AeroVironment (AVAV 21.68%) announced its fourth-quarter and full-year fiscal 2025 results on Tuesday, June 24, delivering a 14% full-year revenue increase to $821 million, securing $1.2 billion in bookings and a record $726 million in funded backlog, which jumped 82% from 2024. During the year, the defense contractor specializing in unmanned aerial vehicles completed its transformational acquisition of Blue Halo, established new business segment structures, and launched three new products. Management issued fiscal 2026 revenue guidance of $1.9 billion to $2 billion with projected adjusted EBITDA of $300 million to $320 million.
Key insights follow regarding the company's accelerating scale, integration milestones, and growth capacity in both established and emerging defense technologies.
Record Bookings and Backlog Signal Demand for Battle-Proven Solutions
Fourth-quarter revenue surged 40% year over year to $275 million, propelled by robust growth in the Loitering Munitions Systems (LMS) segment, which posted an 87% gain to $138.3 million. International revenue accounted for 52% of total revenue, with Switchblade orders received from eight different nations and negotiations active with eight more.
"We achieved record GAAP revenue of $821 million, 14% higher than the prior year, and record fourth quarter revenues of $275 million, which is 40% higher than the prior year period. Second, in fiscal year 2025, we secured $1.2 billion in total bookings, underscoring the robust demand for our innovative and battle-proven solutions. Third, we ended fiscal year 2025 with a funded backlog of $726 million, which is 82% higher than the prior fiscal year."
— Wahid Nawabi, Chairman, President, and Chief Executive
Sustained multi-national adoption and increasing funded backlog magnify visibility into future revenue, fortifying competitive positioning as allied defense budgets and unmanned systems demand accelerate globally.
Blue Halo Acquisition and Portfolio Integration Transform Market Reach
The Blue Halo transaction, closed May 1, did not contribute to FY2025 revenue, but it would have resulted in a pro forma combined revenue base of $1.7 billion. It expanded the company's technology portfolio to include advanced space, cyber, electronic warfare, and directed energy capabilities. Pro forma FY2026 segment revenue guidance -- $1.2 billion to $1.4 billion for Autonomous Systems, and $700 million to $900 million for Space, Cyber, and Directed Energy -- implies double-digit percentage growth in each.
"Fourth, we closed our acquisition of Blue Halo, further strengthening our industry-leading position as the next-generation defense tech prime, with an all-domain portfolio of innovative solutions across air, land, sea, space, and cyber."
— Wahid Nawabi, Chairman, President, and Chief Executive
Unified capabilities across every defense domain enable the company to directly address Department of Defense (DoD) modernization priorities.
Product Innovation Pipeline Drives New Revenue Channels and TAM Expansion
Three newly launched products -- P550, JUMP 20X, and Red Dragon -- open access to high-value emerging markets, including artificial intelligence (AI)-driven modular small UAS and fully autonomous GPS-denied loitering munitions. Notably, the JUMP 20 platform secured an initial $46 million international contract, most recently with the Italian Ministry of Defense, and Red Dragon’s base configuration is free of ITAR restrictions, allowing broader global commercialization.
"As an example, this past fiscal year, we introduced three significant new products that are directly aligned to our customers' highest priorities. The first is our new group two AI-driven autonomous UAS, the P550. ... we unveiled our JUMP 20X ... and finally, we introduced our new one-way attack drone solution, Red Dragon, which is a fully autonomous capable GPS-denied one-way attack UAS."
— Wahid Nawabi, Chairman, President, and Chief Executive Officer
The robust commercialization roadmap and early contract momentum for next-generation unmanned and autonomous systems have the potential to open multi-year, multi-billion-dollar total addressable market (TAM) expansion, accelerating the company's transition into a prime supplier of integrated defense solutions.
Looking Ahead
Management projects FY2026 revenue between $1.9 billion and $2 billion, adjusted EBITDA of $300 million to $320 million, and adjusted EPS of $2.8 to $3, with expected adjusted gross margins in the 29%-31% range. Segment forecasts specify $1.2 billion to $1.4 billion in Autonomous Systems revenue (20%-plus growth) and $700 million to $900 million in Space, Cyber, and Directed Energy revenue guidance (double-digit growth). The company expects 70% revenue visibility to the midpoint of its FY2026 revenue guidance, R&D spend is expected to be in the range of 6%-7% of revenue.