AeroVironment Stock Plummets as Firm Says Ukraine Sales, Wildfires Hit Results

AeroVironment (NASDAQ: AVAV), a leading provider of unmanned aircraft systems (UAS) and loitering munition systems (LMS), has seen its stock price take a significant hit following the release of its fiscal third-quarter 2025 earnings report. The company reported a net loss of $(1.8) million and non-GAAP adjusted EBITDA of $21.8 million for the quarter, compared to net income of $13.9 million and non-GAAP adjusted EBITDA of $28.8 million in the prior-year period. The decline in financial performance was primarily attributed to decreased international sales of the company's UxS family of systems, most significantly sales to Ukraine, and the impact of January's high winds, fires, and resulting blackouts and shutdowns in Southern California.



The company's revenue decreased by 10% year-over-year to $167.6 million, reflecting lower product sales and service revenue. AeroVironment's funded backlog stood at $763.5 million as of January 25, 2025, compared to $400.2 million as of April 30, 2024. However, the company noted that approximately $13 million of the funded backlog was impacted by stop-work orders issued by the Department of the Army for certain existing U.S. government contracts.

AeroVironment's CEO, Wahid Nawabi, acknowledged the challenges faced by the company in the third quarter, stating, "We faced a number of short-term challenges in the third quarter, including the unprecedented high winds and fires in Southern California, which impacted our ability to meet our goals." However, he also expressed optimism about the company's long-term growth prospects, noting that the company had booked record Switchblade and Jump-20 orders, expanded its backlog to a record $764 million, and announced a new manufacturing facility in Utah that will more than double its Switchblade capacity.

The company now expects revenue of between $780 million and $795 million for fiscal 2025, non-GAAP adjusted EBITDA of between $135 million and $142 million, and non-GAAP earnings per diluted share of between $2.92 and $3.13. This guidance does not include the forecasted financial results associated with the anticipated acquisition of BlueHalo, which is expected to close in the second quarter of calendar year 2025.



In conclusion, while AeroVironment's stock price has taken a hit following the release of its fiscal third-quarter 2025 earnings report, the company's long-term growth prospects remain strong. The company's record backlog, global tailwinds supporting its broad portfolio of robotic solutions, and expanding markets all point to a promising future for AeroVironment and its shareholders. As the company continues to execute its growth strategy, investors should remain optimistic about the potential for attractive returns in the long run.