What changed in this filing

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Item 1. Financial Statements

2026-09-10 compared with 2026-03-11 · 269 added, 343 removed, 501 unchanged (55% of the section changed)

6 unchanged sentences

Short-term investments

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

Accounts receivable, net of allowance for credit losses of $ 6,515 at August 1, 2026 and $ 1,961 at April 30, 2026

Unbilled receivables and retentions

6 unchanged sentences

Operating lease right-of-use assets

Deferred income taxes

Intangibles, net

17 unchanged sentences

Authorized shares— 10,000,000 ;

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

none issued or outstanding at August 1, 2026 and April 30, 2026

Common stock, $ 0.0001 par value:

Authorized shares— 100,000,000

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

Issued and outstanding shares— 50,822,963 shares at August 1, 2026 and 50,610,514 shares at April 30, 2026

Additional paid-in capital

Accumulated other comprehensive loss

Retained earnings

Retained (loss) earnings

Total stockholders’ equity

5 unchanged sentences

Three Months Ended

Nine Months Ended

Product sales

8 unchanged sentences

Research and development

Impairment of goodwill

(Loss) income from operations

Loss from operations

Other income (loss):

1 unchanged sentence

Other (expense) income, net

(Loss) income before income taxes

(Benefit from) provision for income taxes

Equity method investment (loss) income, net of tax

Net (loss) income

Net (loss) income per share

Loss before income taxes

Benefit from income taxes

Equity method investment income, net of tax

Net loss per share

Weighted-average shares outstanding:

1 unchanged sentence

AeroVironment, Inc.

Condensed Consolidated Statements of Comprehensive (Loss) Income (Unaudited)

Condensed Consolidated Statements of Comprehensive Loss (Unaudited)

(In thousands)

Three 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 nine months ended January 31, 2026 and January 25, 2025 respectively

Other comprehensive (loss) income:

Unrealized loss on available-for-sale investments, net of deferred tax expense of $ 0 for the three months ended August 1, 2026 and August 2, 2025

Change in foreign currency translation adjustments

Total comprehensive (loss) income

Total comprehensive loss

See accompanying notes to condensed consolidated financial statements (unaudited).

1 unchanged sentence

Condensed Consolidated Statements of Stockholders’ Equity

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

(In thousands except share data)

Comprehensive

Balance at November 1, 2025

Unrealized gain on investments

Foreign currency translation

Employee stock purchase plan contributions

Restricted stock awards

Restricted stock awards forfeited

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

Stock based compensation

Balance at January 31, 2026

Comprehensive

Balance at October 26, 2024

Foreign currency translation

Restricted stock awards

Restricted stock awards forfeited

Stock based compensation

Balance at January 25, 2025

AeroVironment, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

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

For the three months ended August 1, 2026 and August 2, 2025 (Unaudited)

(In thousands except share data)

7 unchanged sentences

Tax withholding payment related to net share settlement of equity awards

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

Shares issued, net of issuance costs

Stock based compensation

Balance at January 31, 2026

Balance at August 1, 2026

Comprehensive

1 unchanged sentence

Foreign currency translation

Stock options exercised

Employee stock purchase plan contributions

Restricted stock awards

1 unchanged sentence

Tax withholding payment related to net share settlement of equity awards

Issuance of common stock for business acquisitions

Shares issued, net of issuance costs

Stock based compensation

Balance at January 25, 2025

Balance at August 2, 2025

AeroVironment, Inc.

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

Nine Months Ended

Three Months Ended

Operating activities

Net (loss) income

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

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

Depreciation and amortization

Impairment of goodwill

Gain from equity method investments

4 unchanged sentences

Non-cash lease expense

Loss (gain) on foreign currency transactions

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

Deferred income taxes

Loss on foreign currency transactions

Gain on sale of equity securities, net

Stock-based compensation

8 unchanged sentences

Other liabilities

Net cash used in operating activities

Net cash provided by (used in) operating activities

Investing activities

Acquisition of property and equipment

Contributions in equity method investments

Acquisition of capitalized software to be sold

Purchase of available-for-sale investments

Redemption of available-for-sale investments

Acquisition of capitalized software to be sold

Business acquisitions, net of cash acquired

Net cash used in investing activities

( 1,224,921 )

Financing activities

Proceeds from revolving credit facility

Principal payments of term loan

Proceeds from term loan

Principal payments of revolver

Proceeds from long-term debt

Proceeds from revolver, net of creditor costs

Proceeds from shares issued, net of underwriter costs

2 unchanged sentences

Payment of equity issuance costs

Holdback and retention payments for business acquisition

Tax withholding payment related to net settlement of equity awards

Employee stock purchase plan contributions

Exercise of stock options

Net cash provided by (used in) financing activities

Net cash (used in) provided by financing activities

Effects of currency translation on cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

Net (decrease) increase in cash and cash equivalents

Cash and cash equivalents at beginning of period

1 unchanged sentence

Supplemental disclosures of cash flow information

Cash paid, net during the period for:

Cash (received) paid, net during the period for:

Non-cash activities

7 unchanged sentences

Organization and Significant Accounting Policies

AeroVironment, Inc.

(“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, 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.

In addition, the Company believes that some of the innovative potential products, services and technologies in its research and development (“R&D”) pipeline will emerge as new growth platforms in the future, creating additional market opportunities.

Effective May 1, 2025, the Company reorganized its segments.

In connection with the Company’s acquisition of BlueHalo Financing Topco, LLC (“BlueHalo”), the reorganization was implemented to drive additional operational improvements, foster synergies and provide leaders with greater autonomy over their product lines.

AeroVironment, Inc., a Delaware corporation (together with its fully-owned subsidiaries, collectively referred to herein as the “Company”), is engaged in the design, development, production, delivery and support of autonomous systems, precision strike systems, Counter-Uncrewed Aircraft Systems (“C-UAS”) technologies, space-based platforms, directed energy systems, and cyber and electronic warfare capabilities.

The Company provides these products and services primarily to organizations within or supplying the U.S.

Department of Defense (“DoD”), other federal agencies and to international allied governments.

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 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.

Department of Defense (“DoD”), other federal agencies, and international allied governments.

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 (“UxS”), Loitering Munitions Systems (“LMS”), and MacCready Works (“MW”) segments as well as Integrated Air and Missile Defense (“IAMD”), Electronic Warfare Systems (“EW”) and Uncrewed Maritime (“UUV”) products and services from the BlueHalo acquisition.

This segment encompasses the Company’s core autonomous platforms, such as drones and robotic systems, tailored for mission-critical applications across air, land and sea domains.

1 unchanged sentence

This segment positions the Company in high-growth areas of next-generation defense technology, addressing emerging threats and mission requirements in space, cyber warfare, and directed energy applications (e.g., high-energy lasers).

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

DoD, other federal agencies, and international allied governments.

Basis of Presentation

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

The results of operations for the three months ended August 1, 2026 are not necessarily indicative of the results for the full year ending April 30, 2027.

For further information, refer to the consolidated financial statements and footnotes thereto for the year ended April 30, 2026, included in the Company’s Annual Report on Form 10-K.

The preparation of financial statements in conformity with U.S.

GAAP requires management to make estimates and assumptions, including estimates of anticipated contract costs and revenue utilized in the revenue recognition process,

that affect the reported amounts in the unaudited condensed consolidated financial statements and accompanying notes.

GAAP requires management to make estimates and assumptions, including estimates of anticipated contract costs and revenue utilized in the revenue recognition process, that affect the reported amounts in the unaudited condensed consolidated financial statements and accompanying notes.

Actual results could differ from those estimates.

1 unchanged sentence

All intercompany accounts and transactions have been eliminated.

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”).

Recent Acquisitions

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 by and among AV, Archangel Merger Sub LLC, a

Delaware limited liability company, BlueHalo, and BlueHalo Holdings Parent, LLC, a Delaware limited liability company and sole member of BlueHalo.

Refer to Note 15—Business Acquisitions for further details.

On March 16, 2026, the Company closed its acquisition of Empirical Systems Aerospace, Inc.

(“ESAero”), a leading producer of UAS and advanced air mobility platforms.

ESAero is incorporated into AeroVironment’s AxS segment.

Refer to Note 15—Business Acquisitions for further details.

Recently Adopted Accounting Standards

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

The Company did not adopt any accounting standards during the three months ended August 1, 2026.

Reclassifications

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

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.

Specifically, the Company’s prior year disaggregated revenue disclosures and segment information have been reclassified to conform to the current year presentation.

Revenue Recognition

1 unchanged sentence

These contracts may be firm fixed price (“FFP”), cost plus fixed fee, cost plus award fee, and cost plus incentive fee (collectively “Cost Plus”), or time and materials (“T&M”).

The Company considers all such contracts to be within the scope of ASU 2014-09, Revenue from Contracts with Customers (“ASC 606”).

The Company considers all such contracts to be within the scope of Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (“ASC 606”).

Performance Obligations

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.

On August 1, 2026, the Company had approximately $ 1,457,822,000 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 78 % of the remaining performance obligations as revenue in fiscal 2027 and the remaining 22 % in fiscal 2028 or beyond.

2 unchanged sentences

Three Months Ended

Nine Months Ended

Revenue by operating group

2 unchanged sentences

Space and Directed Energy

Cyber and Mission Services

Cyber and Mission Solutions

Total revenue

Three Months Ended

Nine Months Ended

Revenue by contract type

7 unchanged sentences

Three Months Ended

Nine Months Ended

Revenue by customer category

1 unchanged sentence

Three Months Ended

Nine Months Ended

Revenue by geographic location

2 unchanged sentences

Three Months Ended

Nine Months Ended

Revenue percentage by recognition method

1 unchanged sentence

Total revenue

Customer-Funded Research & Development

Customer-funded R&D costs are incurred pursuant to contracts (revenue arrangements) to perform R&D activities according to customer specifications.

These costs are direct contract costs and are expensed to cost of sales as costs are incurred.

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 $ 84,982,000 for the three months ended August 1, 2026.

Revenue from customer-funded R&D was approximately $ 60,847,000 for the three months ended August 2, 2025

Contract Balances

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.

Changes in the contract asset and liability balances during the three month period ended August 1, 2026 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 month period ended August 1, 2026 that was included in customer advances balances as of April 30, 2026 was $ 23,665,000 .

Revenue recognized for the three month period ended August 2, 2025 that was included in customer advances balances as of April 30, 2025 was $ 11,358,000 .

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

Unrealized gains and losses for debt securities are excluded from earnings and reported as a separate component of stockholders’ equity, net of deferred income taxes for available-for-sale investments.

2 unchanged sentences

Management determines the appropriate classification of securities at the time of purchase and reevaluates such designation as of each balance sheet date.

Equity securities without a readily determinable fair value are measured at cost minus impairment, if any.

Fair Values of Financial Instruments

3 unchanged sentences

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.

The receivables sold under the factoring facilities are without recourse 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.

As of August 1, 2026, no receivables have been sold, proceeds collected, or purchase discount fees incurred under the agreement.

Government Contracts

3 unchanged sentences

For example, during the course of its audits, the DCAA may question the Company’s incurred costs, and if the DCAA believes the Company has accounted for such costs in a manner inconsistent with the requirements under Federal Acquisition Regulations, the DCAA auditor may recommend to the Company’s administrative contracting officer to disallow such costs.

Historically, the Company has not experienced material disallowed costs as a result of government audits.

Historically, the Company has not experienced material disallowed costs as a result of government

However, the Company can provide no assurance that the DCAA or other government audits will not result in material disallowances for incurred costs in the future.

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

(Loss) Earnings Per Share

Basic (loss) earnings per share is computed using the weighted-average number of common shares outstanding, excluding shares of unvested restricted stock.

As of August 1, 2026, the company had a reserve for incurred cost claims of $ 956,000 .

As of April 30, 2026, the Company had no reserve for incurred cost claim audits.

Loss Per Share

Basic loss per share is computed using the weighted-average number of common shares outstanding, excluding shares of unvested restricted stock.

The reconciliation of basic to diluted shares is as follows (in thousands except share data):

Three Months Ended

Nine Months Ended

January 31, 2026

January 25, 2025

January 31, 2026

January 25, 2025

Net (loss) income

Denominator for basic (loss) earnings per share:

August 1, 2026

August 2, 2025

Denominator for basic loss per share:

Weighted average common shares

Dilutive effect of employee stock options, restricted stock and restricted stock units

Denominator for diluted (loss) earnings per share

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.

Denominator for diluted loss per share

Due to the net loss for the three months ended August 1, 2026 and August 2, 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 330,957 for the three months ended August 1, 2026 .

Potentially dilutive shares not included in the computation of diluted weighted-average common shares because their effect would have been anti-dilutive were 168,254 for the three months ended August 2, 2025.

Recently Issued Accounting Standards

In December 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures (“ASU 2023-09”).

ASU 2023-09 requires updates to the rate reconciliation, income taxes paid and other disclosures.

The new standard is effective for fiscal years beginning after December 15, 2024 and interim periods within fiscal years beginning after December 15, 2025, with early adoption permitted.

ASU 2023-09 is adopted retrospectively.

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

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income— Expense Disaggregation Disclosures (Subtopic 220-40):

2 unchanged sentences

The new standard is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, and should be applied either prospectively to financial statements issued for reporting periods after the effective date of this ASU or retrospectively to any or all prior periods presented in the financial statements.

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

The Company is currently 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.

2 unchanged sentences

Early adoption is permitted.

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

The Company is 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.

2 unchanged sentences

Early adoption is permitted.

We are currently evaluating the impact of adopting this new pronouncement

The Company is 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

2 unchanged sentences

government securities

Equity securities and warrants

Corporate securities

Investments at cost

Total long-term available-for-sale securities investments

4 unchanged sentences

Available-For-Sale Securities

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.

As of August 1, 2026, the balance of available-for-sale securities consisted of U.S.

government securities, money market funds, treasury bills, and high-grade corporate bonds.

Interest earned from these investments is 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 January 31, 2026 (in thousands):

January 31, 2026

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 August 1, 2026 (in thousands):

August 1, 2026

Corporate securities

government securities

Certificates of deposit

Total 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 April 30, 2026 (in thousands):

April 30, 2026

Corporate securities

government securities

Total available-for-sale securities

Equity Securities

2 unchanged sentences

Three months ended

Three Months Ended

Nine Months Ended

January 31, 2026

January 25, 2025

January 31, 2026

January 25, 2025

August 1, 2026

August 2, 2025

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

Net loss recognized during the period on equity securities sold during the period

Net gain recognized during the period on equity securities sold during the period

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

2 unchanged sentences

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.

The Company received 254,634 preferred shares of the Company effective May 2026.

The Company measures the investment at cost, less any impairment and is recorded in long-term investments.

On April 13, 2026, the Company invested $ 5,000,000 in a privately-held technology company through a convertible promissory note.

The note bears interest at 4.03 % annually, matures in 3 years , automatically converts into preferred equity upon a qualified financing event subject to a conversion discount, optional conversion into preferred equity upon a non-qualified financing event subject to a conversion discount, or optional conversion into preferred equity absent subsequent financing without a conversion discount.

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 January 31, 2026, were as follows (in thousands):

The Company’s financial assets measured at fair value on a recurring basis as of August 1, 2026, were as follows (in thousands):

Fair Value Measurement Using

2 unchanged sentences

identical assets

Equity securities

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):

Available-for-sale securities

The Company’s financial assets measured at fair value on a recurring basis as of April 30, 2026, were as follows (in thousands):

Fair Value Measurement Using

2 unchanged sentences

identical assets

Equity securities

The Company had no financial liabilities measured at fair value on a recurring basis at April 30, 2025.

On September 12, 2022, the Company invested $ 5,000,000 and acquired 500,000 shares of common stock and 500,000 privately placed, redeemable warrants of Amprius Technologies, Inc.

The privately placed, redeemable warrants have an exercise price of $ 12.50 and redemption price of $ 20.00 .

The Company measures the fair value of the privately placed, redeemable warrants using the quoted market price of the public warrants which have an exercise price of $ 11.50 and a redemption price of $ 18.00 and classifies the warrants as a level 2 fair value measurement.

Available-for-sale securities

Inventories, net

9 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.

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.

Under the terms of the limited partnership agreement, the Company is committed to contributions totaling $ 20,000,000 over an expected five year period.

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 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 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.

Under the terms of the limited partnership agreement, the Company contributed a total of $ 10,000,000 as of April 30, 2022.

During the fiscal year ended April 30, 2026, the Company received a distribution of $ 528,000 .

In March 2022, the Company entered into a second similar limited partnership fund and committed to contributions totaling $ 20,000,000 over an expected five year period.

As of April 30, 2026, the Company has made total contributions of $ 19,069,000 , and under the terms of the limited partnership agreement, the Company has committed to make additional capital contributions of $ 931,000 to the fund expected to be during this fiscal year.

In May 2026, the Company entered into a third similar limited partnership and committed to contributions totaling $ 20,000,000 over an expected five year period.

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

For the three months ended August 1, 2026 and August 2, 2025, the Company recorded its ownership percentage of the net gain of equity method investments of $ 1,867,000 and $ 1,787,000 net of tax of $ 0 and $ 0 , respectively, in equity

method investment income within the unaudited condensed consolidated statements of operations, respectively.

As of August 1, 2026 and April 30, 2026, the carrying value of the equity method investments of $ 53,746,000 and $ 51,880,000 , 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 nine months ended January 31, 2026 and January 25, 2025 , respectively (in thousands):

Warranty reserve activity is summarized as follows for the three months ended August 1, 2026 and August 2, 2025 , respectively (in thousands):

Three Months Ended

Nine Months Ended

Beginning balance

1 unchanged sentence

Warranty expense

Change in estimate

Warranty costs settled

9 unchanged sentences

Intangibles, net

Technology, backlog and customer relationships intangibles were recognized in conjunction with the Company’s acquisition of Blue Halo on May 1, 2025.

Refer to Note 17—Business Acquisitions for further details.

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.

The weighted average amortization period as of August 1, 2026 and April 30, 2026 was six and six years , respectively.

Amortization expense for the three months ended August 1 , 2026 and August 2 , 2025 was $ 43,357,000 and $ 58,161,000 , respectively.

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

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Additions to goodwill

Impairment to goodwill

Accumulated impairment losses

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.

(“Arcturus”), Telerob Gesellschaft für Fernhantierungstechnik mbH (“Telerob”), Planck Aerosystems, Inc., Tomahawk Robotics, Inc.

and certain BlueHalo reporting units and includes goodwill from the purchase of certain assets of Intelligent Systems Group business segment of Progeny Systems Corporation.

The SCDE segment includes goodwill from certain BlueHalo reporting units.

On October 4, 2024, the Company entered into a Third Amendment to Credit Agreement with the existing lenders, Bank of America, N.A.

(“BofA NA”), the administrative agent and the swingline lender, JPMorgan Chase Bank, N.A.

(“JPM”), U.S.

Balance at August 1, 2026

The AxS segment includes goodwill from the acquisitions of ESAero, Pulse Aerospace, LLC, Arcturus UAV, Inc., Telerob Gesellschaft für Fernhantierungstechnik mbH (“Telerob”), which has since been fully impaired, Planck Aerosystems, Inc., Tomahawk Robotics, Inc.

(“Tomahawk”), certain reporting units from BlueHalo and includes goodwill from the purchase of certain assets of Intelligent Systems Group business segment of Progeny Systems Corporation.

The SCDE segment includes goodwill from certain reporting units from BlueHalo.

During the three months ended August 1, 2026, the additions relate to adjustments to the purchase price allocation of the ESAero acquisition.

Refer to Note 15—Business Acquisitions for further details.

During the most recent annual impairment test during the fourth quarter of fiscal year 2026, the estimated fair value of all reporting units with goodwill from acquisitions in years prior to fiscal year 2026 substantially exceeded their carrying value.

The reporting units from the BlueHalo and ESAero acquisitions were recently recorded at estimated fair value during the fiscal year ended April 30, 2026 and no triggering event for goodwill impairment was since identified with the exception of the Space reporting unit for which a triggering event was identified in January 2026.

The Space reporting unit, included in the SCDE reportable segment, is considered to have an increased risk of failing future quantitative goodwill impairment tests as an impairment was recorded during the quarter ended January 31, 2026.

The Company’s annual impairment test for the fiscal year ending April 30, 2027 will be performed during the fourth quarter of fiscal year 2027 or if interim triggering events are identified.

Credit Facilities

In connection with the consummation of the Arcturus Acquisition on February 19, 2021, the Company, as borrower, and Arcturus, as guarantor, entered into a Credit Agreement with certain lenders, letter of credit issuers, Bank of America, N.A.

(“BofA NA”), as the administrative agent and the swingline lender, and BofA Securities, Inc., JPMorgan Chase Bank, N.A.

(“JPM”), and U.S.

Bank National Association (“U.S.

Bank”), as joint lead arrangers and joint bookrunners (the “Credit Agreement”).

The Credit Agreement and its associated Security and Pledge Agreement set forth the terms and conditions for (i) a five-year $ 100,000,000 revolving credit facility, which included a $ 10,000,000 sublimit for the issuance of standby and commercial letters of credit (the “Revolving Facility”), and (ii) a five-year amortized $ 200,000,000 term A loan drawn in full upon execution (the “Term Loan Facility”, and together with the Revolving Facility, the “Credit Facilities”).

On February 4, 2022, the Company entered into a First Amendment to Credit Agreement and Waiver relating to its existing Credit Agreement.

On June 6, 2023, the Company entered into a Second Amendment to Credit Agreement relating to its existing credit Agreement which increased the sublimit from $ 10,000,000 to $ 25,000,000 .

On October 4, 2024, the Company entered into a Third Amendment to Credit Agreement with the existing lenders, BofA NA, the

administrative agent and the swingline lender, JPM, and U.S.

Bank, and Citibank, N.A.

(“Citibank”) (the “Third Amendment to Credit Agreement”).

The Third Amendment to Credit Agreement provided for an aggregate $ 200,000,000 revolving credit facility (the “Revolving 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 Company’s domestic subsidiaries (the “Guarantors”), and extended the maturity date for obligations pursuant to the Credit Agreement to October 4, 2029.

Upon effectiveness of the Third Amendment to Credit Agreement, the Company drew $ 15,000,000 from the amended Revolving Facility and repaid in full all outstanding amounts owed pursuant to the prior Term Loan Facility.

The unamortized debt issuance costs allocated to the prior Term Loan Facility of $ 590,000 were expensed upon repayment of the Term Loan Facility and recorded in interest expense.

On May 1, 2025 (the “Closing Date”), in connection with the consummation of the BlueHalo acquisition, the Company entered into a Fourth Amendment to Credit Agreement with BofA NA, the administrative agent and the swingline lender, JPM, U.S.

Bank, Citibank, BMO Bank N.A.

(“BMO”), Citizens Banks, N.A.

(“Citizens”) and Royal Bank of Canada (“RBC”) (the “Fourth Amendment to Credit Agreement” and the existing Credit Agreement as amended thereby, the “Amended Credit Agreement”).

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.

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.

The applicable margin on the Term A Loan is based upon the Company’s Consolidated Leverage Ratio (as defined in the Credit Agreement) and whether the Company elects as its benchmark rate (i) SOFR (in which case, the applicable margin ranges from 1.50 - 2.50 % per annum depending on the Company’s Consolidated Leverage Ratio) plus a credit spread adjustment of 0.10 % or (ii) Base Rate (in which case, the applicable margin ranges from 0.50 - 1.50 % per annum depending on the Company’s Consolidated Leverage Ratio).

Upon the occurrence of an event of default, an additional 2.00 % per annum default interest rate may apply.

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.

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.

The Third Amendment to Credit Agreement provided for an aggregate $ 200,000,000 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, and extends the maturity date for obligations pursuant to the Credit Agreement to October 4, 2029.

The Third Amendment to Credit Agreement reflects the removal of the Term Loan Facility.

The unamortized debt issuance costs allocated to the Term Loan Facility of $ 590,000 were expensed upon repayment of the Term Loan Facility and recorded in interest expense.

On May 1, 2025, in connection with the consummation of the BlueHalo Acquisition, the Company entered into a Fourth Amendment to Credit Agreement with the lenders, BofA NA, the administrative agent and the swingline lender, JPM, and U.S.

Bank, and Citibank (the “Fourth Amendment to Credit Agreement” and the existing Credit Agreement as amended by the First Amendment to Credit Agreement, the Second Amendment to Credit Agreement, Third Amendment to Credit Agreement and Fourth Amendment to Credit Agreement, the “Amended Credit Agreement”).

The Amended Credit Agreement now provides for an aggregate $ 700,000,000 term loan (the “Fourth Amendment Term Loan Facility”) 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.

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 Fourth Amendment 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.

The unamortized debt issuance costs allocated to the Term Loan Facility of $ 6,668,000 were expensed upon repayment of the Term Loan Facility and recorded as interest expense in the consolidated statements of operations.

In July 2025, the Company used approximately $ 965,303,000 of the net proceeds from the Convertible Notes Offering (as defined below) and Common Stock Offering (as defined below) to repay indebtedness under the Fourth Amendment Term Loan Facility and outstanding borrowings under the Revolving Facility.

Refer to Note 9—Debt and Note 14—Share Issuances, respectively, for further details.

The unamortized debt issuance costs allocated to the Fourth Amendment Term Loan Facility of $ 6,668,000 were expensed upon repayment of the Fourth Amendment Term Loan Facility and recorded as interest expense in the consolidated statements of operations.

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.

The Company’s ability to borrow under the Revolving Facility is reduced by outstanding letters of credit, which as of August 1, 2026 and April 30, 2026 was $ 13,019,000 and $ 13,152,000 , respectively.

As of August 1, 2026 and April 30, 2026, approximately $ 336,981,000 and $ 336,848,000 was available under the Revolving Facility, respectively.

The $ 700,000,000 Fourth Amendment Term Loan Facility has been repaid in full and closed;

although new term loans can be renegotiated and issued under the Credit 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.

Long-term debt and the current period interest rates were as follows:

(In thousands)

Revolving credit facility

Convertible notes

Total long-term debt

Less unamortized debt issuance costs–convertible notes

Total long-term debt, net of unamortized debt issuance costs–convertible notes

Unamortized debt issuance costs–revolving credit facility

Current period interest rate

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

(In thousands)

As of August 1, 2026, the Company was in compliance with all amended covenants.

Convertible Notes

In July 2025, the Company entered into an underwriting agreement (the “Note Underwriting Agreement”) with certain underwriters (the “Note Underwriters”) agreeing, subject to customary conditions, to issue and sell $ 650,000,000 aggregate principal amount of the Notes to the Note Underwriters as well as an option, exercisable within 30 days after entering the Note Underwriting Agreement, to purchase up to an additional $ 97,500,000 aggregate principal amount of Notes solely to cover over-allotments.

In July 2025, the Company entered into an underwriting agreement (the “Note Underwriting Agreement”) with certain underwriters (the “Note Underwriters”) agreeing, subject to customary conditions, to issue and sell $ 650,000,000 aggregate principal amount of the Company’s 0 % Convertible Senior Notes due 2030 (the “Notes”) to the Note Underwriters as well as an option, exercisable within 30 days after entering the Note Underwriting Agreement, to purchase up to an additional $ 97,500,000 aggregate principal amount of Notes solely to cover over-allotments (the “Convertible Notes Offering”).

The Note Underwriters exercised such option to purchase an additional $ 97,500,000 aggregate principal amount of Notes.

The issuance of $ 747,500,000 aggregate principal amount of Notes was completed in July 2025.

The estimated fair value (Level 2) of the zero-coupon convertible note maturing on July 15, 2030 was $ 680,973,000 and $ 760,656,000 as of August 1, 2026 and April 30, 2026, respectively.

The Notes were issued pursuant to, and are governed by, an indenture (the “Base Indenture”), dated as of July 3, 2025, between the Company and U.S.

Bank Trust Company, National Association, as trustee (the “Trustee”), as supplemented

by a first supplemental indenture (the “Supplemental Indenture,” and the Base Indenture, as supplemented by the Supplemental Indenture, the “Indenture”), dated as of July 3, 2025, between the Company and the Trustee.

The Notes are the Company’s senior, unsecured obligations and are (i) equal in right of payment with the Company’s existing and future senior, unsecured indebtedness;

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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.

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(ii) the Company’s failure to send certain notices under the Indenture within specified periods of time;

(iii) the Company's failure to convert a Note in accordance with the Indenture within a specified period of time;

(iii) the Company’s failure to convert a Note in accordance with the

Indenture within a specified period of time;

(iv) the Company’s failure to comply with certain covenants in the Indenture relating to the Company’s ability to consolidate with or merge with or into, or sell, lease or otherwise transfer, in one transaction or a series of transactions, all or substantially all of the assets of the Company and its subsidiaries, taken as a whole, to another person;

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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.

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.

Long-term debt and the current period interest rates were as follows:

(In thousands)

Convertible notes

Total long-term debt

Less unamortized debt issuance costs–convertible notes

Total long-term debt, net of unamortized debt issuance costs–convertible notes

Unamortized debt issuance costs–revolving credit facility

Current period interest rate

Future contractual long-term debt principal payments as of August 1, 2026 were as follows:

(In thousands)

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

Nine Months Ended

Three Months Ended

Operating lease cost

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Supplemental lease information was as follows:

Nine Months Ended

Three Months Ended

(In thousands)

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Weighted average discount rate

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

Maturities of operating lease liabilities as of August 1, 2026 were as follows (in thousands):

Total lease payments

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

Nine Months Ended

Three Months Ended

Balance as of April 30, 2026 and April 30, 2025, respectively

Change in foreign currency translation adjustments

Unrealized available-for-sale security losses

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

Customer-Funded Research & Development

Customer-funded R&D costs are incurred pursuant to contracts (revenue arrangements) to perform R&D activities according to customer specifications.

These costs are direct contract costs and are expensed to cost of sales as costs are incurred.

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 $ 58,520,000 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.

Change in foreign currency translation adjustments

Balance as of August 1, 2026 and August 2, 2025, respectively

Long-Term Incentive Awards

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Awards under the Fiscal 2027 LTIP consist of:

(i) time-based restricted stock awards and time-based restricted stock units, which vest in equal tranches in July 2026, July 2027 and July 2028, and (ii) performance-based restricted stock units (“PRSUs”), which vest based on the Company’s achievement of revenue and non-GAAP adjusted earnings before interest, taxes, depreciation and amortization (“adjusted EBITDA”) targets for the three-year period ending April 30, 2028.

(i) time-based

restricted stock awards and time-based restricted stock units, which vest in equal tranches in July 2027, July 2028 and July 2029, and (ii) performance-based restricted stock units (“PRSUs”), which vest based on the Company’s achievement of revenue and non-GAAP adjusted earnings before interest, taxes, depreciation and amortization (“adjusted EBITDA”) targets for the three-year period ending April 30, 2029.

At the award date, target achievement levels for each of the financial performance metrics were established for the PRSUs, at which levels the PRSUs would vest at 100 % for each such metric.

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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 $ 1,202,000 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”).

For the three months ended August 1, 2026 the Company recorded $ 743,000 o f compensation expense related to the Fiscal 2027 LTIP, respectively.

As of August 1, 2026, the maximum compensation expense that may be recorded for the performance-based portion of the Fiscal 2027 LTIP is $ 35,950,000 .

During the three months ended August 2, 2025, the Company granted awards under its 2021 Plan to key employees (“Fiscal 2026 LTIP”).

Awards under the Fiscal 2026 LTIP consist of:

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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 $ 1,541,000 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”).

For the three months ended August 1 , 2026 and August 2, 2025 , the Company recorded a $( 687,000 ) reversal of compensation expense and $ 809,000 of compensation expense related to the Fiscal 2026 LTIP, respectively.

As of August 1 , 2026 , the maximum compensation expense that may be recorded for the performance-based portion of the Fiscal 2026 LTIP is $ 27,471,000 .

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

Awards under the Fiscal 2025 LTIP consist of:

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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 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 .

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

For the three months ended August 1 , 2026 and August 2, 2025, the Company recorded a $( 146,000 ) reversal of compensation expense and $ 3,859,000 and of compensation expense related to the Fiscal 2025 LTIP.

As of August 1 , 2026 , the maximum compensation expense that may be recorded for the performance-based portion of the Fiscal 2025 LTIP is $ 14,883,000 .

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

Awards under the Fiscal 2023 LTIP consist of:

(i) time-based restricted stock awards and time-based restricted stock units, which vest in equal tranches in July 2023, July 2024 and July 2025, and (ii) PRSUs, which vest based on the Company’s achievement of revenue and non-GAAP adjusted EBITDA targets for the three-year period ending April 30, 2025.

During the three months ended August 1 , 2026 , the Company issued a total of 84,142 fully-vested shares of the Company’s common stock to settle the PRSUs in the Fiscal 2024 LTIP.

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.

For the three ended August 1, 2026 the Company recorded no compensation expense related to the Fiscal 2024 LTIP.

For the three months ended August 2, 2025, the Company recorded $ 3,008,000 of compensation expense related to the Fiscal 2024 LTIP.

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

The estimation of whether the performance targets will be achieved requires judgment, and, to the extent actual results or updated estimates differ from the Company’s current estimates, the cumulative effect on current and prior periods of those changes will be recorded in the period estimates are revised.

those changes will be recorded in the period estimates are revised.

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

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.

For the three months ended August 1, 2026, the Company recorded an income tax benefit of $( 397,000 ) yielding an effective tax rate of 5.4 %.

For the three months ended August 2, 2025, the Company recorded an income tax benefit of $( 15,169,000 ) yielding an effective tax rate of 18.0 %.

The variance from the statutory rates for the three months ended August 1, 2026, was primarily attributable to federal R&D credits, Section 162(m) limitation on executive compensation, and state taxes.

The variance from the statutory rates for the three months ended August 1, 2025, was primarily attributable to federal R&D credits and acquisition related costs.

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

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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.

The Company is in the process of evaluating the financial statement impact of these provisions in future periods.

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

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 during such period.

Cash tax payments for the fiscal year ending April 30, 2027 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.

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

Share Issuances

In July 2025, the Company entered into an underwriting agreement (the “Common Stock Underwriting Agreement”) with certain underwriters (the “Common Stock Underwriters”) agreeing, subject to customary conditions, to issue and sell 3,528,226 shares of the Company’s common stock to the Common Stock Underwriters.

In addition, pursuant to the Common Stock Underwriting Agreement, the Company granted the Common Stock Underwriters an option, exercisable within 30 days after entering the Common Stock Underwriting Agreement, to purchase up to an additional 529,234 shares of the Company’s common stock (the “Over-allotment Option”).

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Business Acquisitions

ESAero Acquisition

On March 16, 2026, the Company closed its acquisition of ESAero, a leading producer of UAS and advanced air mobility platforms.

Pursuant to the merger agreement, the Company acquired 100 % of ESAero equity for an aggregate purchase price of $ 177,909,000 , consisting of 671,078 shares of the Company’s common stock with a fair value of $ 142,188,000 and $ 26,922,000 cash-on-hand, net of $ 2,386,000 cash acquired, plus an $ 8,800,000 holdback for certain customary adjustments, such as net working capital, and certain seller indemnification obligations.

During August 2026, $ 4,000,000 of the holdback was settled for $ 3,593,000 due to certain customary adjustments.

The fair value of the shares issued was based on the closing price of the Company’s common stock on March 16, 2026 of $ 211.88 .

ESAero is incorporated into AeroVironment’s AxS segment.

The Company believes the acquisition will enhance the Company’s ability to transition from innovative design to advanced manufacturing.

The Company accounted for the acquisition under the acquisition method of accounting for business combinations.

The following table summarizes the preliminary allocation of the fair value of the acquisition consideration transferred to assets acquired and liabilities assumed as of the acquisition date.

The allocation of the purchase price is preliminary and subject to change as the Company continues to evaluate the fair values of certain assets and liabilities acquired.

Open items in the purchase price allocation include the valuation of assets acquired and liabilities assumed including, but not limited to customer relationships, backlog developed technology, non-compete agreements, and tradename intangibles;

details surrounding tax matters;

and assumptions underlying certain existing or potential reserves, such as those for inventory and legal matters (in thousands):

Fair value of assets acquired:

Accounts receivable

Unbilled receivables and retentions

Inventories, net

Prepaid expenses and other current assets

Property and equipment

Operating lease right-of-use assets

Total identifiable assets

Fair value of liabilities assumed:

Accounts payable

Wages and related accruals

Customer advances

Current operating lease liabilities

Other current liabilities

Non-current operating lease liabilities

Income taxes payable (non-current)

Deferred income taxes

Total liabilities assumed

Total identifiable net assets

Determining the fair value of the intangible assets acquired requires significant judgment, including the amount and timing of expected future cash flows, long-term growth rates and discount rates.

The fair value of the intangible assets was determined using a discounted cash flow analysis, which were based on the Company’s preliminary estimates of future sales, earnings and cash flows after considering such factors as general market conditions, anticipated customer demand, changes in working capital, long term business plans and recent operating performance.

Use of different estimates and judgments could yield materially different results.

The goodwill is attributable to the synergies the Company expects to achieve through leveraging the acquired technology to its existing customers, the workforce of ESAero and expected future customers in the AxS market.

For income tax purposes the acquisition is treated as a stock acquisition, as such the goodwill associated with this purchase is not deductible.

ESAero Supplemental Pro Forma Information (unaudited)

ESAero revenue and income from operations for the period ended April 30, 2026 since acquisition on March 16, 2026 was $ 20,038,000 and $ 5,951,000 , inclusive of $ 1,116,000 of intangible amortization, respectively, as of April 30, 2026.

The following unaudited pro forma summary presents condensed consolidated information of the Company as if the business acquisition had occurred on May 1, 2024 (in thousands):

Three Months Ended

The Company incurred approximately $ 2,504,000 of acquisition-related expenses for the fiscal year ended April 30, 2026.

These expenses are included in SG&A on the Company’s consolidated statements of operations.

The unaudited pro forma supplemental information is based on estimates and assumptions, which the Company believes are reasonable and are not necessarily indicative of the results that have been realized had the acquisition been consolidated in the tables above as of May 1, 2024, nor are they indicative of results of operations that may occur in the future.

BlueHalo Acquisition

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Through the acquisition, BlueHalo is incorporated into the Company’s AxS and SCDE segments.

The Company believes that the acquisition will help to advance the combined company as a global defense technology leader across air, land, sea, space, and cyber.

The Company accounted for the acquisition under the acquisition method of accounting for business combinations.

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Fair value of consideration transferred

The fair value of the Company’s common stock issued is based on 17,425,849 shares issued as consideration, per the terms of the Merger Agreement, and the closing share price of $ 151.52 on April 30, 2025.

The following table summarizes the preliminary allocation of the fair value of the merger consideration transferred to assets acquired and liabilities assumed as of the acquisition date.

The allocation of the purchase price is preliminary and subject to change as the Company continues to evaluate the fair values of certain assets and liabilities acquired.

Open items in the purchase price allocation include the valuation of assets acquired and liabilities assumed including, but not limited to technology, backlog and customer relationships intangibles;

fair value adjustment to inventory, property, plant and equipment;

details surrounding tax matters;

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

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 $( 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):

The fair value of the Company’s common stock issued is based on 17,425,849 shares issued as consideration, per the terms of the Merger Agreement, and the closing share price of the Company’s common stock of $ 151.52 on April 30, 2025.

The following table summarizes the preliminary allocation of the fair value of the merger consideration transferred to assets acquired and liabilities assumed as of the acquisition date (in thousands):

Fair value of assets acquired:

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Non-current operating lease liabilities

Liability for uncertain tax positions

Deferred income taxes

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The following table summarizes the valuation of the fair value of intangible assets acquired (in thousands):

Preliminary Fair Value

Estimated Useful Life

Preliminary fair value of intangible assets acquired:

Fair value of intangible assets acquired:

Customer relationships

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BlueHalo Supplemental Pro Forma Information (unaudited)

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.

BlueHalo revenue and loss from operations for the twelve months ended April 30, 2026 since its acquisition on May 1, 2025 was $ 919,414,000 and $( 365,818,000 ), inclusive of $ 208,482,000 of intangible amortization and $ 240,708,000 of goodwill impairment.

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.

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Three 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 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 recognized a nonrecurring pro forma adjustment to pro forma earnings to amortize an increase in the fair value of inventory acquired during the year ended April 30, 2026.

In addition, for the twelve months ended April 30, 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 year ended April 30, 2025, 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 $ 64,194,000 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 Company recognized a nonrecurring pro forma adjustment to the three months ended August 2, 2025 to remove the impact of $ 23,730,000 of the transaction costs incurred in the period to reflect the costs as if the acquisition was completed during the year ended April 30, 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.

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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 January 31, 2026 and April 30, 2025.

The projected benefit obligation includes assumptions of a discount rate of 4.1 % and pension increase for in-payment benefits of 2.5 % for both August 1, 2026 and April 30, 2026.

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

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The Company does not expect to make any contributions to the plan in the fiscal year ending April 30, 2027.

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, 2026 (in thousands):

2 unchanged sentences

Three Months Ended

Nine Months Ended

Expected return on plan assets

5 unchanged sentences

Accordingly, the Company identifies two reportable segments.

Effective May 1, 2025, the Company reorganized its segments.

In connection with the Company’s acquisition of BlueHalo, the reorganization was implemented to drive additional operational improvements, foster synergies and provide leaders with greater autonomy over their business units.

The Company’s reportable segments are Autonomous Systems and Space, Cyber and Directed Energy.

The Company’s reportable segments are AxS and SCDE.

The accounting policies of the segments are the same as those described in Note 1, “Organization and Significant Accounting Policies.” The operating segments sales to each other are eliminated.

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, acquisition related expenses, and goodwill impairment.

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

Three Months Ended January 31, 2026

Product sales

Contract services

Cost of sales less intangible amortization and other purchase accounting adjustments

Intangible amortization included in cost of sales

SG&A less intangible amortization

Intangible amortization included in SG&A

Research and development

Impairment of goodwill

Acquisition-related expenses

Amortization of cloud computing arrangement implementation

Other income (expense)

Stock-based compensation

Segment adjusted EBITDA

Three Months Ended January 25, 2025

Product sales

Contract services

Cost of sales less intangible amortization and other purchase accounting adjustments

Intangible amortization included in cost of sales

SG&A less intangible amortization

Intangible amortization included in SG&A

Research and development

Acquisition-related expenses

Amortization of cloud computing arrangement implementation

Other income (expense)

Stock-based compensation

Segment adjusted EBITDA

Nine Months Ended January 31, 2026

Prior period segment information has been revised to align with the new segment presentation.

Three Months Ended August 1, 2026

Product sales

5 unchanged sentences

Research and development

Impairment of goodwill

Other expense (income)

Acquisition-related expenses

Amortization of cloud computing arrangement implementation

Other income (expense)

Equity securities investments activity, net

Stock-based compensation

Segment adjusted EBITDA

Nine Months Ended January 25, 2025

Three Months Ended August 2, 2025

Product sales

5 unchanged sentences

Research and development

Other expense (income)

Acquisition-related expenses

Amortization of cloud computing arrangement implementation

Other income (expense)

Equity securities investments activity, net

Stock-based compensation

2 unchanged sentences

Three Months Ended

Nine Months Ended

Segment adjusted EBITDA

Depreciation and amortization

Impairment of goodwill

Acquisition-related expenses

2 unchanged sentences

Equity securities investments activity, net

Interest expense

Interest expense, net

(Loss) income before income taxes

1 unchanged sentence

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 January 31, 2026

As of August 1, 2026

As of April 30, 2026

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

Nine Months Ended January 31, 2026

Nine Months Ended January 25, 2025

Three Months Ended August 1, 2026

Three Months Ended August 2, 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.

On August 21, 2026, the Company closed on its purchase of its new campus facility in Southern California for $ 29,250,000 .

The building will be used for research, design, engineering, manufacturing and administrative functions.

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