Aerovironment 2025 Q4 Earnings Surges in Net Income with Record Growth

Aerovironment (AVAV) reported its fiscal 2025 Q4 earnings on June 25th, 2025. The company exceeded analyst expectations, with fourth-quarter sales of $275.1 million, a 40% increase from the previous year. Non-GAAP earnings skyrocketed 274% to $1.61 per share, compared to 43 cents in the same period last year. Aerovironment's guidance for fiscal 2026 projects revenue between $1.9 billion and $2 billion, with adjusted EBITDA expected to be between $300 million and $320 million. The company anticipates adjusted EPS of $2.80 to $3.00, suggesting a promising outlook despite some mixed signals.

Revenue
Aerovironment's total revenue increased by 39.6% to $275.05 million in 2025 Q4, up from $196.98 million in 2024 Q4.

Earnings/Net Income
Aerovironment's EPS rose 174.3% to $0.59 in 2025 Q4 from $0.21 in 2024 Q4, marking continued earnings growth. Net income of $16.66 million in 2025 Q4 shows 175.6% growth from $6.05 million in 2024 Q4. This represents a strong performance in EPS for the quarter.

Price Action
The stock price of Aerovironment climbed 4.96% during the latest trading day, surged 24.48% during the most recent full trading week, and jumped 40.15% month-to-date.

Post-Earnings Price Action Review
The strategy of buying AVAV shares when revenues miss and holding for 30 days yielded a 58.88% return, underperforming the benchmark by 39.13%. Despite the significant return, the strategy faced substantial volatility and risk, evidenced by a maximum drawdown of -65.53% and a Sharpe ratio of 0.19. These metrics suggest that while the strategy may achieve high returns in some periods, it is accompanied by considerable risk. Investors employing this strategy should be prepared for potential large swings in stock price, which could impact overall investment performance. The strategy's performance indicates that market conditions and company-specific factors can heavily influence outcomes, emphasizing the need for a well-considered approach when investing based on earnings results.

CEO Commentary
Wahid Nawabi, Chairman, President & CEO, reported record fiscal year revenue of $821 million, a 14% increase, with fourth-quarter revenues reaching $275 million, up 40%. He highlighted robust demand for innovative solutions, driven by the successful launch of three new products, and emphasized the company's strong position in the defense sector, with a funded backlog of $726 million, an 82% increase year-over-year. Nawabi expressed confidence in AeroVironment's ability to scale production and meet customer needs, stating, "We are confident AV is better positioned than ever... to capitalize on these opportunities."

Guidance
For fiscal year 2026, AeroVironment expects revenue between $1.9 billion and $2 billion, with adjusted EBITDA projected between $300 million and $320 million. The company anticipates adjusted EPS of $2.80 to $3.00 and expects adjusted gross margins to remain in the 29% to 31% range. Guidance reflects a revenue breakdown of approximately 45% in the first half and 55% in the second half, with visibility to the midpoint of revenue guidance at 70%.

Additional News
AeroVironment recently completed its acquisition of Blue Halo, an important strategic move to strengthen its defense technology offerings across multiple domains, including air, land, sea, space, and cyber. The acquisition, closed on May 1, 2025, involved a $925 million debt payment using a $700 million loan and part of a $350 million revolving credit line. This merger positions AeroVironment as a leading defense tech prime, enhancing its capabilities and expanding its portfolio with innovative solutions. The integration process is underway, with projected synergies expected to contribute $10 million in fiscal 2026, providing initial cost benefits in the latter half of the year. The acquisition aligns with AeroVironment's long-term strategy to capitalize on emerging global priorities and drive growth in the defense sector.