Share prices of AeroVironment had dropped by over 40% in 2026 prior to the earnings announcement. Then the drone maker delivered numbers that crushed expectations. The result - a 19% jump in one day.
The company, known for its small unmanned aircraft systems like the Switchblade loitering munition, has seen a surge in orders as militaries worldwide shift toward drone-centric warfare. With conflicts in Ukraine and the Middle East highlighting the effectiveness of such systems, defense budgets are increasingly allocating funds to unmanned platforms.
Investors got a shock in both directions. The stock had been beaten down, but the company proved it could still grow fast.
For its fiscal fourth quarter of 2026, AeroVironment posted adjusted earnings of $1.84 per share. That was well above the $1.46 that analysts from LSEG had expected. Net income soared to $63.17 million from $16.66 million a year earlier. On a reported basis - meaning including one-time items - earnings were $1.25 per share, up from 59 cents per share.
Revenue was also a blowout. Autonomous systems revenue of $492 million handily beat the $402 million StreetAccount expectation.
CEO Wahid Nawabi said the surge in demand comes from real-world conflicts. "We knew that this inflection point was going to happen sooner or later, and these last couple of conflicts that have become globally well known has essentially brought this thing to the forefront," he told CNBC's Morgan Brennan during a facility tour.
The backlog was only slightly above the $1.1 billion reported three months earlier.
For the next fiscal year, AeroVironment issued revenue guidance between $2.13 billion and $2.23 billion. That range brackets the $2.17 billion analysts had forecast. However, the company's guidance for adjusted earnings per share - profit adjusted for one-time costs - was $3.02 to $3.34.
Analysts had expected $3.94. That gap worried some investors.
Nawabi sees a huge opportunity ahead. "Not only the U.S. Department of War, but all of our allies are behind the eight ball in terms of adoption and deployment," he said. "Now we're playing catch-up. Our military is playing catch-up in a very fast pace."
For drones specifically, the Pentagon's budget could exceed $75 billion in the coming fiscal year. The company's ability to double revenue in a single quarter underscores the accelerating demand for its autonomous systems, especially as global military conflicts drive urgent procurement.
AeroVironment smashed quarterly profit and revenue expectations, and its backlog has grown sharply. But the company's own profit forecast for next year came in well below what the market wanted. That split - strong current results but cautious future profit outlook - will keep investors watching closely.
