Aerovironment 2026 Q1 Earnings Misses Targets Despite Strong Revenue Growth

Aerovironment reported first-quarter results that fell short of expectations on the earnings front despite a significant revenue beat. The company swung to a net loss and missed adjusted EPS estimates, but it reaffirmed and raised guidance for the year, reflecting confidence in its growth trajectory. The BlueHalo acquisition contributed meaningfully to revenue, and the company highlighted strong backlog and bookings.

Revenue

Aerovironment’s total revenue surged 140.0% year-over-year to $454.68 million in fiscal 2026 Q1, far exceeding the $439.47 million estimated by analysts. Product sales accounted for $313.53 million, while contract services added $141.14 million. The BlueHalo acquisition, closed in the quarter, contributed $235.2 million to the top line, reinforcing the company’s expansion into space communications and directed energy solutions.

Earnings/Net Income

The company swung to a net loss of $67.37 million, or $1.44 per share, in fiscal 2026 Q1, a stark contrast to the $21.17 million net income and $0.76 per share in the prior-year period—a 418.3% deterioration in net income and a 289.5% negative change in EPS. This marked a significant decline from the same period last year and indicates a challenging operating environment. The adjusted earnings of 32 cents per share also missed the Street estimate of 34 cents.

Price Action

Aerovironment’s stock price climbed 6.49% during the latest trading day, gained 3.70% in the most recent full trading week, but edged down 0.16% month-to-date.

Post Earnings Price Action Review

Despite the earnings miss and net loss, the stock saw a sharp intraday rally, reflecting investor confidence in the company’s underlying business momentum and robust revenue performance. The BlueHalo acquisition appears to be paying off, contributing meaningfully to the top line and expanding AVAV’s capabilities. While the earnings result was mixed, the guidance raise and record backlog signaled strong long-term positioning, which helped support the stock in after-hours trading.

CEO Commentary

Wahid Nawabi, Chairman, President, and CEO, described the quarter as a “very strong start” to fiscal 2026, highlighting record revenue, robust bookings, and the successful integration of BlueHalo. Nawabi emphasized AV’s leadership in laser communication and the FE-1 missile program, which he characterized as multibillion-dollar opportunities. He also noted the company’s alignment with urgent defense priorities and its commitment to scaling manufacturing and expanding globally.

Guidance

Aerovironment maintained its fiscal 2026 revenue guidance of $1.9 billion to $2 billion and raised its adjusted EPS guidance to $3.60 to $3.70, above the previous $3.42 estimate. Kevin McDonnell, CFO, cited visibility of 82% to the midpoint of revenue guidance, driven by a funded and unfunded backlog. The company expects continued margin improvement, with adjusted gross margins projected to reach the mid-30s by Q4, and operating expenses to decline to 11%–13% of revenue.

Additional News

AeroVironment successfully completed the acquisition of BlueHalo, a move that expanded the company’s capabilities in space communications, Counter-UAS, and directed energy. The acquisition contributed $235.2 million in first-quarter revenue, underscoring its immediate impact on growth. The company also reported a record backlog of $1.1 billion and bookings of $399 million, signaling strong customer demand across its portfolio. CEO Wahid Nawabi expressed confidence in the company’s ability to deliver best-in-class solutions aligned with defense priorities across air, land, sea, space, and cyber domains. While the stock initially traded flat post-earnings, it showed signs of resilience in extended trading, gaining 0.70% to $233.97.