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AeroVironment kept fiscal 2027 guidance unchanged after Q1 revenues and adjusted EPS topped estimates.
LOCUST could exceed $500M in annual revenues in about a year as AeroVironment expands production.
Backlog, capacity expansion and higher volumes are expected to support AeroVironment's second-half ramp-up.
AeroVironment, Inc. (AVAV - Free Report) used its first-quarter fiscal 2027 earnings call to stress that backlog and recent program wins are moving several product lines toward higher-volume production, with LOCUST directed energy at the center of the growth discussion.
AVAV reported first-quarter revenues of $480.49 million and adjusted EPS of $0.59, which beat the Zacks Consensus Estimate of $467.9 million and $0.22, respectively. Management cited budget timing and a back-half-weighted delivery profile as key variables. The company kept full-year guidance unchanged.
AeroVironment, Inc. Price, Consensus and EPS Surprise
Executive vice president and CFO Sean Woodward reaffirmed fiscal 2027 revenue guidance of $2.125 billion to $2.225 billion, adjusted EBITDA of $305 million to $325 million and non-GAAP EPS of $3.02 to $3.34.
Woodward said revenues should remain weighted 45% to the first half and 55% to the second half. Adjusted EBITDA is expected to follow a one-third, two-thirds split, while non-GAAP EPS is planned at roughly 30% and 70%.
The CFO pointed to $1.5 billion of funded backlog and 86% revenue visibility to the midpoint of full-year guidance as support for the outlook.
AeroVironment Puts LOCUST at the Growth Center
Chairman, president and CEO Wahid Nawabi framed LOCUST as a major commercialization opportunity after the nearly $465 million U.S. Army E-HEL award and the first international direct commercial sale.
In Q&A, a BTIG analyst asked about LOCUST profitability. Nawabi said higher volumes and firm-fixed-price production contracts should strengthen margins in the second half, with SCDE targeted to approach the AxS margin model over the next couple of years.
Nawabi also said LOCUST could become a more than $500 million annual franchise in about a year as AeroVironment expands production and pursues additional domestic and international opportunities.
AVAV Expands Capacity Around Franchise Programs
Woodward said fiscal 2027 capital spending remains planned at 12% to 14% of revenues, with free cash flow expected to be negative as AeroVironment funds production capacity.
Projects include a $100 million Southern California campus investment, a 200,000-square-foot Salt Lake City facility for loitering munitions, Albuquerque expansion for LOCUST and added Huntsville capacity for Freedom Eagle-1.
Asked by a UBS analyst whether capacity unlocks awards, Nawabi said demonstrated production readiness has supported past wins. He tied current investments in LOCUST, Red Dragon and Freedom Eagle-1 to customer demand and future contracting opportunities.
AeroVironment Balances AxS Growth and SCDE Pressure
Woodward said Autonomous Systems revenues rose 21% year over year to $346 million, while SCDE revenues declined 21% to $134.5 million, reflecting the SCAR termination and other discontinued government programs.
Adjusted gross margin improved to 30% from 29%. Product margin reached 40%, but service margin fell to 8% as lower Cyber & Mission Solutions volume left fixed costs underabsorbed.
Nawabi said cyber and mission services are not central to the company’s long-term growth thesis. Woodward added that higher service volumes should improve margins, while product commercialization remains the main path for EBITDA expansion.
AVAV Q&A Focuses on Budget Timing and Second Half
A Stifel analyst asked why management did not raise guidance after the strong quarter. Nawabi pointed to uncertainty around the timing of the U.S. government’s fiscal 2027 budget, while maintaining that it is not a significant risk to current guidance.
A Piper Sandler analyst asked how the continuing resolution factors into the outlook. Woodward said guidance assumes a short-term continuing resolution followed by an approved defense budget in the December time frame.
Woodward also said second-quarter adjusted EBITDA should step down as sales mix softens and internal R&D spending rises before higher volume and mix support the second half.
AeroVironment Stays Focused on Delivery and Scale
Nawabi’s closing emphasis remained on execution, capacity expansion and supply-chain readiness as the company moves recently awarded programs toward production.
Management combined confidence in demand with discipline on timing, prioritizing manufacturing scale and program delivery while preserving its full-year outlook against an uncertain government budget schedule.
AVAV’s Zacks Rank and Style Scores Point to Weak Signals
AVAV carries a Zacks Rank #4 (Sell), which reflects an unfavorable earnings estimate-revision backdrop. Its Value Score is D, Growth Score is C, Momentum Score is F and VGM Score is D, indicating weaker style characteristics overall.
The Zacks framework places primary weight on estimate revisions, while Style Scores assess value, growth and momentum over a similar near-term horizon. The Zacks Rank can change as analysts revise estimates following the just-reported results.
View the Zacks #1 Rank List
Image: Bigstock
AVAV Q1 Earnings Call Centers on LOCUST Scale-Up & Second-Half Ramp-Up
Key Takeaways
AeroVironment, Inc. (AVAV - Free Report) used its first-quarter fiscal 2027 earnings call to stress that backlog and recent program wins are moving several product lines toward higher-volume production, with LOCUST directed energy at the center of the growth discussion.
AVAV reported first-quarter revenues of $480.49 million and adjusted EPS of $0.59, which beat the Zacks Consensus Estimate of $467.9 million and $0.22, respectively. Management cited budget timing and a back-half-weighted delivery profile as key variables. The company kept full-year guidance unchanged.
AeroVironment, Inc. Price, Consensus and EPS Surprise
AeroVironment, Inc. price-consensus-eps-surprise-chart | AeroVironment, Inc. Quote
AVAV Reaffirms Guidance Despite Early Strength
Executive vice president and CFO Sean Woodward reaffirmed fiscal 2027 revenue guidance of $2.125 billion to $2.225 billion, adjusted EBITDA of $305 million to $325 million and non-GAAP EPS of $3.02 to $3.34.
Woodward said revenues should remain weighted 45% to the first half and 55% to the second half. Adjusted EBITDA is expected to follow a one-third, two-thirds split, while non-GAAP EPS is planned at roughly 30% and 70%.
The CFO pointed to $1.5 billion of funded backlog and 86% revenue visibility to the midpoint of full-year guidance as support for the outlook.
AeroVironment Puts LOCUST at the Growth Center
Chairman, president and CEO Wahid Nawabi framed LOCUST as a major commercialization opportunity after the nearly $465 million U.S. Army E-HEL award and the first international direct commercial sale.
In Q&A, a BTIG analyst asked about LOCUST profitability. Nawabi said higher volumes and firm-fixed-price production contracts should strengthen margins in the second half, with SCDE targeted to approach the AxS margin model over the next couple of years.
Nawabi also said LOCUST could become a more than $500 million annual franchise in about a year as AeroVironment expands production and pursues additional domestic and international opportunities.
AVAV Expands Capacity Around Franchise Programs
Woodward said fiscal 2027 capital spending remains planned at 12% to 14% of revenues, with free cash flow expected to be negative as AeroVironment funds production capacity.
Projects include a $100 million Southern California campus investment, a 200,000-square-foot Salt Lake City facility for loitering munitions, Albuquerque expansion for LOCUST and added Huntsville capacity for Freedom Eagle-1.
Asked by a UBS analyst whether capacity unlocks awards, Nawabi said demonstrated production readiness has supported past wins. He tied current investments in LOCUST, Red Dragon and Freedom Eagle-1 to customer demand and future contracting opportunities.
AeroVironment Balances AxS Growth and SCDE Pressure
Woodward said Autonomous Systems revenues rose 21% year over year to $346 million, while SCDE revenues declined 21% to $134.5 million, reflecting the SCAR termination and other discontinued government programs.
Adjusted gross margin improved to 30% from 29%. Product margin reached 40%, but service margin fell to 8% as lower Cyber & Mission Solutions volume left fixed costs underabsorbed.
Nawabi said cyber and mission services are not central to the company’s long-term growth thesis. Woodward added that higher service volumes should improve margins, while product commercialization remains the main path for EBITDA expansion.
AVAV Q&A Focuses on Budget Timing and Second Half
A Stifel analyst asked why management did not raise guidance after the strong quarter. Nawabi pointed to uncertainty around the timing of the U.S. government’s fiscal 2027 budget, while maintaining that it is not a significant risk to current guidance.
A Piper Sandler analyst asked how the continuing resolution factors into the outlook. Woodward said guidance assumes a short-term continuing resolution followed by an approved defense budget in the December time frame.
Woodward also said second-quarter adjusted EBITDA should step down as sales mix softens and internal R&D spending rises before higher volume and mix support the second half.
AeroVironment Stays Focused on Delivery and Scale
Nawabi’s closing emphasis remained on execution, capacity expansion and supply-chain readiness as the company moves recently awarded programs toward production.
Management combined confidence in demand with discipline on timing, prioritizing manufacturing scale and program delivery while preserving its full-year outlook against an uncertain government budget schedule.
AVAV’s Zacks Rank and Style Scores Point to Weak Signals
AVAV carries a Zacks Rank #4 (Sell), which reflects an unfavorable earnings estimate-revision backdrop. Its Value Score is D, Growth Score is C, Momentum Score is F and VGM Score is D, indicating weaker style characteristics overall.
The Zacks framework places primary weight on estimate revisions, while Style Scores assess value, growth and momentum over a similar near-term horizon. The Zacks Rank can change as analysts revise estimates following the just-reported results.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.