AeroVironment Revenue Jumps 140 Percent

AeroVironment(NASDAQ:AVAV) reported first-quarter fiscal 2026 results on September 3, 2025, posting record revenue of $454.7 million, up 140% year over year, and adjusted EBITDA of $56.6 million. Management maintained full-year guidance, highlighted a $240 million space laser communications contract, and emphasized the ongoing integration of the Blue Halo acquisition. The following insights examine the company’s evolving growth drivers, competitive positioning, and operational milestones.

Blue Halo acquisition accelerates AeroVironment’s U.S. growth

The May 2025 Blue Halo acquisition shifted AeroVironment’s revenue mix to 78% U.S. sales and drove significant pro forma growth in key products, including over 200% year-over-year growth for Switchblade 600 and more than six times growth for Jump 20. This transaction expanded the company’s scale and reach across unmanned aircraft systems (UAS), directed energy, and space technologies.

"Our acquisition of Blue Halo has created significant new growth in critical areas that are aligned with our customers' highest priorities. And our integration efforts are progressing ahead of plan. Our first quarter results benefited from programs tied to this acquisition, and we look forward to building on that momentum in the coming quarters."
-- Wahid Nawabi, Chairman, President, and Chief Executive Officer

This acquisition immediately enhanced AeroVironment’s ability to pursue multibillion-dollar U.S. national security programs and contributed to record bookings and backlog, strengthening its long-term competitive position.

AeroVironment wins major laser communications contract

In the first quarter, AeroVironment secured a $240 million contract for long-haul space laser communication terminals, to be delivered over three and a half years, and a $95 million award for Freedom Eagle One (FE1) long-range interceptor missile development. These wins contributed to a funded backlog of $1.1 billion and an unfunded backlog of $3.1 billion, and signal deeper penetration into space and counter-UAS (unmanned aircraft system) defense markets.

"Yesterday we announced a nearly $240 million award for our long-haul space laser communications terminals. That will be delivered over the next three and a half years with options for additional systems. To put this in perspective, we expect the laser communication is going to be one of the most important aspects of warfare in the space domain. And represents a multibillion-dollar opportunity for AeroVironment. AeroVironment is clearly leading the industry in this critical area and technology."
-- Wahid Nawabi, Chairman, President, and Chief Executive Officer

Transitioning from development to production in advanced space and missile-defense technologies broadens AeroVironment’s total addressable market and reinforces its first-mover advantage in multi-domain national defense platforms.

HALO software ecosystem expands platform stickiness

The launch of the AeroVironment HALO software ecosystem introduced an open, hardware-agnostic platform compatible with both internal and external systems, supporting integration across legacy and Blue Halo software. HALO leverages the company’s installed base of over 42,000 systems and enables third-party hardware and software interoperability.

"AeroVironment Halo software, which we just announced, is really a great example of how we brought the best of both worlds from AeroVironment's portfolio of software solutions as well as BlueHalo software solutions into one cohesive umbrella of an ecosystem and platform that allows us to deliver and innovate in the lots and lots of different areas of the entire market. There is certainly a major, major need and a market opportunity for companies like AeroVironment and others to try to help simplify and integrate and interoperate all these systems together. That's precisely what AeroVironment HALO's strategy and product roadmap and value proposition is all set to be. In regards to your first question, yes, we already today enable third-party devices third-party platforms, hardware systems, to actually integrate and be interoperable with AeroVironment Halo. And many, many other subsystems or modules of AeroVironment HALO. AV Halo is going to be an umbrella brand with lots and lots of different tools and applications underneath it."
-- Wahid Nawabi, Chairman, President, and Chief Executive Officer

By enabling open architecture and API support, HALO increases customer retention and positions AeroVironment as a central integrator across air, land, sea, space, and cyber domains.

Looking Ahead

Management reaffirmed fiscal 2026 guidance of $1.9 billion to $2 billion in revenue (15% pro forma year-over-year growth at the midpoint), a 16% adjusted EBITDA margin, and non-GAAP EPS of $3.60 to $3.70. Bookings reached nearly $400 million, with 82% of revenue guidance supported by backlog, and new contracts are expected to further increase unfunded backlog in the coming quarters. Adjusted gross margin is projected to improve sequentially, ending in the mid-30% range as product mix matures and integration synergies are realized.

Where to invest $1,000 right now

When our analyst team has a stock tip, it can pay to listen. After all, Stock Advisor’s total average return is 1,056%* — a market-crushing outperformance compared to 185% for the S&P 500.

They just revealed what they believe are the 10 best stocks for investors to buy right now, available when you join Stock Advisor.

See the stocks »

*Stock Advisor returns as of September 8, 2025

This article was created using Large Language Models (LLMs) based on The Motley Fool's insights and investing approach. It has been reviewed by our AI quality control systems. Since LLMs cannot (currently) own stocks, it has no positions in any of the stocks mentioned. The Motley Fool has positions in and recommends AeroVironment. The Motley Fool has a disclosure policy.