AVAV
New deal, who dis?
AeroVironment just served up the kind of quarter that makes investors lean forward in their chairs. Revenue hit $480.49 million, adjusted EPS came in at 59 cents, and both numbers beat Wall Street’s expectations. Not exactly a sleepy Tuesday.
The bigger story, though, is the company’s increasingly chunky backlog. Funded backlog jumped 37% year over year to a record $1.5 billion, and total funded plus unfunded backlog came in around $2.8 billion. Translation: the order book is looking more like a dinner reservation list for a hot restaurant than a polite corporate spreadsheet.
The laser side hustle is turning into the main event
CEO Wahid Nawabi said the company’s LOCUST directed-energy business could become a “flagship franchise” and maybe even rival AeroVironment’s biggest businesses in size, profitability, and scale. That’s not small talk. He said the laser weapons line could top $500 million a year within roughly a year, helped by rising U.S. and international demand and more production capacity.
And the contracts back up the bravado:
- a $117 million P550 Long Range Reconnaissance deal
- a $30 million Puma contract for Germany
- a $51 million Switchblade 600 award
- a nearly $465 million U.S. Army EHEL contract for LOCUST, described as the military’s first production contract for directed-energy systems
- a first international order for the same program
Why investors care
Management raised fiscal 2027 revenue guidance to $2.125 billion-$2.225 billion and kept adjusted EPS guidance at $3.02-$3.34. That’s the kind of combo pack investors love: more sales visibility, more big-ticket defense work, and a new product category that could stop being a science project and start acting like a profit center.
There are a couple of caveats, because of course there are. Free cash flow was negative $36 million thanks to facility expansion, and the company expects more negative free cash flow this year because it’s spending heavily to scale. But if you’re looking for the thesis in one sentence, it’s this: AeroVironment is turning from a drone-and-autonomy story into a broader defense tech platform, and laser weapons may be the shiny new engine under the hood.
Big picture: the market likes growth, but it loves visibility even more — and AeroVironment just handed over both, plus a little sci-fi swagger.