AeroVironment Announces Fiscal 2026 Third Quarter Results
March 10, 2026
ARLINGTON, VA, March 10, 2026 — AeroVironment, Inc. (NASDAQ: AVAV) (“AeroVironment” or the “Company”) reported today financial results for the fiscal third quarter ended January 31, 2026.
Third Quarter Highlights:
• Third quarter revenue of $408.0 million
• Bookings of $2.1 billion and book-to-bill ratio of 1.6 for the first nine months of the fiscal year
• Record funded backlog of $1.1 billion
“While our third quarter results were impacted by revenue timing and adjustments in our Space business, demand for our unique solutions remains robust,” said Wahid Nawabi, AeroVironment chairman, president and chief executive officer. “Strong order flow and growth in funded backlog during the quarter are setting the stage for record fourth quarter revenue and a solid start to fiscal year 2027. We are executing with discipline, scaling manufacturing ahead of demand and accelerating the commercialization of our platforms to improve profitability and time to market. We believe there are tremendous opportunities ahead for AV to shape the next era of defense and we remain confident in our ability to deliver long-term shareholder value.”
FISCAL 2026 THIRD QUARTER RESULTS
Revenue for the third quarter of fiscal 2026 was $408.0 million and $1.3 billion of revenue for the first nine months of the fiscal year. Revenue for third quarter of fiscal 2026 increased 143% as compared to $167.6 million for the third quarter of fiscal 2025, due to higher product sales of $138.1 million and higher service revenue of $102.3 million. The acquisition of BlueHalo on May 1, 2025 contributed to $85.1 million and $91.4 million of the current quarter product and service revenue, respectively. From a segment standpoint, Autonomous Systems (“AxS”) recorded revenue of $278.7 million and Space, Cyber and Directed Energy (“SCDE”) recorded revenue of $129.3 million.
Gross margin for the third quarter of fiscal 2026 was $98.8 million, an increase of 56% as compared to $63.2 million for the third quarter of fiscal 2025, reflecting higher product margin of $19.1 million and higher service margin of $16.5 million. Fiscal 2026 third quarter gross margin was negatively impacted by $12.7 million of intangible amortization expense and other related non-cash purchase accounting expenses, as compared to $3.7 million in the third quarter of fiscal 2025. As a percentage of revenue, gross margin fell to 24% from 38%, primarily due to an increase in the proportion of service revenue resulting from the BlueHalo acquisition and the increased amortization and other non-cash purchase accounting expenses.
Impairment of goodwill for the third quarter of fiscal 2026 was $151.3 million. In January 2026, a stop-work order was received on the Company’s Other Transaction Agreement for the delivery of BADGER phased array antenna systems to support Space Force’s Satellite Communication Augmentation Resource (“SCAR”) program. We concluded that the stop-work order represented a trigger event that indicated the carrying value of the Space reporting unit exceeded its fair value. As a result, we updated our estimates of the long-term cash flows of the Space reporting unit to reflect the reduced revenue associated with the stop-work order as well as an increase in expected research and development and capital investments to achieve product commercialization, which is expected to result in expanded opportunities and improve long term product margins. The changes in estimates resulted in the recognition of a goodwill impairment charge of $151.3 million in the Space reporting unit.
Loss from operations for the third quarter of fiscal 2026 was $(179.0) million as compared to $(3.1) million for the third quarter of last fiscal year. The current quarter was negatively impacted by $43.9 million of intangible amortization and other related non-cash purchase accounting expenses as compared to $4.8 million in the third quarter of fiscal 2025. The decrease year-over-year was primarily due to the goodwill impairment of $151.3 million recorded during the third quarter of fiscal 2026 related to Space, an increase in selling, general and administrative (“SG&A”) expense of $55.6 million, which includes an increase of $30.1 million of intangible amortization expense and incremental headcount resulting from our acquisition of BlueHalo which closed on May 1, 2025, partially offset by a decrease of $3.1 million of acquisition related expenses, an increase in research and development (“R&D”) expense of $4.6 million, partially offset by an increase in gross margin of $35.6 million.
Other income, net for the third quarter of fiscal 2026 was $3.3 million, as compared to $0.7 million for the third quarter of fiscal 2025. The increase year-over-year was primarily due to an increase in interest income due to a combination of higher cash and investment balances and lower interest bearing debt balances.
Benefit from income taxes for the third quarter of fiscal 2026 was $(19.5) million, as compared to $(0.6) million for the third quarter of last fiscal year. The increase year-over-year was primarily due to the loss before income taxes, partially offset by non-deductible goodwill impairment.
Net loss for the third quarter of fiscal 2026 was $(156.6) million, or $(3.15) per diluted share, as compared to $(1.8) million, or $(0.06) per diluted share, in the prior-year period, respectively. The current quarter was negatively impacted by goodwill impairment charges of $151.3 million, or $2.95 per diluted share, and $43.9 million, or $0.70 per diluted share, of intangible amortization and other related non-cash purchase accounting expenses as compared to $4.8 million, or $0.13 per diluted share, in the third quarter of fiscal 2025.
Non-GAAP adjusted EBITDA for the third quarter of fiscal 2026 was $44.5 million and non-GAAP earnings per diluted share were $0.64, as compared to $21.8 million and $0.30, respectively, for the third quarter of fiscal 2025.
BACKLOG
As of January 31, 2026, funded backlog (defined as remaining performance obligations under firm orders for which funding is currently appropriated to us under a customer contract) was $1.1 billion, as compared to $726.6 million as of April 30, 2025.
FISCAL 2026 — OUTLOOK FOR THE FULL YEAR
For fiscal year 2026, the Company now expects revenue of between $1.85 billion and $1.95 billion, net loss of between $(218) million and $(201) million, non-GAAP adjusted EBITDA of between $265 million and $285 million, loss per diluted share of between $(4.44) and $(4.10) and non-GAAP earnings per diluted share, which excludes amortization of intangible assets, other non-cash purchase accounting expenses, goodwill impairment, equity securities investments gains or losses, and equity method income or loss of between $2.75 and $3.10.
The foregoing estimates are forward-looking and reflect management’s view of current and future market conditions, subject to certain risks and uncertainties, including certain assumptions with respect to our ability to efficiently and on a timely basis integrate acquisitions, obtain and retain government contracts, changes in the timing and/or amount of government spending, react to changes in the demand for our products and services, activities of competitors, changes in the regulatory environment, and general economic and business conditions in the United States and elsewhere in the world. Investors are reminded that actual results may differ materially from these estimates and investors should review all risks related to achievement of the guidance reflected under “forward-looking statements” below and in the Company’s filings with the Securities and Exchange Commission.
In conjunction with this release, AeroVironment, Inc. will host a conference call today, Tuesday, March 10, 2026, at 4:30 pm Eastern Time that will be webcast live. Wahid Nawabi, chairman, president and chief executive officer, Kevin P. McDonnell, executive vice president and chief financial officer, and Denise Pacioni, investor relations director, will host the call.
Investors may access the call by registering via the following participant registration link up to ten minutes prior to the start time.
Participant registration URL:
https://register-conf.media-se...
Investors may also listen to the live audio webcast via the Investor Relations page of the AeroVironment, Inc. website, http://investor.avinc.com. Please allow 15 minutes prior to the call to download and install any necessary audio software.
A supplementary investor presentation for the third quarter fiscal year 2026 can be accessed at https://investor.avinc.com/events-and-presentations.
Audio Replay
An audio replay of the event will be archived on the Investor Relations section of the Company's website at http://investor.avinc.com.
About AeroVironment, Inc.
AeroVironment ("AV") (NASDAQ: AVAV) is a defense technology leader delivering integrated capabilities across air, land, sea, space, and cyber. The Company develops and deploys autonomous systems, loitering munitions, counter-UAS technologies, space-based platforms, directed energy systems, and cyber and electronic warfare capabilities—built to meet the mission needs of today’s warfighter and tomorrow’s conflicts. At the core of these technologies lies AV_Halo, a modular, mission-ready suite of AI-powered software tools that empowers warfighters and enables full-battlefield dominance: detect, decide, deliver. With a national manufacturing footprint and a deep innovation pipeline, AV delivers proven systems and future-defining capabilities at speed, scale, and operational relevance. For more information, visit www.avinc.com.
Safe Harbor Statement
Certain statements in this press release may constitute "forward-looking statements" as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements are made on the basis of current expectations, forecasts and assumptions that involve risks and uncertainties, including, but not limited to, economic, competitive, governmental and technological factors outside of our control, that may cause our business, strategy or actual results to differ materially from those expressed or implied. Factors that could cause actual results to differ materially from the forward-looking statements include, but are not limited to, our ability to perform under existing contracts and obtain additional contracts; changes in the regulatory environment; the activities of competitors; failure of the markets in which we operate to grow; failure to expand into new markets; failure to develop new products or integrate new technology with current products; and general economic and business conditions in the United States and elsewhere in the world. For a further list and description of such risks and uncertainties, see the reports we file with the Securities and Exchange Commission. We do not intend, and undertake no obligation, to update any forward-looking statements, whether as a result of new information, future events or otherwise.
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