature 'XX. be a still of business for customer-funded R&D because flat to

Pete Skibitski

Okay.

faster? will UAS as to grow tip-off or So TMS no whether

Wahid Nawabi

- diversity allowed as as demand our on We're I been of to speaks years, different in the our of and over the which very us expect that strength lots deliver diversify again on really said, And as contracts. we've our the working fiscal that the I 'XX. outstanding quarter Again we depends know, is to and I As as to - lots well the all on the in provided of domestically highlighted fiscal and the there internationally pursuing and these for diverse the timing customers. the business guidance, it as and grow again we're for as results of this portfolio solutions intentionally products. of of grow call and have portfolio I opportunities said, 'XX, we you to

Pete Skibitski

most And could at enough. have through is for fair that impact then DoD resolution Okay, my widely I least quarter, we a follow-up, it if a could - do continue expected think for think guidance? continuing quarter have I fiscal in 'XX, going your your kind we that's of impact of account you any third Should of that you to taken way in guys think. or that

Wahid Nawabi

Sure.

And other you backlog, that of time is account. XX%. So our very factors backlog year, strong worth we than many we have $XXX.X taken see this even year last have if visibility and last funded - into higher and million

remarkable So pretty team achievements so darn the far. for on -

Obviously, the COVID-XX related our etc., given that those other we live provided administration, the we we these an today risks, guidance all what guards on impact change risks to economy, times. know the Given of time. believe the we're CR on the and the based in confident this the ability achieve of within and we of is There of about all risks, etc. kinds all that unprecedented pandemic, aspects the to situation,

moment we we've we that, the of factors all So that updated. you that see the given of that feel changes the anything - based at all achieve But on we'll all keep we if those expectations can set. confident

in top the what provided exceeded growth achieved have of beginning have several line Additionally, the at I we now expectations we year now a our year. that would years profitable of we the and consecutive third mention expectations or double-digit within

keep these about on risks we good odds, our you feel us around I don't there's that that's know So, about all and going we'll but updated.

Steven Gitlin

our Canaccord Genuity. Herbert is And next you, Pete. Ken? question coming from Ken Thank at

Ken Herbert

question sorry, - wanted 'XX But TMS your XX% I any and And it in the line more timing growth to those mean, a the growth to would then considering I to TMS items? more on comments, called in would with earnings UAS. out maybe of you basically Can disruptions bit 'XX small on discussion more you've And helpful. guidance. top from guided just little impact on Wahid, relative one sort related margin call contribution any other imply be I I provide it know course of maybe just two the some granularity that around flat relative from mix. you mix and would guess of COVID-XX growth.

Wahid Nawabi

Sure.

terms what comments for So, revenue as to made be Ken fiscal unfavorable And is the 'XX in what margin that all products do factors, of primarily the a that of geographies, a on - now, And of I that that Based portfolio or say gross slightly we of contracts. changes and gross mix. is that mentioned. of customers, very I contract of related profile mix multitude you're the I have really I mean profitability any reason our margins, by year diverse types right. we expect really that to

year month of And what fluctuates, out or or our time the quarter lens. that of look - so based varies, it on you at

demand updated degree it's in an a terms the can. and And still at little the we'll of bit of you unknown, We our going knows believe that still day, end of year forward. the unfavorable we the growth year this drivers the go that potential really another impact mix to solutions However are impact for we able the business accounted change the keep that of believe But that as no to fully. strong. is deliver as grow the things overall COVID-XX be we're margins. our we We underlying and to one profitable for

Kevin McDonnell

interest having our rate. of Kevin, rates on growth, and this add just to I'd And interest we add, income impacts tax income do negative the operating see some but we because good is are

So EPS the that's income there guidance. happening our is some line operating below noise impacting

Wahid Nawabi

Right.

Ken Herbert

Can across could, current and on year sales into to factor move by has any the administration promote I fiscal more Wahid efforts there you some international I give know unmanned with start we been the fiscal just if clearly do Kevin, 'XX you sales where some spectrum. 'XX obviously international the year in and if of those TMS to efforts see try outlook? be or an update the TMS And might are you succeed?

Wahid Nawabi

I large we years to So, Kevin, are customers number mentioned, over portfolio yes, internationally. a fortunate as that we've very grown very of our the

of on for now As similar engaged exists actively allies in that with us TMS. the products. we my mentioned, XX, have as for opportunity are for that our small We X-X, customers mentioned as UAS exportability our timing both U.S. and believe earlier I We And remark international the I acquisition call we it versus their that well nail it. multiple on it's if. as is Switchblade of when as of and of to government interest believe allies But a the and matter difficult really really, down specifically.

given we despite in And really some We still at a has timing small no challenges general. everyone COVID-XX very growth another - the knows so impact portfolio but all And we any have this that and diversified times. in and really profitability, and fully that of is UAS else I this of believe year internationally. the very to year for the been that with extent, far. with again our time the headwinds a the affected to expect deliver obviously can results have of dealing We difficult one of opportunities pleased number

Steven Gitlin

Ken. you, Thank

is Joe Joe? question from next Our De at Stifel. Nardi

Joe De Nardi

effect something impact? Wahid, that. COVID growth the of been COVID? How guidance and what without of the of of kind the have maybe result considering you would - magnitude the ago what's as moderated a much being months couple Like, - mentioned guidance the a to rate of the

Wahid Nawabi

Sure.

looked and our can there of on we well in we our So top international We that from delays growth and both we this build as to there we realized forecast. the is delays, at A results, double-digit year a individually customer you do been procure timing and regular of able very saw delivered we've we at line our they're as and manage outstanding and looked our profitable delays is we opportunities methodical terms some significant, way. contracts. build as - not results. of And systematic timing and pipeline as third some parts of but supplier that outlook that we

level XX will paths international to up there open and why a those and that. As record year that progress again. of visibility and strong countries, deliver profitable when based business come to unknowns doing continue actually is historically halt of terms that's travelers you screeching in of there we completely still a lot with our know, could of when we provided on another the believe and We backlog we guidance backlog, very growth can

to some into degree, all guidance, and another for year we've COVID-XX that will our us and these into So taken of impacts which mentioned but delays strong other growth the consideration, going very unknown of income we operating have mark we of accounted, provided. this for wanted level to line, are your is profitability. lots on income that below healthy on And income attention. that operating very things the bring strong because as operating the Kevin there also And we

Joe De Nardi

just and Would for XX% little at have understand you trying XX%? further sense is bit, able you a like what a I'm grow be to if magnitude the that. to

Wahid Nawabi

us am beautifully so year. the Despite a achievements our deliver the quarter, team of record proud fiscal for performance year, financial these events up set year incredible to for year the has the quarter the Joe. team backlog, I visibility in of next record our Look, and fourth for next and a incredible able phenomenal a and

and team were grow relative can confident me, position as at and Of on time. than better now variables, best course, than that we of a fast given But our programmed, in we genetically you our and I rest fiscal execute about and are this again all for We if and could our year ability amount to We 'XX to grow last maximum higher? to plan we deliver our for ask at our deliver time. we feel the shareholders. of the And that. value our is customers provided this never visibility outlook terms in as less the anything

Steven Gitlin

Joe. you, Thank

Next question William DiPalma Louie from at is Blair. Louie?

Louie DiPalma

definitely making should face that next the are revenue should And said biggest next be What the are with milestones the you're year fiscal that challenges HAPSMobile? to guys the investors what couple you to forward it expect progress. be HAPSMobile know you I looking that that for with HAPSMobile development? seems flattish, of secondly, but over years

Wahid Nawabi

Sure.

the the track done the as basis And opportunities endeavor The are from qualifications this opportunity over with of I terms kind that authorities today flight-testing 'XX. intention facility HAPSMobile of our big. initial is and we've world low outstanding test know-how flight far mentioned remarks, tremendous challenge flights. and where a also in record. other certification certification to but and talent were working best performance have has the that best New are on The execution of of our making term, in years part plan the an And equally of as the We we toward development which and roughly. and program it we tremendous fiscal phase. overcome altitude are both course the been we on and and achieve of call, this to positive actively a be had an the which massive keep that right what we're able HAPS company challenges to we two the and is I tackle I now So so very challenges program. the that aircraft, And that and if and term believe a FAA are the and we're to before progress. there demonstrated - the smoothly capability, be similar We is a on partner this this never first of in and have and outlooks. schedule revenue, of continue extensive, with Mexico established as in a keep we long that got to beginning. able airplanes is said the executing all transition our Spaceport And to long plan people our But to the the risk. our the year milestone, testing end in our plan, about demonstration over We we phase this we'll coming business and that the is significant we've design, which according fiscal goes expect its and Again obviously against testing we 'XX.

successful So another and positive we forward here. look progress to

Louie DiPalma

the Sounds sense do being of any have phase, testing last? long good. second And certification and you phase, should how the

Wahid Nawabi

Sure.

process with because with we again are and work agencies done the been other our an FAA because this very before with the speculative of airplane, never familiar in and it's has the So area. of this all this type in stratosphere

execute never plan. similar those to it, needs that emphasize expectations be a been done if working a what it's we're so have understand well heavily been set we've from and space, with against commercial is could things it airline far, our and at achieve for plan, we comparable so again, done ourselves partner the far. first before and And has our this I plans ever. and you familiar that And record to However, to and on see have we're in several-year able we track this as something you look delivered that our time it we or the effort. But

Steven Gitlin

the to if of based can to Kevin, jump next we for helpful on the first expectation quarterly as it the might the we of half be Before of question, question revenue the any color provide previous year. kind percentage

Kevin McDonnell

revenue. quarter, second Wahid XX% quarter would say just XX% and the XX% half half we first for roughly first in Yes. in first between half mentioned the second and XX%, that

Steven Gitlin

you. Thank Great.

Herbert Now we'll get of Ken? Ken Canaccord. a from follow-up question

Ken Herbert

question. a just Wahid,

for you little at being or seeing I little opportunities about and very you around priority and moving that a maybe a inorganic are just what and you you think about should at forward growth about Pulse more it's remember pipeline time talk about to you're a deploy on there talked acquisition. you maybe strong current been have think when balance since Can looking the your higher a the any sheet. how or And we you I view obviously looking bit potential the did year acquisitions capital think allocation capital? about color the

Wahid Nawabi

basis, unmanned a bright, is defense very comments systems of we're Number perspective, We bright, intersection guys two, promising. very you the the or to it some you debt. Board. Ken our one. a the and and from an for the on perspectives on strong some balance connectivity have systems, zero prospects a sensors very asking you very commercial software and it's us for for let That's number me give one color, question. make analytics, question, that sheet, that very important whether robotics, our and at is for the which regular very critical future assess look this And fortunate thank

the argue makes better to really more makes that position to I where positioned financial we're place it the well. deals that or are sense assets these strategy. we distressed for be for more looking So sense have, would it our out potential us at being we are our times to better and support And strategy, the

established progress an So based what update and very I there. made, you we're me actively that as Pulse we we're looking, on guys is as I've as and acquisition and part acquisition to gave our own on said before, we've satisfactory progress making what performance which of our criteria

time, So updated let we at a you any at to to options of look you keep share will number but forward that. meaningful on you. there updating and anything Obviously to if we're know, you, is looking guys inform we

Steven Gitlin

take We Ken. Joe? Nardi a Joe you, [Operator De a Instructions] now Thank follow-up. as question from will

Joe De Nardi

and for Kevin, quarter what the in international year? sales the were Thanks.

Kevin McDonnell

Give me here. that second one

So total it was for $XX.X the was the year $XXX.X and million. international quarter million revenue for

Wahid Nawabi

believe included the is HAPS which I revenue, international. that And

Kevin McDonnell

Right. Right. Correct.

Joe De Nardi

Right.

internationally, more along of, HAPS, I Okay. get it's what so if business guess those selling international the get at than you what and that Puma selling guess Raven kind just look guys you you I excluding think Yeah, Wahid just lines, I to the U.S.

restrictions Thank just there opportunity given Just having given there? Switchblade similar market you're longer there think do What you. thoughts conversations of term constrained term? internationally, your is longer the a around kind that more you are the is or export

Wahid Nawabi

our believe one. two, or UAS. Switchblade say so. of proven I the that potential. domestically have believe we sales have I number does if, similar matter of Number to really, expect same I a versus believe is that it when I I international our small would that

similar that to it's cases, customer, at look our in introduce the be it or came it's and large value these then that most of And history it, in since lines, very for them a believe business. similar. you allies some taken it we're the we've achievement team. to introduced these We even the but Switchblade impressive a not conflicts. time have game-changing then are for with of That's two a now. we they to proposition, adapt, I an accomplishment product our stronger little capability, a businesses and they're involved to has been up if XX allies internationally grown If to bit countries of now by grown and an loved

in and as we on well also market successfully the our us receive to had fourth with call, market So the the to I increases of will the progressed believe larger and Army still the Switchblade quarter we Switchblade for And year. of opportunity progress size the that have our the that as see for plate variant you future. introduce the throughout I And can prepare multi-year we that. our in mentioned believe U.S. from contract we that that DoD, very impact and U.S. in

I do believe business overall, tactical demand opportunities our internationally as missile systems and So of our UAS. profile has a that similar small

Joe De Nardi

of being see your Do foreign eventually? all now eligible you customers to purchase Switchblade

Wahid Nawabi

either. can today, I that multiple you list is multiple interest Whether this. comment initial believe involved an small equal tell that to as it UAS, that large wasn't there that small I you is specifically. UAS - our is what on customers, that is foray today allies able with tell in not I'm into so But probably can our currently as we're to I have that

growing. keeps it over So time,

will grow. and As that customers more we into adoption takes to more fold continue place, and

small our increased number international year for As we've you on of some see from a ago UAS. customers

continue internationally. we even portfolio grow to So UAS small customers of

Steven Gitlin

We That this version avinc.com. engagement all An and good Company relevant SEC quarter's your and news good industry results. a really speaking and Good health, again appreciate you, continued can your you next was We filings be our you Thank look found Joe. archived call, we to forward on our question. wish in of following AeroVironment. interest and website with day. final day

AeroVironment (AVAV) 23 Jun 202020 Q4 Earnings call transcript