AeroVironment Posts Record Backlog, Secures Key Directed Energy Contracts in Q1 FY27

AeroVironment Inc. reported a first-quarter fiscal 2027 earnings presentation on September 9, 2026, highlighting record backlog growth and significant wins in directed energy defense systems. The company’s stock declined 5.36% in regular trading to $140.80 but recovered 2.43% in after-hours trading, ending near $135.20, though it remains well below its 52-week high of $417.86. Revenue for Q1 FY27 reached $480.5 million, surpassing Wall Street estimates of $459.9 million and marking a 6% year-over-year increase. Adjusted earnings per share (EPS) rose to $0.59, up 84% from the prior-year quarter and beating estimates of $0.30, while the company reported a funded backlog of $1.5 billion—a 37% year-over-year increase and the highest in its history. Unfunded backlog stood at $1.4 billion, bringing the total backlog to $2.8 billion. The company’s adjusted EBITDA for the quarter was $53 million, with a 11% margin, while GAAP gross margins expanded 31% year-over-year to $124.6 million, and non-GAAP gross margins improved to 40% from 36% in the prior year. Product margins grew to 30%, while service margins declined to 8% from 13%. The Autonomous Systems segment contributed $346 million in revenue, up 21% year-over-year, with Uncrewed Aircraft Systems growing 71% to $120 million and Precision Strike & Defensive Systems rising 8% to $197 million. In contrast, the Space, Cyber, and Directed Energy segment saw revenue fall 21% year-over-year to $134 million, driven by declines in both Space & Directed Energy (-28% to $51 million) and Cyber & Mission Solutions (-16% to $83 million). Revenue was split 68% products and 32% services. A key highlight was AeroVironment’s $464 million contract for the LOCUST laser weapon system, the first-ever directed energy production contract for the U.S. Army’s Enduring High Energy Laser program. The company also secured a $52 million international commercial order for LOCUST in Q2. Additionally, it won a $500 million selection for the Titan MS system under the U.S. Department of Defense’s Domestic Shield initiative, with an initial $80 million task order. The company expects to capture 80% to 90% of the $117 million P550 Long-Range Reconnaissance Program contract. Full-year fiscal 2027 guidance includes revenue of $2.125 billion to $2.225 billion, a 10% year-over-year increase, with 45% of that expected in the first half. Adjusted EBITDA is projected at $305 million to $325 million, a 14% margin, with back-end loading in the second half. Non-GAAP EPS guidance ranges from $3.02 to $3.34. Capital expenditures are expected to be 12% to 14% of revenue, while R&D spending is guided at 7% to 9% and SG&A at 14% to 16%. The company reported 86% revenue visibility into its full-year guidance midpoint, with $481 million year-to-date revenue, $1.137 billion in funded backlog, and $140 million in quarter-to-date bookings. Supply chain efforts are nearly 98% domestic. CEO Wahid Nawabi emphasized the cost-effectiveness of LOCUST, stating it operates at under $10 per shot, providing an ‘unlimited magazine’ for war fighters in both offensive and defensive roles.