AVAV - Earnings call transcript Q2 2021

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 Second Quarter Fiscal Year 2021 Earnings Call. This is Steven Gitlin, Chief Marketing Officer and 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 on contains Presentations section. this Events website time-sensitive call. at undertakes & reflect XX, 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 December factors the contained in occurring or Form therein. associated The further only we encourage earnings call periodic the XXXX. discussed with the risk

Senior Wahid and from Chief President and Vice Mr. Financial Executive today Officer, Officer, Nawabi; Mr. me McDonnell. Kevin are President AeroVironment Chief Joining and

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

Wahid Nawabi

to Welcome fiscal year Steve. quarter our earnings conference call. second you, XXXX Thank

a in advanced other States quarter, poised our civil our and to X growing of ground in robotics earnings few acquisition a team and is excited with This and markets. the Telerob, intelligent systems and which homeland business a presentation. global the in like first of AeroVironment, own business join vehicles base announced to Before superior support of an or I United defense, robotic for we our strong in positions ground its leadership is and number we that to in further customers company, outstanding and globally right maintaining success portfolio security is unmanned best-in-class At for on a footprint. and leader second is discuss expand global multi-domain goal summarized we them are our customers. German is by UGVs serving value the systems our Slide our robotic response, would Telerob for moments achievements ago our to developing address drive shareholder defense, customer commercial and

customers of an product broader Our to ongoing by than and applications list was broad and and robots are of and extensive applying impressive around experience an complex which team value more IDX: team, to base, offer set spans this aerial to U.S. joint capabilities program, the be deliver the to but and team complementary solutions system Wed The growing introduce ago AeroVironment submitted unique integrate of AeroVironment air multiple robotic portfolio end-markets. that we Telerob The record world founded not as Telerob, Once defense outstanding of and with solution to and that it XX large develop With AeroVironment, to capability to the technologies back management the introduce air years XX plan we in point, we Telerob’s that robotics customer our ]to ground [Author program systems best-in-class increasing aerial ground roadmaps in Telerob’s multi-domain our a AeroVironment has November, portfolio will existing XX in their our will its this customers. explosive and customers To Telerob With offering, built innovative at other has nations date solutions ordinance applications. environments to the from for XXXXs. force capabilities investments. customer represents a track contractor. X intelligence prime disposal and set is will powerful the has includes customers of part of the the unmanned U.S. aircraft Telerob robotics extensive this of nations. force ideal closes, our disclosed that that operating derive and with autonomy more proposal potential multi-year Dec deliver in portfolio, significant. multi-domain technology where success tactical Telerob’s base XXXX of we portfolio. transaction levels more long a element new XX:XX:XX missile of

domestic Eastern the Ministry Corps, additional pursue the Marine and multiple UGVs various significant Defense, which in would German United include, nations Middle National and allied local programs also opportunities Navy, States Air international Guard of presence forces. support. UAS airport a security Specific the police opportunities with will UGV Federal for We with

shareholders AeroVironment. have AeroVironment the potential clearance value team. Upon long-term. of you significant As are planned the the expect our subsidiary Telerob opportunities for XXXX, of a will retain by and two We’ve and we to the to see, can which between in operate wholly-owned teams as spring near government Telerob the transaction, entire German numerous produce

Under agreement, in million GAAP up to this intangible integration expect two in are year accretive earn milestone-based of we of cash, out $XX.X accretive million. and to costs. XXXX We and the excluding acquisition investing EPS non-GAAP year terms EPS three plus a approximately $X.X in be the years amortization fiscal

from at will million pay We $X.X off also in debt closing. Telerob

more our expanding and sharing with to to we of sheet of value business, I deploying our objectives as value. toward look Our you acquisition creating Telerob proposition strong our our of forward proceed supports grow the balance offerings shareholder closing.

emphasize On will included slide results. I our presentation. X messages on Now second three our will I number of key earnings summarize today’s call, quarter

achieve pandemic, us keeping on and our results track strong year First, the COVID-XX to objectives. team to our continues XXXX during deliver fiscal challenging unprecedented

Second, strategy UAS, our we growth tactical tactical in quarter third, HAPS. successfully to and supported executing growth significant And achieved our long-term the milestones by our are missile systems, while our key during balance shareholders. value initiatives significant we delivering within strong sheet

to comments. portion the will a quarter per $X.XX share Loon or in the of of HAPSMobiles of provide for in related earnings an $XX.X number XX% Now Inc.’s delivered let’s and the which diluted share increase our of item $X.XX presentation. performance impairment was on million, Earnings of our in slide an year, of equity investment from primarily declined revenue We consistent XX% our financial diluted review our to information outlined write-down is on X second in expectations. an second and quarter quarter, per prepared year-over-year earnings Non-GAAP prior with more accounting this year-over-year. increase his due LLC. Kevin $X.XX, $X.XX

review achievements second will quarter. business I the in Now our

small unmanned market second of quarter UAS. revenue XX% aircraft our global leader represented small remain for product line systems and the First, the total we in in the

encrypted another network with of example our with greater customers. innovation In Viasat deliver partner to applied our X communications the by more we contract shareholders. our U.S. customers creating solutions delivered UAS on-demand, to Type continue the small October, value to announced and to This industry develop is for for an valuable leaders We Army.

tactical represented of revenue. our Next quarter second product systems missile line XX% about

for significant funding time patented our We LMAMS the year larger program. House Senate provided XXX via procurement greater is recommit effects the U.S. to variant warhead distance, its committees pounds, against portability programmatic law, large be Switchblade budget more procurement. planned for have have the appropriations LMAMS proposed is proposed LMAMS is targets entire to than a during by capabilities. In with family in LMAMS LMAMS of multi-year budgets army this and army but into weighs the procurement of We unveiled support government positioned of including funding is fiscal procurement. budget of back recent the our year other partly all XXX and hardened XX or capable well XXXX. for army until Defense of we’ll $XX XXXX, missile reducing funding the Army. which continue precision armored million remains fiscal important DOD million the new discussed. not prior funding strong endurance October, $XX carries to enacted award. year that the Switchblade Switchblade XXX and against vehicles and is after execute minutes XXX, contract funding much Switchblade Switchblade are Weeks a of and representatives quarter. from driven This maintaining to and In It competitive removed the of has fiscal over XX secure to compete eliminating XXXX Switchblade systems for LMAMS begin certain U.S. we then. recently because XXX Department request, budget know to we years, program believe adoption loitering wave-off delivers note than we new that In while larger our about previously

improves of funding, another late customer a experience believe that award million our received the of annually, on training the missiles introduced award and XXX are than OPFM Organic control TOW procurement U.S. based a XXX, Mounted year U.S. Switchblade at Supporting and the As part $X more even a in DOD second and program. Developed tactical part makes million quarter. $X for market with the Javelin well XXX Switchblade new valued for faster Switchblade we for we and Corp’s segment user With also positioned tablet targeting Fires easier. touch Precision Hellfire, OPFM, missiles. system, we that in we billion current fiscal is $X last Marine competition

are Importantly, XXX these we received funding Switchblade development. in addition to funds customer for separate have and

that this in lead now four fund compete will That down-select one a February period. are award will who low soon rate continuous volume and multi-year for procurement production development as We of to could as a award. over suppliers

quarter XX% Moving hours Mexico. now stratosphere project mission revenue soared which a in second New is at in XX Spaceport America significant during September hour solar represented milestone for which when HAPS Sunglider’s UAS a HAPS to into of the

test connectivity Sunglider. this LTE carried the we flight, broadband successful During also onboard via payload demonstrated an

This the the a for exciting connecting of deliver access. shareholders. glimpse our from fact, smartphone. video good We confident this connected was into calls lack basic that to New offers quality Mexico the if possibilities most video DC standard broadband call we Washington remain as HAPS a that I using and than represents milestone returns android around in the strong for billions have meetings people who not The Silicon of conducted from Valley video participated my office. partnership us would world In better Tokyo,

our of We HAPS to program a to transition expect end certification fiscal and phase year testing current XXXX. the the towards

testing this expect continue production phase We to until launch. commercial multiple we years to transition and for and certification business

business. Now the on turn I impact to the of pandemic will our COVID-XX

in international We contracting continue our customer as in operate to customers unprecedented situations. decisions domestic some and remote delays work experience

We are limited experiencing chains delays of impacts resulting from the in pandemic. also of some our the areas supply

achieved important quarter noteworthy in of COVID-XX team support they of and other way accomplishments customers. the given teams’ milestones our However, of continued each our have our particularly I they proud and challenges The majority the to members during remotely continue am the incredibly the the pandemic. are work to

AeroVironment of results a environment. solid our commitment of operating united work to All and and financial a achievements. us safe strong quarter delivering was at This maintaining while are

intelligent and of multi-domain the We can And portfolio about see, standing progress it robotic are toward still. will not are very Telerob we our excited you drive. acquisition as our

to autonomy technologies and greater customers will for that continue and capability our drive returns of levels the for shareholders. our future-defining invest We in higher

a the to for turn McDonnell Kevin? over financials. call Now, second will summary Kevin quarter I of

Kevin McDonnell

I'll quarter on earnings XX% year-to-date available $XX.X you, The earnings of last earnings Thank presentation. to both metrics quarterly $XX.X of highlights our Similar will contained Slide and Today, revenue breakdown our quarter I'll Revenue in Wahid. the million. second of be details press the by was and addressing some key fiscal of fiscal second quarter in be XXXX to website. revenue is the XXXX of million, our of the press and on an the financial of performance. leaving quarter, second the product I release remarks from reviewing presentation. referring financial area and release increase be X for the only of presentation my

period revenue XXXX offset of showed last we TMS product product X% million, XXX% fiscal revenue. was lower UAS our quarter partially HAPSMobile of performance Revenue $XXX.X service product increase of same in due half from up of XXXX the partially in revenue Small was to which This first and increase was an TMS from During UAS an lower revenue increase by for by reduced the was the in line, the strong half year. first revenue. revenue million. $XXX.X fiscal small the Again largely offset

or of quarter last or gross margin, $XX.X for and half the second past of presentation the product, quarters. five million overall quarter Slide fiscal to fiscal quarterly margin Gross XXXX. margin $XX.X for trends XX% first million first $XX.X Turning shows to fiscal revenue, margin revenue year. $XX.X gross revenue, earnings our or Gross XX% the XX% was of of service to million for X or of second the compared for half the over revenue million compared XXXX the XX% of of was mix

less lower than mix. a favorable first As we we do margins quarter, to second expect product be indicated to due the half margins last half

of for compared SG&A lower large related was revenue the XX% from operating of compared R&D quarter the expense the the of million to the for was revenue to travel reduction compared of of or XXXX second expense the and Now XX% COVID-related The half SG&A I million current quarter second revenue first turn million and first XXXX. million $XX.X half for in $XX R&D of for $XX.X XXXX or $XX restrictions. expense XXXX. expense expense or for is FY XXXX. was or will revenue, of million to in or XX% for $XX of FY the of show spend revenue revenue, million first of SG&A XX% for compared $XX.X expense expenses quarter to fiscal second R&D revenue, $XX.X fiscal year-to-date part XX% resulting second SG&A to was million of half of or or the half XXXX. quarter of for revenue, quarter XX% first of XX% or fiscal XX% expense. the of $XX.X trade million to in fiscal

variance in make We lines, TMS drive to leadership enhancements We both within and these lines our continue longer to significant small investments and investments. include term. our enable growth new in space products, near and will small UAS product investments future continued These the R&D product product additions. in current the believe and UAS

JV discuss on income the I impact like the Before I’d talk statement. about of the bottom-line, to our HAPSMobile

a loss, the HAPSMobile the we second the As fiscal XXXX, own million of a $X.X of reminder, approximately This represents of loss on X% HAPSMobile to the an income our XXXX. quarter to of a total to for first write-down half, joint million investment venture. related million recorded we our In proportionate impairment investment loss includes In which a share our in of HAPSMobile subsidiary. JV. the loss Alphabet of first the recognized in million investment of we a our related $XX.X HAPSMobile fiscal Loon’s of $X.X compared statement half its $X.X

in the second the JV investment accumulated the sheet to should our of have be further therefore at not quarter future resulted balance any in note will carrying zero we the recognize end our investment losses on related in JV our to-date as losses the to periods. the amount I in HAPSMobile that and Finally, of

for compared diluted the by million reduction fiscal Looking bottom-line, per gross $X.X of income share was $X.X for attributable of provision income at lower of and of interest a $X.XX of million higher million. of million, XXXX. of per second partially investments diluted was or to share the our million, XXXXX proportionate The and investment These $X.X $X.X of million net $X.XX quarter reductions $X.X R&D net largely the increased AeroVironment million the to HAPSMobile were $X.X result $X.X quarter second fiscal in tax $X.X Loon its million of margins of SG&A offset impairment million. income spending portion reduced in of $X.X higher or

our million diluted the half first to compared million income is per its million and The diluted impairment $XX.X million. $X.X of to interest portion $X.X partially net HAPSMobile due to with in of fiscal half of spending fiscal $X.XX share higher of $X.XX for first million together share, R&D of lower of primarily million $XX.X XXXX, per or of the million, the $X.X loss net in offset by lower $XX.X For income XXXX. $X.X spending the was reduction from Loon, investment SG&A again attributable AeroVironment or income

In intangible and and diluted second terms acquisition-related second diluted its fiscal share the per was Loon associated intangible share of reconciliation a diluted with quarter share the adjusted of an per adjusted expense share. for fiscal share diluted of $X.XX investment per $X.XX per $X.XX share Non-GAAP of earnings expenses quarter of associated and excludes diluted or for the HAPSMobile per was Non-GAAP XXXX for EPS, additional deal, shows expenses. per excludes diluted our GAAP Aerospace Slide our per acquisition impairment share amortization with earnings Pulse XX per of and $X.XX share integration Aerospace diluted cost and portion and our for in of diluted diluted XXXX amortization Pulse acquisition. share earnings $X.XX of non-GAAP $X.XX

acquisition-related first to amortization its amortization our the earnings was Loon, XXXX share our half was diluted Non-GAAP expense deal diluted investment share fiscal cost for HAPSMobile of with non-GAAP associated the intangible integration share related expenses. per Pulse impairment per earnings and diluted excludes $X.XX $X.XX For share related in and diluted as the diluted Aerospace. as $X.XX $X.XX and of half portion per of of per and fiscal first of diluted per to share acquisition well excludes the $X.XX XXXX, share per of

equivalents result first half maintain accrued and fiscal of of million improvements of of capital Cash, from receivables the improvement the from fiscal activities $XXX.X the end operating offset to $XX.X continue by investments a the and totaled at was partially cash of an unbillables, end accounts the cash of lower million, cash XXXX the liabilities working operating year XXXX. to remainder quarter $XX.X which came Total sheet, was a from million, flow from payable, inventories. increase strong accounts capital during of we Turning and lower $XX.X second and working primarily million The higher balance position. activities.

we the terms In XXXX. during capital $X.X of million fiscal spent first of half expenditures,

to highlight Next I'd metrics. like of backlog our some

a from from was fourth million $XX.X million due of Our end funded of The of impacts. $XX.X delays XXXX in second decrease fiscal at decrease decline to the million, and fiscal quarter of impart the a of is XXXX of backlog $XXX.X million. QX quarter $XXX.X a the of backlog result as COVID the orders backlog

XXXX fiscal on presentation, X of $XXX of visibility, we XXXX is million. terms year-to-date Slide In revenue fiscal which the of highlighted today, have earnings of as in

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

to I’d turn Now like Wahid. to back it

Wahid Nawabi

Kevin. Thanks,

customers. valuable our to critical offering, As strengthening expanding we our development milestone commitments introduction grow strategically to of business potentially in balance leading the our our on achieving are our sheet delivering new deploying our we and and noted, positions capabilities, market

$XXX by in defense integrating presentation. premises guidance and insurgencies of strategy even both shareholders need By software will number developing defense deliver revenue contested on technologies Supported reaffirming offer to our We customers value XXXX win. customers execute well Slide of near visibility our earnings a doing peer we capabilities our solutions and we summarized of our believe to XX are connectivity unmanned year midpoint to our adversaries we robotics, greater analytics continue and And our other and million and full as to and to to we portfolio capabilities environments. as of tools $XXX range, between so, sensors, the XX% continue our the intelligent million with are to peer as customers. multi-domain solutions confront and guidance our equip fiscal of and to the

operating to investment per HAPSMobile result expect diluted XX.X% We and of expect Inc.’s between deliver of margin impairment XX% its now $X.XX to as in equity and earnings a Loon revised $X.XX share LLC. of of

revenue and and expect to non-GAAP of earnings diluted loss of guidance one-third about second XXXX. fiscal EPS third We based expect we quarter year Similar acquisition-related expect third between investment intangible our range quarter on expenses, our the revenue continue we to and $X.XX to HAPSMobile impairment in the last which excludes our half per share, of acquired the $X.XX. similar midpoint an year, assets, of amortization of

percentage earlier, a mentioned Kevin to in in gross lower As result year prior XXXX as year. fiscal compared margin revenue will mix the

and deliver our results investments our this XX% We challenging also development call, between on track points today’s during team reiterate COVID-XX keeping revenue of to In us expect objectives. research strong and for continues range to to fiscal main XXXX summary, XX% year to first, and pandemic achieve year. our fiscal unprecedented the

shareholders. quarter the while Second, Tactical Missile third, our milestones our and with to UAS, sheet Telerob during successfully growth HAPS. significant our deploying did key And significant are and we executing delivering including growth balance the as strategy long-term value our strong Systems, initiatives we within acquisition, we Tactical achieved

thank open for ongoing the and members, say and to to I your to challenging we Q&A, want team excellence. for call Before customers, you engagement deliver our us to always our shareholders our

and We now will focus your with delivering on Steve, continue Kevin, on proceed you I to questions. to certainty. promise help take our

Steven Gitlin

you, Thank Wahid.

Canaccord now call. will begin afternoon at We Ken? first from Herbert this session comes question of and Our Genuity. answer today’s the Instructions] question Ken [Operator

Ken Herbert

afternoon Good Hi, Steve. everybody.

Wahid Nawabi

afternoon, Ken. Good

Ken Herbert

the out for funding, full spent the LMAMS and you of zeroed what contribution XXXX contract remind if the not Wahid, your that the much for XXXX just us year? budget on the what think can I been how money appropriated just the fact to first has wanted you ask LMAMS, implies fiscal year in has guidance yet from

Wahid Nawabi

Ken. Sure,

about it of original I a And actually has was my $XX roughly. House the recommended roughly So, budget item $XX The put Representative item line request million. on senate as recommendation. a mentioned then, the million as zero line that remark, in

this of none final. is Now,

So, actual what around the million, $XX but what really one No will knows authorization matter. appropriated. is is appropriated going what’s is exactly gets the be to still

very our zeroed out customer. being still contact planning in are is close with essentially. We we at – There are on

Number one. fiscal are revenue reason recognize, my we believe I we Switchblade remarks awarded in this of year the in I have funds still expecting achieve specific you have this significant do of expectation said we still there today. full of that, beyond XXXX, XXXX, the details that the the dollars even fiscal why Steve, that since two, But of for is can that iterate have details just number had That’s you year. is However, to is much the that amount significant JUONs significant there that remaining, on dollars terms contract contract on we’ve part us based we on funding how our existing of to a fiscal because before still the are that we have. not as XXX

change So, on it are not currently to And speak our in be on that anyway. that. able as today. that that We we no of be, going there to execute executing is as view, going we are to we believe

Ken Herbert

we that sort of like on terms you line can deal it’s in been Okay. called details in of the revenue has a really Telerob, I or could, follow-up looks growing – quickly of the XX% UGV more provide is the once nice in out about Great. think industry business anything we the Thank Can any And for a contribution should terms acquisition. the business you if this you. closed. with just potential of

Wahid Nawabi

Sure, Ken.

bullish on a tremendous whole value and of lot long-term – revenue there It makes top-line. the about the sense are us for Then excited I acquisition. am move synergies So, amount personally It’s of strategically. on and we of shareholder is extremely the terms in this creation. right side

very technology made first established have In very it’s They for terms very a unique a for business themselves. known for that foremost, got decades. are been around technology. of very The they best-in-class company have and business forty strong IP the business They name private itself, years. They’ve and well few some in already. the number Obviously, is of one. now countries, – their right their systems, plus growing growing business the Number to two, really been related past has with design is do and early that’s we that to of spring, two cannot for the we the next it EPS non-GAAP criteria really until be closes, through. close will and expect when on number that But the in going happen fiscal calendar the believe the the our on accretive place. The accretive year. actually years year be one details deal to is at XXXX, go acquisition that get sometimes we of the into takes German the depending for to close in approval which GAAP-wise government

while. We it a for have worked

than significant are the very a with believe time. working ones. these for assess market. international amount they is ago, opportunities, as for as example a a of joint is, contractor. positioned weeks compete three RFP Air or robotics great to just two And proposal with in submitted Force familiar been well domestic which prime acting AeroVironment that We of a not weeks guys ago, the more a we the recently U.S. very We’ve the as are well We few company. both We

believe not due creation. to for but long-term, as could that this a is we as both acquisition and short-term good at that long-term value issues, very announce strategy of details well our So, that we disclosure the its time very,

Ken Herbert

you. Thank

Wahid Nawabi

Ken. welcome, are You

Steven Gitlin

of of on to call, from on as $XX question, first quarter said that Wahid, year you, the we and about go expect this year. announced respond revenue was army this before Thank earnings a our in we your And we Ken. contract LMAMS million quarter April ago, XX

in to Alembic our that answer hopefully, to Pete now next Pete? the fills questions. Skibitski Global So, We’ll turn for question. from that

Pete Skibitski

Yes. guys. Nice Thanks quarter.

appropriations this that expect XXXX about fiscal the issue, and – should it we you revenue Switchblade Switchblade is on decline? think to for Or us for that? follow-up XXX, to Just will reasonable how the LMAMS

Wahid Nawabi

is This Pete. Wahid. Thanks,

earnings. provide we are terms fiscal going fourth that on quarter So, on of to in guidance our XXXX,

is Switchblade something affect relationship of that not this and XXX. us believe going adoption in our the our However, revenue to terms into is of we

successful grow As know, continue over very to been to you we’ve that last business. decade the

sole We by not far get government process I – of across several a of There competitions, and how expect years. COVID and hands the won fiscal in XXXX have this we still number amount portion really or already down is proceeds year government on the as significant next those XXXX, been significant have depending board of those fiscal source of the of the in to A to we year the provider is the awards the contracted fiscal the last continues. which budget year on almost sometimes several, the this from situation XXXX, dollars that US capability and and beginning mentioned. to us the awarded Military

I major do communicate not all to a what to are there, we I out and wanted far what's consider have So of personally issue. so it. of be this learned you just so you to aware

has on have beyond for potential US last competition already three year the we want to Additionally, I this make JUONS a a this. on. planned The phase point Army that contract

positioned for that customer to very and that working are make well believe we that. with we sure compete we for we our are that So,

transition received continue place, sometimes takes and revenue smooth stream award that awards to a have the contract existing it from year, next the will that. then that beyond probably we be calendar the when So that we've and

competition fiscal and will strong and dollars unawarded is growth, our A, the next will bridge the of we've B, we get receive believe expecting year sort significant position that are we then significant and fiscal which yet, So, had award which the to which that, to there gap hopefully. next year our government still between is XXXX, XXXX revenue, that

Pete Skibitski

a it. chatter some is the Got guess, for on been topic. there has out there exercises I follow-up think Navy There has just think Okay. of and on me launch different was one progress made lot RFI Submarine there. out an there program a I and I UAV been that

well? maybe maybe as on? competition you So, maybe in update to calendar can us see that for a you missionary XXXX expecting Are

Wahid Nawabi

Sure.

of variant geared Switchblade. So, are launch towards Submarine the that very platform our Blackwing specific Navy to and is UAV much referring you

you our on various actually couple years, in past navy this on with progress field with submarines. know, providing the success the have I in of piloting doing our updates and trials the and As sea been

continue to there. progress we So make

and a very really for the had trials real is We growth and it's rate adoption demonstrations critical within field good Obviously, have a of Submarine opportunity But in slow. of us. success lot quite Navy deployments. terms this

that So, we are that be see make to and we front progress RFI well in launch continue that able you positioned our to we expect on with will customer. Submarine compete, that really Navy we

we to a are So, it obviously two. the engaged expect and it on already well aware our and that number delivered year-and-a-half very or we've and throughout customer again units of certain with us compete last to of

Steven Gitlin

Pete. you, Thank

Arment from comes question Peter Baird. at Peter? next Our

Peter Arment

afternoon XXX. Wahid, Yes. on the Good Switchblade Hey, Kevin, Steven. guess question I Wahid,

potential terms February the kind there what of You competition? in maybe a for mentioned decision you timeframe a there. describe just of you expecting Can are

Wahid Nawabi

Sure.

potential I and Organic program think, referring competition. Marine Fire to So, Peter Corps Precision you're Mounted OPFM, the

of that $X capability, our remarks, million also well, worth my involves the also of process customer other competing quarter keep of think are Corps. $X but very in as positioned are that we've in million to competition. We funding – year our Marine XXX competitors past which selection have we this a received there we mentioned this being year. last the fiscal additional already with are received improving we Switchblade part And an As this I about

very However, as you very, know compelling. XXXs Switchblade unique is very and capability

of for leg up have a original because I a record this of also progress field. tremendous, in our with We track call advanced it Switchblade our would sort

has they they get the a after become the as in like is proceed production we what down-select. not And guaranteed, of that sometimes so is government to – initial expect production. would we further. the rate initial and to into OPFM but an result publicly $XX this as approximately low or the million-ish competition budget rate program the – Marine stated it in continues for do are off intends to it the most expect to once because competition US they obviously beyond to year and of that this and now. of of of solution year, fiscal So, And customer that happen and then XXXX a Corps go that, to that's of February into eventually which COVID that full fly the best solution to mature down-select There have

an well, us a opportunities success really Switchblade starting we that always we're you gives it is is we we'll Peter space. keeping unique three, our it as we've progress. believe like able for really our point think advantage program A, we a it's of short make this on XXX and a and the be to keep that far, eye progress So, B, positioned good And amongst view done other so we in compete, long-term my to that updated are in just

Peter Arment

That's color. really Wahid. Thanks helpful

as follow-up. just I you this. if missed Just am mentioned, and - I Kevin, sorry a

there that that Thanks. give that? were to on would some said if orders. be delays Or helpful? us little Did you tied color you COVID quantify can You a

Kevin McDonnell

with of are for No, an situations that. guidance But but the has been our – and where this maintaining have COVID we like things year quantification we don't delayed. obviously and gets exact demos restrictions there

Wahid Nawabi

scope Just to on our we for delays we XXXX prospective beginning been and that we has been as Obviously, Kevin's of we objectives pandemic this expected. our provided and longer. that, our and difficult that it's these part the earnings was guidance of forecast add extended to more said as we of fourth expect None some which call, and actually of outside we of remarks, that actually it year belief, that fiscal further our our planned and Peter, point, during quarter beyond provided. and COVID-XX also

contracting the some delays suppliers, am been as delays. select of the we supply job, some I of in still not they well addressing continues, that done of customers so team. expect given as both all, experienced pandemic just proud issues experiencing them. some and The very have we obstacles that we've with our However, still terms that have the chain with

great making So overall progress. we're

results the all second of updated. you the and give you looks to then half And We of also, from into color we'll second year. for want as the we track, half well, supports although our are it. that the you can the see just like And this what on landscape keep year as going we to positioned are

Steven Gitlin

[Operator question Stifel. comes next from Joe Our Peter. De at you, Joe? Instructions] Thank Nardi

Joseph De Nardi

afternoon everybody. Good Hey.

Wahid Nawabi

Hey, Joe.

Joseph De Nardi

should I expecting, you I Wahid, you guess mentioned LMAMS delays as funding the that does year's business risk? to guess, kind you are the account next impact the of it assuming that that that impact, issue revenue now, But you seeing as year? potential next into we relates are we for think a that year. Is revenue. not to that negatively Are some of order about take next

Wahid Nawabi

So, very are now. XXXX Joe, executing very, I we focused on year right mean, our fiscal

three like what's of long-term the Not on quite now ago. or of what specific looks that and provide XXXX you quarter call. emphasize us portfolio we've the diversification we have. in diversified our and about years underline our growth. progress do looking really opportunities many cars, and But what We base, value countries, I customer LMAMS. given do I color us and top-line for our portfolio And several our today now also are terms in we resiliency right world of but got of I think feel in on opportunities a the creation and opportunities. I we long-term to of fiscal years will believe versus of chances irrespective that our we terms as only and the geographies, that updating good. product-line as good need have in however customers’ going very earnings to our are and of growth picture front profitability there factors shows forward We consecutive fourth that of the

and one We've even many LMAMS years. business been growth we've opportunities opportunity that I that think pipeline. for is other growing. dollars been growth several – to going in our the significant many, that's in be that growing it's There of just element we have

talking very, to are that think remotely are these our going overcome to quite very regularly, soon. We the and we available now becoming vaccines we're customers issues, obviously that especially

Joseph De Nardi

any and opportunities And Okay. you? there kind of update on for does being international a that’s reality then, timing Wahid, is Switchblade

Wahid Nawabi

Obviously, of to to a ask progress, have State, at and engaging international with still. that. quarter, multiple It's last engaged are make interested, Nothing we COVID. with situation to still as potential them as let due work has that well Department changed Nothing And customers of are versus just continue me a materially the this the really still difficult our has having made it - But changed we as but you more matter because see since customers. updates COVID engaged. Pentagon. when you with countries materially know. we'll we slower has from if We'll rate –

Steven Gitlin

[Operator Instructions] take Louie? from William question Joe. questions, now the your for Blair. next DiPalma you Thank Louie We'll from

Louie DiPalma

Steve, and good Kevin, Wahid, afternoon.

Wahid Nawabi

Good afternoon, Louie.

Louie DiPalma

the Switchblade makeup XXX wave-off how capability? wondering Organic patents Fires for strong Mounted Precision the I are Regarding was the program, for AeroVironment's Switchblades

Wahid Nawabi

and good question Louie. Very great insight,

is critical. the Our portfolio, wave-off it's one. most patents defensible. that only is of A, very our on Switchblade It's We patent but important believe one very that not the

but also multiple of the quite specific terms technology patents have deep narrow technology patents that both the very area, We narrow broad in specifics wave-off. address ones like

how from previous in IP, investments our defend that. litigations and think of type we make develop we you've how also always these we similar to And as about seen track have had these – we we make in R&D of capabilities, our record to when technology we've defending that a of So, matters. sure gains have

think about that. just is that the when our selection. for we're customers it want So, our so But to again, an far comes our I I not we think to technology our us feel and it. is progress relying solution irrespective believe their also And of sure position that solution strong, good make our we that technology gives advantage. best We on

that's competition and the having are we with look very competitions. rate as a business to we our when forward familiar do, high always the that competing in we So, win

Louie DiPalma

and the resolution. involved call the telecom in guys made Sunglider assets intellectual Kevin, that had and with that And potentially, property high-quality provide the Google And what and you And write-down AeroVironment Loon, Loon's have of the fund for to associated spoke for order a layer wondering about investment video longer that's Sounds I acquire its connectivity? good. there no the Thanks. Loon? the are an in is progress like, with was like looking radio implications HAPSMobile great you And technology to you access in to opportunity indicated potentially

Wahid Nawabi

Wahid. question Louie, great So, A this is again.

accounting an LLC really based impairment, just terms it that on and process into HAPSMobile. HAPSMobile – In decision process sort that on our in an investment, own exercise impairment was side. the and that It Loon our of made an and which into of Loon triggered expedited was our losses triggered accounting investments the one-time devaluation course a side, of of impairment LLC's related then of to Alphabet it investment

it business it has the has of us it AeroVironment. with So relationship to with and operations, particularly to almost do HAPSMobile's with happen literally our do nothing

a that payload. about good We payload our like capability. In related themselves. insight I very terms are of they that's am HAPSMobile. as to relationship of really that. business. feel demonstrated a the position we sort general We question into flew to of on We Loon, Obviously, involved to in their us in in Loon not are Alphabet supplier have and a the the not

and to prospects both the success quite talk and is always believed about for in SoftBank We've run. and our all And AeroVironment in that. long Sunglider's bullish us, continue beliefs of work We together.

the think globe. connectivity and population for platform record success that being track far the improves on a of substantiates so of this is supports of human and that our viable global the I fact this very

forward look that. to we So,

Steven Gitlin

question. turn Thank with you, from DeNardi to Louie. Joe Joe? Stifel follow-up We'll back now

Joseph De Nardi

Thanks.

you Just international give Kevin, in Can what's HAPS? think. total two were Just for us I quarter? including sales international the

Kevin McDonnell

Total international over $XX $XX is was around little XX-XX. It million. split million, actually just

Joseph De Nardi

I how Okay. travel that material on of Thank kind back about you. shows. side be structural? of the it you be reinvested a other most Great. to that to to elsewhere? And expect it I could G&A, lower this? much How of be of come for and is trade as talked Do or mean, you guess, result of

Kevin McDonnell

will when comeback It's happen. say difficult to

that the would obviously not there on but So, now. reinvestment some putting really and be right at number we're time it

Joseph De Nardi

Thank Okay. you.

Steven Gitlin

holiday no An follow-up and point we wish We day. in and and to version SEC company interest And it. news AeroVironment. a be this found Year Yes, thank at relevant further joyous appreciate Good and for results. a our quarter's following questions speaking look and with you We all website industry season again for next you forward and archived your the filings you for have on Thanks we healthy we attention question, and call, can today. New Joe. avinc.com. your this of

AeroVironment (AVAV) 8 Dec 202021 Q2 Earnings call transcript