AVAV - Earnings call transcript Q3 2021

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Steven Gitlin

Good afternoon, ladies and gentlemen and welcome to AeroVironment's Third 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 call 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 and reflect Xth, 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 March 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 our emphasize Welcome fiscal year Steve. quarter X earnings on key our call, of will messages three earnings I conference Slide On number presentation. call. third today's you, included XXXX Thank

deliver COVID-XX results challenges strong presented to team our despite by continued the pandemic. continues First, the

delivering long-term achieve Second, growth. over our growth consecutive we're to accelerate our on will success of and year the track And that while double-digit line successfully long-term. near our year profitable acquisitions third, executing our we're strategy through XXXX our transformative recent fourth objectives fiscal top

product an per in Now our number presentation. of for expectations. is Earnings quarter, share an a XX% which let's review the revenue quarter $X.XX delivered financial of to the X revenue in with loss performance consistent and on Non-GAAP increased compared increase increase year-over-year $XX.X due $X.XX, of the margin. diluted in earnings an as of third $X.XX our to diluted Slide million, outlined was quarter We earnings and from year year. share increase of $X.XX, prior of primarily per prior third our the

supporting U.S. Our on team continued executing positive our to momentum more and build acquisitions. transformative than customers our XX allied on simultaneously and

pandemic profitable continued to consecutive restrictions, due we're growth. delivering mainly the fourth our to While on and year a orders commitments still working toward of shift some travel

we're that of and quarter, record company extend track we strengthen and During financial our and AeroVironment's the acquisitions operational three will confident after third end success. shortly significantly announced our of

Telerob and the serves defense solutions family and vehicles. public decades With in of leading of Telerob, contractor. U.S. a three portfolio has opportunities we're robotics almost recently unmanned the prime in a our program, decision for significant across await see for Air of from large customer with as We Based countries. XX acquisition cross-selling which ground bid business a on Germany, and expanding EOD the Force safety our been base we in customers

competition result of year and by Telerob Air of the acquisition the end XXXX. We our expect to the the Force close learn fiscal

further X.X and TXX from hours significantly medium class-leading our UAV, XX, of as refer Arcturus compared to XX, fly February Jump acquisition Puma UAS which solutions, and provides with on longer now LE, endurance UAS. us larger small to as to XX our carrying ranging UAS hours. We our while medium that payloads closed providing MUAS Next, can or

team SOCOM MEUAS U.S. to continues IV deliver intelligence-as-a-service on program. MUAS Our the

well-positioned In competitive addition, a solution. and participated UAS this understanding better the the Jump U.S. program. week, opportunity Jump with a the legacy FTUAS, XX last suitability XX's capabilities the Group Army's for in demonstration is of multi-year for the Army's or program Tactical Future for Army replacement providing We a of X FTUAS

extremely Our our will autonomy innovation and autonomy perceptive of Virginia office and significantly capabilities for as and our artificial Progeny development will ISG. a we improve Systems center, our competitive of system become and XXth, Last, of intelligence a Systems or supplier enhance position software of February solutions. this acquisition entire Corporation's focal advanced this Intelligent is intelligence should well developer which performed announced Group machine ISG's on accelerated AeroVironment's best-in-class set. the that demonstration, for point in program. solution ISG serving vision our

us into more solutions key drive team's I The ability For with the helps in modify any changes appropriate be will ISG capabilities ISG Advanced U.S. to ISG's example, source mission and actions. the merge detect relationships for ISG customers. portfolio Works R&D pattern also team life customer-funded defense non-defense with profile missions our our them the into loaded Once search to unmanned ISG customers. take our time, autonomously of increase develop team identify for cannot analysis. increasing objects, search also processes MacCready specific software and innovation automatically from the to of our while deepen the an from our our identifies can even of technology for systems, government and field, projects. and a imagery the value their enabling then to object overstate over revenue object, Solutions

the also exciting and team, area. new over D.C. our three that value near to presence our are enhance ability drive Our shareholder Intelligence and will expand the business, in Artificial Center These Innovation transactions long-term. Washington our our

XX% in the small shifting systems line our results, third small Now, represented total we for revenue and quarter global the in our the business leader to UAS. product remain of unmanned aircraft market

our Antenna UAS XX healthy the solution remains The small a for pipeline. our During UAS our range Extended strong the kilometers. to expands quarter, for our small we up to contributing international of set market announced Range that new command-and-control

third our product strong are received we're market ability travel the to experiencing believe delayed our international limitations revenue, forthcoming. COVID-XX we ability the of government is will this be from also represented missile tactical additional important as close orders, unique customers. systems In export. line, While first approval the export XX% for U.S. in an during U.S. This for in confident delivering us Switchblade's our Switchblade demand we customer capabilities to pandemic, XXX. to We which continue which for of quarter some do the identify to we not customer intend We allies milestone results.

we commercial expect Switchblade States sales We transport also to The performance would program XXX Marine customer Switchblade of A we loitering year military over or performed this XXXX. competitive the impact to missiles and of the as conditions. for Switchblade of direct government's OPF-M or to end foreign key program Precision this in exports a take expect Launcher within on for the Fires-Mounted launch We place stated down demonstration numerous the very proud FMS environmental now the ability XXX that program. platform. opposed place We're the by Multi-Pack program in pandemic as timelines, Corps' multiple Switchblade Due previously Organic select from XXX of on program. mobile the sales. launches U.S. expected, our fiscal providing harsh the United February for compete to took developed

product line develop We Navy to are building additional Switchblade its as our of the we for adoption the and proceeds Blackwing. as demand variants pipeline with continue U.S.

which revenue. represented third Moving to of now HAPS, quarter X%

committed and value and opportunity creation this to AeroVironment remain its Corporation SoftBank potential.

a learning the flights data are five volume the We demonstrate our performance from improve large aircraft. collected the will manufacturability. both that process of confident successful first next into facilitate have version We're and our Sunglider the and enhanced and incorporating next of of certification test design

to like the would discuss of business. pandemic COVID-XX ongoing I impact on Now our the

customers areas without our to production customer in operate We're experiencing our domestic experience and in chain decisions international timelines. of configurations. to continue in impact work some also We our delays minor largely delays limited on supply who contracting remote

rise, continues the likely While summer. situation and assuming we're beyond to the of that is continue this current rate remote work through to vaccination

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

Kevin McDonnell

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

the from the was XXXX $XXX.X TMS we last revenue. the up Again, of offset lower increase performance revenue other an of TMS the reduced which $XXX.X XXX% HAPS in product for same which year. especially from also partially up showed These and last UAS same period quarter, higher XX% year. was During Small period were sales offset strong by our was line, largely revenue fiscal partially million, XX% by XXX% the first million. XXXX was revenue. growth three quarters HAPS year-over-year to in of of from the first sales, fiscal quarters increase due the were three Revenue

revenue mix, first revenue due service product year-over-year by third the overall product quarterly earnings was XXXX. of margin revenue lower lower compared million presentation to X was revenue. our Slide to million over XX% gross $XX.X versus $XXX.X margin primarily to five service prior to partially or Again, XX% Gross an $XX.X the quarter. margin. the margin of year-over-year higher for a first Gross margin or gross product three million The percentage and for trends of of gross $XX.X gross quarters. mix. of primarily or the of due to quarters XX% million year proportion margin the shows quarters unfavorable Turning offset the XX% an was past mix or of which unfavorable the compared XXXX of quarter third for revenue for was three product fiscal was

margin forward, expense intangible result the expect from as Looking increasing decline percentage gross announced amortization to we a of acquisitions.

from still expect gross percentage margin as to we in in points intangible process a X amortization. percentage we of accounting, the be decline as much While purchase are the increased completing

SG&A a of expenses. quarter operating by fiscal was quarter Next, to million third million XXXX. expense revenue for expenses of driven $XX.X to I quarters SG&A in of $XX.X or of by of $XX.X and SG&A quarters of million or first expense million for expenses revenue to XXXX the $X.X compared from the of increase SG&A million, turn revenue expense the restrictions. XX% partially of revenue of XXXX. increase was was offset acquisition for fiscal resulting three fiscal The or XX% $XX.X will COVID-related the three first expense third in an quarter reduction related XX% or for compared in travel show trade current XX%

acquisition expenses quarter and significant recently announced in integrate We the expect related complete as fourth the acquisitions. we

fiscal first portion SG&A expense will a $XX.X fiscal In as amortization fiscal integration addition, will million third we the quarters $XX.X revenue XXXX. of acquisitions or the or 'XX. fiscal expense Integration should XX% of intangible quarter or three of was compared revenue to the expense of quarters and continue result consolidate million of as of a for recognize R&D higher XXXX. of compared the first revenue to as for SG&A. was or the expense SG&A of costs intangible R&D see of million the R&D Overall, of of costs. the amortization XXXX XX% revenue for of also three into a increase and quarter $XX.X million in we fiscal for XX% as part revenue third XXXX percentage $XX.X XX% expense

investment full across we make absolute to expect product as absorb we fiscal but XXXX. of on revenue the a this approximately We continue In acquisitions, year to our basis lines. XX% R&D to increase decline dollars, investments will in

loss a or loss $X.X offset quarter third net or at million, third largely of of in increase of SG&A and net benefit in equity diluted share XXXX $X for compared spending. minus per margins fiscal higher were to investment income AeroVironment income improvements bottom attributable the was the $X.X largely of million. with Looking million a of $X.X line, from $XXX,XXX of income share fiscal a diluted $X.XX higher of $X.XX XXXX. per reduction The quarter million These taxes to was result million, by R&D a and $X.X higher gross the

the the Loon of by million lower For or HAPSMobile $XX.X share net XXXX, fiscal together first the quarters primarily investment first of partially in share spending interest income three impairment $XX.X income $XX.X million. XXXX. to fiscal net gross net $X.XX loss due was R&D with $X.XX reduction three the was $X.X million million. diluted its of quarters income for The income to from of and per per compared reductions or million in higher diluted $X higher These margin $X.X were portion million million our of in of $X.X offset of

XX non-GAAP $X.XX. per EPS. adjusted share XXXX share and the per of diluted per shows third quarter for loss In XXXX the of fiscal third diluted of adjusted Slide $X.XX EPS, GAAP earnings or terms share for of diluted of diluted Non-GAAP the quarter was versus a reconciliation fiscal

per three first per $X.XX of quarters share of diluted share. versus the diluted earnings non-GAAP XXXX three For first fiscal non-GAAP share was share was diluted per the $X.XX diluted per XXXX, quarters for earnings

Turning to sheet. our balance

capital strong end of third of and $XXX.X million, from at of the Total fiscal totaling with position of XXXX. cash, end Our million from activities equivalents, quarter an increase cash the during and cash cash XXXX the quarters investments was came capital three the activities. fiscal $XX.X operating of the $XX.X primarily operating of remainder the the of a receivables. The working million improvements collection improvement of from was million working which accounts $XX year was result from first

closed approximately we In acquisitions end of $X.X first of total to during three we million. from our February $XXX XXXX. capital third quarters Subsequent expenditures, cash the spent existing to terms quarter, outlays cash of of related the had the that the in million

million down Arcturus on entered remains into facility acquisition. the and loan used credit we revolving facility the $XXX facility with $XXX with credit the banks. of acquisition, we of unused. the Arcturus term a a conjunction drew million in facility, $XXX group loan $XXX term to close fund addition, million In the a The million which At transaction, revolving was

at significant as debt go-forward Telerob to in period. also the cash selling issuance the million to restricted we investors adjusted given fact sellable tranches I'd the amortization of that to quarter. $XX XX-month an over issued better outlays EBITDA the a transaction, shares Arcturus We are additional AV that expect inform now adding a our the intangible measure related become during to particularly which we fourth of an balance expected is note will Also shareholders. our of close basis is non-GAAP the stock acquisition, stock Arcturus to XXX,XXX and on like and This approximately on have we sheet. close

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

funded in decrease of $XXX.X quarter from end due $XXX.X fiscal delays a million. COVID from at of quarter an decline the a third $XXX.X Our was and backlog backlog backlog million and of the million of primarily fiscal - of pandemic. $XX.X decrease the to the million, from fourth increase is orders of of resulting impact QX The XXXX XXXX the

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

$XX XXXX in anticipate backlog Third contracts we guidance from of during $XX we Quarter-to-date of that revenue and assume million backlog the XXXX $XX This that we incrementally anticipate unfunded adds our balance recognize up of the to funded of range. anticipate midpoint fiscal fiscal to in acquisition bookings quarter XX% million. to million. year that execute or $XXX fiscal backlog XXXX revenue of including execute to ending million

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

Wahid Nawabi

increased global ISR solutions have Thanks, ISR solutions In demand the locations demand including we has broad military UAS Kevin. set its The delivers. U.S. services. for and this footprint, and SOCOM U.S. approximately IV of at reduced point, for where MEUAS task unique healthy. overseas remains for our latest valued services, product order announced team ISR for program MUAS from MEUAS we highlight seen today, $X it award our the which To million our line

of to to upper demand increased million our expectations. the capabilities earnings We with to as smaller seen number XXXX This XX% military them our XXXX have and year million we of when by presence. also the nations presentation. our operate expectations corresponds half $XXX our on revenue visibility of faced to fiscal fiscal Supported year between prior Slide midpoint allied $XXX revenue range, are for range full a narrowing from summarized X guidance U.S. our help

Our prior and ISG revised acquisition, and expectations include close UAV pending acquired of anticipate to Arcturus the which current businesses the the Telerob from revenue to the we end year. fiscal

margin amortization to prior We will expect expect EBITDA that deliver year adjusted of revenue percentage We our and in with last incremental expenses, now our this $XX investment between million of We quarter's research assets, full share, investments HAPSMobile revenue will results $X.XX profitable acquisition our $X.XX fourth development from low-end acquired year. of growth. range. the diluted revenue revenue expect to our to compared and excluding revenue businesses these XX% to which the for result revenue guidance, impairment of earnings mix as consecutive year intangible and $X.XX. Achieving achieve will $X.XX, acquired the double-digit guidance a diluted fiscal per Consistent per $XX related lower and total represent of of of million, earnings gross the share prior to excludes fiscal non-GAAP approximately now XXXX year. year in

customer the pool more a and to solutions a expansive company increase portfolio Our wider our us stronger of strategic across missions. a address with make variety team of acquisitions talent

members We long-term strategy selected confident new these our team for into manage are and our capable AeroVironment value integrate have and carefully and leaders dedicated businesses and near their to ability in execute of to creation. each new

on our of us conditions portfolio fiscal to follows. providing expectations current undertaken growth as position preliminary market now we're view success, year of based have we result a shaping, significant for and continued As for XXXX the

of to $X.XX to $X.XX share and per and share development adjusted per may earnings million $XXX fourth full million and of late acquisitions June expectations research million more diluted year around accounting. our $XXX associated $XXX purchase We provide fiscal XXXX EPS $X.XX, quarter diluted XX% and $X.XX, million $XXX after expect between revenue. in non-GAAP in EBITDA, revenue all investments completion and in of release revenue, and in the and earnings We between refined earnings

solutions business I evolve range today intelligent, future continue steps portfolio to We robotic achieving achieve three stated of shape The to growth our to main multi-domain In and upon advance state. reiterate delivering for represent the major strategy. future their acquisitions value creation and Ultimately, our provide toward our objectives discussed summary, rely a our will and to our have goal customers increasingly to thereby our objectives call. is today's points achieve systems. that of our

our First, continues COVID-XX pandemic. team the by continued the presented results strong despite to deliver challenges

Second, our of fourth successfully our top profitable third, objectives will acquisitions our growth. year transformative our accelerate track line are to the long-term. and we year near we're through success executing that achieve growth over XXXX And recent consecutive long-term on fiscal delivering while double-digit our strategy

their and to doing for our unprecedented our opening shareholders customers ongoing team so dedication to want rely to trust. for I succeed during to our them their Thank thank to continuing pandemic. serving commitment Before entire the on to our talented across to this you Q&A, ongoing customers organization help for and us your

I your remains Steve, with of you commitment Our questions. certainty. help take all our and to proceed to stakeholders will now Kevin,

Steven Gitlin

Wahid. you, Thank

Robert We now Instructions] afternoon question-and-answer Baird. question Peter begin session. comes Arment Our of from will first the [Operator Peter? this

Peter Arment

sneak kind for giving of XXXX. an fiscal at us peek Kevin. thanks initial Wahid, Wahid,

about, that would I think some but obviously basis had to of be. what talked you of up you've all with given operations M&A come efforts it's the the sort obviously helpful

a maybe breakdown range? to XX% XXXX? that talk XXXX key the you some specifics you of into revenue when that could you want Thanks. when the had if visibility of you just acquisitions, thinking the fiscal think pieces I on Maybe about fiscal around about of we're increase kind came don't

Wahid Nawabi

acquisitions mentioned our range. double-digit and Peter. my growth businesses Sure, will guidance also fourth remarks, the be Thanks on before so line year are as within of our profitable this the I core consecutive top

these next understand of our helpful translate fiscal terms impact of our year is In on will acquisitions significant to how fiscal results. it believe this we year's investors the given for positive business, anticipated our into XXXX, very

matter, provide we we be next outlook clarity for year. of that it level figured for if helpful a So, will could some as preliminary

both I overall our amongst tell us call These acquisitions full value the as provide in solutions, late we In our creation do a and us. strong. three other will for always is, and portfolio domestically and terms set incredibly remain our existing in for opportunities year coupled well our across we solutions can demand that very for growth and of large of of that position and internationally earnings long-term fiscal June. with on you visibility, business, really, opportunities fourth year details What positions

creation that are So customers' very we've carefully in value moves and opportunities that I deliberate us and missions, will provide that we're very long-term the selected to delivers firmly and Peter. these for delighted, it these believe made our the value

Peter Arment

Thank you for that.

opportunities core kind platforms a it or that follow given it's ammunition do similar of on, past follow-up just a the first been the expand if Thanks. we've with I to expect just internationally. something of Obviously, you the as Just that UAS to to kind to continue path loitering be seen nation. how is in related allied just to XXX able a this and adopted? how could the different Switchblade Does you've your

Wahid Nawabi

is, Sure, thanks answer the yes. absolutely Peter. short Yes,

- I've our if not larger actually markets. adoption Switchblade the entire expansion - for of equal XXX, now internationally before, first and Switchblade not Switchblade As other international outside variants said also and the opportunity definitely family us market but our globally, for represents into the the XXX just foremost, domestic

Switchblade our are delighted we an hard years a license very long achieve after that to work for able were - obtaining allied successfully extremely for XXX. an many nation that export We of

position disruptive market. a terms not to paradigm business customer in but the the our name future this brought purposes, the of sensitivity TMS to that shift be this absolutely able in for are disclose of and We that to a capability of is we

great take opportunity other executing that our in I also at good think team these as things time, are engaged We multiple Obviously, we and lot been remarks is our incredibly as my said the with countries. have plans said has but before. allied I've

look in you So, updating to on forward that. we the future

Steven Gitlin

question comes Pete Thank Peter. Skibitski from Pete? And our Alembic of you, Global. next

Pete Skibitski

guys afternoon quarter? hard all - the on congrats the Good and all work accomplishing this

Wahid Nawabi

you, Thank Peter. afternoon. Good

Pete Skibitski

to your Are - fiscal XXXX from of on assuming international and follow-up guidance? kind of little in Wahid both incremental are this assuming Just a your revenue - a remarks, Peter's a you wanted on you opening questions, incremental XXXX headwind ask some kind bit just for some little in but you fiscal touched small UAS?

Wahid Nawabi

Actually, seen those regard. supply we of in and them our in extremely managed chain, the general, what Pete, that timing. do acceptance restriction We've have achievements and some international delays contract really proud but trainings, placed well. that the domestic some tests of I'm that to I mentioned has of of remark, for in mitigated in pandemic terms and COVID my seen that of is team's all for flight in travel, and restrictions demos come our primarily and we've it because customers because to our very

sort year, into Going capabilities the for U.S. of to for a equipping customers to of in very services motivated and fiscal make our troops have a that. up next internationally also the themselves in of with small change of harder No that UAS. our and drawdown posture opportunities international we has look the take doubt our healthy terms ISR pipeline

pandemic major healthy sometime towards in if good, pretty we've of that's don't pretty opportunities think I behind in as of XXXX, issues, overall. And see customers or size volume the some any summer and can especially fiscal So into terms going international the we we overall, pretty a hopefully general, end But and this well. robust demand seen that diverse of pipeline and very so. get us, of I have healthy delays

Pete Skibitski

Okay, great. appreciate that just follow-up. I one

Just on events along HAPS, nicely. test sounded like it the the are coming

that? in some we quarters going [Sunrider] of improvements. kind new You're so? about the kind a to Should kind to at some the next contract next right or point of of the think for of What's couple way expect make uprated

Wahid Nawabi

value Pete and the both on of of and and Yes, long-term that, so going committed after as how remarks value are I is market multi-billion-dollar companies brings large the what creation the mentioned a it HAPS to attacking. opportunity it

designing terms from with are partner. working of amount amount we've We've five our data short-term, There the enormous learning that. we an In - collected into we our terms I have very, all and that. of the was next of successful that very flights building consecutive of original airplane. progression said, of of that is to as the tremendous of exercise had It's plan natural incorporate generation and which the and of development in

and proud this you of ability cost I'm these in times its its to manufacture keep updated. going with a throughout how or put we'll effectively working augment contract there we're very to a a very again, program continue either executed despite are phase team, short-term, contract way reliably the in existing more to but the figure far. to difficult customer so we're and chances improve out we it the So, the we've to foresee disruptions work. new place not pandemic, our to well any be able where and certification do obviously, to to prove business continuing be our critical entering We improve product COVID And and

Steven Gitlin

Thank you, Pete.

Ken? Our Genuity. at next question Ken comes from Canaccord Herbert

Ken Herbert

margins Wahid, the wanted guidance to full ask the the I with at as first initial the Arcturus the implies from expansion, a just does as in down a a margin contribution you for - imply but that percentage year? maybe guidance look step some have XXXX nice

Wahid Nawabi

program, in award, very demonstration both we're which today the very IV with XXXX, acquisitions. FTUAS already and in And of much on line very what terms for potential the expected. progress delighted Hi, for that Overall, with a MEUAS a so and our program. very, fiscal outlook that we Army's Ken. say the would both award I with core it's business say we that I would announced $X did we're far million making the an we successful

both EBITDA over it The top-line lot represent done. of me opportunity billion we're acquisitions they incremental and actually opportunity financials, know, MEUAS Not a we've these of improvements market mind, bottom-line market are very long-term and positioned Keep significant only gives a long-term, in they and strategic alone of are bringing So billions moves that that confidence represents extremely but well. you us. also large for dollars $X in opportunities. our a delivering

engaged lot we we're but closed the we'll quite we Everything done next far the we're and is work acquisition. to go do so engaged what trying as good, with updated be that there a throughout forward. We're is looks keep quarter team. So, to you with them more just

Ken Herbert

just could, the I expect if terms detail a weeks the next any any system ago can timelines? sort how a And on flights performed? demo of should And the we great. that's Okay, you milestones follow-up few in of and more what give or around FTUAS, more the

Wahid Nawabi

Sure, in was as RFP. to the a they them announced a requirements formal U.S. competitors a invitation along come to conclude actually the sets milestones well that the so obviously to well. was conduct conditions, competition general, terms really They inform of terms the system about set of hold environmental very creates of our our their I'm so scenarios that from our demonstrate and another conditions to mature expected a that year be longer-term are finalize and is program, in what and customer this before in years, half in see is it's I pleased demonstration. as very believe It going players result challenges in wind be selected far solution two to performed me sort well as Army the within impressed the but far. haven't and RFI a and the specific various We to of believe the primarily terms for this This which key able a capability. solution by how us. All the really of what team formal difficult to or to and despite performed really actually in awarded that they're extremely any

- least but for that, unfamiliar not is us think and quite that. that compete fairly We're We us positions we're that have positioned we a we're So, very positive - no to sign I with quite well. familiar well. with still at are

Steven Gitlin

Thank you, Ken.

Blair. Louie William to Hi, turn Now, at we'll Louie. DiPalma

Louie DiPalma

the have engineering category? like do has aircraft there you with other have be all patents for in versus will months, aircraft are of increased three done from Thanks. and pursuing this aerospace attempting to your lifting same appears space Sunglider you've and giants space copy on stands Can for view that to technologies. next-gen generation on the certification the been the Over you heavy aircraft? that process? appetite Sunglider like environment Many this And HAPS prevent topic, doing specific what you investor investors what AeroVironment others of been after next the competitive type past how discuss

Wahid Nawabi

great me Louie, of one at them both let a so time. well, questions, address

know platforms, terms in I There ourselves The landscape competitive strategic amount can enormous of competitive all and of is partner, nobody an versus have partner and the successful value first we much This space the we tell track unmatched category that in confident. progress near space much so which feel and we've as has as a alternatives one has Sunglider I as have experiences AeroVironment quite made and achieved space. the industry that and the far the as the entire record and or of of where that our other is world. proposition our both is in you a

feel but also And HAPS not geosynchronous other proposition balloons other or competitive as differentiators or strongly micro believe satellites. or a compelling solar the HAPS alternatives We such that of Sunglider really has value against in space. about only that also LEO very we platforms, competitive

advantage, differentiated sustain ability that area. beginning advantage fundamentally In in to strategy and part a terms competitive that is have of defend the from patent our and it to of our competitive

from that filed jointly also AeroVironment. We work at the years' separately with HAPSMobile two we have patents past last both from three numerous to well as as numerous,

are have cetera, number it there airplane, of So we patents terms constellation, actually subsystems different cetera. the the of provides the way design communication et that architecture, in a of even of the the et the

that publicly we in we later. this more if file competition. versus us and they space they all So can we competitive in But are that claim very like, and that are you and we you in of in could compete other with stuff details provide feel terms general, position, players about our separate good welcome the a discussion who these available

Louie DiPalma

competitions the any as in precision Telerob guidance? fires forward contributions the are competition, preliminary is, waiting Switchblade approval. been wanted that mounted say disposal last such on and investors from for to Wahid you long-range assume something congrats those competitions have I those XXXX export long fiscal three like that the is many does time. program question like referenced FTUAS, Thanks, explosive the the the contributions or That guidance there from also a assumed And my

Wahid Nawabi

next Louie, with our an when conference was that that both you details in next and our I we this time tell call summary outlook have will fiscal that that for lot was go our core So analysts. businesses. year level we've for impact has fiscal a shareholders we on strategic In believe of portfolio numbers that of significant at current general, earnings provide felt with more in large the rest our We We acquired into preliminary opportunities, detailed that integrating our we're a you can the moves of you of made - very of we because provided the year. XXXX. this we and our this in visibility critical businesses businesses that

the Our is in strong. space incredibly position

opportunities and We're AI the and of is portfolio to in Our spectrum. all at space to against intelligent large pretty autonomy diversified. provide that fortunate large solution robotic various to system depth positioned such breadth competitors very of our coupled we're multi-domain, uniquely ends intelligence other access of and believe I capabilities. different have a artificial the And opportunities and with

non-GAAP range current diluted to call. the $X.XX our providing $XXX strong is so, on of our million So, as and million about And very comments, to significant a obviously, $XXX on $X.XX growth the a revenue way look growth per from all next going earnings share to up you in numbers. range details forward our more saw we

Steven Gitlin

at [Operator Thank comes And Stifel. question Joe. Joe next afternoon, you, Instructions]. DeNardi Good from our Louie.

Joseph DeNardi

at of of folks kind - think clarify, are Wahid I it's what to one acquisitions, you to you just the bit. absent that said yes, death, And sorry FY in XXXX but revenue much for quantify this to beat come kind focused on have low-end little guidance a in And the is right? the just guidance, of can implied XXXX how the us? growth organic revenue you FY then would is that

Wahid Nawabi

original beginning remarks my at our ago that from our guidance Joe, we of now. fiscal as that I on provided at the if a you yes, about year said look year XXXX

Our a still although of - we're the referred time us we a - given to variety lower-end. there our of at land. going risk-adjusted organic core that any probability Again, our that range at to think outcomes where businesses, as that be guidance within it we that's is on probability we businesses look gives that would of a

we With this our although that We them not the close these still one believe still to upper this of is expect we're at which but but acquisitions, closed, quarter, to guidance, month. be going are within that limit.

that. very we're So, with pleased

One of said I've the has year things pandemic this timing affected is some the that on us, orders. throughout of as actual that has timing entire these the and had delays

look and opportunities we expected customers portfolio. lots have that. and quarter which to different delivering as a We've a forward We very pretty planned significant of entire ready we our involved and for we across with pipeline. we're We're healthy got

And the another be of in we the creation solve year value us. end-to-end of markets, is will problems that for So think our the ability company breadth top-line customers' the space of unmatched opportunities consecutive of our industry. that's double-digit we so have really as fourth profitable our long-term growth. again, in of this really, are the can't well in for The solution, us I size a to positioned front

for look forward the to we that long So, run.

Joseph DeNardi

revenue in XXXX FY growth the and Okay organic the guidance? implied

Wahid Nawabi

and in those conference the full as earnings amount At next position. so And to call one. details, impressive this amount given our we've of progress quarter and based said Congress providing another we change in we've be fiscal point, the will on commitments of year provided Joe, fourth power We our and the made done all expectations et the initiatives can forward with coming cetera, preliminary pandemic, is of far in Keep of see. and the on acquisitions, - headwinds what still we're do based closed good this parties of we on on that we we our still remarkably haven't a terms again, deliver key change information the year, what finished we year. cetera, in COVID which haven't et we've we look one administration, on mind, to but that political intend growth up in our of

Steven Gitlin

no further We time. have questions at this

be you your wish attention to all We SEC version in next website and this day on following thank for a our call, and you and with found good forward speaking An industry of can for avinc.com. look you we your quarter's results. interest news again company AeroVironment. relevant archived And filings, so, and

AeroVironment (AVAV) 10 Mar 212021 Q3 Earnings call transcript