AVAV and CRWD are sharply lower after earnings, with the former hitting 52-week lowsAeroVironment, Inc. (NASDAQ:AVAV) is down 19.1% at $114.84 at last glance, following the defense contractor's fiscal third-quarter earnings miss and disappointing full-year guidance, with estimates of $780 to $795 million falling short of analysts' expected $820 million. As a key supplier of guided munitions to Ukraine, President Trump's wavering support is weighing on the shares as well. In response, Baird lowered its price ...

Financial Performance - For the three months ended January 25, 2025, the company reported gross favorable cumulative catch-up adjustments of $10.3 million, primarily due to cost adjustments on three contracts [156]. - The net favorable adjustments for the same period amounted to $9.15 million, compared to $4.398 million for the three months ended January 27, 2024 [156]. - For the nine months ended January 25, 2025, the company recorded favorable cumulative catch-up adjustments of $11.6 million, with an aggregate impact of approximately $9.9 million from definitized LMS undefinitized contract actions [158]. - Revenue for the three months ended January 25, 2025 was $167.6 million, a decrease of $18.9 million, or 10%, compared to $186.6 million for the same period in 2024 [170]. - Revenue for the nine months ended January 25, 2025 was $545.6 million, an increase of $25.8 million, or 5%, compared to $519.7 million for the same period in 2024 [189]. - Net income for the nine months ended January 25, 2025, was $26.9 million, down from $53.6 million in the prior year [189]. - Net loss for the three months ended January 25, 2025 was $1.8 million, compared to net income of $13.9 million for the same period in 2024 [170]. Revenue Breakdown - UxS revenue decreased by $49.5 million, or 44%, to $63.8 million, primarily due to decreased international sales, particularly to Ukraine [183]. - LMS revenue increased by $26.2 million, or 45%, to $83.9 million, driven by increased production and global demand for loitering munitions systems [179]. - MacCready Works revenue increased by $4.3 million, or 28%, to $19.9 million, driven by service revenue growth related to HAPS [185]. - LMS revenue increased by $94.8 million, or 80%, to $213.6 million, driven by higher production and global demand for loitering munitions systems [200]. - UxS revenue decreased by $75.2 million, or 22%, to $269.1 million, primarily due to reduced international sales, particularly to Ukraine [202]. Cost and Expenses - Gross margin increased from 36% to 38%, with cost of sales decreasing from 64% to 62% of revenue [171]. - SG&A expenses rose to $43.8 million, or 26% of revenue, compared to $27.8 million, or 15% of revenue, in the prior year, largely due to acquisition-related expenses [173]. - R&D expenses decreased to $22.5 million, or 13% of revenue, from $25.1 million, maintaining the same percentage of revenue [174]. - Selling, General and Administrative (SG&A) expenses increased to $115.5 million, or 21% of revenue, from $79.8 million, or 15% of revenue, in the previous year [194]. - Research and Development (R&D) expenses rose to $75.8 million, or 14% of revenue, compared to $62.6 million, or 12% of revenue, in the prior year [195]. Goodwill and Impairment - The MUAS reporting unit had a goodwill balance of $135.8 million as of January 25, 2025, following a goodwill impairment charge of $156.0 million recognized during the fiscal year ended April 30, 2023 [164]. - The fair value of the MUAS reporting unit exceeded its carrying value by 10% as of January 28, 2024, indicating a potential risk of future impairment [164]. - The company evaluates goodwill for impairment annually, with significant adverse changes in projected future cash flows triggering impairment reviews [160]. - The estimated future annual net cash flows for the MUAS reporting unit are highly sensitive to changes in market conditions and management's expectations, posing a risk for future impairment [164]. Backlog and Future Orders - Funded backlog as of January 25, 2025, was approximately $763.5 million, up from $400.2 million as of April 30, 2024 [208]. - Unfunded backlog totaled $1,429.9 million as of January 25, 2025, indicating potential future orders but not guaranteed revenue [209]. Taxation - The effective income tax rate increased to 25.6% from 8.3% year-over-year, influenced by changes in FDII deductions and tax benefits from equity awards [177]. - The effective income tax rate decreased to 2.5% for the nine months ended January 25, 2025, compared to 6.3% for the same period in 2024 [198]. Cash Flow and Financing - Net cash used in operating activities for the nine months ended January 25, 2025, increased by $28.0 million to $(1.1) million compared to $27.0 million for the same period in 2024 [220]. - The company anticipates funding its normal recurring trade payables and ongoing R&D costs through existing working capital and cash flows from operations [214]. - The company has a line of credit of €7.0 million ($7.3 million) available for issuing letters of credit, with €0.4 million ($0.4 million) outstanding as of January 25, 2025 [213]. - The company expects to service the new $700 million Acquisition Financing Facility from the combined cash flows of the company and BlueHalo [217]. - Net cash used in investing activities decreased by $24.8 million to $16.6 million for the nine months ended January 25, 2025, compared to $41.4 million for the same period in 2024 [221]. - The company has approximately $165.5 million available under the Revolving Facility as of January 25, 2025 [213]. - The company’s net cash used in financing activities decreased by $2.2 million to $8.4 million for the nine months ended January 25, 2025, compared to $10.6 million for the same period in 2024 [224]. - The company’s working capital requirements vary by contract type, with minimal investment needed for cost-plus-fee programs [218]. Acquisitions - The company sold 807,370 shares for total gross proceeds of $91.3 million during the six months ended October 28, 2023, with total proceeds received of $88.6 million after commission expenses [212]. - The company completed the Tomahawk acquisition on September 15, 2023, for a total purchase price of $134.4 million, consisting of $109.8 million in stock and $24.2 million in cash [219].

Financial Data and Key Metrics Changes - Revenue for Q3 fiscal 2025 was $167.6 million, a decrease of 10% compared to $186.6 million in Q3 fiscal 2024 [39] - Adjusted EBITDA for Q3 was $21.8 million, down from $28.8 million in the same quarter last year [45] - The company reported a net loss of $1.8 million compared to a net income of $13.9 million in the same period last year [49] - Funded backlog at the end of Q3 was a record $763.5 million, with expectations for bookings to exceed $1 billion for the year [54][56] Business Segment Data and Key Metrics Changes - The Loitering Munitions Systems (LMS) segment recorded revenue of $83.9 million, a 46% increase from $57.7 million in the previous year [40] - The Uncrewed Systems (UXS) segment generated $53.8 million, down 44% from $113.3 million, primarily due to a decrease in Ukraine-related revenue [41] - The Macready Works segment revenue was $20 million, an increase of 28% from $15.6 million in the same quarter last year [43] Market Data and Key Metrics Changes - Shipments to Ukraine are expected to represent only 17% of revenues for the full fiscal year, down from 38% last fiscal year [15] - The company anticipates that Ukraine will account for about 6% of Q4 revenues [15] Company Strategy and Development Direction - The company is focused on expanding production capacity and launching innovative products while leveraging acquisitions to strengthen market leadership [10] - The BlueHalo transaction is expected to enhance the company's market opportunity by adding capabilities in space technologies, counter-UAS, directed energy, and cyber solutions [17] - The company aims to achieve more than 10% revenue growth and $1 billion in orders in fiscal year 2025 [16] Management's Comments on Operating Environment and Future Outlook - Management acknowledged short-term challenges due to unprecedented high winds and fires in Los Angeles, which impacted operations and financial performance [20][21] - Despite these challenges, management remains confident in achieving record fourth-quarter revenue and accelerating growth in fiscal year 2026 [10][56] - The evolving global security landscape is driving demand for cost-effective AI-driven autonomous defense solutions, aligning with the company's core offerings [12] Other Important Information - The company is lowering its fiscal year 2025 guidance to revenues of $780 million to $795 million and adjusted EBITDA of $135 million to $142 million [56] - The company incurred approximately $10 million in acquisition-related expenses in Q3, which will continue into Q4 [46] Q&A Session Summary Question: Insights on fiscal year 2026 growth - Management expressed confidence in achieving nearly a billion-dollar year in fiscal 2026, supported by a strong backlog and growing pipeline of opportunities [65][66] Question: Details on BlueHalo acquisition growth areas - Management highlighted excitement around BlueHalo's counter-UAS business, space communication capabilities, and advanced cyber solutions as key growth areas post-acquisition [70][72] Question: Clarification on work stoppage for foreign military sales contracts - Management confirmed a stop work order on $13 million in foreign military sales contracts, indicating uncertainty about the duration but expressing confidence in future demand [78][80] Question: Demand environment for uncrewed systems - Management noted strong drivers for growth in the uncrewed systems business, including new capabilities and significant contracts expected to drive revenue in the coming years [84][86] Question: Update on international sales and negotiations - Management reported firm orders from approximately six countries and ongoing engagements with an additional twenty countries for Switchblade systems, indicating a strong long-term growth outlook [112][114]

Financial Data and Key Metrics Changes - Revenue for Q3 fiscal 2025 was $167.6 million, a decrease of 10% compared to $186.6 million in Q3 fiscal 2024 [39] - Adjusted EBITDA for Q3 was $21.8 million, down from $28.8 million in the same quarter last year [45] - The company reported a net loss of $1.8 million for Q3, compared to a net income of $13.9 million in the same period last year [49] - Funded backlog at the end of Q3 reached a record $763.5 million [54] Business Segment Data and Key Metrics Changes - The Loitering Munitions Systems (LMS) segment recorded revenue of $83.9 million, a 46% increase from $57.7 million in the previous year [40] - The Uncrewed Systems (UXS) segment generated $53.8 million in revenue, down 44% from $113.3 million, primarily due to a decrease in Ukraine-related revenue [41] - Revenue from the Macready Works segment was $20 million, an increase of 28% compared to $15.6 million in the same quarter last year [43] Market Data and Key Metrics Changes - Approximately $40 million worth of Switchblade 600 deployments in Ukraine resulted in the destruction of nearly $3 billion worth of enemy military assets [15] - Shipments to Ukraine are expected to represent only 17% of revenues for the full fiscal year, down from 38% last fiscal year [15] Company Strategy and Development Direction - The company is focused on expanding production capacity and launching innovative products while leveraging acquisitions to strengthen market leadership [10] - The BlueHalo transaction is expected to enhance the company's technology and capabilities, adding space technologies, counter-UAS, directed energy, electronic warfare, and cyber solutions to its portfolio [17] - The company aims to achieve more than 10% revenue growth and $1 billion in orders in fiscal year 2025 [16] Management's Comments on Operating Environment and Future Outlook - Management acknowledged short-term challenges due to unprecedented high winds and fires in Los Angeles, which impacted operations and financial performance [20][21] - Despite these challenges, management remains confident in achieving record fourth-quarter revenue and accelerating growth in fiscal year 2026 [10][56] - The evolving global security landscape is driving demand for cost-effective AI-driven autonomous defense solutions, aligning with the company's core offerings [12] Other Important Information - The company has received stop work orders on four foreign military sales contracts, representing about $13 million in orders [22] - The company is preparing for the integration of BlueHalo and has secured key regulatory approvals for the transaction [18] Q&A Session Summary Question: Thoughts on fiscal year 2026 growth - Management expressed confidence in achieving strong growth in fiscal year 2026, supported by a record backlog and expected revenue run rate of $240 to $250 million in Q4 [65][66] Question: Details on BlueHalo growth areas - Management highlighted excitement around BlueHalo's counter-UAS business, space communication capabilities, and advanced cyber solutions as key growth areas post-acquisition [70][72] Question: Clarification on work stoppage for FMS contracts - Management indicated that the stop work orders are related to foreign military sales contracts and are currently unclear if they are temporary or permanent [78][80] Question: Demand environment for uncrewed systems - Management expressed confidence in the uncrewed systems business, citing strong demand drivers and new capabilities expected to drive growth over the next several years [84][85] Question: Update on international sales and negotiations - Management reported firm orders from approximately six countries and ongoing engagement with an additional twenty countries for Switchblade systems [112][114]

AeroVironment (AVAV) came out with quarterly earnings of $0.30 per share, missing the Zacks Consensus Estimate of $0.58 per share. This compares to earnings of $0.63 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -48.28%. A quarter ago, it was expected that this maker of unmanned aircrafts would post earnings of $0.66 per share when it actually produced earnings of $0.47, delivering a surprise of -28.79%.Over the last four qu ...

THIRD QUARTER Fiscal Year 2025 March 4, 2025 Slide 1 © 2025 AeroVironment, Inc. 093024 THIRD QUARTER FISCAL YEAR 2025 Safe Harbor Statement Certain words in this presentation may contain "forward-looking statements" as that term is defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements, and may contain words such as "believe," "anticipate," ...

Financial Performance - Revenue for the third quarter of fiscal 2025 was $167.6 million, a decrease of 10% compared to $186.6 million in the same quarter of fiscal 2024[3] - The company reported a net loss of $(1.8) million, or $(0.06) per diluted share, compared to net income of $13.9 million, or $0.50 per diluted share, in the prior-year period[7] - Non-GAAP adjusted EBITDA for the third quarter was $21.8 million, down from $28.8 million in the same quarter of fiscal 2024[8] - The gross margin for the third quarter was $63.2 million, a decrease of 6% from $67.3 million in the prior year, with a gross margin percentage increase to 38% from 36%[4] - Total revenue for the three months ended January 25, 2025, was $167.636 million, a decrease of 10.1% compared to $186.578 million for the same period in 2024[26] - Product sales revenue decreased to $139.753 million from $155.923 million, representing a decline of 10.4% year-over-year[26] - Gross margin for the three months ended January 25, 2025, was $63.199 million, down from $67.287 million, reflecting a gross margin percentage of 37.7%[26] - Net loss for the three months ended January 25, 2025, was $1.754 million, compared to net income of $13.885 million for the same period in 2024[26] - Adjusted EBITDA for the three months ended January 25, 2025, was $21.8 million, down from $28.8 million in the prior year, representing a decrease of 24.4%[36] - EBITDA (non-GAAP) for the nine months ended January 25, 2025, was $56.0 million, down 35.2% from $86.4 million for the same period last year[36] Backlog and Orders - The funded backlog reached a record $763.5 million as of January 25, 2025, up from $400.2 million as of April 30, 2024[9] - Record orders for Switchblade and Jump-20 products contributed to the backlog expansion[2] Future Outlook - The company expects full-year fiscal 2025 revenue to be between $780 million and $795 million, with non-GAAP adjusted EBITDA between $135 million and $142 million[10] - Significant progress was made towards the acquisition of BlueHalo, expected to close in the second quarter of calendar year 2025[2] Operational Developments - The company announced a new manufacturing facility in Utah, which will more than double Switchblade production capacity[2] - The third quarter was impacted by high winds and fires in Southern California, affecting revenue generation[3] Expenses and Cash Flow - Research and development expenses increased to $22.498 million from $25.127 million, indicating a focus on innovation despite overall revenue decline[26] - Cash and cash equivalents at the end of the period were $47.000 million, down from $73.301 million at the beginning of the period[30] - The company reported a net cash used in operating activities of $1.054 million for the nine months ended January 25, 2025, compared to cash provided of $26.965 million for the same period in 2024[30] Assets and Liabilities - Total current assets increased to $543.886 million from $515.581 million, showing a positive trend in asset management[28] - The company’s total assets increased to $1,048.143 million as of January 25, 2025, compared to $1,015.860 million as of April 30, 2024[28] Shareholder Information - The weighted-average shares outstanding for diluted earnings per share were 28,171,089 for the nine months ended January 25, 2025[26] Other Financial Metrics - Interest expense for the nine months ended January 25, 2025, was $1.2 million, a decrease of 70.7% compared to $4.1 million for the same period last year[36] - Stock-based compensation for the three months ended January 25, 2025, was $5.4 million, an increase of 28.6% from $4.2 million in the same period last year[36] - Depreciation and amortization for the nine months ended January 25, 2025, was $27.1 million, an increase of 8.4% compared to $25.0 million for the same period last year[36] - Acquisition-related expenses for the three months ended January 25, 2025, were $10.0 million, compared to $(0.1) million in the same period last year[36] - The company reported a net benefit from provision for income taxes of $(0.6) million for the three months ended January 25, 2025, compared to a provision of $1.3 million in the same period last year[36] Non-GAAP Measures - The company emphasizes that non-GAAP measures provide useful information for understanding long-term profitability trends and comparing results with peers[37] - Adjusted EBITDA is defined as net income before interest, taxes, and depreciation, adjusted for non-cash items, and is frequently used for evaluating performance in the industry[39]

Core Viewpoint - AeroVironment, Inc. (AVAV) is expected to report its third-quarter fiscal 2025 results on March 4, 2025, after market close, with a projected revenue growth despite higher expenses impacting earnings [1][6]. Revenue Segments - The Loitering Munitions Systems (LMS) segment is anticipated to show strong sales, with quarterly revenues estimated at $92.3 million, reflecting a 60% increase year-over-year [3]. - The MacCready Works (MW) segment is also expected to perform well, with revenues projected at $21.1 million, indicating a 35% growth compared to the same quarter last year [4]. - Conversely, the Uncrewed Systems (UxS) unit is likely to report disappointing figures due to declining product shipments and lower international sales, particularly to Ukraine [5]. Overall Financial Expectations - The overall revenue for AeroVironment in the fiscal third quarter is estimated at $189.3 million, suggesting a 1.4% increase from the previous year [6]. - Despite solid revenue projections, increased sales and marketing expenses, along with higher employee-related costs, may negatively impact operating margins and overall earnings [7]. - The earnings consensus estimate is set at 58 cents per share, indicating a decline of 7.9% from the prior year's figure [8]. Earnings Prediction Model - The current model does not predict a definitive earnings beat for AeroVironment, as the Earnings ESP stands at 0.00% [9]. - AeroVironment holds a Zacks Rank 1 (Strong Buy), indicating a favorable outlook despite the earnings prediction challenges [10].

Core Insights - AeroVironment (AVAV) is expected to report quarterly earnings of $0.58 per share, reflecting a decline of 7.9% year-over-year, while revenues are forecasted to be $189.25 million, indicating a 1.4% increase compared to the previous year [1] - The consensus EPS estimate has remained unchanged over the last 30 days, suggesting stability in analysts' projections [1] Revenue Estimates - The consensus estimate for 'Revenue- Contract Services' is $35.79 million, representing a year-over-year increase of 16.7% [4] - 'Revenue- Product Sales' is expected to reach $160.30 million, indicating a year-over-year change of 2.8% [4] Gross Margin Estimates - Analysts project 'Gross margin- Contract services' to be approximately $8.96 million, down from $10.85 million reported in the same quarter last year [4] - The estimated 'Gross margin- Product sales' is $64.91 million, an increase from $56.44 million reported in the same quarter of the previous year [5] Stock Performance - AeroVironment shares have decreased by 10.3% over the past month, contrasting with the Zacks S&P 500 composite's decline of 2.2% [6] - The company holds a Zacks Rank 1 (Strong Buy), indicating expectations of outperforming the overall market in the near term [6]

Company Performance - AeroVironment (AVAV) closed at $158.13, reflecting a -0.45% change from the previous day, underperforming the S&P 500's loss of 0.43% [1] - Over the past month, AeroVironment's shares have decreased by 10.7%, significantly trailing the Aerospace sector's loss of 1.55% and the S&P 500's gain of 2.6% [1] Upcoming Earnings - The upcoming earnings report for AeroVironment is scheduled for March 4, 2025, with an expected EPS of $0.58, indicating a 7.94% decline year-over-year [2] - Revenue is projected to be $189.25 million, representing a 1.43% increase compared to the same quarter last year [2] Full Year Projections - For the full year, earnings are estimated at $3.38 per share and revenue at $811.51 million, reflecting increases of +13.04% and +13.23% respectively from the prior year [3] Analyst Estimates - Recent changes in analyst estimates for AeroVironment are crucial as they indicate shifts in near-term business trends, with upward revisions suggesting positive sentiment towards the company's operations [4] - The Zacks Rank system, which incorporates these estimate changes, currently ranks AeroVironment as 1 (Strong Buy) [6] Valuation Metrics - AeroVironment has a Forward P/E ratio of 46.95, which is a premium compared to the industry average Forward P/E of 30.64 [7] - The Aerospace - Defense Equipment industry, part of the Aerospace sector, holds a Zacks Industry Rank of 129, placing it in the bottom 49% of over 250 industries [7]