What changed in this filing

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Item 1. Financial Statements

2026-03-11 compared with 2025-12-10 · 200 added, 145 removed, 644 unchanged (35% of the section changed)

6 unchanged sentences

Short-term investments

Accounts receivable, net of allowance for credit losses of $ 2,601 at November 1, 2025 and $ 203 at April 30, 2025

Accounts receivable, net of allowance for credit losses of $ 2,213 at January 31, 2026 and $ 203 at April 30, 2025

Unbilled receivables and retentions

26 unchanged sentences

Authorized shares— 10,000,000 ;

none issued or outstanding at November 1, 2025 and April 30,2025

none issued or outstanding at January 31, 2026 and April 30,2025

Common stock, $ 0.0001 par value:

Authorized shares— 100,000,000

Issued and outstanding shares— 49,927,306 shares at November 1, 2025 and 28,267,517 shares at April 30, 2025

Issued and outstanding shares— 49,934,738 shares at January 31, 2026 and 28,267,517 shares at April 30, 2025

Additional paid-in capital

8 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

Product sales

8 unchanged sentences

Research and development

Impairment of goodwill

(Loss) income from operations

1 unchanged sentence

Interest income (expense), net

Other income (expense), net

Other (expense) income, net

(Loss) income before income taxes

(Benefit from) provision for income taxes

Equity method investment income, net of tax

Equity method investment (loss) income, net of tax

Net (loss) income

6 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

Net (loss) income

Other comprehensive income:

Unrealized loss on available-for-sale investments, net of deferred tax expense of $ 0 for the three and six months ended November 1, 2025 and October 26, 2024, respectively

Unrealized loss on available-for-sale investments, net of deferred tax expense of $ 0 for the three and nine months ended January 31, 2026 and January 25, 2025 respectively

Change in foreign currency translation adjustments

3 unchanged sentences

Condensed Consolidated Statements of Stockholders’ Equity

For the three months ended November 1, 2025 and October 26, 2024 (Unaudited)

For the three months ended January 31, 2026 and January 25, 2025 (Unaudited)

(In thousands except share data)

Comprehensive

Balance at August 2, 2025

Unrealized loss on investments

Balance at November 1, 2025

Unrealized gain on investments

Foreign currency translation

Employee stock purchase plan contributions

Restricted stock awards

Restricted stock awards forfeited

Tax withholding payment related to net share settlement of equity awards

Issuance of common stock for business acquisition, net of issuance costs

Stock based compensation

Balance at November 1, 2025

Balance at January 31, 2026

Comprehensive

Balance at July 27, 2024

Balance at October 26, 2024

Foreign currency translation

1 unchanged sentence

Restricted stock awards forfeited

Tax withholding payment related to net share settlement of equity awards

Stock based compensation

Balance at October 26, 2024

Balance at January 25, 2025

AeroVironment, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

For the six months ended November 1, 2025 and October 26, 2024 (Unaudited)

For the nine months ended January 31, 2026 and January 25, 2025 (Unaudited)

(In thousands except share data)

10 unchanged sentences

Stock based compensation

Balance at November 1, 2025

Balance at January 31, 2026

Comprehensive

6 unchanged sentences

Stock based compensation

Balance at October 26, 2024

Balance at January 25, 2025

AeroVironment, Inc.

Condensed Consolidated Statements of Cash Flow s (Unaudited)

(In thousands)

Six Months Ended

Condensed Consolidated Statements of Cash Flows (Unaudited) (in thousands)

Nine Months Ended

Operating activities

Net (loss) income

Adjustments to reconcile net (loss) income to cash (used in) provided by operating activities:

Adjustments to reconcile net (loss) income to cash used in operating activities:

Depreciation and amortization

Impairment of goodwill

Gain from equity method investments

4 unchanged sentences

Non-cash lease expense

Loss on foreign currency transactions

Unrealized (gain) loss on available-for-sale equity securities, net

Loss (gain) on foreign currency transactions

Unrealized gain on available-for-sale equity securities, net

Deferred income taxes

Stock-based compensation

8 unchanged sentences

Other liabilities

Net cash (used in) provided by operating activities

Net cash used in operating activities

Investing activities

2 unchanged sentences

Purchase of available-for-sale investments

Redemption of available-for-sale investments

Acquisition of capitalized software to be sold

4 unchanged sentences

Principal payments of term loan

Proceeds from long-term debt

Principal payments of revolver

Proceeds from long-term debt

Proceeds from revolver, net of creditor costs

3 unchanged sentences

Payment of equity issuance costs

Holdback and retention payments for business acquisition

Tax withholding payment related to net settlement of equity awards

10 unchanged sentences

Issuance of common stock for business acquisition

Unrealized loss on available-for-sale investments, net of deferred tax expense of $ 0 for the three and six months ended November 1, 2025 and October 26, 2024, respectively

Unrealized loss on available-for-sale investments

Change in foreign currency translation adjustments

6 unchanged sentences

(“AeroVironment”, “AV” or “the Company”), a Delaware corporation, is a defense technology provider delivering integrated capabilities across air, land, sea, space, and cyber.

AV develops and deploys autonomous systems, precision strike systems, counter-UAS technologies, space-based platforms, directed energy systems, and cyber and electronic warfare capabilities.

AV develops and deploys autonomous systems, uncrewed aircraft systems (“UAS”), precision strike systems, counter-UAS (“C-UAS”) technologies, space-based platforms, directed energy systems, and cyber and electronic warfare capabilities.

AV operates a national manufacturing footprint to deliver proven systems and capabilities whose markets offer the potential for significant long-term growth.

3 unchanged sentences

The Company’s reportable segments are as follows:

Autonomous Systems (“AxS”) — The AxS segment focuses on the design, development, production, delivery, and support of intelligent, multi-domain robotic systems, including uncrewed aircraft systems (“UAS”), uncrewed underwater vehicles and ground robot systems.

The segment includes the Company’s former Uncrewed Systems, Loitering Munitions Systems, and MacCready Works segments as well as Radio Frequency (“RF”) and Kinetic Counter-UAS (“C-UAS”), Electronic Warfare Systems (“EW”) and Unmanned Maritime products and services from the BlueHalo acquisition.

Autonomous Systems (“AxS”) — The AxS segment focuses on the design, development, production, delivery, and support of intelligent, multi-domain robotic systems, including UAS, uncrewed underwater vehicles and ground robot systems.

The segment includes the Company’s former Uncrewed Systems, Loitering Munitions Systems (“LMS”), and MacCready Works segments as well as Radio Frequency and Kinetic C-UAS, Electronic Warfare Systems and Uncrewed Maritime products and services from the BlueHalo acquisition.

It primarily serves organizations within or supplying the U.S.

11 unchanged sentences

In the opinion of management, all adjustments, consisting only of normal recurring adjustments necessary for a fair presentation with respect to the interim financial statements have been included.

The results of operations for the three and six months ended November 1, 2025 are not necessarily indicative of the results for the full year ending April 30, 2026.

The results of operations for the three and nine months ended January 31, 2026 are not necessarily indicative of the results for the full year ending April 30, 2026.

For further information, refer to the consolidated financial statements and footnotes thereto for the year ended April 30, 2025, included in the Company’s Annual Report on Form 10-K.

5 unchanged sentences

All intercompany accounts and transactions have been eliminated.

Recent Acquisitions

Recent Acquisition

On May 1, 2025, the Company closed its acquisition of BlueHalo, a Delaware limited liability company, pursuant to the Agreement and Plan of Merger, dated as of November 18, 2024 (the “Merger Agreement”) by and among AV, Archangel Merger Sub LLC, a Delaware limited liability company (“Merger Sub”), BlueHalo, and BlueHalo Holdings Parent, LLC, a Delaware limited liability company and sole member of BlueHalo (“Seller”).

1 unchanged sentence

Recently Adopted Accounting Standards

The Company did not adopt any accounting standards during the three and six months ended November 1, 2025.

The Company did not adopt any accounting standards during the three and nine months ended January 31, 2026.

Reclassifications

Certain prior year amounts have been reclassified to conform to the current year presentation.

Specifically, the Company’s revenue disclosure of revenue by segment and the segment disclosures for prior periods have been recast to conform to the new segments and new measure of segment profitability.

Specifically, the Company’s disaggregated revenue disclosure and disclosure of revenue by segment and the segment disclosures for prior periods have been recast to conform to the new segments and new measure of segment profitability.

Revenue Recognition

3 unchanged sentences

Performance Obligations

On November 1, 2025, the Company had approximately $ 1,092,479,000 of remaining performance obligations under fully funded contracts with its customers, which the Company also refers to as funded backlog.

On January 31, 2026, the Company had approximately $ 1,120,675,000 of remaining performance obligations under fully funded contracts with its customers, which the Company also refers to as funded backlog.

The Company currently expects to recognize approximately 39 % of the remaining performance obligations as revenue in fiscal 2026 and the remaining 61 % in fiscal 2027 or beyond.

Revenue by Category

The following tables present the Company’s revenue disaggregated by segment, contract type, customer category and geographic location (in thousands):

The following tables present the Company’s revenue disaggregated by operating group, contract type, customer category and geographic location (in thousands).

Three Months Ended

Six Months Ended

Revenue by segment

Nine Months Ended

Revenue by operating group

Uncrewed Aircraft Systems

Precision Strike and Defense Systems

Space and Directed Energy

Cyber and Mission Services

Total revenue

Three Months Ended

Six Months Ended

Nine Months Ended

Revenue by contract type

7 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

Revenue by customer category

1 unchanged sentence

Three Months Ended

Six Months Ended

Nine Months Ended

Revenue by geographic location

2 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

Revenue percentage by recognition method

2 unchanged sentences

Contract Balances

Changes in the contract asset and liability balances during the three and six month periods ended November 1, 2025 were not materially impacted by factors other than billings, cash collections, and timing of revenue recognition.

For the Company’s contracts, there are no significant gaps between the receipt of payment and the transfer of the associated goods and services to the customer for material amounts of consideration.

Revenue recognized for the three and six month periods ended November 1, 2025 that was included in customer advances balances as of April 30, 2025 was $ 305,000 and $ 11,663,000 , respectively.

Revenue recognized for the three and six month periods ended October 26, 2024 that was included in customer advances balances as of April 30, 2024 was $ 2,475,000 and $ 7,961,000 , respectively.

Changes in the contract asset and liability balances during the three and nine month periods ended January 31, 2026 were not materially impacted by factors other than billings, cash collections, and timing of revenue recognition.

Company’s contracts, there are no significant gaps between the receipt of payment and the transfer of the associated goods and services to the customer for material amounts of consideration.

Revenue recognized for the three and nine month periods ended January 31, 2026 that was included in customer advances balances as of April 30, 2025 was $ 335,000 and $ 12,112,000 , respectively.

Revenue recognized for the three and nine month periods ended January 25, 2025 that was included in customer advances balances as of April 30, 2024 was $ 1,701,000 and $ 9,662,000 , respectively.

The Company’s investments are accounted for as available-for-sale and are reported at fair value.

5 unchanged sentences

Fair values of cash and cash equivalents, accounts receivable, unbilled receivables and retentions, and accounts payable approximate cost due to the short period of time to maturity.

Accounts Receivable

The Company is party to a receivables sales agreement with Citibank, N.A.

with an aggregate capacity of $100,000,000.

The receivables sold under the factoring facilities are without recourse for any customer credit risk and result in a true sale.

Receivables are de-recognized in their entirety when sold.

As of January 31, 2026, no receivables have been sold, proceeds collected, or purchase discount fees incurred under the agreement.

Government Contracts

6 unchanged sentences

The Company’s revenue recognition policy calls for revenue recognized on all cost reimbursable government contracts to be recorded at estimated full year rates unless collectability is not reasonably assured.

At November 1, 2025 and April 30, 2025, the Company had no reserve for incurred cost claim audits.

At January 31, 2026 and April 30, 2025, the Company had no reserve for incurred cost claim audits.

(Loss) Earnings Per Share

2 unchanged sentences

Three Months Ended

Six Months Ended

November 1, 2025

October 26, 2024

November 1, 2025

October 26, 2024

Nine Months Ended

January 31, 2026

January 25, 2025

January 31, 2026

January 25, 2025

Net (loss) income

3 unchanged sentences

Denominator for diluted (loss) earnings per share

Due to the net loss for the three and six months ended November 1, 2025, no shares reserved for issuance upon exercise of stock options or shares of unvested restricted stock were included in the computation of diluted loss per share as their inclusion would have been anti-dilutive.

Potentially dilutive shares not included in the computation of diluted weighted-average common shares because their effect would have been anti-dilutive were 318,440 and 336,009 for the three and six months ended November 1 , 2025, respectively.

Potentially dilutive shares not included in the computation of diluted weighted-average common shares because their effect would have been anti-dilutive were 83 and 180 for the three and six months ended October 26, 2024, respectively.

Due to the net loss for the three and nine months ended January 31, 2026 , no shares reserved for issuance upon exercise of stock options or shares of unvested restricted stock were included in the computation of diluted loss per share as their inclusion would have been anti-dilutive.

Potentially dilutive shares not included in the computation of diluted weighted-average common shares because their effect would have been anti-dilutive were 326,724 and 344,723 for the three and nine months ended January 31, 2026 , respectively.

Potentially dilutive shares not included in the computation of diluted weighted-average common shares because their effect would have been anti-dilutive were 200,667 and 265 for the three and nine months ended January 25, 2025, respectively.

Recently Issued Accounting Standards

10 unchanged sentences

The Company is evaluating the potential impact of this adoption on its consolidated financial statements.

In September 2025, the FASB issued ASU 2025-06, Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”), which better aligns the accounting guidance to how software is developed by eliminating project stages from capitalization criteria.

The new standard is effective for annual reporting periods beginning after December 15, 2027 and interim periods within those annual reporting periods.

The standard allows for prospective, modified, or retrospective transition.

Early adoption is permitted.

We are currently evaluating the impact of adopting this new pronouncement.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (“ASU 2025-11”), which is intended to improve the navigability of required interim disclosures and clarify when that guidance is applicable, and also to provide additional guidance on what disclosures should be provided in interim reporting periods.

The new standard is effective for annual reporting periods beginning after December 15, 2027 and interim periods within those annual reporting periods.

The standard allows for prospective or retrospective transition.

Early adoption is permitted.

We are currently evaluating the impact of adopting this new pronouncement

Investments consist of the following (in thousands):

3 unchanged sentences

Corporate securities

Certificates of deposit

Total short-term investments

9 unchanged sentences

Available-For-Sale Securities

As of November 1, 2025, the balance of available-for-sale securities consisted of U.S.

government securities and high-grade corporate bonds.

As of January 31, 2026, the balance of available-for-sale securities consisted of U.S.

government securities, certificate of deposits and high-grade corporate bonds.

Interest earned from these investments is recorded in interest income (expense), net.

gains on sales of these investments on the basis of specific identification are recorded in interest income (expense), net.

Realized gains on sales of these investments on the basis of specific identification are recorded in interest income (expense), net.

As of April 30, 2025, the company held no available-for-sale securities.

The following table is a summary of the activity related to the available-for-sale investments recorded in short-term and long-term investments as of November 1, 2025 (in thousands):

November 1, 2025

The following table is a summary of the activity related to the available-for-sale investments recorded in short-term and long-term investments as of January 31, 2026 (in thousands):

January 31, 2026

Corporate securities

government securities

Certificates of deposit

Total available-for-sale securities

Equity Securities

Equity securities and warrants are measured at fair value with net unrealized gains and losses from changes in the fair value recognized in other income (expense), net.

Certain equity securities and warrants are measured at fair value with net unrealized gains and losses from changes in the fair value recognized in other income (expense), net.

Unrealized gain (loss) recorded (in thousands):

1 unchanged sentence

Three Months Ended

Six Months Ended

November 1, 2025

October 26, 2024

November 1, 2025

October 26, 2024

Nine Months Ended

January 31, 2026

January 25, 2025

January 31, 2026

January 25, 2025

Net gain (loss) recognized during the period on equity securities

1 unchanged sentence

Unrealized gain (loss) recognized during the period on equity securities still held at the reporting date

Investments Measured at Cost

On December 22, 2025, the Company invested $ 3,000,000 in a privately-held technology company through a Simple Agreement for Future Equity (“SAFE”).

The SAFE provides the Company with the right to receive equity in the issuing company upon the occurrence of certain future events, including a qualifying equity financing or a liquidity event.

The Company measures the investment at cost, less any impairment and is recorded in long-term investments and included in Equity securities and warrants line in the investments table above.

Fair Value Measurements

4 unchanged sentences

● Level 3—Inputs to the valuation that are unobservable inputs for the asset or liability.

The Company’s financial assets measured at fair value on a recurring basis at November 1 , 2025 , were as follows (in thousands):

The Company’s financial assets measured at fair value on a recurring basis at January 31, 2026, were as follows (in thousands):

Fair Value Measurement Using

3 unchanged sentences

Equity securities

The Company had no financial liabilities measured at fair value on a recurring basis at November 1 , 2025 .

The Company had no financial liabilities measured at fair value on a recurring basis at January 31, 2026.

The Company’s financial assets measured at fair value on a recurring basis at April 30, 2025, were as follows (in thousands):

19 unchanged sentences

In July 2019, the Company made its initial capital contribution to a limited partnership fund focusing on highly relevant technologies and start-up companies serving defense and industrial markets.

Under the terms of the limited partnership

agreement, the Company contributed a total of $ 10,000,000 during the fiscal years ended April 30, 2021 and 2022, and there were no further contribution commitments to this fund as of April 30, 2022.

Under the terms of the limited partnership agreement, the Company contributed a total of $ 10,000,000 during the fiscal years ended April 30, 2021 and 2022, and there were no further contribution commitments to this fund as of April 30, 2022.

On December 30, 2025, the Company received an initial distribution from the limited partnership fund of $ 528,000 .

In March 2022, the Company entered into a limited partnership agreement with a second limited partnership fund also focusing on highly relevant technologies and start-up companies serving defense and industrial markets.

1 unchanged sentence

During the fiscal years ended April 30, 2025, 2024 and 2023, the Company made total contributions of $ 5,674,000 , $ 3,074,000 , and $ 5,778,000 respectively.

During the six months ended November 1, 2025, the Company made contributions of $ 2,123,000 .

During the nine months ended January 31, 2026, the Company made contributions of $ 3,244,000 .

Under the terms of the limited partnership agreement, the Company has committed to make additional capital contributions of $ 2,230,000 to the fund, which are expected to be made over the next two fiscal years.

The Company accounts for investments in limited partnerships as equity method investments as the Company is deemed to have significant influence when it holds more than a minor interest.

For the three and six months ended November 1 , 2025 , the Company recorded its ownership percentage of the net gain of equity method investments, of $ 1,196,000 and $ 2,983,000 , respectively, in equity method investment income, net of $ 0 tax in the unaudited condensed consolidated statements of operations, respectively.

For the three and six months ended October 26, 2024, the Company recorded its ownership percentage of the net gains of the limited partnerships, or $ 1,001,000 and $ 1,066,000 , respectively, in equity method investment income (loss), net of $ 0 tax in the unaudited condensed consolidated statements of operations, respectively.

At November 1 , 2025 and April 30, 2025, the carrying value of the equity method investments of $ 35,687,000 and $ 30,423,000 , respectively, was recorded in long-term investments on the unaudited condensed consolidated balance sheet.

For the three and nine months ended January 31, 2026, the Company recorded its ownership percentage of the net (loss) gain of equity method investments, of $( 295,000 ) and $ 2,688,000 , respectively, in equity method investment income, net of $ 0 tax in the unaudited condensed consolidated statements of operations, respectively.

For the three and nine months ended January 25, 2025, the Company recorded its ownership percentage of the net gains of the limited partnerships, or $ 0 and $ 1,066,000 respectively, in equity method investment income (loss), net of $ 0 tax in the unaudited condensed consolidated statements of operations, respectively.

At January 31, 2026 and April 30, 2025, the carrying value of the equity method investments of $ 35,923,000 and $ 30,423,000 , respectively, was recorded in long-term investments.

Warranty Reserves

2 unchanged sentences

The related expense is included in cost of sales.

Warranty reserve activity is summarized as follows for the three and six months ended November 1 , 2025 and October 26, 2024 , respectively (in thousands):

Warranty reserve activity is summarized as follows for the three and nine months ended January 31, 2026 and January 25, 2025 , respectively (in thousands):

Three Months Ended

Six Months Ended

Nine Months Ended

Beginning balance

1 unchanged sentence

Warranty expense

Change in estimate

Warranty costs settled

11 unchanged sentences

Refer to Note 17—Business Acquisitions for further details.

The weighted average amortization period as of November 1 , 2025 and April 30, 2025 was six and three years , respectively.

Amortization expense for the three and six months ended November 1 , 2025 was $ 44,462,000 and $ 102,423,000 , respectively.

Amortization expense for the three and six months ended October 26, 2024 was $ 4,795,000 and $ 9,569,000 , respectively.

The Company tests identifiable intangible assets for impairment in the fourth quarter of each fiscal year unless there are interim indicators that suggest that it is more likely than not that either the identifiable intangible assets or goodwill may be impaired.

In January 2026, a stop-work order was received on the Company’s Other Transaction Agreement for the delivery of BADGER phased array antenna systems to support Space Force’s Satellite Communication Augmentation Resource (“SCAR”) program.

The Company concluded that the stop-work order represented a trigger event that indicated the carrying value of the Space reporting unit exceeded its fair value.

Due to the trigger event, the Company

performed a recoverability test on the long-lived assets of the Space reporting unit, inclusive of the intangibles, for impairment in accordance with ASC 360.

The undiscounted cash flows exceeded the carrying value and no impairment was recorded for long-lived assets.

The weighted average amortization period as of January 31, 2026 and April 30, 2025 was six and three years , respectively.

Amortization expense for the three and nine months ended January 31, 2026 was $ 49,864,000 and $ 152,287,000 , respectively.

Amortization expense for the three and nine months ended January 25, 2025 was $ 4,778,000 and $ 14,348,000 , respectively.

Estimated remaining amortization expense for the next five years is as follows (in thousands):

3 unchanged sentences

Additions to goodwill

Impairment to goodwill

Accumulated impairment losses

Balance at November 1, 2025

Balance at January 31, 2026

In January 2026, a stop-work order was received on the Company’s Other Transaction Agreement for the delivery of BADGER phased array antenna systems to support Space Force’s SCAR program.

The Company concluded that the stop-work order represented a trigger event that indicated the carrying value of the Space reporting unit exceeded its fair value.

As a result, the Company updated its estimates of the long-term cash flows of the Space reporting unit to reflect the reduced revenue associated with the stop-work order as well as an increase in expected research and development and capital investments to achieve product commercialization, which is expected to result in expanded opportunities and improve long term product margins.

The changes in estimates resulted in the recognition of a goodwill impairment charge of approximately $151,000,000 in the Space reporting unit.

As of January 31, 2026, the Company has not identified any events or circumstances, other than those identified for Space, that could trigger an impairment review prior to the Company’s annual impairment test during the fourth quarter of fiscal year 2026, including taking into account the reporting units identified from the BlueHalo acquisition on May 1, 2025.

The AxS segment includes goodwill from the acquisitions of Pulse Aerospace, LLC (“Pulse”), Arcturus UAV, Inc.

16 unchanged sentences

The Amended Credit Agreement now provides for an aggregate $ 700,000,000 term loan (the “Term Loan Facility” and, together with the Revolving Facility, the “Credit Facilities”) and an aggregate $ 350,000,000 revolving credit facility, including a $ 25,000,000 sublimit for the issuance of standby and commercial letters of credit, and a $ 10,000,000 sublimit for swingline loans, secured by all assets of the Company and the Guarantors, maintains the maturity date for obligations of October 4, 2029, as extended by the Third Amendment to Credit Agreement.

Upon effectiveness of the Amended Credit Agreement, the Company drew $ 225,000,000 from the amended Revolving Facility and the full $ 700,000,000 of the Term Loan Facility.

In June 2025, the Company drew an additional $ 10,000,000 under the Revolving Facility.

The Term A Loan drawn under the Term Loan Facility matures two years after the Closing Date and amortizes at a rate of 5.00 % per annum, with the remaining outstanding principal amount due and payable on the maturity date.

2 unchanged sentences

Pursuant to the Fourth Amendment to Credit Agreement, the Company is subject to two financial maintenance covenants which require that (i) the Consolidated Senior Secured Leverage Ratio (as defined in the Credit Agreement) not exceed 3.50 to 1.00 as of the end of any fiscal quarter, for the four fiscal quarters following consummation of the BlueHalo acquisition, and thereafter 3.00 to 1.00 as of the end of any fiscal quarter, and (ii) the Consolidated Fixed Charge Coverage Ratio (as defined in the Credit Agreement) not be less than 1.25 to 1.00 as of the end of any fiscal quarter.

The Company’s ability to borrow under the Revolving Facility is reduced by outstanding letters of credit, which as of November 1, 2025 and April 30, 2025 was $ 11,737,000 and $ 9,376,000 , respectively.

As of November 1, 2025, approximately $ 338,263,000 was available under the Revolving Facility.

Borrowings under the Revolving Facility may be used for working capital and other general corporate purposes, including acquisitions that meet certain parameters.

As of November 1, 2025, the Company was in compliance with all amended covenants.

Upon effectiveness of the Amended Credit Agreement, the Company drew $ 225,000,000 from the amended Revolving Facility and the full $ 700,000,000 of the Term Loan Facility.

In June 2025, the Company drew an additional $ 10,000,000 under the Revolving Facility.

In July 2025, the Company used the proceeds from the issuance of common stock and the Company’s 0 % Convertible Senior Notes due 2030 (the “Notes”) to fully repay the Term A Loan and outstanding Revolving Facility balance.

1 unchanged sentence

The Revolver Facility remains open and available to the Company.

The Company’s ability to borrow under the Revolving Facility is reduced by outstanding letters of credit, which as of January 31, 2026 and April 30, 2025, was $ 11,008,000 and $ 9,376,000 , respectively, and as of January 31, 2026, approximately $ 338,992,000 was available under the Revolving Facility.

Borrowings under the Revolving Facility may be used for working capital and other general corporate purposes, including acquisitions that meet certain parameters.

As of January

31, 2026, the Company was in compliance with all amended covenants.

Please refer to Note 10–Convertible Notes and Note 16–Share Issuances for further details.

9 unchanged sentences

Current period interest rate

Future contractual long-term debt principal payments at November 1, 2025 were as follows:

Future contractual long-term debt principal payments at January 31, 2026 were as follows:

(In thousands)

13 unchanged sentences

The Company will have the right to elect to settle conversions either entirely in cash or in a combination of cash and shares of its common stock.

Upon conversion of any Note, the consideration due upon conversion, which will be determined over an “Observation Period” (as defined in the Indenture) consisting of 60 consecutive trading days, will be paid in cash up to at least the principal amount of the Notes being converted and the Company will pay or deliver, as the case may be, cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the Company’s election, in respect of the remainder, if any, of the Company’s conversion obligation in excess of the principal amount of the Notes being converted.

Upon conversion of

any Note, the consideration due upon conversion, which will be determined over an “Observation Period” (as defined in the Indenture) consisting of 60 consecutive trading days, will be paid in cash up to at least the principal amount of the Notes being converted and the Company will pay or deliver, as the case may be, cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the Company’s election, in respect of the remainder, if any, of the Company’s conversion obligation in excess of the principal amount of the Notes being converted.

The initial conversion rate is 3.1017 shares of the Company's common stock per $1,000 principal amount of Notes, which represents an initial conversion price of approximately $ 322.40 per share of the Company's common stock.

16 unchanged sentences

If an Event of Default involving bankruptcy, insolvency or reorganization events with respect to the Company (and not solely with respect to a significant subsidiary of the Company) occurs, then the principal amount of, and all accrued and unpaid interest, if any, on all of the Notes then outstanding will immediately become due and payable without any further action or notice by any person.

the Company and the Trustee, may declare the principal amount of, and all accrued and unpaid interest, if any, on, all of the Notes then outstanding to become due and payable immediately.

However, notwithstanding the foregoing, the Company may elect, at its option, that the sole remedy for an Event of Default relating to certain failures by the Company to comply with certain reporting covenants in the Indenture consists exclusively of the right of the noteholders to receive special interest on the Notes for up to 365 days, at a rate per annum equal to 0.25 % of the principal amount of the Notes for the first 180 days on which special interest accrues and, thereafter, at a rate per annum equal to 0.50 % of the principal amount thereof.

If any other Event of Default occurs and is continuing, then, the Trustee, by notice to the Company, or noteholders of at least 25 % of the aggregate principal amount of Notes then outstanding, by notice to the Company and the Trustee, may declare the principal amount of, and all accrued and unpaid interest, if any, on, all of the Notes then outstanding to become due and payable immediately.

to receive special interest on the Notes for up to 365 days, at a rate per annum equal to 0.25 % of the principal amount of the Notes for the first 180 days on which special interest accrues and, thereafter, at a rate per annum equal to 0.50 % of the principal amount thereof.

The components of lease costs recorded in cost of sales and selling, general and administrative (“SG&A”) expense were as follows (in thousands):

Six Months Ended

Nine Months Ended

Operating lease cost

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Supplemental lease information was as follows:

Six Months Ended

Nine Months Ended

(In thousands)

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Weighted average discount rate

Maturities of operating lease liabilities as of November 1, 2025 were as follows (in thousands):

Maturities of operating lease liabilities as of January 31, 2026 were as follows (in thousands):

Total lease payments

3 unchanged sentences

The components of accumulated other comprehensive loss and adjustments are as follows (in thousands):

Six Months Ended

Nine Months Ended

Balance as of April 30, 2025 and April 30, 2024, respectively

1 unchanged sentence

Unrealized available-for-sale security losses

Balance as of November 1, 2025 and October 26, 2024, respectively

Balance as of January 31, 2026 and January 25, 2025, respectively

Customer-Funded Research & Development

2 unchanged sentences

Revenue from customer-funded R&D contracts is recognized in accordance with ASC 606 over time as costs are incurred.

Revenue from customer-funded R&D was approximately $ 58,304,000 and $ 119,151,000 for the three and six months ended November 1 , 2025 .

Revenue from customer-funded R&D was approximately $ 20,280,000 and $ 38,839,000 for the three and six months ended October 26, 2024.

Revenue from customer-funded R&D was approximately $ 58,520,000 and $ 177,671,000 for the three and nine months ended January 31, 2026.

Revenue from customer-funded R&D was approximately $ 19,730,000 and $ 58,569,000 for the three and nine months ended January 25, 2025.

Long-Term Incentive Awards

6 unchanged sentences

Settlement of the PRSUs will be made in fully-vested shares of the Company’s common stock.

For the three and six months ended November 1 , 2025 the Company recorded $ 2,205,000 and $ 3,014,000 o f compensation expense related to the Fiscal 2026 LTIP, respectively.

The Company recorded no compensation expense to the Fiscal 2026 LTIP for the three and six months ended October 26, 2024, respectively.

At November 1 , 2025 , the maximum compensation expense that may be recorded for the performance-based portion of the Fiscal 2026 LTIP is $ 31,160,000 .

For the three and nine months ended January 31, 2026 the Company recorded $ 1,202,000 and $ 4,216,000 o f compensation expense related to the Fiscal 2026 LTIP, respectively.

The Company recorded no compensation expense to the Fiscal 2026 LTIP for the three and nine months ended January 25, 2025, respectively.

At January 31, 2026, the maximum compensation expense that may be recorded for the performance-based portion of the Fiscal 2026 LTIP is $ 31,323,000 .

During the three months ended July 27, 2024, the Company granted awards under its 2021 Plan to key employees (“Fiscal 2025 LTIP”).

5 unchanged sentences

Settlement of the PRSUs will be made in fully-vested shares of the Company’s common stock.

For the three and six months ended November 1 , 2025, the Company recorded $ 1,225,000 and $ 5,084,000 of compensation expense related to the Fiscal 2025 LTIP.

For the three and six months ended October 26, 2024, the Company recorded $ 968,000 and $ 1,274,000 of compensation expense related to the Fiscal 2025 LTIP.

At November 1 , 2025 , the maximum compensation expense that may be recorded for the performance-based portion of the Fiscal 2025 LTIP is $ 17,463,000 .

For the three and nine months ended January 31, 2026 , the Company recorded $ 1,541,000 and $ 6,625,000 of compensation expense related to the Fiscal 2025 LTIP.

For the three and nine months ended January 25, 2025 , the Company recorded $ 918,000 and $ 2,192,000 of compensation expense related to the Fiscal 2025 LTIP.

At January 31, 2026, the maximum compensation expense that may be recorded for the performance-based portion of the Fiscal 2025 LTIP is $ 17,463,000 .

During the three months ended July 29, 2023, the Company granted awards under the 2021 Plan to key employees (“Fiscal 2024 LTIP”).

4 unchanged sentences

The actual payout for the PRSUs at the end of the performance period will be calculated based upon the Company’s achievement of the established revenue and non-GAAP adjusted EBITDA targets for the performance period.

Settlement of the PRSUs will be made in fully-vested shares of the Company’s common stock.

For the three and six months ended November 1 , 2025, the Company recorded $ 876,000 and $ 3,884,000 of compensation expense related to the Fiscal 2024 LTIP.

For the three and six months ended October 26, 2024, the Company recorded $ 1,078,000 and $ 2,190,000 of compensation expense related to the Fiscal 2024 LTIP.

At November 1 , 2025 , the maximum compensation expense that may be recorded for the performance-based portion of the Fiscal 2024 LTIP is $ 14,454,000 .

Settlement of the PRSUs will be made in fully-vested

shares of the Company’s common stock.

For the three and nine months ended January 31, 2026 , the Company recorded $ 1,239,000 and $ 5,123,000 of compensation expense related to the Fiscal 2024 LTIP.

For the three and nine months ended January 25, 2025 , the Company recorded $ 938,000 and $ 3,128,000 of compensation expense related to the Fiscal 2024 LTIP.

At January 31, 2026, the maximum compensation expense that may be recorded for the performance-based portion of the Fiscal 2024 LTIP is $ 14,454,000 .

During the three months ended July 30, 2022, the Company granted awards under the 2021 Plan to key employees (“Fiscal 2023 LTIP”).

2 unchanged sentences

During the three months ended August 2 , 2025 , the Company issued a total of 61,605 fully-vested shares of the Company’s common stock to settle the PRSUs in the Fiscal 2023 LTIP.

For the three and six months ended November 1, 2025 the Company recorded no compensation expense related to the Fiscal 2023 LTIP.

For the three and six months ended October 26, 2024, the Company recorded $ 801,000 , and $ 1,666,000 of compensation expense related to the Fiscal 2023 LTIP, respectively.

For the three and nine months ended January 31, 2026 the Company recorded no compensation expense related to the Fiscal 2023 LTIP.

For the three and nine months ended January 25, 2025, the Company recorded $ 587,000 , and $ 2,253,000 of compensation expense related to the Fiscal 2023 LTIP, respectively.

At each reporting period, the Company reassesses the probability of achieving the performance targets for the PRSUs.

1 unchanged sentence

No compensation cost is ultimately recognized for awards for which employees do not render the requisite service and are forfeited.

For the three and six months ended November 1 , 2025 , the Company recorded an income tax benefit of $( 2,305,000 ) and $( 17,474,000 ) yielding an effective tax rate of ( 11.2 )% and ( 16.7 %), respectively.

For the three and six months ended October 26, 2024, the Company recorded an income tax benefit of $( 221,000 ) and a provision for income taxes of $ 1,264,000 yielding an effective tax rate of ( 3.5 )% and 4.4 %, respectively.

The variance from statutory rates for the three and six months ended November 1 , 2025 was primarily due to the loss before income taxes for the three months ended November 1, 2025.

The variance from statutory rates for the three and six months ended October 26, 2024 was primarily due to foreign-derived intangible income (“FDII”) deductions, federal R&D credits and excess tax benefits from the exercise of stock options and vesting of equity awards.

For the three and nine months ended January 31, 2026, the Company recorded an income tax benefit of $( 19,486,000 ) and $( 36,960,000 ) yielding an effective tax rate of ( 11.1 )% and ( 13.2 %), respectively.

For the three and nine months ended January 25, 2025, the Company recorded an income tax benefit of $( 605,000 ) and a provision for income taxes of $ 659,000 yielding an effective tax rate of ( 25.6 )% and 2.5 %, respectively.

The variance from statutory rates for the three and nine months ended January 31, 2026 was primarily due to the non-deductible goodwill impairment, for the three months ended January 31, 2026.

The variance from statutory rates for the nine months ended January 25, 2025 was primarily due to the decrease in income before taxes, offset by a decrease in foreign-derived intangible income (“FDII”) deductions and federal R&D credits.

On July 4, 2025, the reconciliation bill, commonly known as the One Big Beautiful Bill Act (“OBBBA”), was enacted into law.

The OBBBA, among other things, eliminates the requirement to capitalize U.S.

R&D expenses, permanently extends certain provisions of the Tax Cuts & Jobs Act of 2017 and modifies certain international tax provisions, including changes to the Global Intangible Low-Taxed Income (“GILTI”) and the FDII regimes, with effective dates beginning in calendar year 2025 and extending through calendar year 2027.

R&D expenses, permanently extends certain provisions of the Tax Cuts & Jobs Act of 2017 and modifies certain international tax provisions, as part of a broader set of updates to the U.S.

international tax rules.

These changes are effective for tax years beginning after December 31, 2025, and include modifying key elements of the TCJA-era regime.

These include adjusting the international tax effective rates, renaming and reworking of the current global intangible low-taxed income (“GILTI”) regime as “net CFC tested income” and foreign derived intangible income (FDII) deduction as “foreign derived deduction eligible income”, eliminates QBAI reduction, and modifies deductions and foreign tax credit rules.

As the OBBBA was enacted during the Company’s fiscal quarter ended August 2, 2025, the Company reflected the impacts of the OBBBA on the condensed consolidated financial statements.

1 unchanged sentence

Each of these changes may result in accelerated tax deductions during the current and future tax years.

Cash tax payments for the fiscal year ending April 30, 2026 are expected to be significantly reduced as a result

of the accelerated tax deductions.

Cash tax payments for the fiscal year ending April 30, 2026 are expected to be significantly reduced as a result of the accelerated tax deductions.

However, the Company's total income tax expense and effective tax rate are not expected to materially change as a result of the new legislation.

24 unchanged sentences

and assumptions underlying certain existing or potential reserves, such as those for inventory and legal matters.

During the three months ended November 1, 2025, the Company recorded adjustments related to the preliminary allocation of the purchase price including a revision to the fair value of technology, backlog and customer relationships intangibles;

During the six months ended January 31, 2026, the Company recorded adjustments related to the preliminary allocation of the purchase price including a revision to the fair value of technology, backlog and customer relationships intangibles;

fair value adjustment to inventory;

and deferred tax liability resulting in a net increase to goodwill of $ 73,460,000 .

These adjustments resulted in a reduction of amortization expense of $ 4,956,000 related to the three months ended August 2, 2025 (in thousands):

These adjustments resulted in a reduction of amortization expense of $( 7,427,000 ) and an increase of amortization expense of $ 10,957,000 related to the three months ended August 2, 2025 and November 1, 2025, respectively, (in thousands):

Fair value of assets acquired:

32 unchanged sentences

BlueHalo Supplemental Pro Forma Information (unaudited)

BlueHalo revenue and loss from operations for the six months ended November 1, 2025 since its acquisition on May 1, 2025 was $ 480,337,000 and $( 129,411,000 ), inclusive of $ 120,428,000 of intangible amortization, respectively.

The following unaudited pro forma summary presents condensed consolidated information of the Company as if the business acquisition had occurred as if the acquisition was completed on the first day of the Company's fiscal year May 1, 2024.

BlueHalo revenue and loss from operations for the nine months ended January 31, 2026 since its acquisition on May 1, 2025 was $ 656,854,000 and $( 334,922,000 ), inclusive of $ 161,153,000 of intangible amortization and $ 151,306,000 of goodwill impairment, respectively.

The following unaudited pro forma summary presents condensed consolidated information of the Company as if the business acquisition had occurred on May 1, 2024, the first day of the Company's fiscal year 2025.

The pro forma amounts include the historical operating results of the Company and BlueHalo prior to the acquisition.

1 unchanged sentence

Three Months Ended

Six Months Ended

Nine Months Ended

Net loss attributable to AeroVironment, Inc.

The Company recognized a nonrecurring pro forma adjustment to pro forma earnings to amortize an increase in the fair value of inventory acquired during the three and six months ended November 1, 2025.

In addition, for the three and six months ended November 1, 2025, the amortization expense associated with the Company's one-year intangible backlog has been eliminated within the pro forma adjustments.

The Company recognized a nonrecurring pro forma adjustment to pro forma earnings to amortize an increase in the fair value of inventory acquired during the three and nine months ended January 31, 2026.

In addition, for the three and nine months ended January 31, 2026, the amortization expense associated with the Company's one-year intangible backlog has been eliminated within the pro forma adjustments.

These pro forma amounts have been calculated by applying the Company’s accounting policies, assuming transaction costs had been incurred during the three months ended July 27, 2024, reflecting the additional amortization and depreciation that would have been charged, incremental interest expense associated with the initial financing for the acquisition under the term loan and revolver, and including the results of BlueHalo prior to acquisition.

The Company incurred approximately $ 49,178,000 of BlueHalo acquisition-related expenses.

The Company recognized a nonrecurring pro forma adjustment to the three and six months ended November 1, 2025 to remove the impact of the transaction costs from the historical balance, while recognizing the $ 49,178,000 of transaction expenses within the three months ended July 27, 2024 to reflect the costs as if the acquisition was completed during the three months ended July 27, 2024.

The Company incurred approximately $ 58,166,000 of BlueHalo acquisition-related expenses including integration costs.

The Company recognized a nonrecurring pro forma adjustment to the three and nine months ended January 31, 2026 to remove the impact of the transaction costs from the historical balance, while recognizing the $ 58,166,000 of transaction expenses within the nine months ended January 25, 2025 to reflect the costs as if the acquisition was completed during the nine months ended January 25, 2025.

The unaudited pro forma combined financial information presented above does not give effect to the July 2025 common stock issuance and Notes issuance, as such proceeds were not used to fund the BlueHalo acquisition.

11 unchanged sentences

Funded status of the plan

The projected benefit obligation includes assumptions of a discount rate of 3.6 % and pension increase for in-payment benefits of 2.5 % for both November 1 , 2025 and April 30, 2025.

The projected benefit obligation includes assumptions of a discount rate of 3.6 % and pension increase for in-payment benefits of 2.5 % for both January 31, 2026 and April 30, 2025.

The accumulated benefit obligation is approximately equal to the Company’s projected benefit obligation.

2 unchanged sentences

The Company does not expect to make any contributions to the plan in the fiscal year ending April 30, 2026.

The Company assumed expected return on plan assets of 2.9 % for August 2 , 2025 and April 30, 2025, respectively.

The Company assumed expected return on plan assets of 2.9 % for January 31, 2026 and April 30, 2025, respectively.

Expected benefit payments as of April 30, 2025 (in thousands):

2 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

Expected return on plan assets

10 unchanged sentences

Effective May 1, 2025, segment adjusted EBITDA is the measure of profitability used by the CODM for purposes of making decisions about allocating resources to the segments and assessing performance.

Segment adjusted EBITDA is defined as segment (loss) income from operations before depreciation and amortization, adjusted for the impact of certain other non-cash items, including amortization of implementation of cloud computing arrangements, stock-based compensation, and acquisition related expenses.

Prior period segment information has been revised to align with the new segment measure of profitability.

Three Months Ended November 1, 2025

Three Months Ended January 31, 2026

Product sales

5 unchanged sentences

Research and development

Impairment of goodwill

Acquisition-related expenses

3 unchanged sentences

Segment adjusted EBITDA

Three Months Ended October 26, 2024

Three Months Ended January 25, 2025

Product sales

10 unchanged sentences

Segment adjusted EBITDA

Six Months Ended November 1, 2025

Nine Months Ended January 31, 2026

Product sales

5 unchanged sentences

Research and development

Impairment of goodwill

Acquisition-related expenses

3 unchanged sentences

Segment adjusted EBITDA

Six Months Ended October 26, 2024

Nine Months Ended January 25, 2025

Product sales

12 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

Segment adjusted EBITDA

Depreciation and amortization

Impairment of goodwill

Acquisition-related expenses

6 unchanged sentences

Corporate assets primarily consist of cash and cash equivalents, prepaid expenses and other current assets, long-term investments, property and equipment, net, operating lease right-of-use assets, deferred income taxes and other assets managed centrally on behalf of the business segments.

As of November 1, 2025

As of January 31, 2026

As of April 30, 2025

Capital expenditures are summarized in the table below (in thousands):

Six Months Ended November 1, 2025

Six Months Ended October 26, 2024

Nine Months Ended January 31, 2026

Nine Months Ended January 25, 2025

Subsequent Events

On March 10, 2026, during the course of negotiations between the Company and the U.S.

Government regarding the Company’s Other Transaction Agreement (the “Agreement”) for the delivery of BADGER phased array antenna systems to support the SCAR program, the U.S.

Government informed the Company that it now intends to proceed with a termination for convenience of the Agreement, while providing the Company with the opportunity to compete for work under the SCAR program in the future.

The Company intends to continue to invest in the BADGER product line by developing a commercial product to address the phased array antennae market.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements