AVAVNasdaqAircraftUS GAAP · USD

AeroVironment Inc

AeroVironment designs and manufactures unmanned aircraft systems, loitering munition systems, and related services for defense and government customers. The company’s legacy portfolio includes small unmanned aircraft and tactical strike systems such as Switchblade, while its recent BlueHalo acquisition expanded its exposure to higher-service-content defense technologies. Its business is closely tied to U.S. Department of Defense demand, allied government procurement, and conflict-driven replenishment cycles. AeroVironment also provides training, repairs, customer-funded R&D, and engineering services that support the installed base and new program wins. The company is in the middle of a major integration and portfolio expansion phase following the BlueHalo transaction.

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Revenue1,977m USD
+140.9 %y/y
Operating profit (EBIT)-311m USD
−862.3 %y/y
EBIT margin-15.7%
−20.7 ppy/y
Net income-265m USD
−707.8 %y/y
Free cash flow-141m USD
−484.0 %y/y

Fiscal year 2026 · change from previous year

Development 2021–2026

-50005001,0001,5002,000m USD2021: 395 m USD2021: EBIT 43 m USD20212022: 446 m USD2022: EBIT -9.9 m USD20222023: 541 m USD2023: EBIT -179 m USD20232024: 717 m USD2024: EBIT 72 m USD20242025: 821 m USD2025: EBIT 41 m USD20252026: 1,977 m USD2026: EBIT -311 m USD20261,977-311
RevenueOperating profit (EBIT)
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Business

Share of revenue
Unmanned aircraft systems35 %

Small and medium unmanned aircraft used for surveillance, reconnaissance, and tactical operations.

Loitering munition systems30 %

Switchblade and related precision strike systems sold primarily to defense customers.

Services and sustainment20 %

Training, repairs, and other recurring support services for deployed systems.

Customer-funded engineering10 %

R&D and engineering services performed under customer contracts and development programs.

BlueHalo technologies5 %

Acquired defense technologies and services that broaden the company’s portfolio and service mix.

Products

Reported · share of revenue
42.9%18.4%17.5%13.8%FY2026100 %
  • Precision Strike and Defense Systems42.9 %
  • Uncrewed Aircraft Systems18.4 %
  • Cyber and Mission Solutions17.5 %
  • Space and Directed Energy13.8 %
  • Other7.4 %

Source: 10-K FY2026, revenue the company reports per product line (SEC XBRL). Shares are of the lines shown and add up to 100 %.

Customers

AeroVironment sells primarily to the U.S. Department of Defense and other U.S. government agencies, which buy systems for operational deployment, resupply, and modernization. Foreign governments and allied defense customers are also important, especially for small unmanned aircraft and tactical systems, and the company notes that international demand can fluctuate with conflict conditions and procurement timing. The company also serves customers that fund development work, engineering services, and sustainment activities tied to specific programs. Because many purchases are defense-driven and program-based, customer demand depends on budget cycles, contract awards, and the pace of fielding and replenishment. After the BlueHalo acquisition, the customer base also includes additional defense and technology buyers associated with the acquired portfolio.

U.S. Department of Defense

Buys Switchblade, MUAS, and related systems for operational use and resupply.

U.S. government agencies

Procure unmanned systems and support services for defense and security missions.

Foreign governments and allies

Buy SUAS and tactical systems for surveillance, defense, and battlefield use.

Customer-funded development programs

Fund engineering and R&D services tied to specific technology or platform needs.

Installed-base sustainment customers

Buy training, repairs, and support to keep deployed systems operational.

Strategy

AeroVironment’s near-term strategy is centered on integrating BlueHalo while preserving momentum in its legacy unmanned systems business. Management expects the acquisition to increase the service mix and broaden the company’s defense technology portfolio, which should make revenue less dependent on pure hardware sales over time. The company is also focused on product development, new product introduction, and enhancing existing systems to capture demand from current global conflicts and U.S. resupply needs. Maintaining supply continuity and supplier relationships is a strategic priority because component shortages and trade restrictions can disrupt delivery and program execution. The company is also managing liquidity and leverage carefully as it funds working capital, R&D, capital expenditures, and acquisition-related obligations.

BlueHalo integrationShort term

The acquisition materially changes the company’s scale, product mix, and service content, so integration execution is central to realizing value.

Grow defense demand for Switchblade and MUASShort term

Conflict-driven replenishment and U.S. DoD demand are key near-term revenue drivers for the legacy portfolio.

Shift toward higher service contentMedium term

A larger service mix can improve revenue durability and deepen customer relationships.

Strengthen supply chain resilienceShort term

Component shortages, sole-source dependencies, and trade restrictions can delay production and raise costs.

Geography

Q1/2026

The company’s business is centered in the United States, where most defense procurement, program execution, and manufacturing activity is tied to federal customers. It also serves international defense customers, and management specifically noted that SUAS sales can be affected by changes in international demand. The company’s supply chain is global, with some components sourced from foreign countries including China, which creates operational exposure even when end customers are domestic. Recent disclosures highlight trade restrictions and sanctions risk tied to U.S.-China tensions, which can affect sourcing, costs, and delivery timing. Following the BlueHalo acquisition, the company’s operating footprint and customer exposure broaden further across defense programs and service activities.

Other countries (US filing)100 %

Risks

AeroVironment faces meaningful execution risk from the BlueHalo acquisition, including integration delays, customer or supplier attrition, and failure to realize expected synergies. Its defense business is exposed to government budget timing, contract definitization delays, and changes in procurement priorities, which can shift revenue between quarters. The company also depends on a limited supplier base for critical components, so shortages, price increases, and shipping delays can disrupt production and compress margins. Trade tensions with China add another layer of risk because the company has disclosed sanctions, export-control actions, and sourcing exposure tied to foreign components. More broadly, defense contractors face program concentration, regulatory risk, and demand volatility linked to geopolitical conflict and budget cycles.

Sorted by severity
LowMediumHighLowMediumHighImpact →Likelihood →Acquisition integration and synergy risk1Customer and supplier retention risk2Supply chain shortages and component inflation3China trade and sanctions exposure4Government procurement timing risk5
Impact is the risk’s severity and likelihood how probable it is over the next few years, both assessed from the company’s reports. Numbers match the list.
  1. Acquisition integration and synergy riskImpact: HighLikelihood: Medium

    The company may not realize expected benefits from BlueHalo, and delays or disruption could hurt revenue, expenses, and operating results.

    Exposure: Combined company integration

  2. Customer and supplier retention riskImpact: HighLikelihood: Medium

    Third parties may terminate or modify relationships after the transaction, reducing future revenue or disrupting supply.

    Exposure: Post-closing commercial relationships

  3. Supply chain shortages and component inflationImpact: HighLikelihood: Medium

    The company relies on limited and sometimes sole-source suppliers for hardware components and subsystems.

    ExposureElectronicsSubsystemsRaw materials
  4. China trade and sanctions exposureImpact: HighLikelihood: Low

    Sanctions and export-control actions can restrict access to components and increase costs or lead times.

    ExposureForeign-sourced componentsIncluding China
  5. Government procurement timing riskImpact: MediumLikelihood: High

    Revenue depends heavily on defense budgets, contract awards, and release of funds by government customers.

    Exposure: U.S. and foreign government programs

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Accounting

Judgemental items
Revenue recognition under ASC 606

The company sells products, services, and engineering work with different transfer and performance patterns, affecting when revenue is booked.

Impact: Can shift reported revenue between quarters and affect margin mix

Inventory reserves for excess and obsolescence

Hardware programs and component availability can change quickly, creating write-down risk.

Impact: Can reduce gross margin and earnings

Goodwill and intangible asset impairment

The BlueHalo acquisition and legacy reporting units require periodic impairment testing based on forecasts and fair value assumptions.

Impact: Can create large non-cash charges

Business combination accounting

Acquired assets and liabilities must be measured at fair value, affecting future depreciation and amortization.

Impact: Changes post-acquisition earnings profile

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Last updated: 24/09/2026