AVAV - Earnings call transcript Q3 2025

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Operator

Good day, and thank you for standing by. Welcome to the AeroVironment Fiscal 2025 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, 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 Vice Investor Jonah is This President Relations. Corporate and Development

this risks Securities and differ expectations. contained and the is available with in Litigation of uncertainties Before information other and from Act results XX-K of in factors filings within note SEC AeroVironment to SEC, company's risk please statements such risks or Reform that www.avinc.com meaning call forward-looking our particular, in involve on Further these could at These from the on actual many are the Private we the Relations the our statements Investor uncertainties portions contains information website materially the filings. that the Copies of from XXXX. statement team. on forward-looking and begin, presented certain cause

presentation Presentations. also posted Events of we and a the filed to afternoon, our the presentation and This our section Investors slide earnings release under website with

call to The obligation only new events XXXX. no content undertakes result of this as statements, The company a March or contains time-sensitive of whether future today, as of that any X, forward-looking accurate update information, is information otherwise. conference

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

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

Wahid Nawabi

to the financial Kevin, quarter summarizing who year fiscal in review third XXXX BlueHalo results everyone, will by call. update our performance our quarterly by our greater Jonah. I'll and conference transaction, detail. Welcome, start Thank provide you, earnings an followed on

before questions. rest update for an I take provide your expectations will the I and of XXXX fiscal year Jonah our Kevin, Next, on

our strategy made several pleased significant quarter we progress that despite I'm long-term report growth on short-term challenges. this to

expanding capacity capabilities continue see the while leader in our technology. strong demand as defense global and to solutions We for

DoD's contract #X as on awards while which First, we messages, key included presentation large are Ministry #X won the are to Danish key of programs, U.S. and long-term follows: backlog our million. record strategic of Slide LASSO, earnings the (sic) including a Defense, Slide Replicator $XXX tied U.S. our [ to Our ] growing Army's

Second, continue and acquisitions our to and our innovative investments, products market to expanding we make capabilities production leveraging leadership launching strengthen new capacity, position. disciplined

XXXX. our track despite third came and challenges, solid in And fourth, below unprecedented accelerating guidance performance windstorms. due progress, expectations, for fiscal slightly to quarter Third, fourth primarily we financial quarter record revenue our year remain growth are L.A. on recent but given lowering our the in

our shift with autonomous technology remain While experiencing by this encountered growth challenges is a strategy. on we driven executing plans firmly quarter, track AI-enabled solutions. distributed defense in we our generational long-term sector The

uniquely We capacity technology, strengths, to decades battlefield meet production continue to experience. our positioned of believe unmatched we evolving leveraging cutting-edge our core by needs are customers' and

further strategic are into advantages increasing innovative inorganic through and new strengthening We our products, expanding organic adjacent capacity. these and production developing investments by markets

years for Given value stakeholders deliver our are come. is creating while dynamics, confident certain to AV market well positioned while value to for we and sustained that -- progress favorable growth our

and cost-effective security prioritizing are and needs The rapid global allied of Department AI-driven of critical the evolving to deployment landscape U.S. Defense nations solutions. we the highlight UnCrewed the defense response, Munitions for In continues Systems technologies pioneered. autonomous Loitering

and strategy. align the growth long-term Defense product offerings with priorities autonomous focus drones, Secretary core warfare administration's on Recently, AV's Hegseth AI, directly capabilities. reaffirmed Pete drones of These counter and

this been fiscal demand related preparing year. to for shift Ukraine We have a in proactively

validating our Pacific priorities, DoD, demand evolving aligns allied and policy defense with and from continue procurement the NATO, Ukraine as expansion to shift expected, unprecedented the shipments and the underscored has the AV global our to strategy. solutions, driving and decline conflict battlefield partners. of U.S. U.S. other While effectiveness This further strengthening high

worth To me military has destroyed of Switchblade been $X the illustrate With XXX $XX of assets worth assets. billion worth facts. following In $XX launched, million military Switchblade million nearly deployments, Ukraine this enemy point, words, every have enemy of for destroyed. XXX let share approximately other

now We end this the to and Ukraine growth from larger opportunities. enduring nearing are of transition more

the Ukraine shift, significant track Ukraine we revenue to expect X% fiscal growth will is achieve on QX more to our than of year. all fiscal about $X revenues of of plans. only year Despite revenues future not represent For last revenues XXXX. in and XX% billion full represent and growth AV material we year, to orders XX% total, fiscal only to shipments in to compared Further, this XX% remain in

our a successes, The integration. air, energy, BlueHalo the growth combination, by significant market more we solutions increase further portfolio. electronic of for footprint transaction and space quarter, opportunity comprehensive this towards set this made BlueHalo technologies, increase cyber cyber preparing and technology the potential Through warfare progress capabilities, directed across and total will space Beyond land, and to domains. we organic will adding our our facility counter-UAS, solutions our enhance transaction closing deliver and and sea, our

our initiatives experience Since that successfully positive innovation will deliver Customers overwhelming product are and combination transaction, that have feedback. to future at and have announcing leadership the we defense and recognize the major AV the and scale. brings resources unique excited of engaged customers extensively with on a received company

have successfully SEC next and we of reviews year. secured this S-X terms key In clearing regulatory approvals, antitrust earlier steps, HSR

a which is X. milestone is approve for to scheduled vote major the April shareholder transaction, next Our

In additional calendar has details been international forward the in we quarter outstanding we sharing to remain year in for the look few reviews progress, months. XXXX. still on coming are the preparing integration, close and team actively a While our to second track in parallel, regulatory of transaction

claimed earlier, I we in in our homes winds high mentioned and the unprecedented Los As challenges, lives, short-term community. faced tragically fires including Angeles, which and businesses

to go those employees. AV hearts including many Our out impacted,

both which supply manufacturing While outages, logistics. AV's facilities experienced shutdowns not extended and we disrupted were our directly chain forced and damaged, of power periods

events to achieve ability our Given the operational partially our year, timing goals, constrained expectations. our full full and results our at quarterly fiscal the end impacting these of year

distributed while for hard working strategy are recover build the We manufacturing to our future. to lost resiliency executing also time

government Just foreign $XX stop effect orders, recently Further, Ukraine to received in aid to about evolving of QX. million is sales military U.S. our paused orders clear. work we to tariffs. orders and ship the less new this majority deliveries, in week, X work impact the military the implemented expected situations tied also which other directly will contracts, we stop while The QX of representing

of we'll appropriate. incorporated impact have and these We events further the updates our provide when revised guidance estimated new into

the This each would segments, Systems key business record to LMS. including IDIQ I firm also that, countries quarter, engagements. in XX team with million more of updates Starting single adoption starting a single with our history. several $XXX Switchblade achieving Loitering largest and The Munitions than for is three with like With now more milestones. increasing our in than is team XX-year secured or delivered LMS $XXX AV's $XXX on contract. award contracts, XXX having this orders both LMS order orders, strategic provide revenue placed and million the active XXX million XX award more under Global Switchblade in

growing we have capacity this aggressively demand, meet already. manufacturing To expanded

to larger XXXX. plant Switchblade announced revenue Xx annual newly than year support Additionally, production $X is current Utah fiscal set than our LMS and be end in production over facility will by more positioning of double throughput our to billion in the us again,

We end expect calendar come this the of year. online to facility towards the

rate. nationwide, disruptions. annualized Despite high about run by our track to and a the future be fires, our the combination in on million enhance BlueHalo at L.A. those posed and production QX including extreme $XXX to facilities that gained Utah investments challenges We our with other this resilience winds through remains Switchblade and operational will mitigate exit believe

support and segment expanded to summary, through capacity. continues our LMS production awards strategy the growth In key

revenue transition contract with support market. Now a X bid highly UxS. on key confidence Ukraine Systems reinforces sole-source Danish the a the This XX as ceiling to to which competitive in long-term supply the recently next shifting -- available with process, years. quarter. segment was wins from opportunities that the several to XX Group best growth UAS the a million to continued today XX UnCrewed over is $XXX demonstrated military segment UAS to JUMP We by JUMP UxS other our strategic in secured away The related or our

awarded ground vehicles. a uncrewed with than the was company one Additionally, history. This major we contract Federal were German the XX more supply largest Armed of to in also our Forces awards UGV

announce coming months. Our international major pipeline JUMP award continues we grow, the international in expect and XX to to another

terms the adoption support similar continue will PXXX lead future industry demand, in established and line, the small UAS to and demand. years, We team of for Raven entire positioning the Puma. innovation new PXXX To increasing believe to global future in production

UAVs have Puma As aware, franchises you AV multibillion-dollar be and already. for Raven may been product

the PXXX. same from expect We

European new presence our European our in same market. customers Kingdom, our office the with regional continued a expanded United also new key support to team and strengthening time, ability drive defense the to programs. At We bringing innovation, the capabilities enhancing to opening by engagement

the operations. our for recently we shipboard UAS example, maritime new platform, XX-X JUMP launched XX JUMP For enhanced of an variant optimized

contested enhanced We autonomy, performance AE also Puma and that in flexibility introduced new software our environments. and LE UAS capabilities for provide

expanding programs While and contract U.S. driven introductions, in the long-term confident global UxS wins, a key its product remain is we new growing DoD trajectory year, in market, segment transition footprint. record growth by a an new of

Works continues drive the to systems. to now that MacCready technologies evolution Moving MacCready development progress AI-enabled the Works segment. next-generation of autonomous warfare our of

designed, significant mass new software-defined very whole new produced is systems attack the insights be drones. leveraging high in family can volumes. This affordably team made and of key battlefield quarter, This our one-way progress autonomous in

with months. advantage We environments, to high-threat of We customers operating set we interest delivered provide believe look and to are adopters. forward sharing seeing will our a solution this contested customers lot in more crucial in coming the already from details early a for units

autonomy AV's real-time adaptive continue AVACORE mission execution enhancing capabilities expand We decision-making. entire and to portfolio, across

situational more multiple in faster SPOTR-Edge is AI-driven also environments. and into computer making Systems, technologies strengthen further threat now our and solutions advanced These contested competitive differentiation, our vision being integrated smarter, detection, tracking other software Additionally, AV UnCrewed awareness. effective delivering

continues of position reinforcing boundaries UnCrewed the Works Munitions. as push in what the MacCready possible and in leading Systems AV's warfare, is to Loitering autonomous innovator

achieved confidence us that our give major milestones summary, quarter company the In in in the future.

our impacted quarterly ability winds meet our high and goals. in our limiting area the to unprecedented operations, L.A. However, fires

recent the DoD soft goals. quarter achieve orders the fourth U.S. Further, impacting our ability are from to work

EBITDA non-GAAP EPS a lowering revenue, fiscal our we're XXXX ranges. As and result, year guidance adjusted

and have However, pipeline backlog remain and record growth confident strong we our long-term in a trajectory.

McDonnell With quarter that, to financials. a Kevin of for Kevin? now to like review over turn the I call our would third

Kevin McDonnell

mixed third both our to highlights refer and financial will on Wahid. quarter I quarter you, revenue backlog, presentation occasionally but performance, during and will orders reviewing a our record press profitability Today, we Thank available with the and with below of be website. which Overall, release had I our earnings expectations.

a Our the revenues high to impacted the in continue result area, related to some extent, we up as by Simi LMS sporadic Valley challenges issues shutdowns supplier ramp production. to and production lesser as were a of winds

BlueHalo, pending close BlueHalo any the references impact of acquisition, QX XXXX. performance exclude future to calendar Given expected in is the to of which

As of a decrease of Wahid compared mentioned his for $XXX.X third was the in fiscal the quarter XXXX. million, for quarter of to revenue XX% the XXXX fiscal third as million remarks, $XXX.X

explained revenues in Wahid approximately revenues of Ukraine accounted in As X% his for remarks, QX.

our breakdown segment of quarter Loitering quarter. The earlier. revenue over million the LMS third segment some during provides revenue of to story of challenges revenue for presentation last quarter. as business Switchblade million, $XX.X compared the the of quarter. The of despite the the a was earnings during year's a represented for X increase XX% Munitions $XX.X revenue the continued our by XXX XX% recorded biggest growth mentioned Slide LMS

UnCrewed is of which which the year's is $XX $XX.X in UGV in from $XXX.X down Our our million generated million. UAS, Systems UAS of driven a medium last segment, XX% by a Ukraine small total businesses of and revenue combination decrease UxS, primarily million, of quarter, revenue

the with stop quarter, UxS recent driven growth fourth and awards of products work for XX However, the by the in we in segment the impact strong other JUMP orders. the even expect

last segment Autonomous million, drone Revenue primarily of $XX came SoftBank and fiscal the at as year, the compared the HAPS, MacCready program. in $XX.X increase million program fiscal Works SOAR by XX% to from our resupply driven of from third an quarter

which X presentation Slide revenues, product XX lower shows trend amortization the gross expense adjusted service and the margins, to noncash other Slide gross reconciles while the of GAAP earnings margins intangible of adjusted LMS excludes surface and XX%, last margin accounting quarter, partially by higher increases, the finished gross to In purchase the items. offset margins. consolidated third GAAP margins third which at due is year quarter than of

margins. turning adjusted Now to gross

the last adjusted for XX% Third sales quarter for in an due in versus gross XX%, described same product mix the from Adjusted XX% year. the on change the were contract certain the LMS gross pricing were third year-over-year margins driven to segment quarter previously. margins year period XX% productivity. quarter increase of gains to obtaining The by margin due commercial last pricing fiscal improving at was internally and margins stronger favorability favorable developed in components, the

adjusted In a LMS during quarter third margins, was terms last and due field lower to XX% the lower was of of result gross XX% margins service same UxS margins level service the The of higher quarter service at costs. year. primarily versus

XX% AV the gross expect margins full the to for approximately to of adjusted continue overall business XX% We legacy year. to be

million, the Adjusted shows million as QX $XX.X and In GAAP reconciliation of R&D EBITDA. from and adjusted last EBITDA $XX.X higher EBITDA, gross to earnings for a revenue net of by expense presentation XX income SG&A was was adjusted lower offset terms higher down year's in lower investments QX of of Slide our margin.

higher year, go these and expenses I'll line shortly. with the for in that are more detail However, guidance SG&A in

for adjusted that expenses note first significantly to any incurred we approximately quarters. EBITDA higher We $XX million of be QX Also acquisition-related still the than of X QX. in expect

EBITDA We EPS incur the next likely fiscal and amount impact will providing timing only transaction adjusted to expenses the GAAP and the expenses, QX we're BlueHalo these of of non-GAAP revenue, which transaction guidance. continue Because into difficulty year. income, the related predicting net in and in to

headcount operations. of an employee-related XX% in increase excluding with amortization intangible by or expense increase bid of help along result was and expense is compared or expense, and expense, $XX and for expansion an and SG&A third growth million to increase prior sales adjusted average partially year. support driven in XX% due increase quarter proposal in in $XX the acquisition-related revenue our a revenue million the to to SG&A of activity, an the marketing costs primarily in of The

or down compared in product also for the of of XX-X R&D expect to including make XX% a decline all-domain $XX million our expense $X to LMS development XX% new investments long-term in R&D of revenue for the the recently prior system prior year. XXXX on from third We the and revenue quarter the of This or represented PXXX initiatives. the across million was result range as introduced system. XX% scaled quarter XX% JUMP as the the fiscal $XX Switchblade variants. about Group X million continues still revenue activity line, of to to in be a continued investment we

last can of the to of namely $XX.X $X.X offset margin. of net acquisition, company decrease in with million decrease factors, GAAP amortization in $X a several costs $X.X million turning Now million were in increase $XX.X $X net R&D increase of In third gross by a income income in a attributed the quarter, million net an and to in generated loss recorded period decrease and The decrease million earnings. million million investments $XX These expenses, same million BlueHalo year. versus including intangible a tax deal in in partially and $X.X expense. in associated pending integration a the be SG&A

$X.XX $X.XX of or of per Slide posted the diluted of third XX per company XXXX of GAAP diluted XXXX. EPS. fiscal non-GAAP and for for share The a adjusted quarter third adjusted quarter earnings reconciliation fiscal shows share the versus

million amount the elevated attributable amounted cash quarter the our billings, The is million during compared to increased $XX.X our At end of to reduction XXXX. quarter. Unbilled of total significant the transition the in the third unbilled than at third has which expect receivables of $XX.X to of Turning close so taken longer receivables in and the we $XX forward, QX. progress moving investments fiscal second largely sheet. expected, of unbilled LMS to million is balance a the quarter, but

started progress payments we fact, this In billing the quarter. receiving LMS

have the revolving on We QX. credit drew the million $XX end at we facility to million $XXX a of which revolver access

our backlog some like conclude of metrics. with I'd to highlights

at we third a $XX of recently backlog order work stop of $XXX.X end backlog relates finished of million the Approximately record received Our on. funded fiscal million. contracts at a XXXX the the quarter to

have visibility our range However, of now midpoint lower XXXX. for the to XXX% guidance we revised fiscal

We to billion expect for $X for organic exceed year 'XX. the strong FY bookings in growth position and us revenue

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

Wahid Nawabi

Thanks, Kevin.

and quarter narrowed guidance. our fiscal year third our Given have lowered developments, and recent we performance full

share. now per earnings non-GAAP to we $XXX of million year expect $XXX million, For revenues $X.XX $XXX million to to EBITDA $X.XX fiscal of XXXX, adjusted of And million. $XXX

to gross XX% XX% year. the adjusted We for also full XX% of R&D expenses of to of and XX% expect revenues margins fiscal

the takeaways Before call the summarize over from for me turning today's call. questions, let key

First, long-term we a growing our won strategic record $XXX to backlog programs, million. key to large awards tied

Second, we and capabilities support continue investments market disciplined our make our to our reinforce to growth. leadership, expanding

in Angeles our we third operational XXXX on winds high performance, remain revenue Third, growth And our record for with fiscal year XXXX. fires area challenges. accelerating quarter quarter another lowered financial short-term fiscal creating and have in fourth, fourth track guidance but impacted year Los

the At start the significant call, warfare. this made is progress not quarter. I the responding we of this of AV evolution modern just to highlighted

loitering have our continue we scale. that categories These now global they are be adopted is recognizing transform we lead munitions we autonomous industry. will widely The driving transformation this are and what strategy. long to drones more We a world much on pioneered in defense as believed and that AI-enabled

demand, battle-proven of is installed this modern not production With AI-driven unmatched industry and the by are capacity, fielding that with encouraged and to We're prepared we technology, the global AV meet future the new AV's seamlessly warfare. defining just aligns of capabilities, systems, vision the which prioritized base has rapid a administration, also expertise leadership. momentum largest within autonomous the

This we is is our mission. This exist. why

do to and every employees Our personally their and what cutting-edge matters. that for employees, want allies. to the come day, customers delivering driven shareholders solutions by work protect nation to thank our our its truly that belief we I commitment

critical to We are moment. this defense the pivotal support honored missions most at

with Kevin, that, will And Jonah take I now and questions. your

Operator

And question with [Operator line come our from Jefferies. Greg will of Instructions] the first Konrad

Greg Konrad

thinking bit year are QX. bridge mean at given I to in Just sales rate of around look fiscal some a of million implies you script. 'XX and your commentary it the if you in $XXX Ukraine? the like guidance, teased the of an year fiscal exit backlog run about 'XX we How

Wahid Nawabi

Sure. Greg. Thanks,

So for we accelerating growth are very, year very well and profitable strong poised 'XX. a for growth fiscal

next mentioned, QX again backlog is record at you nearly As positions significant going two, number to very million, levels, revenue. levels, which exit million roughly $XXX to Number million us, is we're unprecedented be billion a our one. at quarter. year about to for large quarter year. a in $XXX close to to $X us $XXX going That

the we While uncertainties but growing. there's across still that decisions, confident our the systems feel some the current is related world -- very for to and administration's demand

an have incredibly strong backlog. We

pipeline the well positive and lead play There we of growing globe, Ukraine. lots of exceptionally opportunities. globally. market categories conflicts and solutions a and sort conflicts we the have towards is around of world that the place. administration unsafe We the our delivered during of a is performed still The incredibly have And the very are

organically our $X nearly And for us business us year going next to so really and believe another alone. growth, year pipeline I be accelerating billion that with supports record year is next for

sometimes in we we're when be couple to through, that BlueHalo course, which much position brings significant to happen goes which our as And capabilities next globally. portfolio, you great that then acquisition, in new going quarter, as it the very with expect to long of

Greg Konrad

impressive in follow-up deal some S-X. specifics, are after growth just And BlueHalo like closes? thinking into what some the next deal for QX, to It the year getting then Without for the there's maybe into seems that year. a just with about the of pretty closing in areas most next in of excited maybe you're acceleration business BlueHalo, stick that forecast as terms

Wahid Nawabi

to and is the clearly, AV leading each we're systems that to has achieve state our computer to Halo an to enabled in overlap order customers our be to businesses acquisition to with that and transform are of connected autonomy Greg, robotic Well, refer vision. already. together industry other, integrated, two going in It for no complementary our what integrated unprecedented come is nearly that industry two and and future in with companies able Blue interoperable deliver we incredibly is the portfolio AI, to

business. about, approach The leading areas and that. very we're the that and player number for capabilities that lasers in to counter-UAS very, their a They in counter-UAS excited energy are directed one including layered market, is

that's one So area.

and billion-plus $X Force to area Another is their program Defense, Air to satellite U.S. communication. also and the Force U.S. and military the excitement have of They of Department a focus space with overhaul won satellite upgrade communications. Space

by two that cyber in with those are they most itself, leading community, the a area. player in but intelligence So advanced and also capabilities

there's and And incredibly of really growth do different what we lots so as areas, to the three but stand combined areas entity. those for potential complementary out high

combined the also sustainable the profitability market. not growth, be record and to will forget the revenue well positioned track with market-leading incredibly to deliver continue has to that that's Let's and entity

our So beyond own excited we're about very organic growth opportunities. that

Operator

Peter the our with will from One Baird. Arment and question, moment that for line next come of

Peter Arment

a more stoppage? were QX mentioned that? beyond? that us it's You the work little or Wahid, is this And give What something into reasons linger going color to on the FMS you could is for contracts. four

Wahid Nawabi

Yes, Peter.

So great question.

been -- in already quarter, on contracts. have particular received those of an stop million is information from that the military that sales to been and contracts secured, the this As we value. we yesterday, I These of that foreign we've asked those Department roughly I delivering $XX mentioned week, my that in we believe, process were the fourth work in U.S. in are of Defense majority just remarks, has actually specific about contracts

believe be suspension be personal clear whether that It of that these not not a -- is guess sort would do and is is permanent. it temporary would My view this I or my a a need And our capabilities. for without allies. customers, countries real international are this priorities using is to these capabilities reassess things. these stay U.S. obviously for and its There reassess to serious is going

fourth removed have outlook that from that our which we results, guidance have we quarter and So our quarter, affects obviously lowered for accordingly. fourth our

particular believe year that, ability next We going year despite Regardless be next grow tariffs very event very that despite strong to good. growth and is our the very, to of is a this year.

We in a U.S. been the the the great as and have, Loitering terms that in have company out have we that the Munitions in are position, never my such to drivers are in drones there the and backlog demand a view, we leader autonomous the the DoD focus of that world. of

that's the it. So of extent

As very you the we'll keep fluid situation evolves, which updated. today, is

Peter Arment

this $XXX then follow-up, just the rate 'XX opportunity on being And basically you to of be I about in get But as which seeing plus quarter I Okay. this at know a mean the trough revenue that kind implies run $X you run close the $XX rate mentioned a talked to step-up billion, path a of million LMS. kind volume. in kind UnCrewed is significant segment million. would of

You're JUMP you confidence the pick demand But talk more volumes XX step-up expecting maybe backdrop? that in gives that the it uncrewed to be there's quarter. basically pretty fourth uncrewed. up environment around Could implies the the in to about a healthy us going

Wahid Nawabi

next years. several UnCrewed our feel demand drivers very business so over Systems general. for the several are in overall, about to confident business There Peter, we for grow strong Absolutely. that

which new worth least has value. the at programs we're capabilities. U.S. one of new We're in plus in announced already investing PXXX, solutions, DoD introducing each the including billion or Specifically, $X generation two

program. of One for those, is long-range the reconnaissance example,

to as as we it be So to revenue over next a for and and grow driver expect to profitability significant to UxS in line we the company. adoption top revenue, of years, X X well continue of expect business terms our the

that proactively been from Regardless spike pivoted 'XX a for of primarily away the year systems. has and that, We fiscal we received us. from and Ukraine, transitioned demand fiscal Puma ourselves transition for in Switchblade really year 'XX

did will revenue, represented on XX% to X% As be last going year. fiscal from year, Ukraine. And Ukraine quarter, that fourth be expected total I our remarks, in about the XX%. This of it's it of revenue around our the said

And Ukraine we that, historic year. unprecedented an essentially, from allows So next that grow the away have all backlog despite us demand. to pivoted we completely have

lead So that but Munitions so our would we expect grow to Loitering and growth, MacCready also UxS will segment.

Operator

Louie next from One question, will with William that and line DiPalma our moment for Blair. of come the

Louie Dipalma

think Wahid are I in was and how AV that for also close confident $X just generating that wondering, projections confident XXXX? that you revenue there S-X billion But wondering I are stand-alone $X for are in in fiscal out. you generating to billion was the to BlueHalo XXXX. you indicated projection that in Kevin, current was filing came just fiscal the I from S-X. close

Wahid Nawabi

Sure.

compared AV we've obviously, fiscal compelled to for year. organically. Louie, believe even So, I in feel we truly very position that never been such last strong a

have also as to performance that is very systems they sets on us stated and the publicly going increase. as is amount to a our even fiscal priorities our 'XX strong that a of for more. up the for support backlog backlog total and focus revenue administration's And growth demand unprecedented. believe our percentage continue a of Our new It the I sort

look to AV, that going this I business, continue year. those. to to are to beyond S-X. very that we expect In of and refer forecast published terms of absolutely at fiscal have internally has BlueHalo, the verified and ourselves. a also been third-party has That's complementary including and by we They specific developed experts, those you encourage BlueHalo by been and already vetted part growing

closing fantastic for combination of the so two it's while be done the yet, -- we and And market. the businesses yet not that is guaranteed not two going the is feel the strongly to

be offering around well are to priorities going threats positioned conflicts incredibly the from administration We're of unparalleled globe the the and and worldwide. our the to in the terms that current in benefit of and the market

that, bullish very think and feel term be very, I about I it's to very going So long positive AeroVironment. for

Kevin McDonnell

And we'll when year-end results. we guidance combined do do the

Wahid Nawabi

right. That's

Louie Dipalma

announced Great. earnings to quarter you of one XX you that call, that you different pending? Did second were orders, formally close two last you mentioned is Or order? still And JUMP the on close orders. closing and the the

Wahid Nawabi

a It's question. great

we're the correct with we military. million of last which quarter this that was said we next $XXX You're absolutely years that and the quarter, report XX contract the them, have two source announced pleased Danish for IDIQ sole one to value

one. second The

Kevin McDonnell

Competitive bid.

Wahid Nawabi

It bid. was competitive a very

mentioned, incredibly we market, XX solution the protested competitive protested actually competition that bid. solution the is eventually highlights was It was and JUMP that an leading that prevail. and in the Kevin again market. And basically in As best-in-class

actively working the are Regardless, we one. second

quarter. unseating We those the our is also hands to we're expect going that well. customer, positioned are that and and be Obviously, we of fiscal or strong either positive program expect very of of QX And quarter 'XX. be we'll we announcement that the hopefully, timing decided to a large very sometimes we come It in in another competitor, we're about first fourth that. announced And sometimes and the our you to very that position updated. on but in beginning believe feel keep of

Louie Dipalma

Great. And one. final one

believe using stop blocking your U.S. of Switchblade AeroVironment countries this indicated their military Regarding I you the to it's multiple was own does it sales. for multiple And work countries. systems? the relate either that or that using for foreign Army buy order, own But And or the other from or their Army funds one the allies to systems. buy to is funds Puma countries

Wahid Nawabi

question. great Louie,

AeroVironment U.S. disclose able in for under stop a specific to be work around to foreign the position So contracts countries not world. FMS, yesterday I'm the military contracts to the that just is sales received countries. specific particular and Army the that we specific is with

backlog, ship we of total about the roughly that QX. up in in bookings we it However, our were which majority have to million $XX adds of in expecting to

through whether don't undetermined. this administration current by and provided that that positions all are with its the position funding negotiate for of well hold. funded, terms countries. know as FMS military foreign U.S. do DoD process. is tools negotiate are Most which at We the future U.S. deals exactly as that also know these various actually is the We the contracts of of -- the these a The government these using an is to temporary orders these means

last. is It not capabilities, possibilities view, do we should or what and desperately number point one. they whether know. sorts need I my at these would would reevaluating these in What is how as undetermined be this case. that don't that know long DoD in are to U.S. therefore, probable the All proceed of and countries outcome each And

quite two, do up do is also their affordable that funding a with U.S. if many they countries countries these acquisitions possibility and so come already funding, which there anyways. our may these that solutions are Number -- get own not for

that compelled we so information know. it up enough and And let share as you comes felt to

updated growth very strong Regardless our backlog, you keep strong and really be of and going have we'll our and able we're The We're really, feel to about forward. that is go and business. about all changing position feel believe execute year. that, we QX. We we administration's as we our fluid, another very to to going evolving

Operator

And our Andre next the come question line of with will from Madrid BTIG.

Andre Madrid

maybe acquisition On and give the incremental last you trending? there an in sales, phases update are how that an mentioned process. you international were those of of Can quarter, different the negotiations nations on were topic six

Wahid Nawabi

Sure.

as then and in the backlog, in months additional remarks, engaged of for in now sometime I countries those is next expect addition an to And my Andre, approximately those that year. we firm XX So, there our we countries we're and orders six throughout few that, to mentioned received actively next with. have ship

means their they systems, which which that train structure inform they in also of force And their adoption. buys, countries, these of to And their buy variants. and these deployment, or them and forces to and as countries some use these eventually lead will countries usage of these first-time of list their more that will XXX XXX are interested every flavors the Switchblade are almost grow. let's not to continue one these All forget

looking So Switchblade's Munitions this that believe has conflict the at performance very capability. growth absolutely and business our I a here is opportunity truly Loitering Ukraine for Switchblade. long-term in with allies our validated adoption large and

We are the leading industry.

we a and significant our produce We've already capacity We continue terms of have that's volume. to why these to expand advantage capacity. increase And ability in in significantly. deliver in volume

or again. year, the believe But come next in sometime going facility year, calendar end with next this beyond of of now it's is only our towards footprint the this facility, by that indicators new Xx which, we all to calendar business, to And growth we're again, the going strongly increase online not year, that this but year.

is several that we're very we billion so aggressively truly the believe growing franchise this next a over years. $X And that

And will again, LMS the is leading growing in size obviously but growing it's and are businesses all year, of our next grow pack, and considerably.

Andre Madrid

impact Got exactly of mean, much attributable the it. revisiting pivot how quantify from in South negative away And the XQ to fires? wildfires, that, kind maybe then was I could of guess the I maybe California I you if

Wahid Nawabi

Sure.

of get complexities as details of won't be levels Andre, remember, because wins. different were the these into I as and But there's So, unprecedented specifics it. to to able lots fires well

extremely were what of a periods utility, the our of So forced long time. local wins, and extended multiple Southern all for sites, affected almost essentially of and supplier these only were our we were outages, on California. power utilities local. in are the losing and day-in happened our weeks, sites shutdowns here Many power base, result that in some our high as our terms sites day-out cases, in so of of too, Not employee base

plans that all does us that recover in third to which a all of quarter, middle the period, happened was time enough of end to we time give which our So had. not towards

made So still. pleased adjustments. we've We're results these our very with

with We strong, year be to grow quarter to year. And next the a up going a exit us. going for as and for performance year the revenues continue us It's record to another setting fourth profitability for strong company. we're

'XX. fiscal in And such to I great position a even year been that this 'XX looking into our time, not think company last beyond has compared

we forward that. future, about excited to we're So the look and

Operator

call Jonah the the would back over questions time. closing further to to no in like showing at queue I'm any remarks. for now turn I this

Jonah Teeter-Balin

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

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

Operator

concludes This today's program. Thank you all for participating.

disconnect. may You now

AeroVironment (AVAV) 4 Mar 252025 Q3 Earnings call transcript