AeroVironment reported a record start to its fiscal year with a QQ1 2026 revenue run-rate that reflects the integration of the Blue Halo acquisition and a broad, defense-led growth trajectory. Management highlighted nearly $455 million in quarterly revenue, bookings of roughly $400 million, and funded backlog of $1.1 billion, with unfunded backlog at $3.1 billion, underscoring a robust demand pipeline across UAS, counter-UAS, directed energy, space technologies, and cyber solutions. The quarter benefited from Blue Halo’s contribution and the rapid ramp of high-priority programs, including the Space Laser Communications terminal award and the FE1 missile development program, positioning AeroVironment to scale production to meet near- to mid-term demand. Guidance for FY2026 remains intact at $1.9–$2.0 billion in revenue and adjusted EBITDA of $100–$320 million, with 82% visibility to the midpoint.
From a profitability perspective, GAAP gross margin declined to 21% in QQ1 2026, driven by a higher services mix (31% of revenue) and elevated intangible amortization versus the prior year, while adjusted gross margin was 29% (down from 45% in the prior year). Adjusted EBITDA was $56.6 million (approximately 16% of revenue), reflecting the Blue Halo contribution and the posture of higher R&D and integration costs during a period of rapid capacity expansion. The company expects gross margins to improve through the year, guided to the mid-30s by Q4 and an average in the low-30s for FY2026, as synergies from the Blue Halo combination take effect and the mix shifts toward higher-value, production-stage programs.
Strategically, AeroVironment reaffirmed its leadership in defense-technology platforms across autonomous systems and space, cyber, and directed energy (SCDE). Halo, the open, software-defined ecosystem, is positioned to broaden the addressable market by enabling interoperability and third-party integrations, potentially accelerating international and domestic adoption. Management also highlighted a diversified manufacturing footprint (12 states) and a Salt Lake City expansion to lift long-term capacity beyond FY2027, signaling a deliberate plan to scale with demand. Overall, the QQ1 results validate AeroVironment’s multi-domain portfolio and growth strategy, even as the near-term profitability trajectory reflects the integration and ramp costs associated with a major acquisition.