AeroVironment ($AVAV) Stock Hub 2026: Fiscal Q1 2027 Results Due in September, the BlueHalo Integration and the Accounting Questions

01 Next scheduled event: fiscal first quarter 2027 results, expected in September 2026 and not yet confirmed

AeroVironment runs an April 30 fiscal year end, so its first quarter of fiscal 2027 is the quarter that closed at the start of August 2026. The comparable quarter a year earlier ended on August 2, 2025, and the quarter before that ended on April 30, 2026.

As of August 4, 2026 the company has not published its own announcement of the date, the dial-in or the webcast link for that print. Third-party earnings calendars carry the week of September 8, 2026, but that is an estimate rather than a company statement, and it should be treated as such until AeroVironment issues the release that normally precedes the call.

The historical pattern is consistent and gives a reasonable expectation of how the date will be communicated. For the first quarter of fiscal 2026, AeroVironment issued a scheduling press release on August 25, 2025 and then reported on September 9, 2025 with a conference call at 4:30 p.m. Eastern Time. A year earlier, first quarter fiscal 2025 results landed on September 4, 2024. The fiscal 2026 fourth quarter and full-year results were released on June 29, 2026, again with a 4:30 p.m. Eastern Time call hosted by chairman, president and chief executive officer Wahid Nawabi, executive vice president and chief financial officer Sean T. Woodward, and investor relations director Denise Pacioni. Access to that call was through a participant registration link published inside the release, with the live audio webcast on the investor relations site.

Direct links: AeroVironment events and presentations · quarterly results archive · EDGAR Form 8-K filings for CIK 0001368622.

02 Executive summary

AeroVironment spent fiscal 2026 turning itself into a different company. On May 1, 2025 it closed the acquisition of BlueHalo for merger consideration of $3.485 billion net of cash acquired, of which $2.640 billion was paid in stock. On March 16, 2026 it added Empirical Systems Aerospace for $177.9 million, again mostly in stock. The result is a two-segment defense technology group with 3,991 full-time employees, $5.72 billion of total assets and revenue 2.8 times what it was two years earlier.

The reported financials look strange because they are carrying the accounting weight of that transformation. Fiscal 2026 revenue was $1,976.8 million, up 141%. Adjusted EBITDA was $286.1 million, a record. And GAAP net income was negative $265.1 million, or a loss of $5.40 per diluted share, because a $240.7 million goodwill impairment in the Space reporting unit and $223.1 million of intangible amortization and other purchase accounting expenses both ran through the income statement. Non-GAAP earnings per diluted share, which strip those items out, were $3.31 against $3.28 the prior year.

Guidance for fiscal 2027 is revenue of $2.125 billion to $2.225 billion, adjusted EBITDA of $305 million to $325 million, GAAP earnings per diluted share of $0.16 to $0.48 and non-GAAP earnings per diluted share of $3.02 to $3.34. The distance between those last two lines, roughly $2.86 per share at the midpoints, is the purchase accounting drag stated as a per-share number by the company itself.

Three things deserve to be kept apart when reading anything written about this stock, because they are routinely blended: what is booked and funded, what is awarded but unfunded, and what is a contract ceiling on an indefinite-delivery vehicle that obliges nobody to buy anything. AeroVironment’s own 10-K draws those lines explicitly, and the section further down follows the company’s definitions rather than the press-release headline numbers.

03 Market Data And Peer Comparison

Price and performance figures below are based on the completed session of Friday, August 7, 2026. Float, ownership, short interest, average volume and the consensus target are from Finviz, pulled on the same date. Company financial figures come from SEC filings and company releases, each carrying its own reference date.

Peer comparison, all figures at the August 7, 2026 close

Cash generation is the line that separates $AVAV from the rest of this group in the wrong direction: operating cash flow was negative $78.4 million in fiscal 2026 with working capital absorbing $355.0 million net, and unbilled receivables and retentions of $570.4 million now exceed the whole of fiscal 2025 gross margin. Revenue recognised over time rose from 57% to 70%, which mechanically pushes cash collection out.

On analyst coverage the honest position is a narrow one. The consensus target above is a Finviz aggregate of third-party estimates pulled on August 7, 2026. Individual houses, ratings and note dates were not verified for this update, so no coverage table is presented. A consensus figure without named notes behind it is a market-data point, not research, and it is neither a company figure nor a Merlintrader forecast.

04 Verified developments, most recent first

AeroVironment filed a Form 8-K reporting that on July 23 director Stephen F. Page notified the board of his decision to retire and not stand for re-election. His term ends at the start of the 2026 annual meeting, anticipated for September 24, 2026. The filing states the decision was not due to any disagreement with the company, its auditors or its advisers.

AeroVironment and Applied Intuition announced a strategic collaboration integrating Applied Intuition’s Acuity ISR/Strike autonomy software with Mayhem 10, AeroVironment’s launched-effects system. The companies said a demonstration validated collaborative autonomy behaviors across multiple Mayhem 10 units. Mayhem 10 carries a 10-pound payload, operates beyond 100 kilometers with more than 50 minutes of endurance, and is built on the Switchblade lineage. No contract value was disclosed.

The Army awarded a $117.3 million production contract for the P550 electric vertical take-off and landing system covering 82 aircraft in support of the Battalion Reconnaissance effort, issued under a Basic Ordering Agreement through a competitive Call for Solutions on the Army’s UAS Marketplace. AeroVironment described it as the initial full-rate procurement of P550.

Italy’s Directorate of Aeronautical Armaments and Airworthiness granted an MQ-31A military designation for the JUMP 20 uncrewed aircraft system supplied to the Italian Army, following the April 2025 contract. The company said JUMP 20 is in use with Italy, Denmark, Lithuania and the Czech Republic, has more than 70 integrated payloads and over 500,000 flight hours, with 13-plus hours of endurance and 185 kilometers of range.

At its 2026 investor day in New York, AeroVironment introduced fiscal 2030 targets of $3.5 billion to $4.0 billion of revenue, described as a 15% to 20% organic compound annual growth rate, research and development at 7% to 9% of revenue, and adjusted EBITDA margins of 18% to 20%. These are company targets for a year four fiscal years out, not guidance for fiscal 2027.

AeroVironment was awarded a $30 million contract to supply what it called the entire Puma capability stack to Germany’s LARUS program, managed by BAAINBw: laser designator kits for Puma LE, signals-intelligence payloads, Puma VTOL kits, Kinesis-enabled ground control stations, mobile ad hoc network relay kits, autonomy retrofit kits and a support package.

Two separate announcements on the same day. The first: a three-year, $500 million sole-source indefinite-delivery, indefinite-quantity contract supporting Joint Interagency Task Force 401’s Domestic Shield program, with the Department of War having announced the award on July 1. AeroVironment stated plainly that it “will release more news as task and delivery orders are executed against the IDIQ.” The second: an $80.5 million award for Titan-MS under the same task force. In the Titan release the company said it delivered 118 Titan 4 systems and 400 Titan-SV systems worldwide during the quarter and that Titan is operationally deployed in 17 countries, with three new international customers fielding it in the quarter.

Fourth quarter revenue of $641.6 million, up 133%, and full-year revenue of $1,976.8 million, up 141%. Bookings of $2.7 billion and a book-to-bill ratio of 1.4 for the year. Funded backlog of $1.2 billion. Fourth quarter net income of $63.2 million, or $1.25 per diluted share, against a full-year net loss of $265.1 million. Fiscal 2027 guidance introduced.

Management concluded that disclosure controls and procedures were not effective as of April 30, 2026. One material weakness relates to information technology general controls at BlueHalo, specifically user access controls and segregation of duties. The second relates to the design of controls over the preparation and review of the goodwill impairment analysis, and is the origin of the third-quarter restatement. Management stated that the financial statements nonetheless present fairly in all material respects, and Deloitte & Touche LLP audited internal control over financial reporting.

On June 24 the board appointed William J. Lynn III as a Class I director effective immediately and reduced the authorized board size from ten to nine.

The audit committee determined on June 17 that the unaudited financial statements for the three and nine months ended January 31, 2026 should no longer be relied upon. The error was in the carrying value used in the goodwill impairment analysis of the Space reporting unit, which had not included an allocation of goodwill arising from acquired deferred tax assets and liabilities. Loss from operations was understated by $89.4 million and net loss by $87.3 million for both the three and nine month periods, worth $1.75 per share in the quarter. The error was non-cash and did not affect revenue, current assets, current liabilities, cash used in operating activities, adjusted EBITDA or non-GAAP earnings per share. Separately, directors David Wodlinger and Henry Albers, both designees of Arlington Capital Partners, resigned effective June 17.

The Department of War Test Resource Management Center awarded a three-year, $43 million contract to integrate the PANTHER phased array antenna system on SkyRange platforms for hypersonic telemetry.

AeroVironment received a prototype agreement from the U.S. Army under the Low-Altitude Stalking and Strike Ordnance program covering rapid development, delivery and testing of the Switchblade 400. The release also disclosed a recent $186 million delivery order for Switchblade 600 Block 2 and Switchblade 300 Block 20 explosively formed penetrator systems, placed under the Army’s existing five-year, $990 million indefinite-delivery, indefinite-quantity contract for Lethal Unmanned Systems awarded in August 2024, and described it as the Army’s first Switchblade order containing an EFP payload.

The Army awarded a $14.6 million production contract for the VAPOR Compact Long Endurance system under the Company-Level Directed Requirement small UAS effort, Tranche 2, supporting the Medium Range Reconnaissance initiative.

Sean Woodward, previously chief financial officer of the Autonomous Systems segment and with the company since 2010, was appointed executive vice president and chief financial officer effective May 1, 2026, succeeding Kevin McDonnell. Dr. Robert Smith, previously vice president of Radio Frequency Solutions at Raytheon, was appointed executive vice president and chief operating officer effective April 13, 2026, succeeding Brad Truesdell.

AeroVironment closed the acquisition of ESAero for an aggregate purchase price of $177.9 million, comprising 671,078 shares valued at $142.2 million using the March 16 closing price of $211.88, $26.9 million of cash net of cash acquired, and an $8.8 million holdback. The deal added $110.2 million of goodwill and $55.3 million of intangibles and sits inside the Autonomous Systems segment.

During negotiations, the U.S. government informed AeroVironment that it intended to proceed with a termination for convenience of the Other Transaction Agreement covering delivery of BADGER phased array antenna systems for the Satellite Communication Augmentation Resource program, while allowing the company to compete for future SCAR work. This was the trigger for the Space reporting unit impairment. The company said it intends to keep investing in BADGER and develop a commercial phased-array product.

Merger consideration of $3,528.8 million, or $3,484.9 million net of $43.8 million of cash acquired, made up of $2,640.4 million of equity consideration (17,425,849 shares valued at the April 30, 2025 close of $151.52), $863.2 million to settle BlueHalo debt and $25.2 million of BlueHalo transaction expenses. The purchase price allocation booked $2,367.4 million of goodwill and $1,029.8 million of intangibles, split between backlog of $49.9 million with a one to two year life, customer relationships of $499.5 million over four to nine years and developed technology of $480.4 million over four to ten years.

05 The numbers behind the transformation

Six charts, all built from figures published by AeroVironment itself in its quarterly earnings releases and its fiscal 2026 Form 10-K. Each caption names the document the numbers came from.

Fiscal 2026 revenue by quarter (US$ millions)

Source: AeroVironment quarterly earnings releases furnished on Form 8-K on September 9 and December 9, 2025 and March 10 and June 29, 2026. The four quarters sum to the reported full-year figure of $1,976.8 million. The third quarter dip is the quarter management attributed to revenue timing and adjustments in the Space business.

Annual revenue and the fiscal 2027 guidance midpoint (US$ millions)

Source: fiscal 2026 Form 10-K for the three actual years and the June 29, 2026 earnings release for guidance of $2.125 billion to $2.225 billion. The guidance midpoint implies growth of about 10.0% on fiscal 2026, a range of 7.5% to 12.6%, against 141% in fiscal 2026 and 14% in fiscal 2025.

Fiscal 2026 revenue by operating group (US$ millions)

Source: revenue disaggregation table in the fiscal 2026 Form 10-K. Shares of the $1,976.8 million total are 42.9%, 18.4%, 17.5%, 13.8% and 7.4%. Cyber and Mission Solutions and Space and Directed Energy did not exist inside AeroVironment before BlueHalo; both showed zero revenue in fiscal 2025 and fiscal 2024. Precision Strike and Defense Systems, which contains the Switchblade family and the Titan counter-UAS line, has gone from $192.6 million in fiscal 2024 to $359.4 million in fiscal 2025 to $848.3 million.

Funded and unfunded backlog at fiscal year end (US$ millions)

Source: fiscal 2026 Form 10-K. Combined backlog rose from $1,501.2 million to $2,640.7 million, an increase of 75.9%, which the company attributes primarily to BlueHalo. The 10-K states that approximately 85% of backlog is expected to be recognized as revenue during fiscal 2027, which on the funded figure alone works out at roughly $1,006 million, or about 46% of the guidance midpoint. Unfunded backlog explicitly excludes unfunded ceiling amounts on sole-source and multi-award IDIQ contracts.

Shares outstanding through the acquisition year (millions)

Source: fiscal 2026 Form 10-K balance sheet and business combination notes. Shares issued and outstanding went from 28,267,517 to 50,610,514, an increase of 79.0% in twelve months. The build is 17,425,849 shares for BlueHalo, 4,057,460 in the July 2025 public offering at $248.00 per share, 671,078 for ESAero and about 188,600 from equity awards and the employee stock purchase plan.

Purchase accounting charged to cost of sales, by quarter of fiscal 2026 (US$ millions)

Source: the four fiscal 2026 quarterly earnings releases. The quarters sum to $92.7 million, which reconciles to the $81.2 million of product cost of sales plus $11.5 million of contract services cost of sales disclosed as intangible amortization and other purchase accounting in the fiscal 2026 Form 10-K. The front-loading is the short-lived acquired backlog intangible, valued at $49.9 million with a one to two year life, amortizing away. Reported gross margin by quarter was 20.9%, 22.0%, 24.2% and 31.6%, against 38.8% for the whole of fiscal 2025.

06 Business overview: two segments, five operating groups

Effective May 1, 2025, in connection with the BlueHalo acquisition, AeroVironment reports in two segments. It describes itself as a defense technology provider delivering integrated capabilities across air, land, sea, space and cyber.

Autonomous Systems (AxS)

Fiscal 2026 revenue of $1,358.1 million, 68.7% of the group, with segment adjusted EBITDA of $288.7 million, a 21.3% margin. AxS contains three of the five operating groups.

• Uncrewed Aircraft Systems. Small systems in Groups 1 and 2 including Puma LE, Puma 3 AE, Puma VTOL, P550, Raven B and VAPOR 55 CLE; medium Group 3 systems including JUMP 20, JUMP 20-X and T-20; and AV_Halo, the hardware-agnostic command-and-control software stack that incorporates Kinesis. Fiscal 2026 revenue of $363.9 million, which is below the $407.7 million this group generated in fiscal 2024.
• Precision Strike and Defensive Systems. The Switchblade family of loitering munitions in 300, 400 and 600 variants, the Blackwing ISR round, the Red Dragon one-way attack family and the newly launched Mayhem 10 launched-effects system. It also holds integrated air and missile defense, which is where the Titan counter-UAS line sits, including Titan 4, Titan SV and the multi-sensor Titan-MS, plus the Freedom Eagle FE-1 kinetic interceptor, and the electronic warfare products built to SOSA and MOSA standards. Fiscal 2026 revenue of $848.3 million.
• Other. MacCready Works, the advanced concepts organization that produced Red Dragon and the DARPA WildCat Group 3 VTOL aircraft; uncrewed maritime systems including Mission Specialist Defender, Mission Specialist Wraith, Pro 5 and Ally; and uncrewed ground vehicles for explosive ordnance disposal including tEODor EVO, Telemax EVO and the new backpackable TOM 50 RE. Fiscal 2026 revenue of $145.9 million.

Space, Cyber and Directed Energy (SCDE)

Fiscal 2026 revenue of $618.8 million, 31.3% of the group, with segment adjusted EBITDA of negative $2.6 million. This is essentially the BlueHalo business, and it did not exist inside AeroVironment before May 1, 2025.

• Space and Directed Energy. Digital beamforming through the multi-band software defined antenna tile, which underpins the BADGER and WASP products; laser communications; space-qualified hardware with more than 260 systems in orbit across low, medium, geostationary and cislunar orbits; the PANTHER phased array family for hypersonic telemetry and tracking; and the LOCUST laser weapon system, where LOCUST X2 covers a 20 to 25 kilowatt range and LOCUST X3 is a third-generation 20 to 35-plus kilowatt system aimed at Group 1 to 3 drones. Fiscal 2026 revenue of $273.4 million.
• Cyber and Mission Solutions. Offensive and defensive cyber, geospatial, signals, measurement and open-source intelligence analytics, and engineering and research services for defense, intelligence and national security customers. Fiscal 2026 revenue of $345.4 million, which makes it larger than the space and directed energy business it is grouped with.

Two shifts in that table matter more than the headline growth. First, the customer base has become far more American: sales to non-U.S. customers were 28% of revenue in fiscal 2026 against 52% in fiscal 2025 and 62% in fiscal 2024. Second, the contract mix has moved toward cost-reimbursable and time-and-materials work, which now accounts for 30% of revenue against 9% a year earlier. Cost-plus work carries lower risk and correspondingly lower margins, which is part of why the blended gross margin fell even as revenue more than doubled. The U.S. Army alone was approximately 25% of fiscal 2026 revenue, other U.S. government agencies and government subcontractors 47%, and the Department of Defense in total about 63%.

On Ukraine, the 10-K gives explicit figures for the two prior years and none for fiscal 2026: Ukraine represented $149.6 million, or 18% of consolidated revenue, in fiscal 2025 and $274.1 million, or 38%, in fiscal 2024. The absence of a fiscal 2026 figure, alongside international revenue falling to 28% of a much larger total, indicates that the Ukraine concentration that once defined the revenue line has been diluted rather than replaced. The 10-K also notes that a decrease in international sales to Ukraine reduced uncrewed systems product deliveries by $62.1 million in fiscal 2025.

07 Financial position at April 30, 2026

Three observations follow directly from that table. First, operating cash flow was negative $78.4 million in a year of record revenue, because receivables, unbilled receivables and inventory together absorbed roughly $399 million of cash before payables and other liabilities gave $66 million back. Free cash flow after capital expenditure and capitalized software was approximately negative $164.6 million. Second, the balance sheet is now dominated by acquisition intangibles: goodwill is 43.6% of total assets and goodwill plus intangibles is 59.9%, leaving tangible book value of roughly $977 million against a market capitalization of about $8.1 billion. Third, retained earnings have fallen to $9.2 million from $274.3 million, consumed by the fiscal 2026 loss.

What to watch in the next print

• Sequential revenue against $641.6 million. The fourth quarter is seasonally the strongest and the first quarter the weakest; the meaningful test is whether the first quarter of fiscal 2027 improves on the $454.7 million of a year earlier by enough to keep the full-year guidance range intact.
• Gross margin. Fourth quarter gross margin of 31.6% was the best of the year, and the purchase accounting charged to cost of sales is falling as the acquired backlog intangible runs off. Whether the trend continues, and whether the contract services line recovers from the negative $9.2 million gross margin it posted in the fourth quarter, will decide how much of the adjusted EBITDA guidance is deliverable.
• SCDE segment profitability. Segment adjusted EBITDA of negative $2.6 million on $618.8 million of revenue for the full year, and only $1.4 million on $149.2 million in the fourth quarter, is the single largest gap between the acquisition thesis and the reported result so far.
• Operating cash flow. After a full year of cash consumption, the unwinding of unbilled receivables is the swing factor that decides whether fiscal 2027 converts adjusted EBITDA into cash.
• Funded backlog. The starting point is $1,183.0 million. Bookings ran at $2.7 billion in fiscal 2026 for a book-to-bill of 1.4; a first quarter book-to-bill below 1.0 would be normal seasonally but would still be worth watching against the fiscal 2030 targets.
• Material weakness remediation. Management has described the remedial controls but says they must operate for a sufficient period before any conclusion can be drawn.

08 Guidance, capital structure and the dilution arithmetic

Fiscal 2027 guidance, line by line

The reconciliation the company published makes the accounting bridge explicit: the $2.86 per share separating the GAAP and non-GAAP midpoints is $2.70 of amortization of acquired intangibles and other purchase accounting adjustments plus $0.16 of acquisition-related expenses. In other words, on management’s own numbers, fiscal 2027 will be a year in which almost all of the reported earnings power is absorbed by the accounting for the BlueHalo deal.

It is also worth noting how fiscal 2026 guidance actually behaved, because it is the only track record the combined company has. The initial range was $1.9 billion to $2.0 billion, raised to $1.95 billion to $2.0 billion in December, then cut to $1.85 billion to $1.95 billion in March after the Space business problems, and the year finished at $1.977 billion, above the top of the cut range. Adjusted EBITDA guidance followed the same path, from $300 million to $320 million, down to $265 million to $285 million, finishing at $286.1 million. The pattern was a large mid-year cut followed by a beat against the reduced bar.

Fiscal 2030 targets

At the July 8, 2026 investor day, management introduced targets for the fiscal year ending April 30, 2030: revenue of $3.5 billion to $4.0 billion described as a 15% to 20% organic compound annual growth rate, research and development at 7% to 9% of revenue, and adjusted EBITDA margins of 18% to 20%. Set against fiscal 2027 guidance of about 14.5% adjusted EBITDA margin, the target implies roughly 400 basis points of margin expansion over three subsequent years, at the same time as research and development spending rises as a share of revenue. Fiscal 2026 research and development was $127.7 million, or 6.5% of revenue.

The capital structure

• Convertible notes. $747.5 million principal of 0% convertible senior notes due July 15, 2030, carried at $729.0 million net of issuance costs. They pay no regular interest and do not accrete. The initial conversion rate is 3.1017 shares per $1,000 principal, an initial conversion price of approximately $322.40 per share, which is roughly double the current price. All conversions must be settled in cash at least up to principal. The company may redeem at par on or after July 21, 2028 if the stock exceeds 130% of the conversion price for specified periods.
• Term loan repaid. The $700.0 million term loan drawn to fund BlueHalo was repaid in full and closed during fiscal 2026, using approximately $965.3 million of the combined proceeds from the July 2025 equity offering and note issue to clear the term loan and the revolver. The revolving facility remains available and undrawn at year end. Covenants include a maximum consolidated leverage ratio and a minimum fixed charge coverage ratio.
• Equity issuance. The July 2025 offering sold 4,057,460 shares at $248.00. Combined net proceeds from the equity and note offerings were approximately $1.70 billion.
• No dividend. The company has never paid a cash dividend on its common stock and does not anticipate doing so.

09 Contract ceilings, funded orders and booked backlog: how to tell them apart

Defense announcements use several different kinds of number, and they are not interchangeable. AeroVironment’s own 10-K sets out the definitions, and they are stricter than most headlines suggest.

• Funded backlog means remaining performance obligations under firm orders for which funding is currently appropriated. This is the $1,183.0 million figure. It is the only one that meets the definition of a performance obligation under ASC 606.
• Unfunded backlog means the total remaining value of awarded contracts with incremental funding yet to be received. This is the $1,457.7 million figure. The company states plainly that it “does not obligate the customer to purchase goods or services” and that there “can be no assurance that unfunded backlog will result in any orders in any particular period, or at all.”
• Contract ceilings on sole-source or multi-award indefinite-delivery, indefinite-quantity vehicles are excluded from both. The 10-K says so explicitly. A $500 million IDIQ ceiling does not appear anywhere in the $2.64 billion of combined backlog until orders are actually placed against it.
• All U.S. government contracts in backlog, funded or not, may be terminated at the convenience of the government.

Counter-UAS and homeland defense

The counter-UAS opportunity is the clearest new demand signal in AeroVironment’s 2026 announcements, and it is domestic rather than expeditionary. In its own July 6 release the company cited a Department of War statement from April that JIATF-401 has committed more than $600 million at a record pace to strengthen counter-unmanned aircraft systems capabilities in support of Operation Epic Fury and homeland defense. AeroVironment’s Titan release cited the executive order “Restoring American Airspace Sovereignty” and the SAFER SKIES Act as policy changes enabling broader deployment, said it delivered 118 Titan 4 and 400 Titan-SV systems worldwide during the quarter, and said Titan is operationally deployed in 17 countries with three new international customers in the quarter.

10 The BlueHalo accounting: impairment, restatement and two material weaknesses

The single largest item in the fiscal 2026 income statement is not revenue growth, it is a write-down. AeroVironment recorded a $240.7 million goodwill impairment charge in the Space reporting unit, worth $4.76 per diluted share. The trigger was the SCAR programme: a stop-work order on the Other Transaction Agreement for BADGER phased array antenna systems, followed on March 10, 2026 by the government’s stated intent to terminate for convenience. Management updated the long-term cash flows of the Space reporting unit to reflect the lost revenue plus higher research and development and capital investment needed to commercialize the product.

That charge then produced an accounting error. In preparing the year-end statements the company found that the Space reporting unit carrying value used in the third-quarter impairment analysis had omitted an allocation of goodwill arising from acquired deferred tax assets and liabilities. On June 17, 2026 the audit committee determined that the third-quarter financial statements should no longer be relied upon. The restated figures, filed on Form 10-Q/A on June 22, 2026, increased the reported loss from operations by $89.4 million and net loss by $87.3 million for both the three and nine months ended January 31, 2026. Loss per diluted share for the quarter went from $(3.15) as originally reported to $(4.90) as restated, an understatement of $1.75; for the nine months it went from $(4.94) to $(6.73), an understatement of $1.79. The error was non-cash and did not touch revenue, current assets, current liabilities, operating cash flow, adjusted EBITDA or non-GAAP earnings per share.

Two material weaknesses were then disclosed in the Form 10-K, and management concluded that disclosure controls and procedures were not effective as of April 30, 2026:

• IT general controls at BlueHalo. BlueHalo did not design and maintain effective information technology general controls for certain systems relevant to financial reporting; specifically, user access controls did not ensure appropriate segregation of duties or adequately restrict privileged access. As a result, automated controls and IT-dependent manual controls relying on those applications were deemed ineffective. Remediation includes restricting administrator-level access, periodic user access reviews and formalized change management workflows.
• Goodwill impairment review design. The company did not have a properly designed control requiring preparation and review of a reconciliation of goodwill by reporting unit. It has now implemented a quarterly reconciliation control.

Management’s assessment of internal control over financial reporting excluded BlueHalo and ESAero, which together represented approximately 46% of total assets and 48% of total revenue. The material weakness relating to BlueHalo IT controls was identified despite that exclusion. Management stated that remedial controls must operate for a sufficient period before any conclusion can be drawn, and gave no assurance that further material weaknesses will not arise.

What BlueHalo actually contributed is disclosed separately in the 10-K and is worth stating plainly: revenue of $919.1 million for fiscal 2026 since acquisition, and a loss from operations of $365.5 million, inclusive of $208.5 million of intangible amortization and the $240.7 million goodwill impairment. Excluding those two non-cash items, BlueHalo’s contribution to operating income was approximately $83.7 million on $919.1 million of revenue, a margin of about 9.1%.

11 Management and governance

The executive team turned over substantially in the first half of calendar 2026, with both the chief financial officer and the chief operating officer replaced.

The board has also moved. On June 16, 2026 directors David Wodlinger and Henry Albers, both designees of Arlington Capital Partners under the shareholder’s agreement dated November 18, 2024, notified the company of their resignations effective June 17, leaving eight directors. Both letters stated the decision was not the result of any disagreement with management. Arlington retains the right to designate two successor directors and, as of the June 24 Schedule 13D amendment, had not done so. On June 24 the board appointed William J. Lynn III as a Class I director effective immediately and reduced the authorized board size from ten to nine. On July 23 director Stephen F. Page notified the board that he will retire and not stand for re-election, with his term ending at the start of the 2026 annual meeting anticipated for September 24, 2026.

A separate governance item from the February and March 2026 filings: on February 27, 2026 the compensation committee approved a non-qualified deferred compensation plan effective March 1, 2026, allowing named executive officers to defer up to 75% of base salary and all or part of annual cash bonuses, and non-employee directors to defer board fees and equity grants.

12 Ownership, Short Interest And Retail Sentiment

The ownership register is unusual for a company of this size because a private equity firm still holds roughly a quarter of it as a result of the all-stock acquisition.

Two things follow. First, the free float is small relative to the market capitalization: roughly 37.9 million shares out of 50.6 million. That amplifies moves in both directions and helps explain a short interest of just over 10% of float on a company with an $8 billion market capitalization. Second, the Arlington position is an identifiable supply overhang whose eventual disposition is not scheduled in any public filing. The 10-K itself flags the point, noting that as lock-up and other restrictions on consideration shares lapse the company “could experience heightened trading activity that could disrupt the market price.”

Insider selling in July 2026 was small and routine: Form 144 notices covered 1,500 shares for retiring chief financial officer Kevin Patrick McDonnell with an aggregate market value of $286,335, and 400 shares for officer Brian Shackley at $57,388. Several Form 4 filings clustered on July 6 and July 15, dates consistent with scheduled equity award vesting and related tax withholding rather than discretionary sales.

Retail commentary on AeroVironment across social platforms tends to focus on the drone and counter-UAS narrative and on the distance between the current price and the 2025 highs. Those are non-professional opinions expressed by individuals with unknown positions and no disclosure obligations. They are not research, they are not verified, and nothing in them has been used in this page. Every figure here is traceable to a filing or a company release.

The block below is a snapshot of the Stocktwits flow, with its date. These are opinions of retail traders and non-professional investors, not analyst research, and they measure attention and how one-sided positioning has become rather than anything about the business.

13 Valuation against the defense peer group

At the August 3 close of $159.18 on 50,610,514 shares, the market capitalization is approximately $8.06 billion. Adding $747.5 million of convertible principal and deducting $377.3 million of cash and $255.0 million of short-term investments gives an enterprise value of approximately $8.17 billion, before the further $81.1 million of long-term investments.

Peer market capitalizations, forward price-to-earnings and price-to-sales ratios are compiled by Finviz Elite as of August 4, 2026 and are shown for context only. Forward earnings multiples rest on third-party estimates, not company guidance, and are not comparable across companies with different fiscal years, accounting for acquisitions and definitions of adjusted earnings. This is not a valuation recommendation.

The pattern is straightforward. AeroVironment trades at more than twice the price-to-sales multiple of the large primes and at a forward earnings multiple close to double theirs, but at a discount to Kratos, the other pure-play growth name in the group. The multiple is being paid for growth: management’s fiscal 2030 targets imply revenue roughly doubling from the fiscal 2027 base, whereas the primes in the table have compounded sales in the low single digits over five years. Whether that gap is warranted depends entirely on the delivery of the 18% to 20% adjusted EBITDA margin target, since at the guided 14.5% margin the company earns considerably less on each dollar of revenue than most of the primes do.

14 Catalyst table

15 The constructive case

• The demand signals are dated, funded and documented. Between April and July 2026 the company announced a $117.3 million Army production contract for 82 P550 aircraft, an $80.5 million Titan award, a $43 million three-year telemetry contract, a $30 million German Puma programme, a $14.6 million VAPOR CLE production contract and a $186 million Switchblade delivery order. These are individually verifiable and were placed by different customers across different product lines.
• Bookings ran well ahead of revenue. $2.7 billion of bookings against $1.977 billion of revenue is a book-to-bill of 1.4 for the year, with the second quarter alone at 2.9. Combined backlog grew 75.9% to $2.64 billion.
• The portfolio is genuinely broader. Two years ago this was a tactical drone and loitering munition company with an outsized Ukraine exposure. Ukraine was 38% of revenue in fiscal 2024 and 18% in fiscal 2025; in fiscal 2026 it fell below the level at which the company discloses it, while total revenue rose 141%. Concentration risk has been reduced by growth rather than by contraction.
• The purchase accounting drag is finite and already tapering. Amortization charged to cost of sales fell from $37.4 million in the first quarter to $18.4 million in the fourth as the one-to-two-year acquired backlog intangible ran off. Guided depreciation and amortization falls from $265.0 million to $243.0 million in fiscal 2027.
• The balance sheet is not stretched. The $700 million term loan is repaid and closed. What remains is $747.5 million of zero-coupon convertible debt not due until July 2030, against $632.3 million of cash and short-term investments. Guided net interest swings from a $5.6 million expense to $8 million of income.
• Counter-UAS demand has a domestic funding channel. The three-year, sole-source $500 million IDIQ for JIATF-401’s Domestic Shield programme, with the Department of War having committed more than $600 million to counter-UAS capability per the April statement AeroVironment cited, gives the Titan line a defined vehicle to sell through.
• The fourth quarter showed the model working. Revenue of $641.6 million, gross margin back to 31.6%, income from operations of $56.9 million and adjusted EBITDA of $140.1 million, a 21.8% margin, all in a single quarter.

16 The sceptical case

• Per-share earnings have not moved. Non-GAAP diluted earnings per share were $3.31 in fiscal 2026 against $3.28 in fiscal 2025 and are guided to $3.02 to $3.34 in fiscal 2027. Revenue more than doubled over that span. Shareholders paid for the growth in shares, and so far the arithmetic has been a wash.
• Adjusted EBITDA margin went backwards and is guided flat. 17.8% in fiscal 2025, 14.5% in fiscal 2026, about 14.5% guided for fiscal 2027. The fiscal 2030 target of 18% to 20% therefore requires all of the improvement in the three years after that.
• The acquired half of the business is not yet profitable at the segment line. SCDE produced segment adjusted EBITDA of negative $2.6 million on $618.8 million of revenue in fiscal 2026.
• Cash generation is negative. Operating cash flow of negative $78.4 million and free cash flow of approximately negative $164.6 million in a record revenue year, with unbilled receivables up $158.98 million and inventories up $111.6 million.
• Controls failed, publicly, and are not yet fixed. A restatement, two material weaknesses and a conclusion that disclosure controls were not effective. Nearly half of total assets and revenue was excluded from the internal control assessment because of the acquisitions, so the assessment scope was narrower than the business.
• Programs of record can vanish. SCAR is the worked example: a stop-work order, then a termination for convenience, then a $240.7 million goodwill write-down and a restatement. The 10-K notes that all U.S. government contracts in backlog may be terminated for convenience.
• Customer concentration went up, not down. The U.S. government was 85% of fiscal 2026 revenue against 75% in fiscal 2025, and the Department of Defense alone about 63%. The 10-K discusses the funding uncertainty created by budget scrutiny and possible government shutdowns.
• Mix has moved toward lower-margin contract types. Cost-plus and time-and-materials work went from 9% of revenue to 30%, and revenue recognized over time from 57% to 70%.
• Goodwill is 43.6% of the balance sheet. After one impairment already, the carrying value of the remaining $2.49 billion depends on cash-flow forecasts for businesses acquired at the top of a defense-technology re-rating.
• Supply overhang. Arlington Capital holds about 24.1% and has not sold; the free float is roughly 37.9 million shares.

17 Scenario framework, not a forecast

The following table sets out what would have to be true for each outcome, using only figures the company has already published. It is an analytical framework for reading future disclosures. It is not a prediction, a target or advice.

18 Bottom line

AeroVironment is now two businesses stapled together, and they are performing very differently. The legacy autonomous systems and precision strike operation earned $288.7 million of segment adjusted EBITDA on $1,358.1 million of revenue in fiscal 2026, a 21.3% margin, and it is winning production contracts across the Army, allied European ministries and the domestic counter-drone mission. The acquired space, cyber and directed energy operation earned nothing at all, lost its largest space programme to a termination for convenience, produced a $240.7 million write-down and a restatement, and brought with it an IT control failure that remains open.

Guidance for fiscal 2027 is a 10% revenue increase at the midpoint with the adjusted EBITDA margin flat at about 14.5%, and non-GAAP earnings per share slightly below the fiscal 2026 result. The fiscal 2030 targets ask for revenue roughly doubling and a margin four to five points higher. Nothing in the reported numbers so far demonstrates that inflection, and nothing in them rules it out; the fourth quarter of fiscal 2026, with 31.6% gross margin and a 21.8% adjusted EBITDA margin, is the single strongest piece of evidence for it.

The September print is the first look at the combined company under a new chief financial officer, a new chief operating officer, a changed segment structure and an unremediated control environment. The figures worth reading first are segment adjusted EBITDA for SCDE, gross margin, funded backlog against the $1,183.0 million starting point, and operating cash flow. The date of that print has not yet been announced by the company.

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