Highlights

  • Fiscal first quarter revenue rose 6% to $480.5 million, and the net loss narrowed to $5.1 million from $67.4 million.
  • Autonomous Systems revenue grew 21% to $346.0 million, while Space, Cyber and Directed Energy revenue fell 21% to $134.5 million.
  • Management reported two material weaknesses in internal controls, one tied to the restatement of the quarter ended January 31, 2026.
  • Funded backlog climbed to $1.46 billion from $1.18 billion at April 30, and operating cash flow turned positive.

AeroVironment (NASDAQ:AVAV) shares were trading near their 52-week low at USD 117.72 on October 21, 2026, up 0.08%. The autonomous systems and defense technology company closed the purchase of a new Southern California campus on August 21 and filed its fiscal first quarter 2027 report on September 10, which showed higher revenue, a smaller net loss and two unresolved material weaknesses in internal controls.

Based in Arlington, Virginia, AeroVironment is a Delaware corporation that designs, develops, produces and supports autonomous systems, precision strike systems, counter-uncrewed aircraft technologies, space-based platforms, directed energy systems, and cyber and electronic warfare capabilities. It reports two segments: Autonomous Systems, which covers uncrewed aircraft, underwater vehicles, ground robots, loitering munitions and air defense products, and Space, Cyber and Directed Energy. Its fiscal year ends April 30.

Revenue Up 6% as Segment Results Diverge

Revenue for the quarter ended August 1, 2026 was $480.5 million, compared with $454.7 million a year earlier. Gross margin widened to 26% from 21%, largely because intangible amortization and other non-cash purchase accounting charges in cost of sales fell to $18.6 million from $37.4 million. Selling, general and administrative expense eased to 23% of revenue from 29%. The net loss was $5.1 million, or $0.10 per share, against $67.4 million, or $1.44 per share.

Autonomous Systems revenue grew 21% to $346.0 million, and its segment adjusted EBITDA, a non-GAAP measure, rose 18% to $62.3 million. Management pointed to higher uncrewed aircraft sales and more customer-funded research. Switchblade product revenue was $56.9 million lower on order delays, while the ESAero acquisition contributed $41.8 million of revenue to the Precision Strike and Defense Systems line.

Space, Cyber and Directed Energy revenue fell to $134.5 million after the prior-year termination of the SCAR program and reduced scope on certain cyber and mission solutions contracts. Its segment adjusted EBITDA was a loss of $8.9 million, versus a profit of $3.8 million a year earlier.

Controls, Restatement and Impairment Risk

The company said its disclosure controls were not effective as of August 1, 2026. It identified a material weakness in information technology general controls at BlueHalo, the business it acquired on May 1, 2025. A second weakness concerns the design of controls over its goodwill impairment analysis and relates to the error behind the restatement of its quarter ended January 31, 2026, filed through a Form 10-Q/A on June 22, 2026.

Remediation is under way, including tighter user access controls and a quarterly goodwill reconciliation by reporting unit. Management cannot assure that these steps have resolved the weaknesses, yet concluded that the financial statements present fairly in all material respects. The filing also states that the Space reporting unit carries an elevated risk of failing a future goodwill test, after an impairment recorded in the quarter ended January 31, 2026 following a stop-work order on a Space Force program.

Backlog, Liquidity and Outlook

Funded backlog reached $1.46 billion at August 1, 2026, up from $1.18 billion at April 30, and management expects to recognize about 78% of it in fiscal 2027. Unfunded backlog, which does not obligate customers to purchase, stood at $1.37 billion. Operating cash flow was $13.5 million, against an outflow of $123.7 million a year earlier.

Cash and cash equivalents were $278.4 million, with $301.8 million of short-term investments and $337.0 million available under a revolving credit facility that had no outstanding borrowings. The company also carries $747.5 million of 0% convertible senior notes due 2030.

The quarterly report gives no revenue or earnings guidance. Management expects research and development spending to run at 7% to 9% of revenue in the fiscal year ending April 30, 2027, and believes existing cash, operating cash flow and credit resources cover its needs for the next twelve months. The $29.25 million campus will house research, engineering, manufacturing and administrative functions.