AeroVironment holds fiscal 2027 as funded backlog hits a record $1.5 billion

AeroVironment kept fiscal 2027 revenue at $2.125 billion to $2.225 billion after Wednesday's close, even as the quarter booked more work than it billed and funded backlog, remaining work on firm orders that already have appropriated customer money, rose to a record $1.5 billion. Adjusted EBITDA still declined. The order book thickened; the year did not.

The drone and loitering-munition maker closed an all-stock acquisition of BlueHalo on May 1, 2025, a deal with an enterprise value of $4.1 billion that added space, cyber, directed-energy and counter-drone systems and created the second segment that now sits beside Autonomous Systems. The shares are 42% lower this year, with Wednesday's close of $140.80, down 5.4% on the session.

At those prices, an unchanged year is the print that matters. For holders of the large-cap aerospace funds most readers own, Wednesday's report barely moves what they hold.

Revenue was $480.5 million, up 6% from $454.7 million a year earlier and above a $452 million consensus. Bookings were $683 million, or 1.4 times quarterly sales. The 8-K landed at 4:04 p.m. Eastern, so the regular session was not a reaction to the print. In extended hours as of 4:56 p.m., the bid-ask midpoint was $143.76, 2.1% above the close.

A fatter adjusted profit, a thinner operating line

Adjusted earnings were $0.59 a share, up from $0.32, more than double a $0.22 consensus that sat below last year's figure, so the beat was always going to look large. The company said that increase came from Autonomous Systems margin, lower stock-based compensation, and higher interest income. It also pointed to lower interest expense after refinancing term and revolver loans taken on for BlueHalo.

Adjusted EBITDA was $53.4 million, an 11% margin, down from $56.6 million, or 12%, a year earlier.

GAAP gross margin was $124.6 million, or 26% of sales, up from 21%. AeroVironment said the lift was driven mainly by lower intangible amortization and other non-cash purchase-accounting expense: $43.4 million this quarter against $79.7 million a year ago, including $18.5 million in cost of sales versus $37.4 million. Acquisition-related expense collapsed to $2.1 million from $23.7 million. The year-ago quarter already carried those BlueHalo purchase-accounting charges, so this is amortization rolling off, not a new integration bill landing.

Adjusted gross margin, a different figure, was 30%, up from 29% a year earlier, with adjusted product margin at 40% and adjusted service margin at 8%. Product was 68% of revenue, services 32%. Service work has been the thin side of the mix since BlueHalo: a year earlier, adjusted service margin was 13% and adjusted product margin 36%. The overall adjusted gross line rose 1 percentage point. On adjusted EBITDA margin, 11% from 12%, the quarter did not get more profitable.

Autonomous Systems carried the quarter

Autonomous Systems revenue was $346.0 million, up from $285 million. Space, Cyber and Directed Energy, the segment created when BlueHalo closed, fell to $134.5 million from $170 million. Inside Autonomous Systems, Uncrewed Aircraft Systems revenue was $120 million, up 71%, and Precision Strike and Defensive Systems was $197 million, up 8%.

The company did not split the $480.5 million of revenue or the $683 million of bookings into BlueHalo versus legacy loitering munitions or uncrewed systems. That cut is the one this print does not give. Wahid Nawabi, chairman, president and chief executive, called it "a strong start, with record first-quarter revenue and funded backlog and landmark strategic wins," and said customers were "continuing to field autonomous capabilities at increasing scale." The release did not quantify Ukraine demand, European rearmament, or US Army program funding. It did flag US government funding, continuing resolutions, and shifting government priorities as risks.

The accompanying presentation highlighted a $30 million Puma award for Germany's LARUS program, a $51 million Switchblade 600 order, a $117 million P550 long-range reconnaissance contract, and a $464 million LOCUST award for the Enduring High Energy Laser program. It did not say those figures are the $683 million, and they should not be added into it.

A thicker backlog, the same year

Funded backlog was $1.5 billion as of August 1, up from $1.2 billion on April 30. AeroVironment said that was up 23% from the prior quarter and 37% from a year earlier. Official releases had shown funded backlog stuck near $1.1 billion through the first three quarters of fiscal 2026 before the step-up to $1.2 billion at April 30.

Fiscal 2027 guidance was unchanged: revenue of $2.125 billion to $2.225 billion, adjusted EBITDA of $305 million to $325 million, non-GAAP diluted EPS of $3.02 to $3.34, and GAAP net income of $10 million to $27 million. Internal R&D was kept at 7% to 9% of revenue, adjusted SG&A at 14% to 16%, and stock-based compensation at about $40 million.

A $480.5 million opening quarter does not, on its own, fill that revenue range. The $1.5 billion backlog and 1.4 book-to-bill are what would have to convert later in the year. AeroVironment did not publish a second-half schedule, so the filings do not settle whether holding the year is caution or a softer outlook. They do show that BlueHalo-related deal costs shrank, not that they swelled. Nawabi and Sean Woodward, executive vice president and chief financial officer, host the 4:30 p.m. Eastern call where that question gets asked. The 8-K does not answer it.

Where the stock actually sits in funds

About 4.1 million shares traded in the regular session, against a 1.5 million average. Aerospace funds closed before the release; Wednesday's declines in those products are not a verdict on the print.

AeroVironment is a concentrated holding only in drone-themed portfolios. It is a mid-sized name in equal-weight aerospace and a sliver of the large-cap defense funds most readers actually hold.

If you hold DDRNZ, this is the top position. If you hold AITA or BPPA, it is a sliver of the book.

The $1.5 billion is funded work, not a raise. What would settle the conversion question is a second-half schedule, or a year that finally moves. Neither is in Wednesday's filing.