What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-06-27 compared with 2023-06-28 · 384 added, 361 removed, 1303 unchanged (36% of the section changed)

5 unchanged sentences

Consolidated Balance Sheets at April 30, 2024 and 2023

Consolidated Statements of (Loss) Income for the Years Ended April 30, 2023, 2022 and 2021

Consolidated Statements of Comprehensive (Loss) Income for the Years Ended April 30, 2023, 2022 and 2021

Consolidated Statements of Income (Loss) for the Years Ended April 30, 2024, 2023 and 2022

Consolidated Statements of Comprehensive Income (Loss) for the Years Ended April 30, 2024, 2023 and 2022

Consolidated Statements of Stockholders’ Equity for the Years Ended April 30, 2024, 2023 and 2022

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We have audited the accompanying consolidated balance sheets of AeroVironment, Inc.

and subsidiaries (the "Company") as of April 30, 2023 and 2022, the related consolidated statements of (loss) income, comprehensive (loss) income, stockholders' equity, and cash flows, for each of the three years in the period ended April 30, 2023, and the related notes and the schedule listed in the Index at Item 15(a) (collectively referred to as the "financial statements").

and subsidiaries (the "Company") as of April 30, 2024 and 2023, the related consolidated statements of income (loss), comprehensive income (loss), stockholders' equity, and cash flows, for each of the three years in the period ended April 30, 2024, and the related notes and the schedule listed in the Index at Item 15(a) (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of April 30, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended April 30, 2024, in conformity with accounting principles generally accepted in the United States of America.

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We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing a separate opinion on the critical audit matters or on the accounts or disclosures to which they relate.

Goodwill — Refer to Note 1 and Note 6 to the financial statements

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The Company estimates the fair value by weighting the results from the income approach and the market approach.

The income approach incorporates the use of cash flow projections and a discount rate that are developed using market participant-based assumptions.

The cash-flow projections are based on seven-year financial forecasts developed by management that include revenue projections, capital spending trends, and investment in working capital to support

anticipated revenue growth.

The income approach incorporates the use of projected financial information and a discount rate that are developed using market participant-based assumptions.

The cash-flow projections are based on seven-year financial forecasts developed by management that include revenue projections, capital spending trends, and investment in working

capital to support anticipated revenue growth.

The selected discount rate considers the risk and nature of the respective reporting unit’s cash flows, and the rates of return market participants would require to invest their capital in its reporting units.

The market approach utilizes the guideline public company and guideline transaction methods.

Subsequent to the performance of the Company’s annual goodwill impairment test, in May 2023, a trigger event was identified that indicated that the carrying value of the medium unmanned aircraft systems (MUAS) reporting unit exceeded its fair value.

As a result, the Company updated its estimates of long-term future cash flows to reflect lower revenue and EBITDA growth rate expectations used in the valuation of the MUAS reporting unit.

These changes in estimates resulted in the recognition of a goodwill impairment charge of $156.0 million in the MUAS reporting unit.

We identified goodwill for MUAS as a critical audit matter because of the significant judgments made by management to estimate the fair value of MUAS and the difference between its fair value and carrying value.

As of April 30, 2024, the Medium Uncrewed Aircraft Systems (MUAS) reporting unit has a goodwill balance of $135,800,000.

The fair value of the MUAS reporting unit exceeded the carrying value by 10% as of January 28, 2024, the date of the most recent annual goodwill impairment test.

The MUAS reporting unit is considered at an increased risk of failing future quantitative goodwill impairment tests.

We identified goodwill for MUAS as a critical audit matter because of the significant judgments made by management to estimate the fair value of the MUAS reporting unit and the difference between its fair value and carrying value.

This required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists, when performing audit procedures to evaluate the reasonableness of management’s estimates and assumptions related to future revenue projections.

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● We evaluated management’s ability to estimate future revenues by comparing actual revenues to management’s historical forecasts.

Business Acquisitions — Refer to Note 1 and Note 21 to the financial statements

Critical Audit Matter Description

On September 15, 2023, the Company closed its acquisition of Tomahawk Robotics, Inc.

Pursuant to the merger agreement, the Company acquired 100% of Tomahawk equity for total consideration of $134,367,000, net of cash acquired.

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

Accordingly, the purchase price was allocated to the fair value of the assets acquired and liabilities assumed, resulting in technology of $39,000,000, customer relationship of $4,800,000, trademarks of $1,600,000 and goodwill of $95,414,000.

Management estimated the fair value of the intangible assets using discounted cash flow analyses, 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.

Determining the fair value of the intangible assets acquired required management to make significant judgments including the amount and timing of expected future cash flows, long term growth rates and discount rates.

We identified the assumptions related to estimating the amount and timing of expected future revenues to be a critical audit matter given the inherent judgment involved in estimating these amounts.

Performing audit procedures to evaluate the reasonableness of these estimates and assumptions required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the expected amount and timing of future revenue used to estimate the fair value of the intangible assets acquired included the following, among others:

● We tested the effectiveness of management’s controls over the valuation of intangibles, including management’s controls over the estimates of the amount and timing of expected future revenues.

● We assessed the reasonableness of management’s forecasts of future revenues by performing inquiries of appropriate individuals outside of the accounting organization, comparing the projections to historical results, contractual agreements, third-party industry forecasts, and internal communications to management and the Company’s Board of Directors.

● With the assistance of our fair value specialists, we compared applicable industry forecasted long-term revenue growth rates to management’s projected revenues used within the valuation model.

● We evaluated management’s ability to estimate future revenues by comparing actual revenues to estimates assumed in the valuation model.

/s/ Deloitte & Touche LLP

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Cash and cash equivalents

Short-term investments

Accounts receivable, net of allowance for doubtful accounts of $ 159 at April 30, 2024 and $ 156 at April 30, 2023

Unbilled receivables and retentions (inclusive of related party unbilled receivables of $ 2,229 at April 30, 2022)

Unbilled receivables and retentions

Inventories, net

Income taxes receivable

Prepaid expenses and other current assets

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Retained earnings

Total AeroVironment, Inc.

stockholders’ equity

Noncontrolling interest

Total stockholders’ equity

Total liabilities and stockholders’ equity

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AEROVIRONMENT, INC.

CONSOLIDATED STATEMENTS OF (LOSS) INCOM E

CONSOLIDATED STATEMENTS OF INCOM E (LOSS)

(In thousands except share and per share data)

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Product sales

Contract services (inclusive of related party revenue of $ 43,325 and $ 42,426 for the years ended April 30, 2022 and 2021, respectively)

Contract services

Cost of sales:

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Impairment of goodwill

(Loss) income from operations

Income (loss) from operations

Other (loss) income:

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joint venture

(Loss) income before income taxes

(Benefit from) provision for income taxes

Income (loss) before income taxes

Provision for (benefit from) income taxes

Equity method investment (loss) income, net of tax

Net (loss) income

Net income (loss)

Net income attributable to noncontrolling interest

Net (loss) income attributable to AeroVironment, Inc.

Net (loss) income per share attributable to AeroVironment, Inc.

Net income (loss) attributable to AeroVironment, Inc.

Net income (loss) per share attributable to AeroVironment, Inc.

Weighted-average shares outstanding:

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AEROVIRONMENT, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOM E

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOM E (LOSS)

(In thousands)

Year Ended April 30,

Net (loss) income

Net income (loss)

Other comprehensive income (loss):

Unrealized gain (loss) on investments, net of deferred tax expense of $ 0 , $ 8 , and $ 1 for the fiscal years ended 2023, 2022 and 2021, respectively

Unrealized gain (loss) on available-for-sale investments, net of deferred tax expense of $ 0 , $ 0 and $ 8 for the fiscal years ended April 30, 2024, 2023 and 2022, respectively

Change in foreign currency translation adjustments

Total comprehensive (loss) income

Total comprehensive income (loss)

Net income attributable to noncontrolling interest

Comprehensive (loss) income attributable to AeroVironment, Inc.

Comprehensive income (loss) attributable to AeroVironment, Inc.

See accompanying notes to consolidated financial statements.

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Balance at April 30, 2021

Net (loss) income

Unrealized loss on investments

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Net (loss) income

Unrealized loss on investments

Unrealized gain on investments

Foreign currency translation

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Tax withholding payment related to net share settlement of equity awards

Change in non-controlling interest

Shares issued, net of issuance costs

Deconsolidation of previously controlled subsidiary

Stock based compensation

Balance at April 30, 2023

Net (loss) income

Unrealized gain on investments

Foreign currency translation

Stock options exercised

Restricted stock awards

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Shares issued, net of issuance costs

Deconsolidation of previously controlled subsidiary

Issuance of common stock for business acquisition

Stock based compensation

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Operating activities

Net (loss) income

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

Net income (loss)

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

Depreciation and amortization

Impairment of goodwill

Loss (income) from equity method investments

Loss (gain) from equity method investments

Loss on deconsolidation of previously controlled subsidiary

Amortization of debt issuance costs

Realized gain from sale of available-for-sale investments

Provision for doubtful accounts

Reserve for inventory excess and obsolescence

Other non-cash expense (income), net

Other non-cash expense, net

Non-cash lease expense

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Business acquisitions, net of cash acquired

Acquisition of intangibles

Proceeds from sale of ownership in equity method investment

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Holdback and retention payments for business acquisition

Payment of contingent consideration

Proceeds from shares issued, net of issuance costs

Payment of debt issuance costs

Tax withholding payment related to net settlement of equity awards

Exercise of stock options

Payment of debt issuance costs

Proceeds from long-term debt

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, cash equivalents, and restricted cash

Net (decrease) increase in cash, cash equivalents, and restricted cash

Cash, cash equivalents and restricted cash at beginning of period

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Non-cash activities

Unrealized (gain) loss on investments, net of deferred tax expense of $ 0 , $ 8 , and $ 1 for the fiscal years ended 2023, 2022 and 2021, respectively

Issuance of common stock for business acquisition

Unrealized gain (loss) on available-for-sale investments, net of deferred tax expense of $ 0 , $ 0 and $ 8 for the fiscal years ended April 30, 2024, 2023 and 2022, respectively

Change in foreign currency translation adjustments

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AeroVironment, Inc.

supplies unmanned aircraft systems (“UAS”), tactical missile systems (“TMS”), unmanned ground vehicles (“UGV”) and related services primarily to organizations within the U.S.

Department of Defense (“DoD”) and to international allied governments.

supplies uncrewed aircraft and ground robot systems, loitering munitions systems and related services primarily to organizations within or supplying the U.S.

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

Significant Accounting Policies

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and its wholly-owned subsidiaries Arcturus UAV, Inc.

(“Arcturus”), and Telerob Gesellschaft für Fernhantierungstechnik mbH (“Telerob”) (collectively referred to herein as the “Company”).

On February 19, 2021, the Company closed its acquisition of Arcturus, a California corporation pursuant to the Stock Purchase Agreement (the “Arcturus Purchase Agreement”) with Arcturus and each of the shareholders and other equity interest holders of Arcturus (collectively, the “Arcturus Sellers”), to purchase 100 % of the issued and outstanding equity of Arcturus (the “Arcturus Acquisition”).

The assets, liabilities and operating results of Arcturus have been included in the Company’s consolidated financial statements.

Refer to Note 21—Business Acquisitions for further details.

On February 23, 2021, the Company purchased certain assets of, and assumed certain liabilities of, the Intelligent Systems Group business segment (“ISG”) of Progeny Systems Corporation, a Virginia corporation (the “ISG Seller”), pursuant to the terms of an Asset Purchase Agreement (the “ISG Purchase Agreement”) of the same date by and among the Company, ISG Seller and the sole shareholder of ISG Seller (the “Beneficial Owner,” and such acquisition of ISG, the “ISG Acquisition”).

The assets, liabilities and operating results of ISG have been included in the Company’s consolidated financial statements.

Refer to Note 21—Business Acquisitions for further details.

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

(“Tomahawk”) (collectively referred to herein as the “Company”).

On May 3, 2021, the Company closed its acquisition of Telerob pursuant to the Share Purchase Agreement (the “Telerob Purchase Agreement”) with Unmanned Systems Investments GmbH, a German limited liability company incorporated under the laws of Germany (the “Telerob Seller”), and each of the unit holders of the Seller (collectively, the “Telerob Shareholders”), to purchase 100 % of the issued and outstanding shares of Telerob Seller’s wholly-owned subsidiary Telerob GmbH (the “Telerob Acquisition”).

Telerob has been incorporated into the Uncrewed Systems (“UxS”) segment.

The assets, liabilities and operating results of Telerob GmbH have been included in the Company’s consolidated financial statements.

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On August 17, 2022, the Company purchased certain assets of, and assumed certain liabilities of Planck Aerosystems, Inc.

(“Planck”) pursuant to the purchase agreement, and post-acquisition, Planck has been incorporated into the medium UAS (“MUAS”) segment.

(“Planck”) pursuant to the purchase agreement, and post-acquisition, Planck has been incorporated into the UxS segment.

The assets, liabilities and operating results of Planck have been included in the Company’s consolidated financial statements.

Refer to Note 21—Business Acquisitions for further details.

On September 15, 2023, the Company closed its acquisition of Tomahawk pursuant to a merger agreement, and post-acquisition, Tomahawk has been incorporated into the UxS segment.

The assets, liabilities and operating results of Tomahawk have been included in the Company’s consolidated financial statements.

Refer to Note 21—Business Acquisitions for further details.

Investments in Companies Accounted for Using the Equity or Cost Method

Investments in other non-consolidated entities are accounted for using the equity method or cost basis depending upon the level of ownership and/or the Company’s ability to exercise significant influence over the operating and financial policies of the investee.

When the equity method is used, investments are recorded at original cost and adjusted periodically to recognize the Company’s proportionate share of the investees’ net income or losses after the date

of investment.

When net losses from an investment accounted for under the equity method exceed its carrying amount, the investment balance is reduced to zero and additional losses are not provided for as the Company is not obligated to provide additional capital.

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When an investment accounted for using the equity method issues its own shares, the subsequent reduction in the Company’s proportionate interest in the investee is reflected in equity as an adjustment to paid-in-capital.

The Company evaluates its investments in companies accounted for by the equity or cost method for impairment when there is evidence or indicators that a decrease in value may be other than temporary.

In December of 2017, the Company and SoftBank Corp.

Company evaluates its investments in companies accounted for by the equity or cost method for impairment when there is evidence or indicators that a decrease in value may be other than temporary.

In December 2017, the Company and SoftBank Corp.

(“SoftBank”) formed a joint venture, HAPSMobile Inc.

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Prior to the sale, as the Company had the ability to exercise significant influence over the operating and financial policies of HAPSMobile, the Company’s investment was accounted as an equity method investment.

The Company had presented its proportion of HAPSMobile’s net loss in equity method investment (loss) income, net of tax in the consolidated statements of (loss) income.

The Company had presented its proportion of HAPSMobile’s net loss in equity method investment (loss) income, net of tax in the consolidated statements of income (loss).

The carrying value of the investment in HAPSMobile was recorded in other assets.

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Significant estimates made by management include, but are not limited to, valuation of:

inventory, available-for-sale securities, acquired intangibles, goodwill, deferred tax assets and liabilities, useful lives of property, plant and

equipment, medical and dental liabilities, warranty liabilities, long-term incentive plan liabilities and estimates of anticipated contract costs and transaction price utilized in the revenue recognition process.

inventory, acquired intangibles, goodwill, deferred tax assets and liabilities, useful lives of property, plant and equipment, medical and dental liabilities, warranty liabilities, long-term incentive plan liabilities and estimates of anticipated contract costs and transaction price utilized in the revenue recognition process.

Actual results could differ from those estimates.

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

Specifically, the Company’s reserves for inventory excess and obsolescence have been reclassified from changes in inventories to non-cash adjustments within operating activities on the consolidated statements of cash flows for all periods presented.

Specifically, the Company’s limit on executive compensation has been reclassified out of changes permanent items in the reconciliation of income tax expense (benefit) for all periods presented.

Also, the Company’s inventory reserve has been reclassified out of allowances, reserves and other in the significant components of the Company’s deferred income tax assets and liabilities for all periods presented.

Cash Equivalents

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The Company classifies cash accounts which are not available for general use as restricted cash.

Pursuant to the terms of the Arcturus Purchase Agreement, the Company maintained escrow accounts to address final purchase price adjustments post-Arcturus Closing and to address Arcturus UAV’s and/or the Sellers’ indemnification obligations.

The restricted funds in the escrow account were recorded in other assets on the consolidated balance sheets.

During the fiscal year ended April 30, 2022, the restricted cash was released, and the Company had no restricted cash as of April 30, 2023 or 2022, respectively.

The Company had no restricted cash as of April 30, 2024 or 2023, respectively.

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

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Additions and betterments to property and equipment are capitalized at cost.

When the Company disposes of assets, the applicable costs and accumulated depreciation and amortization thereon are removed from the accounts and any resulting gain or loss is included in selling, general and administrative (“SG&A”) in the period incurred with the exception of in-service ISR assets which is included in cost of sales in the period incurred.

Following the closure of all of the Company’s contractor-owned, contractor-operated (“COCO”) site locations, in-service intelligence, surveillance and reconnaissance (“ISR”) assets determined to have an alternate business use were reclassified to machinery and equipment as of April 30, 2023.

When the Company disposes of assets, the applicable costs and accumulated depreciation and amortization thereon are removed from the accounts and any resulting gain or loss is included in selling, general and administrative (“SG&A”) in the period incurred with the exception of in-service intelligence, surveillance and reconnaissance (“ISR”) assets which is included in cost of sales in the period incurred.

Following the closure of all of the Company’s contractor-owned, contractor-operated (“COCO”) site locations, in-service ISR assets determined to have an alternate business use were reclassified to machinery and equipment as of April 30, 2023.

The Company reviews the recoverability of its long-lived assets whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable.

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If the sum of the projected undiscounted cash flows (excluding interest) is less than the carrying value of the assets, the assets will be written down to the estimated fair value in the period in which the determination is made.

Cloud Computing Arrangements

Implementation costs incurred in a cloud computing arrangement that is a service contract are capitalized and recorded on the consolidated balance sheets in prepaid expenses and other current assets and other assets.

The amounts capitalized are amortized on a straight-line basis over the estimated useful life of the service arrangement, which generally range from three to seven years .

As of April 30, 2024 and 2023, capitalized costs related to cloud computing arrangements was $ 15,424,000 and $ 4,957,000 , respectively, net of accumulated amortization of $ 2,346,000 and $ 902,000 , respectively.

Amortization expense related to cloud computing arrangements for the fiscal years ended April 30, 2024, 2023 and 2022 was $ 1,444,000 , $ 560,000 and $ 339,000 .

Intangibles Assets — Acquired in Business Combinations

The Company performs valuations of assets acquired and liabilities assumed on each acquisition accounted for as a business combination and allocates the purchase price of the acquired business to the respective net tangible and intangible assets.

Acquired intangible assets include technology, backlog, in-process research and development,

customer relationships, trademarks and tradenames, and non-compete agreements.

Acquired intangible assets include technology, backlog, in-process research and development, customer relationships, trademarks and tradenames, and non-compete agreements.

The Company determines the appropriate useful life by performing an analysis of expected cash flows based on historical experience of the acquired businesses.

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Due to the closure of all the Company’s MUAS COCO sites, the Company revised the estimated useful life for the MUAS customer relationships which resulted in accelerated intangible amortization expenses of $ 34,149,000 during the fiscal year ended April 30, 2023.

Additionally, in conjunction with the goodwill impairment test performed during the year ended April 30, 2023, the remaining intangibles in the MUAS reporting unit were tested for recoverability.

The asset recoverability test did not result in an impairment for the remaining intangibles in the MUAS reporting unit.

Refer to Note 6—Goodwill for further details.

Goodwill represents the excess of the cost of an acquired entity over the fair value of the acquired net assets.

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The Company’s evaluation of goodwill for impairment involves the comparison of the fair value of each reporting unit to its carrying value.

For the impairment test, the Company first assesses qualitative factors, macroeconomic conditions, industry and market considerations, triggering events, cost factors, and overall financial performance, to determine whether it is necessary to perform a quantitative goodwill impairment test.

For the impairment test, the Company first assesses qualitative factors,

macroeconomic conditions, industry and market considerations, triggering events, cost factors, and overall financial performance, to determine whether it is necessary to perform a quantitative goodwill impairment test.

Alternatively, the Company may bypass the qualitative assessment for some or all of its reporting units and apply the quantitative impairment test.

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Subsequent to the performance of the Company’s annual goodwill impairment test, in May 2023, a trigger event was identified that indicated that the carrying value of the MUAS reporting unit exceeded its fair value.

Specifically, the Company received notification that it was not down selected for a US DoD program of record which resulted in a significant decrease in the projected future cash flows of the MUAS reporting unit.

Specifically, the Company received notification that it was not down selected for a U.S.

DoD program of record which resulted in a significant decrease in the projected future cash flows of the MUAS reporting unit.

As a result, the Company updated its estimates of long-term future cash flows to reflect lower revenue and EBITDA growth rate expectations used in the valuation of the MUAS reporting unit.

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The Company determined that it was more likely than not that the fair value of the Company’s other reporting units were more than their carrying values as of the annual goodwill impairment test date.

The estimated fair value of the MUAS reporting unit does not substantially exceed its carrying value due to the impairment recorded during the fourth quarter ended April 30, 2023, resulting in carrying value being equal to estimated fair value.

The fair value of the MUAS reporting unit exceeded the carrying value by 10 % as of January 28, 2024, the date of the most recent annual goodwill impairment test.

Fair value determinations utilized in the quantitative goodwill impairment test require considerable judgment and are sensitive to changes in underlying assumptions, estimates, and market factors.

Estimating the fair value of individual reporting units requires us to make assumptions and estimates regarding future plans, as well as industry, economic, and regulatory conditions.

These assumptions and estimates include estimated future annual net cash flows, income tax rates, discount rates, growth rates, and other market factors.

Estimated future annual net cash flows based in part upon the Company’s ability to obtain contracts from the U.S.

DoD and foreign allied nations and negotiate the estimated pricing are considered the most significant, sensitive assumptions.

If current expectations of future growth rates and margins are not met, if market factors outside of the Company’s control, such as discount rates, income tax rates, or inflation, change, or if management’s expectations or plans otherwise change, including updates to long-term operating plans, then MUAS may become impaired in the future.

Accordingly, the MUAS reporting unit is considered at an increased risk of failing future quantitative goodwill impairment tests.

During the most recent annual impairment test during the fourth quarter of fiscal year 2024, the estimated fair value of all reporting units, other than MUAS, substantially exceeded their carrying value.

The estimates and assumptions used to determine the fair value of the Company’s reporting units are highly subjective in nature.

Actual results can be materially different from the estimates and assumptions.

If actual market conditions are less favorable than those projected by the industry or by us, or if events occur or circumstances change that would reduce the estimated fair value of the Company’s indefinite-lived intangible assets below the carrying amounts, the Company could recognize future impairment charges, the amount of which could be material.

Product Warranty

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A performance obligation is a promise in a contract to transfer distinct goods or services to a customer, and it is the unit of account in ASC 606.

A contract’s transaction price is allocated to each distinct performance obligation and revenue is recognized when each performance obligation under the terms of a contract is satisfied.

A contract’s transaction price is allocated to each distinct performance obligation and

revenue is recognized when each performance obligation under the terms of a contract is satisfied.

Revenue is measured at the amount of consideration the Company expects to receive in exchange for transferring goods or providing services.

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In most instances, contract modifications are for additional goods and/or services that are distinct and, therefore, accounted for as new contracts.

The Company’s performance obligations are satisfied over time, which accounted for 51 %, 57 % and 43 % of revenue during its fiscal years ended April 30, 2023, 2022 and 2021, respectively, or at a point in time, 49 %, 43 % and 57 % during its fiscal year ended April 30, 2023, 2022 and 2021, respectively.

Performance obligations are satisfied over time if the customer receives the benefits as the Company performs, if the customer controls the asset as it is being developed or produced, or if the product being produced for the customer has no alternative use and the Company has a contractual right to payment for the Company’s costs incurred to date plus a reasonable margin.

The contractual right to payment is generally supported by termination for convenience clauses that allow the customer to unilaterally terminate the contract for convenience, pay the Company for costs incurred plus a reasonable profit, and take control of any work in process.

Revenue for TMS product deliveries, customization of UGV transport vehicles and customer-funded R&D contracts is recognized over time as costs are incurred.

Revenue for Loitering Munitions Systems (“LMS”) product deliveries, customization of uncrewed ground vehicles (“UGV”) transport vehicles and customer-funded R&D contracts is recognized over time as costs are incurred.

Contract services revenue is composed of revenue recognized on contracts for the provision of services, including repairs and maintenance, training, engineering design, development and prototyping activities and technical support services.

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For performance obligations which are not satisfied over time per the aforementioned criteria above, revenue is recognized at the point in time in which each performance obligation is fully satisfied.

The Company’s SUAS, MUAS and UGV product sales revenue is composed of revenue recognized on contracts for the delivery of SUAS, MUAS and UGV systems and spare parts.

The Company’s UxS product sales revenue is primarily composed of revenue recognized on contracts for the delivery of UxS systems and spare parts.

Revenue is recognized at the point in time when control transfers to the customer, which generally occurs when title and risk of loss have passed to the customer.

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The impact of adjustments in contract estimates on the Company’s operating earnings can be reflected in either operating costs and expenses or revenue.

The aggregate impact of adjustments in contract estimates on revenue related to performance obligations satisfied or partially satisfied in previous periods was not significant for the years ended April 30, 2023, 2022 or 2021.

During the years ended April 30, 2023, 2022 and 2021, the Company revised its estimates of the total expected costs to complete a TMS contract.

The aggregate impact of these adjustments in contract estimates on

revenue related to performance obligations satisfied or partially satisfied in previous periods was a decrease to revenue of approximately $ 1,898,000 , $ 1,124,000 and $ 1,041,000 , respectively.

The aggregate impact of adjustments in contract estimates on revenue related to performance obligations satisfied or partially satisfied in previous periods was an increase to revenue of $ 5,408,000 for the year ended April 30, 2024 and not significant for the years ended April 30, 2023 or 2022.

During the year ended April 30, 2024, the Company revised estimates to complete two LMS contracts.

The aggregate impact of these adjustments in contract estimates on revenue related to performance obligations satisfied or partially satisfied in previous periods was an increase to revenue of approximately $ 2,672,000 .

During the years ended April 30, 2023 and 2022, the Company revised its estimates of the total expected costs to complete a LMS contract.

The aggregate impact of these adjustments in contract estimates on revenue related to performance obligations satisfied or partially satisfied in previous periods was a decrease to revenue of approximately $ 1,898,000 and $ 1,124,000 , respectively.

Revenue by Category

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Total revenue

Year Ended April 30,

Revenue percentage by recognition method

Point in time

Total revenue

Contract Balances

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The assets related to costs to fulfill contracts with customers are capitalized and amortized over the period the related performance obligations are satisfied.

As of April 30, 2023 and 2022, the Company had no costs to fulfill future performance obligations on contracts considered to be probable of occurrence.

As of April 30, 2024, the Company’s costs to fulfill were not material.

As of April 30, 2023, the Company had no costs to fulfill future performance obligations on contracts considered to be probable of occurrence.

Stock-Based Compensation

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The related cost of sales for customer-funded R&D totaled approximately $ 62,181,000 , $ 70,711,000 and $ 59,054,000 for the years ended April 30, 2024, 2023 and 2022, respectively.

In January 2017, the Company executed a cost sharing Other Transaction Agreement type contract funded by the US Federal Government to perform certain system design, development and functional testing activities specific to a new prototype UAS on a best-efforts basis.

The term of the agreement was completed as of December 2020.

Costs of $ 21,833,000 have been reimbursed to the Company as the activities were performed, while the Company was responsible for funding a minimum of $ 11,225,000 .

The Company has determined that the contract meets the criteria of ASC 912-730-05 Contractors – Federal Government and, therefore, all reimbursements are recorded as an offset to research and development expense in the consolidated statements of (loss) income.

Reimbursements under the contract were $ 3,424,000 for the fiscal year ended April 30, 2021.

Lease Accounting

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Foreign currency transaction gains and losses are charged or credited to earnings as incurred.

For the fiscal years ended April 30, 2023, 2022 and 2021, foreign currency transaction losses that are included in other (expense) income, net in the accompanying consolidated statements of (loss) income were $ 119,000 , $ 242,000 , and $ 1,000 , respectively.

(Loss) Earnings Per Share

Basic (loss) earnings per share are computed using the weighted-average number of common shares outstanding and excludes any anti-dilutive effects of options, restricted stock and restricted stock units.

The dilutive effect of potential common shares outstanding is included in diluted (loss) earnings per share.

For the fiscal years ended April 30, 2024, 2023 and 2022, foreign currency transaction losses that are included in other expense, net in the accompanying consolidated statements of income (loss) were $ 22,000 , $ 119,000 , and $ 242,000 , respectively.

Earnings (Loss) Per Share

Basic earnings (loss) per share are computed using the weighted-average number of common shares outstanding and excludes any anti-dilutive effects of options, restricted stock and restricted stock units.

The dilutive effect of potential common shares outstanding is included in diluted earnings (loss) per share.

The reconciliation of diluted to basic shares is as follows:

Year Ended April 30,

Net (loss) income attributable to AeroVironment, Inc.

Net income (loss) attributable to AeroVironment, Inc.

( 176,212,000 )

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The number of options, restricted stock and restricted stock units which met this anti-dilutive criterion was approximately 1,000 , 146,000 and 224,000 for the years ended April 30, 2024, 2023 and 2022, respectively.

Recently Adopted Accounting Standards

In October 2021, the Financial Accounting Standards Board issued Accounting Standard Update (“ASU”) 2021-08, Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”).

ASU 2021-08 requires an acquirer to apply the guidance in ASC 606, to recognize and measure contract assets and contract liabilities in a business combination, rather than using fair value.

On May 1, 2022, the Company early adopted ASU 2021-08.

ASU 2021-08 was adopted prospectively and did not have a material impact on the Company’s consolidated financial statements.

Recently Issued Accounting Standards

No recently issued accounting standards are expected to have a material impact on the Company.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures (“ASU 2023-07”).

ASU 2023-07 improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses reported to the CODM.

ASU 2023-07 also requires all segment profit or loss and assets disclosures to be provided on an annual and interim basis.

The new standard is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

ASU 2023-07 is adopted retrospectively.

The Company is evaluating the potential impact of this adoption on its disclosures.

In December 2023, the 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.

Investments consist of the following:

(In thousands)

Short-term investments:

Available-for-sale securities:

Municipal securities

government securities

Total short-term investments

Long-term investments:

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Total long-term investments

Available-For-Sale Securities

As of April 30, 2022, the balance of available-for-sale debt securities consisted of state and local government municipal securities, U.S.

government securities and U.S.

government agency securities.

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

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

As of April 30, 2023, the Company held no available-for-sale debt securities.

The following table is a summary of the activity related to the available-for-sale debt securities recorded in short-term investments as of April 30, 2022, respectively (in thousands):

Municipal securities

government securities

Total available-for-sale equity securities

Equity Securities

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

Net loss recognized during the period on equity securities

April 30, 2024

April 30, 2023

Net losses recognized during the period on equity securities

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

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Equity securities

The Company’s financial liabilities measured at fair value on a recurring basis at April 30, 2023, were as follows (in thousands):

Fair Value Measurement Using

Quoted prices in

active markets for

identical assets

Contingent consideration

The Company had no financial liabilities measured at fair value on a recurring basis at April 30, 2024.

The Company’s financial assets measured at fair value on a recurring basis at April 30, 2023, were as follows (in thousands):

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identical assets

Available-for-sale securities

Contingently returnable consideration

Equity securities

The Company’s financial liabilities measured at fair value on a recurring basis at April 30, 2023, were as follows (in thousands):

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Measurements Using

Unobservable Inputs

Balance at May 1, 2023

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The amount of total (gains) or losses for the period included in earnings attributable to the change in unrealized gains or losses relating to assets or liabilities still held at April 30, 2024

Pursuant to the Telerob Purchase Agreement, the Telerob Sellers were eligible to receive up to a maximum of € 6,000,000 (approximately $ 6,418,000 ) in additional cash consideration if specific revenue and contract award targets for Telerob were achieved during the 36 month period after closing.

The contingent consideration was valued using a Black-Scholes option-pricing model.

The analysis considered, among other items, contractual terms of the Telerob Purchase Agreement, the Company’s discount rate, the timing of expected future cash flows and the probability that the revenue and contract award targets required for payment of the contingent consideration will be achieved.

The first year earnout of € 2,000,000 (approximately $ 2,139,000 ) was not achieved.

During the fiscal year ended April 30, 2023, the second year earnout of € 2,000,000 (approximately $ 2,132,000 ) was achieved and was paid in November 2023.

The third earnout of € 2,000,000 (approximately $ 2,139,000 ) was not achieved.

Refer to Note 21—Business Acquisitions.

Pursuant to the ISG Purchase Agreement, the sellers could receive up to a maximum of $ 6,000,000 in additional cash consideration (“contingent consideration”), if certain revenue targets were achieved during the three years following closing.

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The related consideration of $ 2,000,000 for both the second and third year targets were released from the escrow account during the fiscal year ended April 30, 2023.

Pursuant to the Telerob Purchase Agreement, the Telerob Sellers may receive up to a maximum of € 6,000,000 (approximately $ 6,609,000 ) in additional cash consideration if specific revenue and contract award targets for Telerob are achieved during the 36 month period after closing.

The contingent consideration was valued using a Black-Scholes option-pricing model.

The first year earnout of € 2,000,000 was not achieved.

During the fiscal year ended April 30, 2023, the second year earnout of € 2,000,000

(approximately $ 2,203,000 ) was achieved.

The fair value of the contingent consideration is recorded in other current liabilities on the consolidated balance sheets.

Refer to Note 21—Business Acquisitions.

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

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The Company tests identifiable intangible assets and goodwill 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.

The weighted average amortization period at April 30, 2023 and 2022 was four years , respectively.

The weighted average amortization period at April 30, 2024 and 2023 was three years and four years , respectively.

Amortization expense for the years ended April 30, 2024, 2023 and 2022 was $ 17,954,000 , $ 58,121,000 and $ 26,558,000 , respectively.

Due to the closure of all of the Company’s MUAS COCO sites during the three months ended April 30, 2023, we revised the estimated useful life for MUAS customer relationships which resulted in accelerated intangible amortization expenses of $ 34,149,000 during the fiscal year ended April 30, 2023.

Additionally, in conjunction with the goodwill impairment test performed during the year ended April 30, 2023,

the remaining intangibles in the MUAS reporting unit were tested for recoverability.

The asset recoverability test did not result in an impairment for the remaining intangibles in the MUAS reporting unit.

Refer to Note 6—Goodwill for further details.

Technology, customer relationship and tradename intangibles were recognized in conjunction with the Company’s acquisition of Tomahawk on September 15, 2023.

Technology and backlog intangible assets were recognized in conjunction with the Company’s acquisition of Planck on August 17, 2022.

Technology, backlog and customer relationship intangible assets were recognized in conjunction with the Company’s acquisition of Telerob on May 3, 2021.

Technology and customer relationship intangible assets were recognized in conjunction with the Company’s acquisition of Arcturus on February 19, 2021.

Technology and customer relationship intangible assets were recognized in conjunction with the Company’s acquisition of ISG on February 23, 2021.

Refer to Note 21—Business Acquisitions for further details.

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Additions to goodwill

Impairment of goodwill

Change to goodwill

Balance at April 30, 2024

1 unchanged sentence

Additions to goodwill

Change to goodwill

Impairment of goodwill

Balance at April 30, 2023

The addition during the fiscal year ended April 30, 2023 to the MUAS segment relates to the Planck Acquisition.

The addition during the fiscal year ended April 30, 2023 to All other goodwill is attributable to the translation of the goodwill related to the Telerob Acquisition, which was recorded in Euros and translated to dollars at each reporting date.

The addition during the fiscal year ended April 30, 2022 to the MUAS segment relates to measurement period adjustments for pre-acquisition tax returns.

The addition to All other goodwill during the fiscal year ended April 30, 2022 is attributable to the Telerob Acquisition.

The addition during the fiscal year ended April 30, 2024 to the UxS segment relates to the Tomahawk Acquisition.

The addition during the fiscal year ended April 30, 2023 to the UxS segment relates to the Planck Acquisition.

The change to goodwill during the fiscal years ended April 30, 2024 and 2023 in UxS is attributable to the translation of the goodwill related to the Telerob Acquisition, which was recorded in Euros and translated to dollars at each reporting date.

Refer to Note 21—Business Acquisitions for further details.

Specifically, the Company received notification that it was not down selected for a US DOD program of record which resulted in a significant decrease in the projected future cash flows of the MUAS reporting unit.

Specifically, the Company received notification that it was not down selected for a U.S.

DoD program of record which resulted in a significant decrease in the projected future cash flows of the MUAS reporting unit.

As a result, the Company updated its estimates of long-term future cash flows to reflect lower revenue and EBITDA growth rate expectations used in the valuation of the MUAS reporting unit.

These changes in estimates resulted in the recognition of a goodwill impairment charge of $ 156,017,000 in the MUAS reporting unit.

The fair value of the MUAS reporting unit exceeded the carrying value by 10 % as of January 28, 2024, the

date of the most recent annual goodwill impairment test.

Fair value determinations utilized in the quantitative goodwill impairment test require considerable judgment and are sensitive to changes in underlying assumptions, estimates, and market factors.

Estimating the fair value of individual reporting units requires us to make assumptions and estimates regarding future plans, as well as industry, economic, and regulatory conditions.

These assumptions and estimates include estimated future annual net cash flows, income tax rates, discount rates, growth rates, and other market factors.

Estimated future annual net cash flows based in part upon the Company’s ability to obtain contracts from the U.S.

DoD and foreign allied nations and negotiate the estimated pricing are considered the most significant, sensitive assumptions.

Accordingly, the MUAS reporting unit is considered at an increased risk of failing future quantitative goodwill impairment tests.

Property and Equipment, net

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(In thousands)

In-service ISR assets

Leasehold improvements

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The Company reclassified certain in-service ISR assets determined to have an alternate business use to machinery and equipment.

At April 30, 2023, the reclassified assets had a carrying value of $ 4,586,000 .

At April 30, 2024 and 2023, the reclassified assets had a carrying value of $ 1,979,000 and $ 4,586,000 , respectively.

During the fiscal years ended April 30, 2024, 2023 and 2022, the Company recorded losses on the disposal of in-service ISR assets which included the write-off of $ 0 , $ 192,000 and $ 1,378,000 of non-cash purchase accounting fair value adjustments, respectively.

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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 year ended April 30, 2023, the Company made total contributions of $ 5,778,000 .

Under the terms of the limited partnership agreement, the Company has committed to make additional capital contributions of $ 14,222,000 to the fund.

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

Under the terms of the limited partnership agreement, the Company has committed to make additional capital contributions of $ 11,126,000 to the fund expected to be paid over the next three fiscal years.

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 fiscal years ended April 30, 2023, 2022 and 2021, the Company recorded its ownership percentage of the net gain (loss) of the limited partnership, or $( 2,453,000 ), $ 5,889,000 and $ 49,000 , respectively, in equity method investment (loss) income, net of deferred taxes of $ 0 , $ 1,300,000 and $ 11 , respectively, in the consolidated statements of (loss) income.

For the fiscal years ended April 30, 2024, 2023 and 2022, the

Company recorded its ownership percentage of the net (loss) gain of the limited partnership, or $( 1,782,000 ), $( 2,453,000 ), and $ 5,889,000 , respectively, in equity method investment (loss) income, net of deferred taxes $ 0 , $ 0 , and $ 1,300,000 , respectively, in the consolidated statements of income (loss).

At April 30, 2024 and 2023, the carrying value of the investment in the limited partnership of $ 19,933,000 and $ 18,644,000 , respectively, was recorded in available-for-sale long-term investments.

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As a result of the sales, the Company decreased its interest in Altoy from 85 % to 15 %.

The Company no longer controls Altoy, and therefore, has deconsolidated Altoy in the Company’s consolidated financial statements, which resulted in a loss of $ 189,000 during the fiscal year ended April 30, 2023.

Company maintains significant influence, accounts for its investment in Altoy as an equity method investment and records its proportion of any gains or losses of Altoy in equity method investment (loss) income, net of tax.

The Company no longer controls Altoy, and therefore, has deconsolidated Altoy in the Company’s consolidated financial statements, which resulted in losses of $ 0 and $ 189,000 during the fiscal years ended April 30, 2024 and 2023, respectively.

The Company maintains significant influence, accounts for its investment in Altoy as an equity method investment and records its proportion of any gains or losses of Altoy in equity method investment (loss) income, net of tax.

For the fiscal year ended April 30, 2024, the Company’s proportion of the net income of Altoy for the Company’s ownership was $ 108,000 .

For the fiscal year ended April 30, 2023, the Company’s proportion of the net income of Altoy for the Company’s ownership was not significant.

At April 30, 2023, the carrying value of the investment in Altoy of $ 114,000 was recorded in other assets on the consolidated balance sheets.

At April 30, 2024 and 2023, the carrying values of the investment in Altoy of $ 152,000 and $ 114,000 , respectively, was recorded in other assets on the consolidated balance sheets.

Investment in HAPSMobile Inc.

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The repayment resulted in equity method income during the fiscal year ended April 30, 2022 up to the extent of the previously recognized equity method losses associate with the loan.

Prior to the sale of the equity interest, the Company had the ability to exercise significant influence over the operating and financial policies of HAPSMobile pursuant to the applicable joint venture agreement and related organizational documents, and therefore, the Company’s investment was accounted for as an equity method investment.

For the fiscal years ended April 30, 2022 and 2021, the Company recorded its proportionate net loss of HAPSMobile, or $ 0 and $ 10,530,000 , respectively, in equity method investment (loss) income, net of tax in the consolidated statements of (loss) income.

During the fiscal year ended April 30, 2021, the Company recorded its proportion of a loss for HAPSMobile’s impairment of its investment in Loon LLC in the amount of $ 8,363,000 .

HAPSMobile initially made its investment in Loon LLC in April 2019.

The impairment recorded by HAPSMobile is included in realized and unrealized losses on investments in the summarized financial information shown below.

Summarized financial information of the equity method investments, including HAPSMobile for the period of fiscal year 2022 prior to the sale of equity interest, are as follows:

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Bank National Association, 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 million revolving credit facility, which includes a $ 25 million sublimit for the issuance of standby and commercial letters of credit (the “Revolving Facility”), and (ii) a five-year amortized $ 200 million term A loan (the “Term Loan Facility”, and together with the Revolving Facility, the “Credit Facilities”).

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 includes a $ 25,000,000 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 (the “Term Loan Facility”, and together with the Revolving Facility, the “Credit Facilities”).

Certain existing letters of credit issued by JPMorgan Chase Bank were reserved for under the Revolving Facility at closing and remain outstanding under the terms thereof.

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and 3.00 to 1.00 for any fiscal quarter ending thereafter.

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 million to $ 25 million.

The Credit Agreement, as amended by the First Amendment to Credit Agreement, contains certain customary events of default, which include failure to make payments when due thereunder, the material inaccuracy of representations or warranties, failure to observe or perform certain covenants, cross-defaults, bankruptcy and insolvency-related events, certain judgments, certain ERISA-related events, invalidity of loan documents, or a Change of Control (as defined in the 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 .

The Credit Agreement, as amended by the First Amendment and Second Amendment to the Credit Agreement, contains certain customary events of default, which include failure to make payments when due thereunder, the material inaccuracy of representations or warranties, failure to observe or perform certain covenants, cross-defaults, bankruptcy and insolvency-related events, certain judgments, certain ERISA-related events, invalidity of loan documents, or a Change of Control (as defined in the Credit Agreement).

Upon the occurrence and continuation of an event of default, the Lenders may cease making future loans under the Credit Agreement and may declare all amounts owing under the Credit Agreement to be immediately due and payable.

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The Company also remains responsible for certain commitment fees from 0.20 – 0.35 % depending on the Consolidated Leverage Ratio, and administrative agent expenses incurred in relation to the Credit Facilities.

In the event of a default,

an additional 2 % default interest rate in addition to the applicable rate if specified or the Base Rate plus Applicable Margin if an applicable rate is not specified.

In the event of a default, an additional 2 %

default interest rate in addition to the applicable rate if specified or the Base Rate plus Applicable Margin if an applicable rate is not specified.

As of April 30, 2024, the Company is in compliance with all amended covenants.

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Current period interest rate

Future long-term debt principal payments at April 30, 2023 were as follows:

Future contractual long-term debt principal payments at April 30, 2024 were as follows:

(In thousands)

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The Restated 2006 Plan expired in July 2021.

The Company had a 1992 nonqualified stock option plan (“1992 Plan”) for certain officers and key employees.

Options under the 1992 Plan were granted at their fair market value (as determined by the board of directors) at the date of grant and became exercisable at various times over a five-year period from the grant date.

The 1992 Plan expired in August 2002.

The fair value of stock options granted previously was estimated at the grant date using the Black-Scholes option pricing model.

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The expected volatility is based on historical volatility for the Company’s stock.

The risk free

interest rate is based on the implied yield on a U.S.

The risk-free interest rate is based on the implied yield on a U.S.

Treasury zero-coupon bond with a remaining term that approximates the expected term of the option.

18 unchanged sentences

The intrinsic value of all options outstanding and exercisable at April 30, 2024 and 2023 was $ 8,732,000 and $ 4,822,000 , respectively.

The Company had zero non-vested stock options as of April 30, 2023 and the year then ended.

The Company had zero non-vested stock options as of April 30, 2024 and 2023 and the years then ended, respectively.

As of April 30, 2024, there was approximately $ 12,693,000 of total unrecognized compensation cost related to non-vested share-based compensation awards granted under the equity plans.

3 unchanged sentences

Proceeds from all option exercises under all stock option plans for the years ended April 30, 2024, 2023 and 2022 were approximately $ 0 , $ 2,278,000 and $ 2,776,000 , respectively.

The tax benefit realized from stock-based compensation was $ 3,387,000 during the years ended April 30, 2023, and $ 0 during the years ended April 30, 2022 and 2021, respectively.

The tax benefit realized from stock-based compensation was $ 0 , $ 3,387,000 and $ 0 for the fiscal years ended April 30, 2024, 2023, and 2022, respectively.

The following tabulation summarizes certain information concerning outstanding and exercisable options at April 30, 2024:

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Long-Term Incentive Awards

During the three months ended July 30, 2022, the Company granted awards under its amended and restated 2006 Equity Incentive Plan (the “Restated 2006 Plan”) to key employees (“Fiscal 2023 LTIP”).

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

Awards under the Fiscal 2024 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) performance-based restricted stock units (“PRSUs”), which vest based on the Company’s achievement of revenue and non-GAAP operating income targets for the three-year period ending April 30, 2025.

(i) time-based restricted stock awards and time-based restricted stock units, which vest in equal tranches in July 2024, July 2025 and July 2026, 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, 2026.

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.

Threshold achievement levels for which the PRSUs would vest at 50 % for each such metric and maximum achievement levels for which such awards would vest at 250 % for each such metric were also established.

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 operating income targets for the performance period.

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.

1 unchanged sentence

At April 30, 2024, the maximum compensation expense that may be recorded for the performance-based portion of the Fiscal 2024 LTIP PRSUs is $ 15,836,000 .

During the three months ended July 31, 2021, the Company granted awards under its amended and restated 2006 Equity Incentive Plan (the “Restated 2006 Plan”) to key employees (“Fiscal 2022 LTIP”).

During the three months ended July 30, 2022, the Company granted awards under the 2021 Plan to key employees (“Fiscal 2023 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 2022, July 2023 and July 2024, and (ii) performance-based restricted stock units (“PRSUs”), which vest based on the Company’s achievement of revenue and non-GAAP operating income targets for the three-year period ending April 30, 2024.

(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.

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.

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 operating income targets for the performance period.

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

During the fiscal years ended April 30, 2023 and 2022, the Company recorded $ 846,000 and $ 752,000 of compensation expense related to the Fiscal 2022 LTIP PRSUs, respectively.

Settlement of the PRSUs

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

During the fiscal year ended April 30, 2024 and 2023, the Company recorded $ 3,349,000 and $ 2,690,000 of compensation expense related to the Fiscal 2023 LTIP PRSUs, respectively.

At April 30, 2024, the maximum compensation expense that may be recorded for the performance-based portion of the Fiscal 2023 LTIP PRSUs is $ 11,611,000 .

During the three months ended August 1, 2020, the Company granted awards under its amended and restated 2006 Equity Incentive Plan (the “Restated 2006 Plan”) to key employees (“Fiscal 2021 LTIP”).

Awards under the Fiscal 2022 LTIP consist of:

(i) time-based restricted stock awards, which vest in equal tranches in July 2021, July 2022 and July 2023, and (ii) performance-based restricted stock units (“PRSUs”), which vest based on the Company’s achievement of revenue and operating income targets for the three-year period ending April 30, 2023.

(i) time-based restricted stock awards and time-based restricted stock units, which vest in equal tranches in July 2022, July 2023 and July 2024, and (ii) PRSUs, which vest based on the Company’s achievement of revenue and non-GAAP operating income targets for the three-year period ending April 30, 2024.

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.

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 operating income targets for the performance period.

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

During the fiscal year ended April 30, 2023 and 2021, the Company recorded $ 354,000 and $ 1,072,000 of compensation expense related to the Fiscal 2021 LTIP PRSUs, respectively.

During the fiscal year ended April 30, 2022, the Company recorded a reversal of $( 634,000 ) compensation expense related to the Fiscal 2021 LTIP PRSUs.

During the three months ended July 27, 2019, the Company granted awards under its amended and restated 2006 Equity Incentive Plan (the “Restated 2006 Plan”) to key employees (“Fiscal 2020 LTIP”).

During the fiscal years ended April 30, 2024, 2023 and 2022, the Company recorded $ 902,000 , $ 846,000 and $ 752,000 of compensation expense related to the Fiscal 2022 LTIP PRSUs, respectively.

At April 30, 2024, the maximum compensation expense that may be recorded for the performance-based portion of the Fiscal 2022 LTIP PRSUs is $ 9,214,000 .

During the three months ended August 1, 2020, the Company granted awards under the Restated 2006 Plan to key employees (“Fiscal 2021 LTIP”).

Awards under the Fiscal 2021 LTIP consist of:

(i) time-based restricted stock awards, which vest in equal tranches in July 2020, July 2021 and July 2022, and (ii) performance-based restricted stock units (“PRSUs”), which vest based on the Company’s achievement of revenue and operating income targets for the three-year period ending April 30, 2022.

(i) time-based restricted stock awards, which vest in equal tranches in July 2021, July 2022 and July 2023, and (ii) PRSUs, which vest based on the Company’s achievement of revenue and operating income targets for the three-year period ending April 30, 2023.

During the three months ended July 29, 2023, the Company issued a total of 5,772 fully-vested shares of the Company’s common stock to settle the PRSUs in the Fiscal 2021 LTIP.

No compensation expense was recorded during fiscal year ended April 30, 2024 for the Fiscal 2021 LTIP PRSUs.

During the fiscal year ended April 30, 2022, the Company recorded a reversal of $( 701,000 ) compensation expense related to the Fiscal 2020 LTIP.

During the fiscal year ended April 30, 2021, the Company recorded $ 620,000 of compensation expense related to the Fiscal 2020 LTIP.

During the fiscal year ended April 30, 2023, the Company recorded $ 354,000 of compensation expense related to the Fiscal 2021 LTIP PRSUs.

During the fiscal year ended April 30, 2022, the Company recorded a reversal of $( 634,000 ) compensation expense related to the Fiscal 2021 LTIP PRSUs.

At April 30, 2024 and 2023, the Company recorded cumulative stock-based compensation expense from these long-term incentive award PRSUs of $ 16,662,000 and $ 8,495,000 , respectively.

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income taxes on undistributed earnings are recorded.

The foreign subsidiaries do not have any undistributed earnings.

A reconciliation of income tax expense computed using the U.S.

The foreign subsidiaries do not have

any undistributed earnings.

A reconciliation of income tax expense (benefit) computed using the U.S.

federal statutory rates to actual income tax expense is as follows:

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Return to provision adjustments

Limit on executive compensation

Permanent items

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Effective income tax rate

The components of the provision for income taxes are as follows (in thousands):

The components of the provision for (benefit from) income taxes are as follows (in thousands):

Year Ended April 30,

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Net operating loss and credit carry-forwards

Section 174 Capitalization

Intangibles basis

Capitalized research and development costs

Reserve for inventory excess and obsolescence

Lease liability

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Net deferred tax assets

For tax years beginning in 2022, the Tax Cuts and Jobs Act of 2017 (“TCJA”) eliminated the option to currently deduct research and experimental (“R&E”) expenditures in the period incurred and requires taxpayers to capitalize and amortize such expenditures over a period of five years (for U.S.-based research) or fifteen years (for non-U.S.

based research), as applicable, pursuant to Section 174 of the Internal Revenue Code.

As of April 30, 2024 and 2023, the Company recorded a tax adjustment to capitalize and amortize its R&E costs, which resulted in an increase to income taxes payable of approximately $ 42,788,000 and $ 24,962,000 , respectively, and a decrease to net deferred tax liabilities of a similar amount.

At April 30, 2024 and 2023 the Company recorded a valuation allowance of $ 23,835,000 and $ 22,503,000 , respectively, primarily against state R&D credits as the Company is currently generating more tax credits than it will utilize in future years and against capital loss carryforward.

The valuation allowance decreased by $ 2,337,000 and increased by $ 7,387,000 for April 30, 2023 and April 30, 2022, respectively.

At April 30, 2023 the Company had federal credit carryforwards of $ 2,809,000 that will begin to expire in 2042 and state credit carryforwards of $ 23,330,000 that do not expire.

The valuation allowance increased by $ 1,332,000 and decreased by $ 2,337,000 for April 30, 2024 and April 30, 2023, respectively.

At April 30, 2024 the Company had state credit carryforwards of $ 24,054,000 that do not expire.

At April 30, 2024, the Company had federal, state and foreign net operating loss carryforwards of approximately $ 2,464,000 , $ 99,333,000 and $ 74,000 , respectively.

The federal net operating losses carry forward indefinitely.

The state net operating losses will begin expiring in fiscal year 2035, and the foreign loss carryforward will begin expiring in fiscal year 2024.

The state net operating losses will begin expiring in fiscal year 2035, and the foreign loss carry forward indefinitely.

Utilization of federal and state net operating loss carryforwards may be subject to substantial annual limitation due to the ownership changes as provided by Section 382 of the Internal Revenue Code and similar state provisions.

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The Company’s share repurchase program announced September 2015 was terminated by the Company’s Board of Directors in September 2022.

There were no repurchases of the Company’s common stock during the year ended April 30, 2023.

On September 8, 2022 the Company filed an S-3 shelf registration statement to offer and sell shares of the Company’s common stock, including a prospectus supplement in relation to an Open Market Sale Agreement SM , also dated September 8, 2022, with Jefferies LLC relating to the proposed offer and sale of shares of our common stock having an aggregate offering price of up to $ 200,000,000 from time to time through Jefferies LLC as the sales agent.

As of April 30, 2023, the Company has sold 1,109,730 of its shares for total gross proceeds of $ 108,686,000 , total proceeds received of $ 105,425,000 , net of commission expense and $ 104,649,000 net of equity issuance costs.

The Company has $ 91,314,000 aggregate offering price remaining available under the registration.

On September 8, 2022 the Company filed an S-3 shelf registration statement to offer and sell shares of the Company’s common stock, including a prospectus supplement in relation to an Open Market Sale Agreement SM , also dated September 8, 2022, with Jefferies LLC relating to the proposed offer and sale of shares of the Company’s common stock having an aggregate offering price of up to $ 200,000,000 from time to time through Jefferies LLC as the sales agent.

During the fiscal year ended April 30, 2024, the Company completed the Open Market Sale Agreement SM , and the Company sold 807,370 shares, for total gross proceeds of $ 91,313,000 , total proceeds received of $ 88,574,000 , net of commission expense, and $ 88,437,000 , net of equity issuance costs.

During the fiscal year ended April 30, 2023, the Company sold 1,109,730 of its shares for total gross proceeds of $ 108,686,000 , total proceeds received of $ 105,425,000 , net of commission expense and $ 104,649,000 , net of equity issuance costs.

Accumulated Other Comprehensive Loss

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Total Accumulated

Available-for-Sale

Foreign Currency

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Total accumulated other comprehensive loss balance as of April 30, 2023

Unrealized gain, net of $ 0 of taxes

Changes in foreign currency translation adjustments

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The change in estimate was a result of the Company changing the total costs required to complete the contracts due to having more accurate cost information as work progressed in subsequent periods on the various contracts.

During the years ended April 30, 2023, 2022 and 2021, the Company revised its estimates of the total expected costs to complete a TMS variant contract.

During the fiscal year ended

April 30, 2023, due to the closure of all of the Company’s MUAS COCO sites, the Company revised the estimated useful life of the MUAS customer relationship intangible asset which resulted in accelerated intangible amortization expenses of $ 34,149,000 , increasing net loss by $ 26,158,000 , or loss per diluted share of $ 1.04 .

During the year ended April 30, 2024, the Company revised estimates to complete two LMS contracts.

During the years ended April 30, 2023 and 2022, the Company revised its estimates of the total expected costs to complete a LMS contract.

$ 1,898,000 and $ 1,124,000 , respectively.

During the fiscal year ended April 30, 2023, due to the closure of all of the Company’s MUAS COCO sites, the Company revised the estimated useful life of the MUAS customer relationship intangible asset which resulted in accelerated intangible amortization expenses of $ 34,149,000 , increasing net loss by $ 26,158,000 , or loss per diluted share of $ 1.04 .

During the year ended April 30, 2022, the Company revised its estimates of the achievement of the performance metrics of the Company’s long term incentive plans, which resulted in a cumulative adjustment to reduce previously recognized compensation expense of $ 1,602,000 .

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Upon the execution of the MDDA, SoftBank issued the first order under the MDDA, which has a maximum value of approximately $ 51,200,000 .

The Company recorded revenue under both the MDDA and DDA and preliminary design agreements between the Company and SoftBank of $ 43,325,000 and $ 42,426,000 for the fiscal years ended April 30, 2022 and 2021, respectively.

At April 30, 2022, the Company had unbilled related party receivables from HAPSMobile of $ 2,229,000 recorded in unbilled receivables and retentions on the consolidated balance sheets.

As of April 30, 2023, the Company had no ownership stake in HAPSMobile and SoftBank and HAPSMobile are no longer considered related parties.

The Company recorded revenue under both the MDDA and DDA and preliminary design agreements between the Company and SoftBank of $ 43,325,000 for the fiscal year ended April 30, 2022.

As of April 30, 2024 and 2023, the Company had no ownership stake in HAPSMobile and SoftBank and HAPSMobile are no longer considered related parties.

Refer to Note 8— Investments in Companies Accounted for Using the Equity Method for further details.

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(“Webasto”) pursuant to an Asset Purchase Agreement (the “Purchase Agreement”) between Webasto and the Company.

On February 22, 2019, Webasto filed a lawsuit, which was amended in April 2019, alleging several claims against the Company for breach of contract, indemnity, and bad faith, including allegations regarding inaccuracy of certain diligence disclosures and failure to provide certain consents to contract assignments, and related to a previously

announced product recall.

Webasto sought to recover the costs of the recall and other damages totaling a minimum of $ 6,500,000 in addition to attorneys’ fees, costs, and punitive damages.

On August 16, 2019, the Company filed a counterclaim against Webasto seeking payment of $ 6,500,000 in additional cash consideration due under the Purchase Agreement (the “Holdback”) and declaratory relief regarding Webasto’s cancellation of an assigned contract.

On August 16, 2019, the Company filed a counterclaim against Webasto seeking payment of $ 6,500,000 in additional cash consideration due under the Purchase

Agreement (the “Holdback”) and declaratory relief regarding Webasto’s cancellation of an assigned contract.

Webasto again amended the complaint in May 2021 to include additional claims.

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The offer did not reflect the Company’s view of the merits of the claims made;

however, as a result of the preparation of the good faith offer and the Company’s willingness to pursue settlement for that amount, the Company recorded litigation reserve expenses in the amount of $ 9,300,000 during the year ended April 30, 2021 recorded in other expense on the consolidated statements of (loss) income and in other current liabilities on the consolidated balance sheet.

however, as a result of the preparation of the good faith offer and the Company’s willingness to pursue settlement for that amount, the Company recorded litigation reserve expenses in the amount of $ 9,300,000 during the year ended April 30, 2021, recorded in other expense on the consolidated statements of income (loss) and in other current liabilities on the consolidated balance sheet.

On December 2, 2021, the Company agreed in principle, subject to formal documentation with Webasto, to settle all existing claims related to the sale of its former EES Business for $ 20,000,000 and Webasto keeping the Holdback.

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Business Acquisitions

Planck Acquisition

On August 17, 2022 the Company closed its acquisition of Planck, a leading provider of advanced unmanned aircraft navigation solutions based in San Diego, California.

Pursuant to the purchase agreement, the Company paid a total purchase price of $ 5,105,000 from cash-on-hand plus a $ 500,000 holdback for certain assets of Planck.

Planck is a small technology company and post-acquisition was incorporated into the Company’s MUAS segment to focus on integrating its flight autonomy solutions, such as ACE™, or Autonomous Control Engine, into the Company’s offerings to enable safe, autonomous takeoff and landing from moving platforms on land or at sea in GPS-denied environments.

Other solutions include AVEM™, a fully integrated mobile tethered sensor platform designed for persistent autonomous

operation from moving vehicles and vessels in any environment, and a suite of machine-learning object detection and tracking systems that are customized for specific end-user needs.

Tomahawk Acquisition

On September 15, 2023, the Company closed its acquisition of Tomahawk Robotics, Inc., a leader in AI-enabled robotic control systems.

Pursuant to the merger agreement, the Company acquired 100 % of Tomahawk equity for an aggregate purchase price of $ 134,467,000 consisting of 985,999 shares of restricted common stock of the Company valued at $ 109,820,000 and $ 27,205,000 cash-on-hand, net of $ 3,048,000 cash acquired, plus a $ 490,000 holdback.

During the three months ended January 27, 2024, the holdback was decreased $ 100,000 as part of the working capital adjustment, and the total purchase price and goodwill, therefore, decreased by $ 100,000 as well.

The fair value of the shares issued was the closing price on September 15, 2023, the close of the Tomahawk purchase agreement.

Tomahawk is incorporated into AeroVironment’s UxS segment.

The acquisition will enable deeper integration of both companies’ technology, leading to enhanced interoperability and interconnectivity of uncrewed systems through a

singular platform with similar control features.

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

The following table summarizes the provisional allocation of the purchase price over the estimated fair value of the assets and liabilities assumed in the acquisition of Planck.

The following table summarizes the provisional allocation of the purchase price over the estimated fair value of the assets and liabilities assumed in the acquisition of Tomahawk.

The purchase price allocation is expected to be finalized as soon as practicable within the measurement period, but not later than one year following the acquisition date (in thousands):

September 15,

Fair value of assets acquired:

Accounts receivable

Unbilled receivable

Inventories, net

Prepaid and other current assets

Property and equipment, net

Operating lease assets

Customer relationship

Deferred tax asset

Total identifiable net 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

Other non-current liabilities

Deferred income taxes

Total liabilities assumed

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Fair value of consideration transferred:

Equity consideration

Cash consideration, net of cash acquired

Total consideration

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 Tomahawk and expected future customers in the UxS market.

income tax purposes the acquisition is treated as a stock acquisition, and none of the goodwill is expected to be deductible.

Tomahawk Supplemental Pro Forma Information (unaudited)

Tomahawk revenue since acquisition on September 15, 2023 was $ 15,883,000 as of April 30, 2024.

Other than the aforementioned revenue and intangible asset amortization expense of $ 5,730,000 for the year ended April 30, 2024 since the acquisition on September 15, 2023, the Tomahawk financial results were not significant.

The following unaudited pro forma summary presents condensed consolidated information of the Company as if the business acquisition had occurred on May 1, 2022 (in thousands):

Net income (loss) attributable to AeroVironment, Inc.

The Company did not have any material, nonrecurring pro forma adjustments directly attributable to the business acquisition included in the reported pro forma revenue and earnings.

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 30, 2022, reflecting the additional amortization that would have been charged and including the results of Tomahawk prior to acquisition.

The Company incurred approximately $ 1,873,000 of acquisition-related expenses for the fiscal year ended April 30, 2024.

These expenses are included in selling, general and administrative on the Company’s consolidated statements of income (loss).

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, 2022, nor are they indicative of results of operations that may occur in the future.

Planck Acquisition

On August 17, 2022, the Company closed its acquisition of Planck, a leading provider of advanced uncrewed aircraft navigation solutions based in San Diego, California.

Pursuant to the purchase agreement, the Company paid a total purchase price of $ 5,105,000 from cash-on-hand plus a $ 500,000 holdback for certain assets of Planck, which was paid during the three months ended October 28, 2023.

Planck is a small technology company incorporated into AeroVironment’s UxS segment for the MUAS product line to focus on integrating its flight autonomy solutions, such as ACE™, or Autonomous Control Engine, into the Company’s offerings to enable safe, autonomous takeoff and landing from moving platforms on land or at sea in GPS-denied environments.

Other solutions include AVEM™, a fully integrated mobile tethered sensor platform designed for persistent autonomous operation from moving vehicles and vessels in any environment, and a suite of machine-learning object detection and tracking systems that are customized for specific end-user needs.

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

The following table summarizes the final allocation of the purchase price over the estimated fair value of the assets and liabilities assumed in the acquisition of Planck.

During the three months ended July 29, 2023, the Company finalized its determination of the fair value of the assets and liabilities assumed in the acquisition of Planck and no significant changes were recorded from the original estimation (in thousands):

Fair value of assets acquired:

Property and equipment, net

Total identifiable net assets

Fair value of liabilities assumed:

Customer advances

Total liabilities assumed

Total identifiable net assets

Fair value of consideration transferred:

Total consideration

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 intangibles 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.

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Planck Supplemental Pro Forma Information (unaudited)

Planck revenue since acquisition on August 17, 2022 was $ 368,000 .

Planck revenue since acquisition on August 17, 2022 through April 30, 2023 was $ 368,000 .

Other than the aforementioned revenue and intangible asset amortization expense of $ 542,000 for the year ended April 30, 2023 since the acquisition on August 17, 2022, the Planck financial results were not significant.

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The Company incurred approximately $ 1,009,000 of acquisition-related expenses for the fiscal year ended April 30, 2023.

These expenses are included in selling, general and administrative on the Company’s consolidated statements of (loss) income.

These expenses are included in selling, general and administrative on the Company’s consolidated statements of income (loss).

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, 2021, nor are they indicative of results of operations that may occur in the future.

1 unchanged sentence

On May 3, 2021, the Company closed its acquisition of Telerob pursuant to the terms of the Telerob Purchase Agreement.

Telerob develops, manufactures, sells, and services remote-controlled unmanned ground robots and transport vehicles for civil and defense applications.

Telerob develops, manufactures, sells, and services remote-controlled uncrewed ground robots and transport vehicles for civil and defense applications.

Pursuant to the Telerob Purchase Agreement at closing, the Company paid € 37,455,000 (approximately $ 45,400,000 ) in cash to the Telerob Seller (subject to certain purchase price adjustments as set forth in the Telerob Purchase Agreement), less (a) € 3,000,000 (approximately $ 3,636,000 ) to be held in escrow for breaches of the Telerob Seller’s fundamental warranties or any other of Telerob Seller’s warranties to the extent not covered by a representation and warranty insurance policy (the “RWI Policy”) obtained by the Company in support of certain indemnifications provided by the Telerob Seller;

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In addition to the consideration paid at closing, the Telerob Seller may receive € 2,000,000 (approximately $ 2,139,000 ) in additional cash consideration if specific revenue targets for Telerob are achieved during the 12 month period after closing beginning on the first day of the calendar month following the closing (the “First Earnout Year”) and an additional € 2,000,000 (approximately $ 2,139,000 ) in cash consideration if specific revenue targets for Telerob are achieved in the 12 month period following the First Earnout Year.

The Telerob Seller may also receive up to € 2,000,000 (approximately $ 2,203,000 ) in additional cash consideration if specific awards and/or orders from the U.S.

The Telerob Seller was also entitled to receive up to € 2,000,000 (approximately $ 2,203,000 ) in additional cash consideration if specific awards and/or orders from the U.S.

military are achieved prior to the end of a 36-month post-closing period.

The first year earnout of € 2,000,000 (approximately $ 2,139,000 ) was not achieved.

The second year earnout of € 2,000,000 (approximately $ 2,203,000 ) was achieved, which the Company expects to pay during the first half of the fiscal year ending April 30, 2024.

During the fiscal year ended April 30, 2023, the second year earnout of € 2,000,000 (approximately $ 2,132,000 ) was achieved and was paid in November 2023.

The third earnout of € 2,000,000 (approximately $ 2,139,000 ) was not achieved.

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

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For tax purposes the acquisition was treated as a stock purchase and the goodwill is not deductible.

Supplemental Pro Forma Information (unaudited)

Telerob Supplemental Pro Forma Information (unaudited)

Telerob revenue and loss from operations for the year ended April 30, 2022 since acquisition on May 3, 2021 was $ 29,177,000 and $ 12,115,000 , respectively.

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The Company incurred approximately $ 1,186,000 of acquisition-related expenses for the fiscal year ended April 30, 2022.

These expenses are included in selling, general and administrative on the Company’s consolidated statements of (loss) income.

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, 2020, nor are they indicative of results of operations that may occur in the future.

Arcturus Acquisition

On February 19, 2021, the Company closed its acquisition of Arcturus pursuant to the terms of the Arcturus Purchase Agreement.

Arcturus, headquartered in Petaluma, California, designs, engineers, tools, and manufactures unmanned aerial and aircraft systems including airborne platforms, payloads and payload integration, ground control systems, and ground support equipment and other items and services related generally to unmanned aircraft systems.

Pursuant to the Arcturus Purchase Agreement at the closing of the Arcturus Acquisition, the Company paid approximately $ 422,602,000 , net of cash acquired (subject to certain customary adjustments and escrow arrangements set forth in the Arcturus Purchase Agreement), financed with a combination of approximately $ 150,218,000 of cash-on-hand, $ 200,000,000 of financing pursuant to the Term Loan Facility and the issuance of approximately $ 72,384,000 of unregistered, restricted shares of common stock.

As specified in the Arcturus Purchase agreement, the number of shares issued was determined based on a value of $ 50,000,000 and a calculated average price as of the last business day prior to execution of the Arcturus Purchase Agreement.

The final cash consideration is subject to certain customary adjustments, including for net working capital, cash, debt and unpaid transaction expenses (including change in control related payments triggered by the transaction) of Arcturus at the Arcturus closing, less $ 6,500,000 held in escrow to address final purchase price adjustments post-Arcturus closing, if any (the “Adjustment Escrow”), and $ 1,822,500 held in escrow to address Arcturus’s and/or the Sellers’ indemnification obligations (the “Indemnification Escrow”).

During the fiscal year ended April 30, 2022, the Adjustment Escrow of $ 6,500,000 , less $ 509,000 of post-closing adjustments, and Indemnification Escrow of $ 1,822,500 was released to the Arcturus Sellers.

To further address potential breaches of Arcturus’s and the Sellers’ representations and warranties beyond the application of the Indemnification Escrow, the Company also obtained representation and warranty insurance policies providing $ 40,000,000 in coverage, subject to customary terms, exclusions and retention amounts.

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

During the fiscal year ended April 30, 2022, the Company finalized its determination of the fair value of the assets and liabilities assumed as of the acquisition date, which is summarized in the following table (in thousands):

Fair value of assets acquired:

Accounts receivable

Unbilled receivable

Inventories, net

Prepaid and other current assets

Property and equipment, net

Operating lease assets

Customer relationships

Total assets acquired

Fair value of liabilities assumed:

Accounts payable

Wages and related accruals

Customer advances

Other current liabilities

Operating lease liabilities

Other non-current liabilities

Deferred income taxes, net

Total liabilities assumed

Total identifiable net assets

Fair value of consideration transferred:

Cash consideration, net of cash acquired

Equity consideration

Total consideration

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.

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 Arcturus and expected future customers in the MUAS market.

For tax purposes the acquisition was treated as a stock purchase and the goodwill is not deductible.

Supplemental Pro Forma Information (unaudited)

Arcturus revenue and loss from operations for the year ended April 30, 2021 since acquisition on February 19, 2021 was $ 15,837,000 and $ 1,869,000 , respectively.

The following unaudited pro forma summary presents consolidated information of the Company as if the business acquisition had occurred on May 1, 2019 (in thousands):

Net income attributable to AeroVironment, Inc.

The Company did not have any material, nonrecurring pro forma adjustments directly attributable to the business acquisition included in the reported pro forma revenue and earnings.

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, 2019, reflecting the additional amortization that would have been charged assuming the fair value adjustments to intangible assets had been applied from May 1, 2019 with the consequential tax effects, and including the results of Arcturus prior to acquisition.

The Company incurred approximately $ 6,015,000 acquisition-related expenses for the year ended April 30, 2021.

These expenses are included in selling, general and administrative expense on the Company’s consolidated statements of (loss) income.

These expenses are included in selling, general and administrative on the Company’s consolidated statements of income (loss).

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, 2020, nor are they indicative of results of operations that may occur in the future.

ISG Acquisition

On February 23, 2021, the Company purchased certain assets of, and assumed certain liabilities of, ISG pursuant to the terms of the ISG Purchase Agreement.

ISG is engaged in development of artificial intelligence-enabled computer vision, machine learning and perceptive autonomy technologies and provides related services to United States government customers.

In connection with the ISG Acquisition, the Company (i) paid a base purchase price of $ 29,700,000 in cash at closing and (ii) agreed to pay additional cash consideration of up to $ 6,000,000 , which is held in escrow account not controlled by the Company, if certain revenue targets were achieved by ISG during the 3 years following closing, in each case, subject to the terms and conditions of the ISG Purchase Agreement, including certain customary adjustments.

During the fiscal year ended April 30, 2022, the target for the first year was achieved and the related consideration of $ 2,000,000 was released from an escrow account that is not controlled by the Company and, therefore, not recorded on the consolidated balance sheets.

The related consideration of $ 2,000,000 for both the second and third year targets was released from the escrow account during the fiscal year ended April 30, 2023.

As a condition to closing pursuant to the ISG Purchase Agreement, the Company and the ISG Seller entered into certain ancillary agreements, including a transition services agreement through February 2023 and two subleases pursuant to which the ISG Seller will provide the Company certain services and facilities space to accommodate the transition of ISG to the Company.

The parties to the ISG Purchase Agreement have made representations, warranties, and covenants that are customary for a transaction of this type, including, among other things, restrictions on the ISG Seller and the Beneficial Owner from engaging in certain competitive activities, as well as mutual indemnification obligations between the

Company and the ISG Seller.

To supplement certain indemnifications provided by the ISG Seller, the Company obtained a representation and warranty insurance policy.

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

Fair value of assets acquired:

Customer relationships

Total identifiable net assets

Fair value of consideration transferred:

Contingent consideration

Total consideration

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.

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.

For tax purposes the acquisition was treated as an asset purchase and the goodwill is deductible ratably over a period of fifteen years .

Supplemental Pro Forma Information (unaudited)

ISG revenue for the year ended April 30, 2021 since acquisition on February 23, 2021 was $ 1,724,000 .

Other than the aforementioned revenue and intangible asset amortization expense of $ 474,000 for the year ended April 30, 2021 since the acquisition on February 23, 2021, the ISG financial results were not significant.

The following unaudited pro forma summary presents consolidated information of the Company as if the business acquisition had occurred on May 1, 2019 (in thousands):

Net income attributable to AeroVironment, Inc.

The Company did not have any material, nonrecurring pro forma adjustments directly attributable to the business acquisition included in the reported pro forma revenue and earnings.

that would have been charged assuming the fair value adjustments to intangible assets had been applied from May 1, 2019 with the consequential tax effects, and including the results of ISG prior to acquisition.

The Company incurred approximately $ 954,000 acquisition-related expenses for the year ended April 30, 2021.

These expenses are included in selling, general and administrative expenses on the Company’s consolidated statements of (loss) income.

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 acquisitions been consolidated in the tables above as of May 1, 2019, nor are they indicative of results of operations that may occur in the future.

As part of the Telerob acquisition, the Company acquired a small foreign-based defined benefit pension plan.

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(In thousands)

Projected benefit obligation

2 unchanged sentences

Change in projected benefit obligation (in thousands):

Pension benefit obligation balance as of April 30, 2022 and May 3, 2021, respectively

Pension benefit obligation balance as of April 30, 2023 and April 30, 2022, respectively

Interest cost

Actuarial gain

Actuarial loss

Benefits paid

2 unchanged sentences

Change in plan assets (in thousands):

Fair value of plan assets as of April 30, 2022 and May 3, 2021, respectively

Fair value of plan assets as of April 30, 2023 and April 30, 2022, respectively

Expected return on plan assets

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(In thousands)

Expected return on plan assets

Interest cost

Actuarial gain

Actuarial loss

Net periodic benefit cost

Effective May 1, 2023, the Company reorganized its segments.

Due to the Company’s growth as an organization, the reorganization was implemented to drive additional operational improvements, foster synergies and provide leaders with greater autonomy over their product lines.

The Company’s reportable segments are as follows:

Small Unmanned Aircraft Systems —The SUAS segment focuses primarily on products designed to operate reliably at very low altitudes in a wide range of environmental conditions, providing a vantage point from which to collect and deliver valuable information as well as related support services including training, spare parts, product repair, product replacement, and the customer contracted operation.

Tactical Missile Systems – The TMS segment focuses primarily on TMS products, which are tube-launched aircraft that deploy with the push of a button, fly at higher speeds than SUAS products, and perform either effects delivery or reconnaissance missions, and related support services including training, spare parts, product repair, and product replacement.

The TMS segment also includes customer-funded R&D programs.

Medium Unmanned Aircraft Systems—The MUAS segment, which originates with the acquisition of Arcturus, focuses on designs, engineers, tools, and manufactures unmanned aerial and aircraft systems including airborne

platforms, payloads and payload integration, ground control systems, and ground support equipment and other items and services related generally to unmanned aircraft systems including ISR services.

All other—All other segments include High Altitude Pseudo-Satellite Unmanned Aircraft Systems (“HAPS”), MacCready Works and UGV.

Effective May 1, 2023, the Company reorganized its product lines into the following segments:

Unmanned Systems segment consisting of SUAS, MUAS and UGV product lines;

Loitering Munition Systems segment, the renamed TMS segment;

and the MacCready Works segment, consisting of the HAPS and the MacCready Works businesses.

UnCrewed Systems—The UxS segment, the renamed UAS segment which consists of the former SUAS, MUAS and UGV segments and the recently acquired Tomahawk, focuses primarily on small UAS products designed to operate reliably at lower altitudes in a wide range of environmental conditions, providing a vantage point from which to collect and deliver valuable information as well as related support including training, spare and accessory parts, product repair, product replacement, maintenance and upgrades;

medium UAS products designed to operate reliably at medium altitudes with longer range while carrying larger payloads including airborne platforms, payloads and payload integration, and ground support equipment and other items and services related generally to uncrewed aircraft systems historically including ISR services;

UGV products designed to help responders remove, contain or neutralize these hazards in situations where improvised explosive devices, caustic chemicals, nuclear, radiological or biological hazards or violent individuals represent significant danger to humans;

and AI-enabled common control and communication solutions that allow any uncrewed system to be controlled from a common user interface while aggregating data from multiple platforms to provide real time intelligence.

Loitering Munitions Systems—The LMS segment, which consists of the former Tactical Missile Systems segment, focuses primarily on tube-launched aircraft that deploy with the push of a button, fly at higher speeds than small UAS products, and perform either effects delivery or reconnaissance missions, and related support services including training, spare parts, product repair, and product replacement.

The LMS segment also includes customer-funded research and development programs.

MacCready Works— The MW segment, which consists of the former MacCready Works and HAPS segments, focuses on customer-funded research and development in the areas of HAPS, robotics, sensors, software analytics, data intelligence and connectivity.

This segment contains the Company’s center of excellence for the development of machine learning, object identification and autonomy solutions and also seeks to identify new products, services and businesses for the Company.

Prior period segment information has been recast to align with the new segment structure.

The accounting policies of the segments are the same as those described in Note 1–Organization and Significant Accounting Policies.

The operating segments do not make sales to each other.

The following table (in thousands) sets forth segment revenue, gross margin, operating income (loss) and adjusted operating income (loss) from operations for the periods indicated.

Adjusted operating income (loss) is defined as operating income (loss) before impairment of goodwill and accelerated amortization, intangible amortization, amortization of purchase accounting adjustments related to increasing the carrying value of certain assets to fair value, and acquisition related expenses.

The following table (in thousands) sets forth segment revenue and adjusted operating income (loss) from operations for the periods indicated.

Segment adjusted operating income (loss) is defined as operating income (loss) before impairment of goodwill and accelerated amortization, intangible amortization, amortization of purchase accounting adjustments related to increasing the carrying value of certain assets to fair value, and acquisition related expenses.

Segment adjusted income (loss) from operations is the measure of profitability used by the CODM for purposes of making decisions about allocating resources to the segments and assessing performance.

Year Ended April 30, 2024

Income (loss) from operations

Impairment of goodwill and accelerated amortization

Acquisition-related expenses

Amortization of acquired intangible assets and other purchase accounting adjustments

Adjusted income (loss) from operations

Product sales

Contract services

Segment adjusted income (loss) from operations

Depreciation and amortization

Year Ended April 30, 2023

Income (loss) from operations

Acquisition-related expenses

Amortization of acquired intangible assets and other purchase accounting adjustments

Adjusted income (loss) from operations

Product sales

Contract services

Segment adjusted income from operations

Depreciation and amortization

Year Ended April 30, 2022

Income (loss) from continuing operations

Acquisition-related expenses

Product sales

Contract services

Segment adjusted income (loss) from operations

Depreciation and amortization

The following table (in thousands) provides a reconciliation from segment adjusted income from operations to income (loss) before taxes:

Year Ended April 30,

Segment adjusted income from operations

Impairment of goodwill and accelerated amortization

Amortization of acquired intangible assets and other purchase accounting adjustments

Adjusted income (loss) from operations

Acquisition-related expenses

Interest expense, net

Other expense, net

Sale of ownership in HAPSMobile Inc.

joint venture

Income (loss) before income taxes

Segment assets are summarized in the table below.

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

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.

April 30, 2024

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Identifiable assets

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

Year Ended April 30, 2024

Year Ended April 30, 2023

Year Ended April 30, 2022

Geographic Information

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government foreign military sales in which an end user is a foreign government, accounted for 62 %, 53 % and 41 % of revenue for each of the fiscal years ended April 30, 2024, 2023 and 2022, respectively.

The Company’s internationally deployed in-service assets for MUAS was $ 0 and $ 48,496,000 as of April 30, 2023 and 2022, respectively.

For the fiscal year ended April 30, 2024 and 2023, Ukraine represented $ 274,136,000 , or 38 %, and $ 100,095,000 , or 19 %, respectively, of the Company’s consolidated revenues.

The Company’s international revenues from customers in each foreign country were less than 10 % of consolidated revenues for fiscal year 2022.

The Company’s internationally deployed in-service assets for UGV was $ 2,912,000 and $ 1,798,000 as of April 30, 2024 and 2023, respectively.

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The effectiveness of our internal control over financial reporting as of April 30, 2024 has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report which is included herein.

Remediation of Previously Disclosed Material Weaknesses

We previously identified and disclosed in our Form 10-K for the fiscal year ended April 30, 2022, as well as in our Quarterly Report on Form 10-Q filed for the quarters ended July 30, 2022, October 29, 2022 and January 28, 2023, the material weaknesses over identified deficiencies related to inadequate design and operation of certain controls at certain newly acquired businesses.

Specifically, management did not effectively select and develop certain information technology (“IT”) general controls related to access, computer operations and change management controls that led to deficiencies in the design and operation of control activities, including segregation of duties at certain newly acquired businesses.

The Company also had deficiencies in the design and operation of account reconciliations at certain newly acquired businesses.

As of April 30, 2023, we have completed the implementation of our remediation efforts of the material weaknesses.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis.

The remediation activities included, but are not limited to:

● rationalized access privileges for all system users and critical transactions based on job responsibilities considering segregation of duties (“SOD”);

● limited excess rights and access for all system users;

● implemented controls that require the periodic re-evaluation of user access privileges, including administrative access;

● enhanced system monitoring controls to confirm the adequacy of program change management and security controls;

● trained personnel on the design and operation of our internal controls over financial reporting, as well as hired additional resources with experience with the Committee of Sponsoring Organizations, or COSO, guidance;

Changes in Internal Control over Financial Reporting

Except for the identification of the material weaknesses described above, there were no changes in our internal control over financial reporting or in other factors identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15(f) or 15d-15(f) that occurred during the quarter ended April 30, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

There were no changes in our internal control over financial reporting or in other factors identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15(f) or 15d-15(f) that occurred during the fiscal year ended April 30, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Other Informatio n.

On March 19, 2024 , Kevin McDonnell , our Senior Vice President and Chief Financial Officer , adopted a trading arrangement (the “McDonnell Rule 10b5-1 Trading Plan”) for the sale of shares of Common Stock that is intended to satisfy the affirmative defense conditions of Exchange Act Rule 10b5-1(c).

The McDonnell Rule 10b5-1 Trading Plan, which has a term of approximately 9 months , provides for the sale of shares of Common Stock issuable under the terms of certain restricted stock awards granted to Mr.

McDonnell by the Company.

The aggregate number of shares of Common Stock that will be subject to sale pursuant to the terms of the McDonnell Rule 10b5-1 Trading Plan, is 3,202 shares.

Other than with respect to the McDonnell Rule 10b5-1 Trading Plan, none of our directors or officers informed us of the adoption or termination of a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as those terms are defined in Regulation S-K, Item 408 during the three-month period ended April 30, 2024.

Disclosure Regarding Foreign Jurisdictions That Prevent Inspections

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Directors, Executive Officer s, and Corporate Governance.

Certain information required by Item 401 and Item 405 of Regulation S-K will be included in the definitive proxy statement for our 2023 Annual Meeting of Stockholders, which will be filed no later than 120 days after April 30, 2023, and that information is incorporated by reference herein.

Certain information required by Item 401, Item 405, Item 407(c)(3) and Items 407(d)(4) and (d)(5) of Regulation S-K will be included in the definitive proxy statement for our 2024 Annual Meeting of Stockholders, which will be filed no later than 120 days after April 30, 2024, and that information is incorporated by reference herein.

Codes of Ethics

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There have been no material changes to the procedures by which security holders may recommend nominees to our board of directors.

The information required by Item 407(d)(4) and (5) of Regulation S-K will be included in the definitive proxy statement for our 2023 Annual Meeting of Stockholders, and that information is incorporated by reference herein.

Insider Trading Policy

We have adopted an Insider Trading Policy addressing our policies and procedures governing securities trading by our directors, officers, employees and certain other service providers and the company itself, intended to promote compliance with insider trading laws, rules and regulations, including Nasdaq listing standards, applicable to the company and such personnel.

A copy of the current Insider Trading Policy is filed with this Annual Report on Form 10-K as Exhibit 19.

Executive Compensation.

The information required by Item 402 and Item 407(e)(4) and (5) of Regulation S-K will be included in the definitive proxy statement for our 2023 Annual Meeting of Stockholders, and that information is incorporated by reference herein.

The information required by Item 402 and Items 407(e)(4) and (5) of Regulation S-K will be included in the definitive proxy statement for our 2024 Annual Meeting of Stockholders, and that information is incorporated by reference herein.

Security Ownership of Certain Beneficial Owner s and Management and Related Stockholder Matters.

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● Consolidated Balance Sheets at April 30, 2024 and 2023

● Consolidated Statements of (Loss) Income for the Years Ended April 30, 2023, 2022 and 2021

● Consolidated Statements of Comprehensive (Loss) Income for the Years Ended April 30, 2023, 2022 and 2021

● Consolidated Statements of Income (Loss) for the Years Ended April 30, 2024, 2023 and 2022

● Consolidated Statements of Comprehensive Income (Loss) for the Years Ended April 30, 2024, 2023 and 2022

● Consolidated Statements of Stockholders’ Equity for the Years Ended April 30, 2024, 2023 and 2022

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See Item 15(b) of this report below.

Agreement and Plan of Merger, dated as of August 18, 2023, by and among AeroVironment, Inc., Tropic Merger Sub, Inc., Tomahawk Robotics, Inc., and Shareholder Representative Services LLC, solely in its capacity as the Stockholder Representative.

Amended and Restated Certificate of Incorporation of AeroVironment, Inc.

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and BCORE Defender CA1W01, LLC, for the property located at 85 Moreland Road, Simi Valley, California

First Amendment to Lease, dated March 11, 2022, between AeroVironment, Inc.

and BCORE Defender CA1W01, LLC, for the property located at 85 Moreland Road, Simi Valley, California, dated as of September 10, 2023.

Standard Industrial/Commercial Single-Tenant Lease, dated March 3, 2008, between AeroVironment, Inc.

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Bank National Association

Joinder Agreement, dated October 30, 2023, between AeroVironment, Inc.

and Bank of America, N.A.

Share Purchase Agreement, dated December 3, 2020, by and between AeroVironment, Inc., Unmanned Systems Investments GmbH, and each of the unit holders of Unmanned Systems Investments GmbH

AeroVironment, Inc.

2023 Employee Stock Purchase Plan

Insider Trading Policy

Subsidiaries of AeroVironment, Inc.

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Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Nasdaq Rule 5608 Equity Incentive Compensation Recovery Policy

Inline XBRL Instance Document

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Incorporated by reference herein to the exhibits to the Company's Annual Report on Form 10-K filed June 28, 2022 (File No.

Incorporated by reference herein to the exhibits to the Company's Annual Report on Form 10-K filed June 27, 2023 (File No.

Incorporated by reference herein to Appendix A to the Company’s Definitive Proxy Statement on Schedule 14A filed August 17, 2023 (File No.

Incorporated by reference herein to the exhibits to the Company's Current Report on Form 8-K filed August 22, 2023 (File No.

Incorporated by reference herein to the exhibits to the Company's Quarterly Report on Form 10-Q filed December 5, 2023 (File No.

Pursuant to Items 601(b)(2) and/or 601(b)(10) of Regulation S-K, certain immaterial provisions of the agreement that would likely cause competitive harm to the Company if publicly disclosed have been redacted or omitted.

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Not applicable.

Form 10-K Summary

Not applicable.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

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June 26, 2024

/s/ Catharine Merigold

/s/ Mary Beth Long

June 26, 2024

Catharine Merigold

Mary Beth Long

/s/ Joseph L.

June 26, 2024

/s/ Charles Thomas Burbage

4 unchanged sentences

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-K

Item 8. Financial Statements and Supplementary Data