AVAV - Earnings call 3 2024 | AeroVironment, Inc.

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Operator

Good day, and thank you for standing by. Welcome to the AeroVironment Fiscal Year 2024 Third Quarter Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Jonah Teeter-Balin. Please go ahead.

Jonah Teeter-Balin

ladies afternoon, good and and gentlemen. Thanks, AeroVironment's to fiscal year call. earnings quarter third XXXX Welcome Teeter-Balin, of Senior Investor Jonah is This Director Relations. Corporate and Development

this risks Securities differ expectations. Litigation Before information Act results of within note to please statements Reform that meaning call involve could These on actual many the Private we our statements uncertainties contains materially the that of from XXXX. forward-looking and begin, presented certain cause

the XX-K and further factors earnings contained AeroVironment Officer, and company's conference after circumstances For or me of today on in in are SEC, SEC Investors President and Presentations. The website and Chief these call.Joining contains any information or Vice is and AeroVironment Copies from website team.This available also slide to contained the portions and undertakes risk Senior Mr. content update filings is uncertainties of release XXXX. other any afternoon, section particular, information risks March statements on time-sensitive from company our under such the reflect the occurring the Events filings. remarks the we McDonnell. our with a the and that to Mr. in Officer, forward-looking to are in presentation as them of statements www.avinc.com Investor posted Kevin or and our the from our events President Nawabi; Chairman, this filed this Relations to accurate Executive revision with at of Wahid no presentation make The Financial obligation to X, Chief today, forward-looking call today conference only

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

Wahid Nawabi

will will Welcome, call. our our our quarter earnings Kevin financial Jonah. recent in which third achievements, I XXXX fiscal review you, year by to and performance summarizing results detail. conference after everyone, start Thank

milestones report the Kevin, then that Jonah your questions.I'm outlook fiscal and information to Next, year remainder our we pleased take best results ever. exceptional, once achieving quarter for will were I will had our I provide and of toward key our about third year XXXX. again

included our as which Our also follows. key are Slide presentation messages, earnings #X are on of

First, million, same by third revenue Segment outperforming results $XXX nearly significantly to new quarterly for year-over-year date. revenue third highest setting and more record year's quarter Loitering quarter and XX%.Second, last doubled quarter revenue than achieved its rose to Munition a

year And performance and confidence exceptional quarter's leader be to fiscal visibility our a positioned to growth to performance continues tech strong for well this top fiscal for pleased us very and the created tighten profitability in Third, ranges. raise date. space gives fourth, high line revenue and double-digit XXXX.Our year in our XXXX our and growth and AeroVironment with guidance value defense remains shareholders, we're meaningful

strong were unmatched operational and results increasing our for solutions driven demand Our by execution.

update on systems, development, active also only quarter the market-leading also up in We're increased with vehicles to forward greater we're with Vehicle is interest consistent strike more platforms emerging the Corps backlog unmanned ground U.S. and these same U.S. Precision countries we XX in and seek U.S. loading more Replicator they later up the Innovation fires our We further programs invest we and our yet We quarter we and LRPM to continue across IDIQ emerging Range this allies stand-alone facilities, of current current to fiscal we confident with year-over-year, or across I vital and precision people deliver for long-term for throughput. Our to the These pipeline. these LMS this in to to LASSO deliver and with conditions.While as well year.In XXXX on in from Marine we markets. opportunities historic I also our and Army's last and to Switchblade on for segments. me product the initiative. those, positioned top see to our and Optionally globe our of we missions. stocking well key helicopters demonstrated integrate customers portfolio U.S. programs will to investing getting for the are a success. remain into proud further who year to the our while quarter, has This driving Fighting expanding country and last unmanned program, quarterly an million. we're Segment billion-dollar meet their our started.As our they are U.S. delivering these record as primarily remainder significant the current low Army's multiyear or platforms, updates partner for sharing mind, continue significant We're even other U.S. of solicitation demand look from as benefit such which mentioned opportunities. beyond.Now calendar through developments ordinance level about continue Defense Army's the would doubled upgrades Munition the addition growth. that to ever year, program the continue to more Long by revenue operational about applications, allies. production targeting or our AeroVironment will organic for battlefield a our LMS, year record programs internal for Munition is than begin for than to U.S. Loading We customer-driven and was capacity its in Manned believe authorization government throughout units a line future.With orders so in be we success and we on for of increase of year, third record have solutions to a setting our in DoD.We're And program to engaged altitude focus for to sequentially shareholders remain continue suited innovative Switchblade the our believe demand optimistic reinvest out another export programs in LMS factories seeking record stakeholders OPF large in best which backlog value efficiencies active successfully even the achieved will further program. manufacturing quarter greater in strong have three well increase year-over-year for include X/X investing U.S. provide significant solutions. Higher we're solutions our we're let evolving greater both We're the expect and the the multiple horizon, prepare in also demand the Since processes rise we production or revenues with leveraged in the foresee inorganic need on Switchblade have strong large or opportunities, component $XX carry fourth and XX% Switchblade negotiations believe demonstrated sole-source stable and performance.By to our of to contract capacity. integrations we future. additional fiscal LMS to platform years.We the in future manufacturing Switchblade quarter, further We're OMFV with

the line geographies $XXX team potential Systems segment.Moving quarter rose in Unmanned our Puma a to of segment. the Top the our In we million. we to good is across XX broadly for partners. XX% Revenue business and and year-over-year systems, approximately mix customers. of growth JUMP domestic reflecting our spread international sufficient very of facilities, and remain summary, increased While also this supply years next for growth couple future is evaluating chain demand, optimistic capacity of have expansion about

These is While the the is the best-in-class. million alone, we third operations, the this We undeniably for product third-generation few. upgrades contested today investments Puma AeroVironment domestic VTOL and or remains autonomous defense international small industry the include important and resolution its to leader to standard vertical keep than shipping Puma plan gold to longer these of to greater unmanned in in to we're name have and cameras, more one. navigation, the technological UAS. XX the significant takeoff resiliency enhancements In higher generation aircraft compared a tech environments, that landing systems, to shipped system continue endurance last mention customers.It also now has Puma in $XXX months original

Raven years later is stack software we're announcement has their autonomy the computer product.In open RQ-XX this Kinesis with image more we're include and to than adopted architecture platform similar vision systems recognition for platforms This common upgrading segment, address example, software workhorse UAS approximately to year.I transitioned control of it widely our Unmanned in Army's we leveraging With amazing our learning-enabled business recent and units the also to to into Raven, full manner, our bring integrate military recent Tomahawk after UAS most portfolio. XX,XXX an As delivered, new a machine the XX features Robotics to sunset our U.S. Systems plans now our acquisition, world. want UAS this service. expect the UAS that most small the to successfully

UAS Raven Range ready program stand for to Reconnaissance We to our next-generation of compete proud are the the we U.S. and provided Range the the or LRR the U.S. Medium Long time, Army MRR soldiers.At program. has Army's on same extremely and the Reconnaissance support small or

Systems our segments additional and about stream, a pipeline. continue and in revenue Unmanned remain profitable international and we Our orders offer to optimistic steady domestic strong,

remainder Puma X will and and customer drive enhancements segment. XX that We for for the XXXX Works recent enduring XX to beyond.Moving of fiscal and year our believe also demand our future product AE VAPOR JUMP MacCready

fiscal third down revenue slightly from expected, quarter XXXX. As year was

That which associated discussed discuss, to R&D quarter, quarter business's to will await the fourth rapidly shape an and many we some R&D.As in we and approvals. while last reduction programs continue new As now continuing these expect exciting on order related growth. delays resolution in customer-funded to said, to this opportunities, realizing the we increase focus Kevin progress program in will spend we funding we're now

AeroVironment maintaining of Contested solutions platforms other our advanced very are is in technologies.Many Maritime HAPS, exciting investments providing. these which and capable We UAS capabilities, require of Logistics, uniquely and

performed review fact, This its enhanced all the and shared computer video work multiyear We're performance mission I situational achieving how objectives MacCready forward mission software expectations. and to targeting Navy to million short would future exploration program a of to exceeding nothing Under recently was vial new lines explore won of of call DoD.Finally, implement supporting awareness on advancement financials. look to we XXnd that technology capabilities, that, the in award our just McDonnell leverages U.S. robotics. battlefield. future developments effort, Mars its exciting $XX wound note support planetary will and is and vision new optimizes down of that the Ingenuity sharing I U.S. our after over research quarterly In development like we outstanding, for we throughout and contract surveillance provide mission ecosystems to Ingenuity's turn intelligent our Works this analytics are Helicopter the and product very a of multidomain this that its to proud and Kevin making flight. forward incubate initiatives.In for summary, the on quarters.With now develop look will Kevin? reconnaissance

Kevin McDonnell

be highlights another you, third I adjusted the will terms quarter of will third revenue, refer margins had EBITDA. during Thank available to reviewing as finished of strong and gross our performance, both and which quarter adjusted press presentation Today, in our earnings occasionally we Wahid. outstanding release financial the I quarter on website.Overall, our

last Switchblade little $XXX.X as mentioned vehicles ground Munition the we about LMS the track to fiscal million, XX% of saw from a fiscal also meet our UMS revenue million, million. $XXX.X for is XXXX more segment earnings the of a from compared of of from increase contribution the for Medium quarter UAS, Slide in the small $XX.X but of than for or compared third accounting came UGV objectives.As meaningful during provides to product, came from half Tomahawk revenue the segment Systems, Tomahawk XX Switchblade largest million, our quarter remainder UMS, products Puma was remained our businesses. a breakdown Unmanned Wahid demand the revenue, JUMP was million during in at year XXX million X as a on quarter by had million the Works to of increase our from quarter.Our revenue is during remarks, segment year an $XX.X which $XX.X of the presentation XXXX. quarter, of XX% quarter the revenue and $XX fiscal and is from the XX% products.Revenue up last compared A quarter.Loading last and $XXX.X of services, are UAS, the year. decrease the acquired as the third half of recorded in of LMS strong, XXX% revenues primarily MacCready while QX. recently the XXX products combination third which full $XX.X to We a the for million UMS his all year's

we autonomy year capabilities. in government earnings in revenue ] muted 'XX as had X growth However, XX% and product of to the machine increase Works a breakdown between been non-halves see a year-over-year learning the because segment's Slide of revenue. [ for establishing has demand presentation, strong we The service budget.In over continue and there's delays our MacCready

XX% Specifically, accounted Munition of both year, during strong the product revenue businesses. the third corresponding for total increase small quarter, revenues, quarter systems to from in the UAS product from revenue Loitering of and primarily XX% our previous an due

trend the period for XX% of purchase of while Slide service the improvement GAAP expense We business the future.Moving expect in quarter, accounting of amortization items.In gross revenue adjusted GAAP revenues last result mix COCO products the margins, gross service gross higher gross a of other comparable foreseeable product X the margins earnings quarter XX the Slide XX% margins, margins down to improved GAAP medium to above remain at margin as consolidated the adjusted shows year.Third a XX% factors which gross product third following XX%, mix from XX% up quarter service and and of reconciles XX% XX%, intangible margins and year. Loitering in finished quarter adjusted our increase previous the this excludes presentation gross marking Munition margins. in service onetime noncash the gross overall driven improvement percentage The UAS recorded was Adjusted third scaling third from The gross margins. terms and margins, same for impact level of last was the adjusted the Tomahawk was of product closeout for the service year. XX% in period quarter XX% of primarily our the of high was same in the of an versus at the the result a The fiscal systems reached same last product last GAAP in revenue the versus increase during year.In quarter contract favorable year. new margins of margins as margins acquisition. gross the gross by year, the gross were reflecting to

JUMP decrease and factors XXXX, EBITDA. the UAS adjusted adjusted this revenue revenue amortization expenses.SG&A stronger fiscal from systems which increase or investments end products. excluding of $X in in Group an The third revenue a The $XX the of intangible the main proportional UAV, as We was or is to offset million investment in of acquisition up EBITDA GAAP expect increase right net in next-generation HAPS EBITDA, Slide in of of partially was full of R&D XX% increase year acquisition of $XX expense a Loitering terms increased version revenue last year. prior in XX% XX% prior in gross compared margins million $XX gross million, a XX, or both was the third investment increase expense $XX Tomahawk dollar income around for aircraft contributing the presentation the compared small were $XX fiscal is investments and result quarter million -- terms of third the in year. SG&A The quarter incremental quarter revenue.In was partially revenue of revenue by of of our SG&A margin, increase and the representing XX% million related our expense, to third and year. expansion X new XX following the XX% in of XXXX of of to and adjusted of revenue Munition the fiscal continued to XX% continued shows terms domestic for the of or or and and In teams.R&D million R&D sales maritime in of adjusted a earnings international expense the result a solar quarter reconciliation expense percentage

million same loss increase R&D earnings. high income U.S. result percentage $X.X the gross quarter and million factors, U.S. for initiatives as were to the spending, due last These excluding of GAAP to increase to In in in $X.XX income a a turning acquisition a or of $XX DoD funding and a to reduction the delayed delays.Now R&D adjusted XXXX. primarily decreased the of versus expenses, $X.X of $X.X million company million continuing in pay $XX.X the and The shows inventories. a some to the net growth enabled of budget $X to diluted increase AV in third finalization teens quarter amortization the R&D recorded $XXX namely loan federal on SG&A our quarter. for spend expense, by quarter other compared million million Working been fiscal cash the of $XX.X intangible balance offset are year intangible due per a dollars million close government in The in which versus share budget the to total which related for in third had our earnings million a to our of in accounts term second the sheet. million We $X.XX and third $X.X fourth pending several in revenue quarter, reconciliation We programs the be receivable to margin, down of increase and the can increase company and We expect long-term $XX.X a partially in now interest during in At decrease in increase expenses. taxes.Slide of net a cash $XXX.X investment a strong continued third quarter as $XX capital decrease DoD generated end adjusted a EPS. per other to facility. at investments very of run us the million in a of diluted year. our of quarter, has period $X.X GAAP adjusted share XX million $X for in amounted of million income, XXXX a the fiscal the posted fiscal million million quarter, the attributed non-GAAP amortization XXXX.Turning net the

usage anticipate we as working forward. capital However, fluctuate we to quarter-to-quarter move

investments facility.I'd $XXX and metrics. some million sheet of working have to our earnings X over current with fiscal under to conclude like and provides our a capital highlights with continue of summary We our cash a available million strong approximately the of $XXX of Slide balance visibility. backlog XXXX presentation

revised fiscal As and of these million, Wahid due order revenue resolution $XXX to mentioned, military of foreign backlog sales end over at to the at the lower process. the we have Despite range. challenges, third from quarter XXXX guidance our the elongated of funded finished continuing our the sequentially visibility midpoint headwinds XXX%

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

Wahid Nawabi

guidance share. follows. per confident share fiscal of our million to year million, revenue net to $X.XX remain performance and Kevin. totaling income per XX% of in trajectory us, non-GAAP of to Non-GAAP to quarter diluted now XXXX. $X.XX fiscal strong to $X year R&D and million diluted of fourth $XXX revenue.We spend a $XXX $XXX anticipate to of the We growth million, quarter third $XX $XXX EBITDA for year adjusted for earnings Thanks, XX% and increasing $XX XXXX behind we're or million full With range as narrowing $X.XX our million

Our backlog remains strong.

to continues pipeline our and XXX%, nearly is visibility expand. Our

on year the our on to soon. unmatched battle tested stand bipartisan we our capacity ever that performance, in with supplemental remain and reached trajectory our We solutions our approvals resolution needs.Given we cutting-edge await strong of best we manufacturing package ready a customers' will in again. a be meet assistance continuing While agreement hopeful remain Congress,

beyond overall expectations the the past, manufacturing product for this are customer, not expanding best and suited our given but agile or and global successful stated driven global base, track As demand single ideally are unmatched solutions.We grow in unmanned battle-tested year offering, by a capacity. technology, AI-enabled our this autonomous by record, in-glass trajectory cycle product proven to installed development our and solution continue

the Q&A, today's me remain as expand, markets benefit industry the abroad technology the U.S. addressable to leader in priorities over original for key As and our and innovator.Before points call from positioned let well call. summarize from in defense U.S. -- the we the I budget an turn

with First, revenue outstanding quarter strong record-breaking we results delivered and profitability. third

delivered to quarterly Second, revenue Segment our date. year-over-year achieved Munition highest Loitering impressive and growth its

our year in our faith we with and thank investors Third, fourth, guidance mission momentum, support growth putting AeroVironment. their and to anticipate our and double-digit you company, fiscal top raising for customers our fiscal XXXX the in tightening XXXX.Thanks year we're and line to range, of their for solid again

capable thank our Finally, ensure to strive to it products our and when who employees urgent you counts. really our customers' highly meet deliver needs

country are to support our at honored We critical and this allies time.

out to we success come.And further questions. take Kevin, As and will with now I fiscal Jonah years the close in forward we to your year that, XXXX, look

Operator

Arment [Operator Baird. Instructions] question with Please Our with proceed first Peter comes from your question.

Peter Arment

Hey, Kevin Wahid, thanks. nice and results. Good afternoon, Jonah,

Wahid Nawabi

Peter. Hi, you. Thank

Kevin McDonnell

Thank you.

Peter Arment

capacity. about I kind color Switchblade of mentioned expansion little capacity you plans. a give wonder you Wahid, on if more could

us we've what reports you you think you had existing give front seen just -- Maybe your opportunities thousand in that capacity And of thoughts there the for if I to? that product. could of a taking units. think I you're of on the was thoughts capacity couple that that know all where kind already of guys of numerous are you

Wahid Nawabi

Peter. you, Thank

such as the increased customers year the entire we and have sufficient capacity delivered several demand significantly We X produce that I today. the the the see Loitering now of them mentioned we've thousands in by remarks, of one.Number capacity believe forecasting as we're years. demand the only globe, Switchblades the two, And increased the that in next we're there that across and beyond new above sites which to in And facilities expansion Replicator, looking as plans especially so know.And next unique remain years, we're beyond that new expect and reliability you DIU, as the need.So we them engaged will that. we and to able past safety we that level at meet our and volume Defense programs thousands of and quarters heightened this Switchblade capability to in have the and we're program we produce ready. company and AeroVironment, with out in such customer already our can from world of has a in heavily X demand number go the who benefit alone, Department Munition production the record at for engaged last with very very companies to So U.S. right rigor the and expectation with years new be X like

been in to delivering additional very in products several have years, very all of quarters look We very, we couple effectively It our a the demands coming for and positive last are us. and the way. forward is that

Peter Arment

my of just units? And is to a second kind Yes. as up a more little you we held Yes. if of -- that resolution do And that color ship just to when the again, if Thanks being March, begin by LASSO just give around in could expect would delays? timing Wahid. funding you question, get

Wahid Nawabi

AeroVironment are that provider to I stated So U.S. go through that first they've on the their believe said systems the publicly sole U.S. own tranche public Army Army for has the and they the tranches, source of that statements. is the going multiple

as or deliver probably with and contract, we're to requirement well Congress, us them.In through U.S. directly. them pursuing, more. turn a the as we're their because as It our are acquisitions is expecting well that and records directed from happens there engaged expecting is award increased one many one working mentioned thereafter.We're we've the and that within Futures with we're remarks, another sometimes the support actively the for We're the that contracts others budget right office it's engaged prepared approval Pentagon we're pursuing. capacity executives key to that, by with of work know U.S. key We fact, reasons Army. in If as besides them that the General process this we're budget summer that's are program We Rainey to Peter? of I the to through by very Command. why Army as my eventually a Army need the into

Peter Arment

I'll much. two. so Thanks leave at

Wahid Nawabi

You're Thanks, Peter. welcome.

Operator

One moment question. for next our

with question proceed your comes Jefferies. Greg with next Our Please from Konrad question.

Greg Konrad

comments to bridge any How Good just about whenever service out? out that evening. phasing start, Raven. think you Raven the does to that? replacement the tied phasing is of thinking and some OE Raven about phase in And today? And terms Maybe of your how about do volume just of meaningful

Wahid Nawabi

those I'm has Raven, you been glad XX,XXX of the We've workhorse that X of at the last of the the has of is one units of around our know, got asked years, primary Army world and Greg, revenue you U.S. several of small UAS shipped the customers the We're question So because over Raven.In as driver the Military's been largest decades. shipments last Raven proud that. not for all. U.S. or very

In fact, it's been part. in a sustainment mode most for the

likely. be b, a most program going happen a, take years, And it's It to won't financial to impact will our that Army, material overnight. several sunsetting so U.S. by And the environment. not

And and prominent the been X of been in driver is to has they of expedite next-generation with as primary remarks, revenue, very very did far, requirements UAS Puma Puma those for several systems.The insignificant pursuing In last that small continues our systems, are driver can fact, at Raven generation I be years, the and mentioned almost the the we're the to really, X small for is by bullish least. -- and most UAS. our excited we're of army so that we revenue the which next system. has the

reconnaissance. referred impacts. any the is potentially have MRR which that expect as we long-range of an And record, instigator of which as that medium-range to consider we don't reconnaissance expediting to fact, in and So program negative is the LRR, next

with be the in for over years forward that future. to systems next solutions have of that. We is for and to small customers, AeroVironment requirements. those UAS tranche another look I going working several the we And We're think demand the

Greg Konrad

then one And just follow-up.

in maybe terms be think was the sequentially good move? the or stabilization think of of inventory or said inventory capital X that I in supply would that in working quarters. that in But terms around else down anything working chain lumpy I read Anything X capital first quarter. you given to the and receivable

Kevin McDonnell

Well, level our I'll the kind kind look you reached basically, of I of if we've at take that. another $XXX-or-so revenue mean, trend, of it's reached, million.

go So year. was range, increase business.But Obviously, to the continue the get you working we're -- if the grow is going capital usage look year to when a our XX% this last and midpoint guidance growth to level. that up of XX% you growth us a with year to to

X-year over period. lot a of following And right, forward, up upon I capital down we what is and had quarter depending it'll But a quarters the where that's X quarters. and think see growth the a years that in sequential demand over So go first as down move you're working we've we'll quarter. the it's

Greg Konrad

leave at Thank that. you. it I'll

Kevin McDonnell

Thank you, Greg.

Operator

One moment next question. our for

Our from Global. comes next with proceed Please your Skibitski with question. Alembic Pete question

Peter Skibitski

Hey, guys. good afternoon,

and wondering, the fiscal revenue expect target, towards I'm recent shift line into look shift you As we 'XX to to within given the that product top we LMS. given to words, current you've should line, product other continue sales. that on the In continues And continue? gross a margin double-digit trends sales, -- towards

'XX. Is it? margin is maybe in sort And of way that about gross the right so to fiscal overall think flattish

Wahid Nawabi

Yes.

about way I think think that's it. to a good

Kevin McDonnell

Yes.

Wahid Nawabi

in margins guidance both our well growth last and our strong feel the healthy, Absolutely, as next improved Pete, as resulted obviously a that. our in is the product services mean, But that we remarks, mix you very said over And our and our quite gross we of solid. a portfolio are We've lot quarters. in made with mode quarter. 'XX products margin in provide has is business I fiscal and I bit quite favorable as that our a several very very adjustments

Peter Skibitski

Okay. 'XX? I a us for to give customers you've then just Thanks 'XX, that. kind any major orders guess one, of fiscal is internationally any Got delivering near in many you're you And for can international on actually term Obviously, are fiscal of And it. that Switchblade, but sense Ukraine how that other delivered to? expected?

Wahid Nawabi

X/X of over those desire very a we working needs not respect approval view. The Department sensitivity tell with countries said you have with I for the number and to is of Switchblade. And going acquire haven't countries going pipeline of demand over yet, us with continue robust. a long and as of countries So the fact, and shrink customers, Pete, countries to all that demonstrated real are export strong are What them. able we shown actual well many the my I of are in in my and many that the the can -- in the About and is of I remarks, of number grow enduring phases our our those delivered customers' to in militaries.I'm not to the respective because different customers and that. process acquisition, large a and with XX U.S. license State is of to believe country that them demand time.They're customers in be specify

as -- a the as is match expanding and So and demand Switchblade. our 'XX customers can this of And our market we of year in we market is business has There's bullish that general lot the beyond. to capability there's why that's Switchblade convinced fiscal into also literally that alternative Switchblade still this grow record solutions to in business, feel that about battlefield. track in come nothing no the

quite on run. we're is for [ so And ] the bullish long fun that

Peter Skibitski

Okay. Appreciate guys. Thanks, it.

Wahid Nawabi

You're welcome.

Operator

next moment One for our question.

comes Our with DiPalma from next question Louie William Blair.

open. is line Your

Louie Dipalma

and Kevin Jonah, afternoon. Wahid,

Wahid Nawabi

Louie. Hi,

Louie Dipalma

the for saw referenced X past I'm Replicator. a top Replicator Puma for discussed reports contender call, you the the Switchblade a Is the Puma -- on contender? as sure the media you the tremendous over also years. Various demand

Wahid Nawabi

and systems So portfolio, We We I services. is and are different I you what if initiative Replicator is DoD with very that the our as what agree Louie, entire things -- you, do essentially, the our the on. that both U.S. the well that engaged of AeroVironment's of at Pentagon with can set we look you will DIU as not speculate on all tell poster a the is is of essentially branches portfolio volume. child coupled solution AI what working AeroVironment's DNA environments. integrated any unmanned and candidates battle in a to current is in on of cost, and Replicator. solutions and speculate details. for position identity be about.And I'm our and so should could candidates of about. not and That autonomy and that multiple with the background distributed And portfolio be intelligent, multi-domain It's precisely all also about systems about is low it's contested high and are robotics all

Replicator in things and Well, have that of all and of important can DIU, is heavily be or of for you you of that in as that we thing And is, go see that it's us highlight U.S. the produced that's production deliver with to level you've you able I engaged sure tens way ready.The than thousands thousands production to them described the as well today, from cases, the with to supposed want portfolio various in hundreds better Although to Department to heard Defense concept of the ability the in today. fast. into our thousands, systems entire really whole I other from already.So as even Replicator to the leaders most else military industry. is we're the anyone make be way, of the Pentagon, we services very stand the about

we that because And is that. top the against and And at big the Replicator production levels U.S. to so of high think play reliability cost our is role of success a the initiative manufacturing all in adversaries scaling about world. that, lower would key

I we're quite well. So think positioned

Louie Dipalma

be like this on is need given given, does end it you? Peter's to X passed award funded the award be formally Tranche and like appropriations the backlog that were Great. And to X be order to for there following now for up you that that Tranche in budget question, of the to quarter? XXXX in Or for verbally LASSO be to is

Wahid Nawabi

on Louie. it's within all that based think budget the I Congress, approval

the that believe also, in far should those those you process up to to on it's the and won't also So ones, approval we And many as potential the U.S. several the is we are tranches, not tied reflected there's there provide Ukraine. packages. specific our of for assistance be of planning and so within is in part our And of as any to are know, that but able DoDs House I Congress. White backlog. still comment orders opportunities additional, candidates tranches that budget be great

Louie Dipalma

on Great. double-digit Ukraine one. like XXXX stimulus growth dependent like one major fiscal funding? How is final And the

Wahid Nawabi

Not much at all, Louie.

us. expecting very our next a quarter. now. be the another year at backlog XXXX But sitting for Obviously, we'll very to we're are We details provide high -- right you record the level of

the in strong. is position Our market really

track high. our delivering Our extremely products and is record real performing today in the of relevant battlefield battlefield,

continue and believe demand the going excellent Our expectations grow, many I high. is year. and backlog of opportunities that are next or to is level those our customer satisfaction to in And not for current

Louie Dipalma

Awesome. Thanks, That's everyone. it for me.

Wahid Nawabi

Thank you, Louie.

Operator

proceed RBC Herbert [Operator from Instructions] Markets. question. Capital Our next Please with with question your comes Ken

Unknown Analyst

Congrats guys. ] Hi, the and [ Jonah. Herbert. quarter, is on for Wahid, Kevin on Strachaus Steve This Ken

Wahid Nawabi

Thank you.

Unknown Analyst

either So or if of percent kind just quarter I to it business business. was the discuss And what it's like of the sequentially for flat, Historically, means moving year-over-year. be on could at wanted that start the of the revenue. XX-plus your of seasonality to your hoping represented going kind about fourth you forward. looks guide, looking

moving how -- just think about trying So just gauge should about trying we a that forward. think to for get to

Wahid Nawabi

Sure.

in fact the at it equal very us of to the in margin terms my improvements. to so I'm you our mentioned So quarter, improved level level for beginning load each not backlog allowed increased production, terms due of fiscal which our that have only quarters, that throughput able in noticed glad and been our load that specifically remarks factories a the I increments also year, helped that our large we've on Steve, but of deliver to product the efficiencies because revenue

very, how this level decided been year. us.So able we've past throughout very achieve our and to year, we fortunate So and all factories, remarkable for load whole of well that intentionally been been that the has positive intentionally a to it's quite

-- each the that fact midpoint level in year we're of quarters. the year, loaded we've been the XX% guidance growing equal we've for of almost Given grown our the nearly quarter,

would good.Going really we load determine that's going too next So lot our to we it -- all backlog Not receive our best have customers always afford that our a products us to level early these synergies of year us helps to allows large a into But to as that. the mention that forward, as possible. prefer also obviously trying as factories soon improve are early that to to things. it's

come those our more next all and are So on that intentions fiscal things year. for to

Unknown Analyst

more as a maybe follow-up. then just And Great. one

you gone to to push the most now? right of CR expectations. kind earnings continued sounds just sit season as of of this wanted outline fiscal to budget for the some yours maybe through recent have it get Just your 'XX. thoughts far the It and as we've on as to we like just Can people, as kind where

Wahid Nawabi

for since fairly backlog the is our and given Steve, this strong this quarter, year strong fiscal fiscal year. fiscal not and year So XXXX, our going fourth for a continuing And to resolution we visibility have impact revenue news backlog, the environment, year this not of be be and a for elongate were to good beyond obviously, fiscal even these first go year to should resolution manageable.However, quarter continuing next going of if our anybody. quite it's

of a good bipartisan from about experts that I. There that passed. than hopeful many lot past other is fairly so Congress. There's in signs that couple weeks budget And perspective, that this we're know are more

Loitering continuing. still what's what Munitions I'm Ukraine war end going of believe what East the still stockpiles high systems that our tell And We and I'm we reading So is can and understanding that a the unmanned and we're small systems. our anytime quite needs believe an We military that I on. to you from are terms low priority. these in won't speculate, that Middle then really but the don't soon prepared. I see And capabilities in are is and from

well, to result... off I but pass think and the we're think and just a positioned will much Congress quite I get need as So everything better over hurdle the we therefore, be budget,

Unknown Analyst

queue. in the jump back Appreciate I'll it. guys. Thanks,

Wahid Nawabi

Welcome. Thank you.

Operator

time, At closing to remarks. like for the session. you. this Thank concludes the would call to Jonah I That question-and-answer turn back

Jonah Teeter-Balin

your joining for again AeroVironment. once conference you Thank for and call interest today's in

look and As results. again you this a can evening with wish following call, of an We our to Investors found a quarter's of filings next reminder, relevant version the under archived good news and website. section forward speaking SEC be you

Operator

call. conference today's concludes This

disconnect. now may You

AeroVironment (AVAV) 4 Mar 242024 Q3 Earnings call transcript