5 Revealing Analyst Questions From AeroVironment's Q1 Earnings Call
Is now the time to buy AVAV? Find out in our full research report (it's free).
Revenue: $275.1 million vs analyst estimates of $243.7 million (39.6% year-on-year growth, 12.9% beat)
Adjusted EPS: $1.61 vs analyst estimates of $1.41 (13.9% beat)
Adjusted EBITDA: $61.6 million vs analyst estimates of $55.53 million (22.4% margin, 10.9% beat)
Adjusted EPS guidance for the upcoming financial year 2026 is $2.90 at the midpoint, missing analyst estimates by 27.9%
EBITDA guidance for the upcoming financial year 2026 is $310 million at the midpoint, above analyst estimates of $240.7 million
Operating Margin: 5%, up from 3% in the same quarter last year
Market Capitalization: $12.11 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Louie DiPalma (William Blair) asked about the U.S. Army's transformation initiative and drone procurement plans. CEO Wahid Nawabi explained that these represent incremental opportunities and that AeroVironment is positioned to benefit from modernization priorities in drones and counter-UAS technologies.
Greg Conrad (Jefferies) pressed on revenue guidance ranges and Blue Halo integration. Nawabi clarified that contract timing, especially U.S. DoD awards, drives the forecast range, and early integration focus is on cost—not revenue—synergies.
Peter Arment (Baird) questioned segment-level growth variability, especially in Autonomous Systems. Nawabi attributed this to timing and scale of U.S. government contracts, emphasizing the company's readiness to deliver if budget approvals are timely.
Andre Madrid (BTIG) inquired about potential impact from a proposed 5% NATO defense spending pledge. Nawabi said AeroVironment is well-positioned to meet increased European demand due to its proven, scalable systems and established presence.
Pete Skibitski (Alembic Global) sought clarification on backlog dynamics and capital expenditures. Management confirmed backlog changes resulted from conversion of unfunded to funded contracts, not cancellations, and discussed elevated CapEx to support production for upcoming large programs.
Going forward, the StockStory team will be closely monitoring (1) progress on integrating Blue Halo's technologies and realizing expected cost and operational synergies, (2) execution against major U.S. and international defense contracts—including Switchblade and new product orders, and (3) expansion of manufacturing capacity to meet growing demand. Additional focus will be on AeroVironment's ability to secure wins in NATO markets as European defense budgets increase.
AeroVironment currently trades at $244.75, up from $191.22 just before the earnings. In the wake of this quarter, is it a buy or sell? See for yourself in our full research report (it's free).
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