AeroVironment Inc (NASDAQ:AVAV) Posts Mixed Q1 Results with Revenue Beat and EPS Miss

AEROVIRONMENT INC (NASDAQ:AVAV) delivered mixed fiscal first quarter 2026 results, with revenue exceeding expectations but profitability metrics falling short of analyst projections. The defense technology company reported substantial growth following its recent acquisition of BlueHalo, though integration costs significantly impacted bottom-line performance.

Quarterly Performance Overview

The company reported record first quarter revenue of $454.7 million, representing a 140% increase compared to the same period last year. This figure surpassed analyst expectations of $448.3 million, driven primarily by the contribution from the BlueHalo acquisition, which added $235.2 million in revenue during the quarter. Legacy business revenue showed solid growth as well, increasing 16% year-over-year to $219.5 million.

Despite the strong top-line performance, non-GAAP earnings per share came in at $0.32, below the consensus estimate of $0.35. The earnings shortfall reflects significant acquisition-related expenses and intangible asset amortization totaling $79.7 million during the quarter. On a GAAP basis, the company reported a net loss of $67.4 million, or $1.44 per diluted share, compared to net income of $21.2 million in the prior-year period.

Key financial metrics from the quarter include:

• Gross margin of 21%, down from 43% in the prior-year period due to increased amortization and non-cash purchase accounting expenses
• Record backlog of $1.1 billion as of August 2, 2025
• Quarterly bookings of $399.0 million
• Non-GAAP adjusted EBITDA of $56.6 million

Market Reaction and Guidance Analysis

The market response to the earnings release has been moderately negative, with the stock declining approximately 1.3% in after-hours trading. This reaction appears to reflect concerns about the company's full-year revenue guidance, which at the midpoint of $1.95 billion falls slightly below analyst expectations of $2.04 billion.

The company maintained its fiscal 2026 outlook, projecting:

• Revenue between $1.9 billion and $2.0 billion
• Net loss between $(77) million and $(72) million
• Non-GAAP adjusted EBITDA between $300 million and $320 million
• Non-GAAP earnings per diluted share between $3.60 and $3.70

Strategic Positioning and Future Outlook

CEO Wahid Nawabi expressed confidence in the company's positioning, noting that AeroVironment is "exceptionally well positioned to capture growing demand due to our innovative solutions and manufacturing capacity that can quickly scale to meet our customers' expedited delivery timelines." The company reported visibility of 82% to the midpoint of its fiscal year 2026 revenue guidance as of September 9, 2025.

The acquisition of BlueHalo has significantly expanded AeroVironment's capabilities across space, cyber, and directed energy segments, which now account for $169.4 million of quarterly revenue. The autonomous systems segment contributed $285.3 million in revenue during the quarter.

For more detailed earnings information and future estimates, readers can review the company's earnings and estimates page.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Readers should conduct their own research and consult with a qualified financial advisor before making any investment decisions.