AeroVironment’s QQ3 2025 results reflect a meaningful deceleration in revenue and continued profitability challenges, despite positive EBITDA and a solid balance sheet. Reported revenue of $167.64 million declined roughly 10% year over year and 11% quarter over quarter, with gross profit of $63.20 million yielding a gross margin of 37.7%. Operating income was negative at $(3.09) million, and net income came in at $(1.75) million, or a loss of $(0.06) per share. The quarter also produced negative free cash flow of $(29.61) million and an operating cash flow burn of $(25.76) million, driven largely by working capital movements (notably accounts receivable of $(38.19) million and other working capital items totaling $(38.68) million). These metrics underscore near-term earnings fragility even as the company maintains a robust equity base and a relatively modest debt burden.
From a balance sheet perspective, AeroVironment finishes the period with cash and equivalents of $47.0 million and total debt of $59.2 million, yielding a net debt position of approximately $(12.2) million. This yields a healthy liquidity profile (current ratio 4.22, quick ratio 3.07), albeit with working capital consumption as a key swing factor. On a multi-quarter basis, the company’s profitability remains challenged (net margin −1.05%) while gross margins hover near 37.7%, indicating that any margin improvement will likely hinge on operating expense leverage and higher-margin mix or volumes in its UAS/TMS/MUAS/HAPS portfolio.
Management commentary is not provided in the supplied data. Given the scale of defense and commercial unmanned systems markets, AeroVironment’s longer-term outlook will depend on a) stabilization or acceleration of defense spending and curation of contract wins, b) improvement in working capital efficiency, and c) progress toward sustained operating profitability through cost discipline and revenue mix optimization. In the near term, investors should monitor signs of improved cash flow, margin recovery, and any segment-level demand signals as public procurement and international opportunities evolve.