AeroVironment (AVAV) Q3 2026 earnings summary

Executive summary

• Third quarter revenue reached $408 million, up 143% year-over-year, driven by the BlueHalo acquisition, higher product and service sales, and strong demand in defense markets.

• Net loss for the quarter was $156.6 million, primarily due to a $151.3 million goodwill impairment in the Space segment following a stop-work order on a major contract.

• Funded backlog rose to a record $1.1 billion, with a book-to-bill ratio of 1.6 and total awards of $4.5 billion for the first nine months.

• The company is leveraging product innovation, customer relationships, and manufacturing scalability to capture demand in high-growth defense markets and transitioning programs to commercial product solutions for improved profitability.

• BlueHalo integration is progressing, expanding operations and contributing $656.9 million in revenue since acquisition.

Financial highlights

• Q3 revenue was $408 million, up 143% year-over-year as reported, with organic growth of 38%.

• Adjusted EBITDA for Q3 was $44.5 million (10.9% margin), up from $22 million last year; non-GAAP EPS was $0.64.

• Gross margin for the quarter was $98.8 million, but gross margin percentage declined to 24% from 38% year-over-year due to higher service revenue and amortization.

• Q3 GAAP net loss was $156.6 million, or $(3.15) per diluted share, mainly due to goodwill impairment.

• Cash and cash equivalents at quarter-end were $289.9 million, up from $40.9 million at April 30, 2025, due to financing activities.

Outlook and guidance

• FY 2026 revenue guidance is $1.85–$1.95 billion; adjusted EBITDA is $265–$285 million; non-GAAP EPS is $2.75–$3.10.

• Full-year GAAP net loss forecasted between $(218) million and $(201) million.

• Revenue visibility for FY26 is 98% based on current backlog and bookings.

• R&D expense is expected to remain at 7–8% of revenue.

• Q4 is expected to be a record quarter, with strong demand and backlog supporting growth into FY 2027.