AeroVironment, Inc. (NASDAQ:AVAV) Q4 2024 Earnings Conference Call June 26, 2024 4:30 PM ET Company Participants Jonah Teeter-Balin - Senior Director, Corporate Development & Investor Relations Wahid Nawabi - Chairman, President & Chief Executive Officer Kevin McDonnell - Senior Vice President & Chief Financial Officer Conference Call Participants Greg Konrad - Jefferies Peter Arment - Baird Ken Herbert - RBC Bryce Sandberg - William Blair Andre Madrid - BTIG Operator Good day, and thank you for standing by ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended April 30, 2024 ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to Commission file number 001-33261 AEROVIRONMENT, INC. (Exact name of registrant as specified in its charter) Delaware 95-2705790 (State or other jurisdiction of ...

Fourth Quarter Fiscal Year 2024 Earnings Presentation June 26, 2024 Slide 1 | © 2024 AeroVironment, Inc. Safe Harbor Statement Factors that could cause actual results to differ materially from the forward-looking statements include, but are not limited to, the impact of our ability to successfully close and integrate acquisitions into our operations and avoid disruptions from acquisition transactions that will harm our business; the recording of goodwill and other intangible assets as part of acquisitions t ...

Revenue and Income - Record fourth quarter revenue of $197.0 million, up 6% year-over-year, and fiscal year revenue of $716.7 million, up 33% year-over-year[1] - Fourth quarter net income of $6.0 million, compared to a net loss of $(160.5) million in the prior-year period[6] - Fiscal year 2025 revenue guidance is between $790 million and $820 million, indicating nearly 12% top line growth[2] - Net income for the year ended April 30, 2024, was $59,666, compared to a loss of $176,167 for the previous year[22] - For the fiscal year ending April 30, 2025, the company expects net income to be between $74 million and $83 million, compared to $60 million for the fiscal year ended April 30, 2024[31] Adjusted EBITDA and Earnings Per Share - Adjusted EBITDA for the fourth quarter was $22.2 million, down from $46.4 million in the fourth quarter of fiscal 2023[7] - Adjusted earnings per diluted share for the three months ended April 30, 2024, were $0.43, compared to $0.99 for the same period last year, reflecting a decline of approximately 56.6%[27] - The company forecasts earnings per diluted share for the fiscal year ending April 30, 2025, to be between $2.61 and $2.92, with adjusted earnings per diluted share projected to be between $3.18 and $3.49[30] Segment Performance - Loitering Munitions Systems segment revenue grew by 74% year-over-year, driving overall revenue growth[3] - Product sales revenue for the three months ended April 30, 2024, was $164,598, an increase of 16.3% compared to $141,529 for the same period in 2023[17] - Contract services revenue for the three months ended April 30, 2024, was $32,381, a decrease of 27.4% compared to $44,512 for the same period in 2023[17] - Product sales in the UxS segment for the three months ended April 30, 2024, were $96,365, down from $107,572 in the same period last year, a decrease of about 10.5%[23][24] Financial Position - Total current assets increased to $515,581 as of April 30, 2024, from $477,002 as of April 30, 2023, representing an increase of 8.5%[20] - Total assets increased to $1,015,860 as of April 30, 2024, compared to $824,577 as of April 30, 2023, reflecting a growth of 23.2%[20] - Total stockholders' equity rose to $822,745 as of April 30, 2024, from $550,970 as of April 30, 2023, indicating a significant increase of 49.2%[20] - Long-term debt decreased to $17,092 as of April 30, 2024, from $125,904 as of April 30, 2023, showing a reduction of 86.4%[20] Expenses and Cash Flow - Research and development expenses for the three months ended April 30, 2024, were $35,069, an increase of 113.2% compared to $16,462 for the same period in 2023[17] - Cash provided by operating activities for the year ended April 30, 2024, was $15,292, an increase from $11,400 in the previous year[22] - Cash, cash equivalents, and restricted cash at the end of the period were $73,301, down from $132,859 at the beginning of the period, indicating a decrease of approximately 44.5%[22] - The company reported a stock-based compensation expense of $17,069 for the year ended April 30, 2024, compared to $10,765 in the previous year, an increase of approximately 58.5%[22] Management Insights - Management emphasizes that non-GAAP measures, such as adjusted EBITDA, provide useful insights into long-term profitability trends and operational performance[33] - The company is expanding capacity to meet increasing customer demand for autonomous systems[2] - The company is focusing on enhancing its cloud computing arrangements, with amortization costs of $0.6 million for the three months ended April 30, 2024[28]

Financial Data and Key Metrics Changes - Revenue for Q3 2024 reached $187 million, a nearly 40% increase compared to the same quarter last year [7][19] - Adjusted EBITDA for Q3 2024 was $29 million, representing a 21% increase from the previous year [24] - Net income for Q3 2024 was $13.9 million, a significant improvement from a net loss of $0.7 million in the same period last year [27] Business Line Data and Key Metrics Changes - Loitering Munition segment revenue more than doubled year-over-year to $58 million, driven by high demand and emerging programs [10][21] - Unmanned Systems segment revenue rose 23% year-over-year to approximately $113 million, with strong contributions from Puma and JUMP 20 systems [13][20] - MacCready Works segment revenue decreased slightly to $15.6 million, down 13% from the previous year, due to program delays [16][21] Market Data and Key Metrics Changes - Backlog increased by 12% year-over-year, reaching $463 million, despite some headwinds from the continuing resolution and foreign military sales process [8][29] - Product revenue accounted for 84% of total revenues, up from 68% in the same quarter last year, indicating a shift towards product sales [22] Company Strategy and Development Direction - The company is targeting multiple $1 billion programs and investing in upgrades to current platforms to meet evolving battlefield conditions [9] - AeroVironment is actively seeking inorganic opportunities to enhance its product portfolio while focusing on internal development [9] - The company remains optimistic about future growth, particularly in the Loitering Munition segment, and is preparing for increased manufacturing capacity [12][37] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving double-digit revenue growth in fiscal year 2025, supported by strong demand for unmanned solutions [7][30] - The company is well-positioned to benefit from budget priorities in the U.S. and abroad, with a strong backlog and nearly 100% order visibility [30][31] - Management highlighted the importance of congressional budget approvals for future contracts and revenue stability [70] Other Important Information - The company recently won a $16 million contract from the U.S. Navy for advancements in video analytics and computer vision research [17] - The Ingenuity Mars Helicopter completed its mission with 72 flights, showcasing the company's capabilities in advanced technology [17] Q&A Session Summary Question: Can you provide more details on Switchblade capacity expansion? - Management confirmed significant increases in Switchblade production capacity and readiness to meet forecasted demand for the next two years [36][37] Question: What is the timing for the LASSO program? - Management indicated that the U.S. Army is expected to award contracts following budget approvals, likely in the summer [39] Question: How significant is the Raven program to current operations? - Management stated that the Raven program has been in sustainment mode and is not a primary revenue driver, with the Puma system being the main contributor [43][44] Question: What are the implications of recent working capital changes? - Management noted that working capital usage may fluctuate but is manageable due to strong backlog and revenue trends [46][70] Question: How dependent is fiscal 2025 growth on Ukraine funding? - Management indicated that fiscal 2025 growth is not heavily reliant on Ukraine funding, with strong demand expected from various sources [61]

Third Quarter Fiscal Year 2024 Earnings Presentation March 4, 2024 Slide 1 | © 2024 AeroVironment, Inc. Safe Harbor Statement This press release contains "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,” “expect,” “estimate,” “intend,” ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the quarterly period ended January 27, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-33261 AEROVIRONMENT, INC. (Exact name of registrant as specified in its charter) Delaware 95-2705790 (State or other ...

Financial Performance Projections - Net income for the fiscal year ending April 30, 2024 is projected to be between $51 million and $55 million, compared to a net loss of $176 million in the previous fiscal year[33] - Adjusted EBITDA (Non-GAAP) for the fiscal year ending April 30, 2024 is expected to be between $122 million and $127 million, up from $90 million in the previous fiscal year[33] Expense Projections - Depreciation and amortization expenses are projected to decrease significantly to $36 million in fiscal 2024, down from $100 million in fiscal 2023[33] - Stock-based compensation is expected to increase to $17 million in fiscal 2024, up from $11 million in the previous year[33] - Interest expense is projected to decrease to $5 million in fiscal 2024, down from $9 million in fiscal 2023[33] - Provision for income taxes is expected to be between $3 million and $4 million in fiscal 2024, compared to a benefit of $15 million in the previous fiscal year[33] - Acquisition-related expenses are expected to double to $2 million in fiscal 2024, compared to $1 million in the previous fiscal year[33] Impairment and Investments - The company incurred a goodwill impairment charge of $156 million in fiscal 2023, with no similar charge projected for fiscal 2024[33] - Equity method and equity securities investments activity is projected to increase to $7 million in fiscal 2024, up from $3 million in fiscal 2023[33] Non-GAAP Measures - The company emphasizes the importance of non-GAAP measures for evaluating long-term profitability trends and comparing performance with peers[35]

Financial Data and Key Metrics - Q2 2024 revenue reached $180.8 million, up 62% YoY, marking a record Q2 for the company [6] - Adjusted EBITDA for Q2 2024 was $40 million, a significant increase from $7 million in Q2 2023 [25] - Net income for Q2 2024 was $17.8 million, compared to a net loss of $6.7 million in Q2 2023 [27] - Funded backlog at the end of Q2 2024 stood at $487 million, providing strong visibility for future quarters [6][29] - Adjusted gross margins improved to 43% in Q2 2024, up from 27% in Q2 2023 [24] Business Segment Performance Unmanned Systems (UMS) - UMS revenue more than doubled YoY to $132.8 million, driven by strong international demand for Puma systems and initial shipments of JUMP 20 to Ukraine [11][21] - The segment benefited from the integration of Tomahawk Robotics, which is now part of UMS [9][21] Loitering Munitions Systems (LMS) - LMS revenue was $30.2 million, a 3% decrease YoY, primarily driven by Switchblade 600 sales [21] - The company is negotiating a large multi-year IDIQ contract with the U.S. DoD for LMS products, with significant demand from both U.S. and international allies [14][45] MacCready Works - Revenue for MacCready Works was $17.8 million, a 6% decrease YoY, due to lower SoftBank-funded HAPS revenue [22] - The segment is focused on developing next-generation technologies, including the Sunglider and SOAR programs [17][18] Market and Geographic Performance - The company has nine unmanned platforms deployed in Ukraine, receiving high praise for their effectiveness [8] - Strong demand for Puma and JUMP 20 systems in international markets, particularly in Ukraine, contributed to record deliveries [11][12] - The company is engaged with over 20 countries for Switchblade sales, with about a third in the U.S. DoD export approval process [15][44] Strategic Direction and Industry Competition - The company is leveraging its acquisition of Tomahawk Robotics to enhance interconnectivity and interoperability across its portfolio, offering a common operating picture for customers [9][10] - AeroVironment is positioned as a leader in contested environment operations, autonomous missions, and loitering munitions capabilities [32] - The company is investing in R&D to develop next-generation solutions, including autonomous systems and advanced munitions, to meet evolving customer needs [26][76] Management Commentary on Operating Environment and Future Outlook - Management remains optimistic about future growth, driven by strong demand for unmanned systems and loitering munitions, particularly in international markets [7][33] - The company expects uneven revenue distribution in the second half of FY 2024, with LMS becoming a stronger contributor to revenue growth [30][51] - Gross margins are expected to decline in the second half due to a shift in product mix towards lower-margin LMS products [23][46] Other Important Information - The company has revised its FY 2024 revenue guidance to $685 million - $705 million, reflecting strong performance and the impact of the Tomahawk acquisition [30] - AeroVironment has appointed retired General Joseph Votel to its Board of Directors, bringing extensive military expertise to guide the company's strategic direction [34] Q&A Session Summary Question: Contribution from Tomahawk Robotics and revised guidance - The increase in revenue guidance is attributed to both organic growth and the acquisition of Tomahawk Robotics, with both factors equally represented in the demand for the second half of the year [36] Question: Integration roadmap for Tomahawk Robotics - Integration is on track, with Tomahawk already part of the UMS segment. The company is working on integrating Tomahawk's common controller with its existing products, with significant synergies expected in the future [38][39] Question: Status of Switchblade 600 production - The company has significant production capacity for Switchblade 600, with deliveries expected to increase in the second half of FY 2024. Over 20 countries are interested in acquiring Switchblade, with about a third in the export approval process [43][44] Question: Gross margin outlook for the second half of FY 2024 - Gross margins are expected to decline in the second half due to a shift towards lower-margin LMS products, with adjusted gross margins anticipated to be in the high-30s to low-40s [46][47] Question: Growth outlook for LMS in the second half of FY 2024 - LMS is expected to be the strongest driver of growth in FY 2024, with robust demand for Switchblade 300 and 600 products. The pipeline for LMS is strong, with significant opportunities not yet reflected in the backlog [50][51] Question: Path to improving LMS gross margins - LMS gross margins are improving, with strategies focused on increasing production volume, reducing costs, and enhancing manufacturing efficiency. Switchblade Block 20 products are easier to manufacture, contributing to margin improvements [57][58] Question: LASSO contract and Switchblade IDIQ - The LASSO contract is part of the U.S. Army's program of record, while the IDIQ contract is a larger multi-year agreement that will streamline procurement for Switchblade products. Both contracts are expected to drive significant revenue growth [60][61] Question: SoftBank's funding for HAPS - SoftBank remains committed to funding the HAPS program, although funding has slowed due to macroeconomic conditions. AeroVironment is also investing in HAPS to protect its IP and expects additional funding from the U.S. DoD in FY 2024 [68][69] Question: EPS guidance for the second half of FY 2024 - The decline in EPS guidance for the second half is primarily due to a shift in product mix and increased R&D spending, as the company invests in next-generation technologies [73][75]

Second Quarter Fiscal Year 2024 Earnings Presentation December 5, 2023 026250 Slide 1 | © 2022 AeroVironment, Inc. Safe Harbor Statement Certain statements in this presentation may constitute "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,” “anticip ...