AeroVironment stock rose 2.9% in after-hours trading to $144.91 on Tuesday after the drone maker posted quarterly results that came in well ahead of Wall Street expectations.
The company reported fiscal first-quarter 2027 earnings of $0.59 per share on revenue of $480.5 million. Analysts had expected just $0.22 per share on $452 million in revenue. A year ago, AVAV earned $0.32 per share on $455 million in sales.
Adjusted EBITDA came in at $53.4 million, a 36.6% beat versus the $39.1 million analysts had penciled in. Operating margin improved to -2.3%, up from -15.2% in the same quarter last year.
Free cash flow was -$35.95 million, a clear improvement from -$146.5 million in the year-ago period.
AEROVIRONMENT $AVAV Q1’27 EARNINGS HIGHLIGHTS
🔹 Revenue: $480.5M (Est. $456M) 🟢; +6% YoY
🔹 Adj. EPS: $0.59 (Est. $0.25) 🟢; +84% YoY
🔹 Oper Income: -$10.9M (Est. -$31M) 🟢; improved from -$69.3M YoY
🔹 Funded Backlog: $1.5B; +37% YoYAffirms FY27 Guide:
🔹 Revenue:… pic.twitter.com/3eY0l7bass— Wall St Engine (@wallstengine) September 9, 2026
The backlog grew to $1.5 billion, up from $1.2 billion at the end of April. That’s a number worth watching, as it points to continued demand for AeroVironment’s unmanned systems.
Management reaffirmed full-year FY2027 revenue guidance of $2.18 billion at the midpoint, with adjusted EPS guidance of $3.18. EBITDA guidance of $315 million came in slightly below the $318.2 million analyst estimate.
The stock had been under pressure heading into the print. AVAV was down about 40% year to date and more than 40% since the start of the Iran War, so investors were watching closely.
Defense stocks broadly have sold off since fighting began, with investors concerned that a divided Congress following the midterm elections could lead to budget gridlock.
AeroVironment also faced its own headwinds. In March, the government canceled a roughly $1 billion contract for the company’s BADGER phased-array antenna systems, after the Space Force determined that commercial alternatives would be cheaper.
That cancellation hit the stock hard. Valuation compressed from around 90 times forward earnings earlier in 2026 to roughly 39 times now. Earnings are still expected to grow at close to 39% annually over the next few years.
Over the last five years, AeroVironment has grown revenue at a 37.4% compound annual rate. That growth has accelerated recently, with annualized revenue growth of 63% over the last two years.
Products revenue, which includes aircraft, missile systems, and satellites, averaged 65.4% year-over-year growth over the past two years. Services revenue, covering maintenance, training, and consulting, averaged an even sharper 195% growth over the same period.
Looking ahead, sell-side analysts expect revenue to grow 13.9% over the next 12 months. That’s a slowdown from recent years, but it still reflects expectations for continued demand.
AVAV has a history of big post-earnings swings. The stock jumped roughly 19% after its Q4 FY2026 report in June, and dropped 6% after Q3 results in March.
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