AeroVironment Inc 10-K

Item 8. Financial Statements and Supplementary Dat a. ​ AeroVironment, Inc. Audited Consolidated Financial Statements Index to Consolidated Financial Statements and Supplementary Data ​ ​ Page Report of Independent Registered Public Accounting Firm (PCAOB 34 ) ​ 80 ​ Consolidated Balance Sheets at April 30, 2024 and 2023 ​ 83 ​ Consolidated Statements of Income (Loss) for the Years Ended April 30, 2024, 2023 and 2022 ​ 84 ​ Consolidated Statements of Comprehensive Income (Loss) for the Years Ended April 30, 2024, 2023 and 2022 ​ 85 ​ Consolidated Statements of Stockholders’ Equity for the Years Ended April 30, 2024, 2023 and 2022 ​ 86 ​ Consolidated Statements of Cash Flows for the Years Ended April 30, 2024, 2023 and 2022 ​ 87 ​ Notes to Consolidated Financial Statements ​ 88 ​ Supplementary Data ​ ​ ​ Financial Statement Schedule : Schedule II—Valuation and Qualifying Accounts ​ 129 ​ ​ All other schedules are omitted because they are not applicable, not required or the information required is included in the Consolidated Financial Statements, including the notes thereto. ​ ​ 79 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ​ ​ To the Stockholders and the Board of Directors of AeroVironment, Inc. ​ Opinion on the Financial Statements ​ We have audited the accompanying consolidated balance sheets of AeroVironment, Inc. 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. ​ We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of April 30, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated June 26, 2024, expressed an unqualified opinion on the Company's internal control over financial reporting. ​ Basis for Opinion ​ These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. ​ We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. ​ 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 ​ Critical Audit Matter Description ​ The Company’s evaluation of goodwill for impairment involves the comparison of the fair value of each reporting unit to its carrying value. 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 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 80 Table of Contents 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. 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. ​ How the Critical Audit Matter Was Addressed in the Audit ​ Our audit procedures related to the expected amount and timing of future revenue projections used to estimate the fair value of the MUAS reporting unit included the following, among others: ​ ● We tested the effectiveness of management’s controls over their goodwill impairment evaluation, including those over the determination of the fair value of the MUAS reporting unit, such as controls related to management’s review of forecasts of future revenues. ​ ● We inquired of appropriate individuals, both within and outside of finance, regarding the revenue projections. ​ ● We assessed the reasonableness of management’s forecasts of future revenues by comparing the projections to historical results, certain peer companies, third-party industry forecasts, contractual agreements 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 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. 81 Table of Contents ​ 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 ​ Los Angeles, California June 26, 2024 ​ We have served as the Company’s auditor since fiscal 2020. ​ ​ 82 Table of Contents AEROVIRONMENT, INC. CONSOLIDATED BALANCE SHEET S (In thousands except share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ April 30, ​ ​ ​ 2024 ​ 2023 ​ ​ ​ ​ ​ ​ Assets ​ ​ ​ ​ ​ ​ ​ Current assets: ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 73,301 ​ $ 132,859 ​ Accounts receivable, net of allowance for doubtful accounts of $ 159 at April 30, 2024 and $ 156 at April 30, 2023 ​ ​ 70,305 ​ ​ 87,633 ​ Unbilled receivables and retentions ​ ​ 199,474 ​ ​ 105,653 ​ Inventories, net ​ ​ 150,168 ​ ​ 138,814 ​ Prepaid expenses and other current assets ​ ​ 22,333 ​ ​ 12,043 ​ Total current assets ​ ​ 515,581 ​ ​ 477,002 ​ Long-term investments ​ ​ 20,960 ​ ​ 23,613 ​ Property and equipment, net ​ ​ 46,602 ​ ​ 39,795 ​ Operating lease right-of-use assets ​ ​ 30,033 ​ ​ 27,363 ​ Deferred income taxes ​ ​ 41,303 ​ ​ 27,206 ​ Intangibles, net ​ ​ 72,224 ​ ​ 43,577 ​ Goodwill ​ ​ 275,652 ​ ​ 180,801 ​ Other assets ​ ​ 13,505 ​ ​ 5,220 ​ Total assets ​ $ 1,015,860 ​ $ 824,577 ​ Liabilities and stockholders’ equity ​ ​ ​ ​ ​ ​ ​ Current liabilities: ​ ​ ​ ​ ​ ​ ​ Accounts payable ​ $ 48,298 ​ $ 31,355 ​ Wages and related accruals ​ ​ 44,312 ​ ​ 35,637 ​ Customer advances ​ ​ 11,192 ​ ​ 16,645 ​ Current portion of long-term debt ​ ​ 10,000 ​ ​ 7,500 ​ Current operating lease liabilities ​ ​ 9,841 ​ ​ 8,229 ​ Income taxes payable ​ ​ 4,162 ​ ​ 2,342 ​ Other current liabilities ​ ​ 17,074 ​ ​ 19,626 ​ Total current liabilities ​ ​ 144,879 ​ ​ 121,334 ​ Long-term debt, net of current portion ​ ​ 17,092 ​ ​ 125,904 ​ Non-current operating lease liabilities ​ ​ 22,745 ​ ​ 21,189 ​ Other non-current liabilities ​ ​ 2,132 ​ ​ 746 ​ Liability for uncertain tax positions ​ ​ 5,603 ​ ​ 2,705 ​ Deferred income taxes ​ ​ 664 ​ ​ 1,729 ​ Commitments and contingencies ​ ​ ​ ​ ​ ​ ​ Stockholders’ equity: ​ ​ ​ ​ ​ ​ ​ Preferred stock, $ 0.0001 par value: ​ ​ ​ ​ ​ ​ ​ Authorized shares— 10,000,000 ; none issued or outstanding at April 30, 2024 and April 30, 2023 ​ ​ — ​ ​ — ​ Common stock, $ 0.0001 par value: ​ ​ ​ ​ ​ ​ ​ Authorized shares— 100,000,000 ​ ​ ​ ​ ​ ​ ​ Issued and outstanding shares— 28,134,438 shares at April 30, 2024 and 26,216,897 shares at April 30, 2023 ​ ​ 4 ​ ​ 4 ​ Additional paid-in capital ​ ​ 597,646 ​ ​ 384,397 ​ Accumulated other comprehensive loss ​ ​ ( 5,592 ) ​ ​ ( 4,452 ) ​ Retained earnings ​ ​ 230,687 ​ ​ 171,021 ​ Total stockholders’ equity ​ ​ 822,745 ​ ​ 550,970 ​ Total liabilities and stockholders’ equity ​ $ 1,015,860 ​ $ 824,577 ​ ​ See accompanying notes to consolidated financial statements. 83 Table of Contents AEROVIRONMENT, INC. CONSOLIDATED STATEMENTS OF INCOM E (LOSS) (In thousands except share and per share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended April 30, ​ ​ 2024 2023 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Product sales ​ $ 585,771 ​ $ 353,062 ​ $ 240,683 ​ Contract services ​ 130,949 ​ 187,474 ​ 205,049 ​ ​ ​ 716,720 ​ 540,536 ​ 445,732 ​ Cost of sales: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Product sales ​ 340,174 ​ 203,419 ​ 140,596 ​ Contract services ​ 92,615 ​ 163,603 ​ 163,900 ​ ​ ​ 432,789 ​ 367,022 ​ 304,496 ​ Gross margin: ​ ​ ​ ​ ​ ​ ​ ​ ​ Product sales ​ ​ 245,597 ​ ​ 149,643 ​ ​ 100,087 ​ Contract services ​ ​ 38,334 ​ ​ 23,871 ​ ​ 41,149 ​ ​ ​ 283,931 ​ 173,514 ​ 141,236 ​ Selling, general and administrative ​ 114,420 ​ 131,905 ​ 96,434 ​ Research and development ​ 97,687 ​ 64,255 ​ 54,689 ​ Impairment of goodwill ​ ​ — ​ ​ 156,017 ​ ​ — ​ Income (loss) from operations ​ 71,824 ​ ( 178,663 ) ​ ( 9,887 ) ​ Other (loss) income: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest expense, net ​ ( 4,220 ) ​ ( 9,368 ) ​ ( 5,440 ) ​ Other expense, net ​ ( 4,373 ) ​ ( 346 ) ​ ( 10,313 ) ​ Sale of ownership in HAPSMobile Inc. joint venture ​ ​ — ​ ​ — ​ ​ 6,497 ​ Income (loss) before income taxes ​ 63,231 ​ ( 188,377 ) ​ ( 19,143 ) ​ Provision for (benefit from) income taxes ​ ​ 1,891 ​ ( 14,663 ) ​ ( 10,369 ) ​ Equity method investment (loss) income, net of tax ​ ( 1,674 ) ​ ( 2,453 ) ​ 4,589 ​ Net income (loss) ​ ​ 59,666 ​ ​ ( 176,167 ) ​ ​ ( 4,185 ) ​ Net income attributable to noncontrolling interest ​ ​ — ​ ​ ( 45 ) ​ ​ ( 3 ) ​ Net income (loss) attributable to AeroVironment, Inc. ​ $ 59,666 ​ $ ( 176,212 ) ​ $ ( 4,188 ) ​ Net income (loss) per share attributable to AeroVironment, Inc. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic ​ $ 2.19 ​ $ ( 7.04 ) ​ $ ( 0.17 ) ​ Diluted ​ ​ 2.18 ​ ​ ( 7.04 ) ​ ​ ( 0.17 ) ​ Weighted-average shares outstanding: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic ​ 27,203,417 ​ 25,044,881 ​ 24,685,534 ​ Diluted ​ 27,327,993 ​ 25,044,881 ​ 24,685,534 ​ ​ See accompanying notes to consolidated financial statements. ​ 84 Table of Contents ​ AEROVIRONMENT, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOM E (LOSS) (In thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended April 30, ​ ​ 2024 2023 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income (loss) ​ $ 59,666 ​ $ ( 176,167 ) ​ $ ( 4,185 ) ​ Other comprehensive income (loss): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 ​ — ​ 53 ​ ( 43 ) ​ Change in foreign currency translation adjustments ​ ​ ( 1,140 ) ​ ​ 2,009 ​ ​ ( 6,814 ) ​ Total comprehensive income (loss) ​ ​ 58,526 ​ ​ ( 174,105 ) ​ ​ ( 11,042 ) ​ Net income attributable to noncontrolling interest ​ ​ — ​ ​ ( 45 ) ​ ​ ( 3 ) ​ Comprehensive income (loss) attributable to AeroVironment, Inc. ​ $ 58,526 ​ $ ( 174,150 ) ​ $ ( 11,045 ) ​ ​ See accompanying notes to consolidated financial statements. ​ 85 Table of Contents AEROVIRONMENT, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUIT Y (In thousands except share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ ​ Other ​ Total ​ Non- ​ ​ ​ ​ ​ Common Stock ​ Paid-In ​ Retained ​ Comprehensive ​ AeroVironment, Inc. ​ Controlling ​ ​ ​ ​ Shares Amount Capital Earnings (Loss) Income ​ Equity ​ Interest Total Balance at April 30, 2021 24,777,295 ​ 2 ​ 260,327 ​ 351,421 ​ 343 ​ ​ 612,093 ​ ​ 14 ​ 612,107 ​ Net (loss) income — ​ — ​ — ​ ( 4,188 ) ​ — ​ ​ ( 4,188 ) ​ ​ 3 ​ ( 4,185 ) ​ Unrealized loss on investments — ​ — ​ — ​ — ​ ( 43 ) ​ ​ ( 43 ) ​ ​ — ​ ( 43 ) ​ Foreign currency translation ​ — ​ — ​ — ​ — ​ ( 6,814 ) ​ ​ ( 6,814 ) ​ ​ — ​ ( 6,814 ) ​ Stock options exercised 114,362 ​ — ​ 2,776 ​ — ​ ​ — ​ ​ 2,776 ​ ​ — ​ 2,776 ​ Restricted stock awards 104,402 ​ — ​ — ​ — ​ ​ — ​ ​ — ​ ​ — ​ — ​ Restricted stock awards forfeited ( 32,120 ) ​ — ​ — ​ — ​ ​ — ​ ​ — ​ ​ — ​ — ​ Business acquisition ​ ( 12,652 ) ​ — ​ ( 1,245 ) ​ — ​ ​ — ​ ​ ( 1,245 ) ​ ​ — ​ ​ ( 1,245 ) ​ Tax withholding payment related to net share settlement of equity awards ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ​ ​ ​ 224 ​ 224 ​ Stock-based compensation — ​ — ​ 5,390 ​ — ​ ​ — ​ ​ 5,390 ​ ​ — ​ 5,390 ​ Balance at April 30, 2022 24,951,287 ​ 2 ​ 267,248 ​ 347,233 ​ ( 6,514 ) ​ ​ 607,969 ​ ​ 241 ​ 608,210 ​ Net (loss) income — ​ — ​ — ​ ( 176,212 ) ​ — ​ ​ ( 176,212 ) ​ ​ 45 ​ ( 176,167 ) ​ Unrealized gain on investments — ​ — ​ — ​ — ​ 53 ​ ​ 53 ​ ​ — ​ 53 ​ Foreign currency translation ​ — ​ — ​ — ​ — ​ 2,009 ​ ​ 2,009 ​ ​ — ​ 2,009 ​ Stock options exercised 100,000 ​ — ​ 2,278 ​ — ​ ​ — ​ ​ 2,278 ​ ​ — ​ 2,278 ​ Restricted stock awards 80,168 ​ — ​ — ​ — ​ ​ — ​ ​ — ​ ​ — ​ — ​ Restricted stock awards forfeited ( 11,476 ) ​ — ​ — ​ — ​ ​ — ​ ​ — ​ ​ — ​ — ​ Tax withholding payment related to net share settlement of equity awards ( 12,812 ) ​ — ​ ( 1,065 ) ​ — ​ ​ — ​ ​ ( 1,065 ) ​ ​ — ​ ( 1,065 ) ​ Shares issued, net of issuance costs ​ 1,109,730 ​ 2 ​ 105,171 ​ — ​ ​ — ​ ​ 105,173 ​ ​ — ​ ​ 105,173 ​ Deconsolidation of previously controlled subsidiary ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 286 ) ​ ​ ( 286 ) ​ Stock based compensation — ​ — ​ 10,765 ​ — ​ ​ — ​ ​ 10,765 ​ ​ — ​ 10,765 ​ Balance at April 30, 2023 26,216,897 ​ ​ 4 ​ ​ 384,397 ​ ​ 171,021 ​ ​ ( 4,452 ) ​ ​ 550,970 ​ ​ — ​ ​ 550,970 ​ Net income — ​ — ​ — ​ 59,666 ​ — ​ ​ 59,666 ​ ​ — ​ 59,666 ​ Foreign currency translation ​ — ​ — ​ — ​ — ​ ( 1,140 ) ​ ​ ( 1,140 ) ​ ​ — ​ ( 1,140 ) ​ Restricted stock awards 151,113 ​ — ​ — ​ — ​ ​ — ​ ​ — ​ ​ — ​ — ​ Restricted stock awards forfeited ( 11,470 ) ​ — ​ — ​ — ​ ​ — ​ ​ — ​ ​ — ​ — ​ Tax withholding payment related to net share settlement of equity awards ( 15,471 ) ​ — ​ ( 1,596 ) ​ — ​ ​ — ​ ​ ( 1,596 ) ​ ​ — ​ ( 1,596 ) ​ Shares issued, net of issuance costs ​ 807,370 ​ — ​ 87,956 ​ — ​ ​ — ​ ​ 87,956 ​ ​ — ​ 87,956 ​ Issuance of common stock for business acquisition ​ 985,999 ​ ​ — ​ 109,820 ​ — ​ ​ — ​ ​ 109,820 ​ ​ — ​ 109,820 ​ Stock based compensation — ​ — ​ 17,069 ​ — ​ ​ — ​ ​ 17,069 ​ ​ — ​ 17,069 ​ Balance at April 30, 2024 28,134,438 ​ $ 4 ​ $ 597,646 ​ $ 230,687 ​ $ ( 5,592 ) ​ $ 822,745 ​ $ — ​ $ 822,745 ​ ​ See accompanying notes to consolidated financial statements. ​ 86 Table of Contents AEROVIRONMENT, INC. CONSOLIDATED STATEMENTS OF CASH FLOW S (In thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended April 30, ​ 2024 2023 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating activities ​ ​ ​ ​ ​ ​ ​ ​ Net income (loss) ​ $ 59,666 ​ $ ( 176,167 ) ​ $ ( 4,185 ) ​ Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Depreciation and amortization ​ ​ 35,749 ​ ​ 99,999 ​ ​ 60,825 ​ Impairment of goodwill ​ ​ — ​ ​ 156,017 ​ ​ — ​ Loss (gain) from equity method investments ​ ​ 1,674 ​ ​ 2,453 ​ ​ ( 5,889 ) ​ Loss on deconsolidation of previously controlled subsidiary ​ ​ — ​ ​ 189 ​ ​ — ​ Amortization of debt issuance costs ​ ​ 1,009 ​ ​ 845 ​ ​ 789 ​ Provision for doubtful accounts ​ ​ 4 ​ ​ 99 ​ ​ ( 6 ) ​ Reserve for inventory excess and obsolescence ​ ​ 13,937 ​ ​ 8,136 ​ ​ 2,271 ​ Other non-cash expense, net ​ ​ 1,316 ​ ​ 1,995 ​ ​ 649 ​ Non-cash lease expense ​ ​ 10,400 ​ ​ 8,048 ​ ​ 6,814 ​ Loss on foreign currency transactions ​ ​ 22 ​ ​ 119 ​ ​ 233 ​ Unrealized loss on available-for-sale equity securities, net ​ ​ 3,945 ​ ​ 132 ​ ​ — ​ Deferred income taxes ​ ​ ( 23,290 ) ​ ​ ( 18,661 ) ​ ​ ( 7,282 ) ​ Stock-based compensation ​ ​ 17,069 ​ ​ 10,765 ​ ​ 5,390 ​ Loss on disposal of property and equipment ​ ​ 621 ​ ​ 1,497 ​ ​ 8,277 ​ Amortization of debt securities discount ​ ​ — ​ ​ 125 ​ ​ 242 ​ Changes in operating assets and liabilities, net of acquisitions: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accounts receivable ​ ​ 19,208 ​ ​ ( 27,423 ) ​ ​ 3,084 ​ Unbilled receivables and retentions ​ ​ ( 92,850 ) ​ ​ ( 1,446 ) ​ ​ ( 31,883 ) ​ Inventories ​ ​ ( 23,045 ) ​ ​ ( 61,846 ) ​ ​ ( 29,431 ) ​ Income taxes receivable ​ ​ — ​ ​ 442 ​ ​ ( 442 ) ​ Prepaid expenses and other assets ​ ​ ( 20,279 ) ​ ​ ( 3,821 ) ​ ​ ( 4,534 ) ​ Accounts payable ​ ​ 12,968 ​ ​ 12,538 ​ ​ ( 7,044 ) ​ Other liabilities ​ ​ ( 2,832 ) ​ ​ ( 2,635 ) ​ ​ ( 7,496 ) ​ Net cash provided by (used in) operating activities ​ ​ 15,292 ​ ​ 11,400 ​ ​ ( 9,618 ) ​ Investing activities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Acquisition of property and equipment ​ ​ ( 22,983 ) ​ ​ ( 14,868 ) ​ ​ ( 22,289 ) ​ Equity method investments ​ ​ ( 3,074 ) ​ ​ ( 5,778 ) ​ ​ ( 6,884 ) ​ Equity security investments ​ ​ — ​ ​ ( 5,100 ) ​ ​ — ​ Business acquisitions, net of cash acquired ​ ​ ( 24,157 ) ​ ​ ( 5,105 ) ​ ​ ( 46,150 ) ​ Acquisition of intangibles ​ ​ ( 1,500 ) ​ ​ — ​ ​ — ​ Proceeds from sale of ownership in equity method investment ​ ​ — ​ ​ — ​ ​ 6,497 ​ Proceeds from loan repayment ​ ​ — ​ ​ — ​ ​ 4,345 ​ Proceeds from deconsolidation of previously controlled subsidiary, net of cash deconsolidated ​ ​ — ​ ​ ( 635 ) ​ ​ — ​ Redemptions of available-for-sale investments ​ ​ — ​ ​ 26,059 ​ ​ 35,851 ​ Purchases of available-for-sale investments ​ ​ — ​ ​ ( 1,326 ) ​ ​ ( 23,882 ) ​ Other ​ ​ — ​ ​ ( 250 ) ​ ​ 224 ​ Net cash used in investing activities ​ ​ ( 51,714 ) ​ ​ ( 7,003 ) ​ ​ ( 52,288 ) ​ Financing activities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Principal payments of term loan ​ ​ ( 107,000 ) ​ ​ ( 55,000 ) ​ ​ ( 10,000 ) ​ Holdback and retention payments for business acquisition ​ ​ ( 500 ) ​ ​ — ​ ​ ( 7,814 ) ​ Payment of contingent consideration ​ ​ ( 2,132 ) ​ ​ — ​ ​ — ​ Proceeds from shares issued, net of issuance costs ​ ​ 88,437 ​ ​ 104,649 ​ ​ — ​ Payment of debt issuance costs ​ ​ ( 37 ) ​ ​ — ​ ​ ( 293 ) ​ Tax withholding payment related to net settlement of equity awards ​ ​ ( 1,596 ) ​ ​ ( 1,065 ) ​ ​ ( 1,245 ) ​ Exercise of stock options ​ ​ — ​ ​ 2,278 ​ ​ 2,776 ​ Other ​ ​ ( 24 ) ​ ​ ( 28 ) ​ ​ ( 31 ) ​ Net cash (used in) provided by financing activities ​ ​ ( 22,852 ) ​ ​ 50,834 ​ ​ ( 16,607 ) ​ Effects of currency translation on cash and cash equivalents ​ ​ ( 284 ) ​ ​ 397 ​ ​ ( 1,319 ) ​ Net (decrease) increase in cash, cash equivalents, and restricted cash ​ ( 59,558 ) ​ 55,628 ​ ( 79,832 ) ​ Cash, cash equivalents and restricted cash at beginning of period ​ ​ 132,859 ​ ​ 77,231 ​ ​ 157,063 ​ Cash, cash equivalents and restricted cash at end of period ​ $ 73,301 ​ $ 132,859 ​ $ 77,231 ​ Supplemental disclosures of cash flow information ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash paid, net during the period for: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income taxes ​ $ 20,438 ​ $ 2,911 ​ $ 1,879 ​ Interest ​ $ 6,823 ​ $ 10,229 ​ $ 5,025 ​ Non-cash activities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Issuance of common stock for business acquisition ​ $ 109,820 ​ $ — ​ $ — ​ 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 ​ $ — ​ $ 53 ​ $ ( 43 ) ​ Change in foreign currency translation adjustments ​ $ ( 1,140 ) ​ $ 2,009 ​ $ 6,814 ​ Issuances of inventory to property and equipment, ISR in-service assets ​ $ — ​ $ 6,306 ​ $ 17,481 ​ Acquisitions of property and equipment included in accounts payable ​ $ 986 ​ $ 721 ​ $ 1,117 ​ ​ See accompanying notes to consolidated financial statements. ​ 87 Table of Contents AEROVIRONMENT, INC. ​ NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ​ 1. Organization and Significant Accounting Policies ​ Organization ​ AeroVironment, Inc., a Delaware corporation, is engaged in the design, development, production, delivery and support of a technologically advanced portfolio of intelligent, multi-domain robotic systems and related services for government agencies and businesses. AeroVironment, Inc. 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 ​ Principles of Consolidation ​ The accompanying consolidated financial statements include the accounts of AeroVironment, Inc. and its wholly-owned subsidiaries Arcturus UAV, Inc. (“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. Refer to Note 21—Business Acquisitions for further details. ​ 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 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. The Company resumes accounting for the investment under the equity method if the entity subsequently reports net income and the Company’s share of that net income exceeds the share of net losses not recognized during the period the equity method was suspended. ​ 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 88 Table of Contents 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. (“HAPSMobile”). In March 2022, the Company sold its 7 % share of HAPSMobile to SoftBank. Following the sale, SoftBank owns 100 % of HAPSMobile. 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 income (loss). The carrying value of the investment in HAPSMobile was recorded in other assets. Refer to Note 8—Investments in Companies Accounted for Using the Equity Method for further details. ​ In July 2019, the Company made its initial capital contribution to a limited partnership fund focusing on highly relevant technologies and start-up companies serving defense and industrial markets. In March 2022, the Company entered into a second related limited partnership fund also focusing on highly relevant technologies and start-up companies serving defense and industrial markets. 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. Refer to Note 8—Investments in Companies Accounted for Using the Equity Method for further details. ​ On September 15, 2021, the Company entered into a Share Sale and Purchase Agreement with Toygun Savunma Sanayi ve Havacilik Anonim Sirketi (“Toygun”) whereby the Company sold 35 % of the common shares of the Company’s Turkish joint venture, Altoy Savunma Sanayi ve Havacilik Anonim Sirketi (“Altoy”), to Toygun. On October 14, 2022, the Company sold an additional 35 % of the common shares of Altoy to Toygun. As a result of the share sales, the Company decreased its interest in Altoy from 85 % to 15 % and has determined that it no longer controls Altoy. Therefore, the Company no longer consolidates Altoy in the Company’s consolidated financial statements. As the Company has the ability to exercise significant influence over the operating and financial policies of Altoy, the Company accounts for the investment as an equity method investment and records its proportion of any gains or losses of Altoy in equity method investments (loss) income, net of tax. Refer to Note 8— Investments in Companies Accounted for Using the Equity Method for further details. ​ Segments ​ Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources and in assessing performance. The Company’s CODM, who is the Chief Executive Officer, makes operating decisions, assesses performance and makes resource allocation decisions, including the focus of research and development (“R&D”). Accordingly, the Company identifies three reportable segments. ​ Use of Estimates ​ The preparation of consolidated financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Significant estimates made by management include, but are not limited to, valuation of: 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. ​ 89 Table of Contents Reclassifications ​ Certain prior year amounts have been reclassified to conform to the current year presentation. 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 ​ The Company considers all highly liquid investments with an original maturity of three months or less at the time of purchase to be cash equivalents. The Company’s cash equivalents are comprised of money market funds, certificates of deposit of major financial institutions and U.S. Treasury bills. ​ Restricted Cash ​ The Company classifies cash accounts which are not available for general use as restricted cash. The Company had no restricted cash as of April 30, 2024 or 2023, respectively. ​ Investments ​ The Company’s investments are accounted for as available-for-sale and are reported at fair value. Unrealized gains and losses for debt securities are excluded from earnings and reported as a separate component of stockholders’ equity, net of deferred income taxes for available-for-sale investments. Investments in equity securities and warrants are measured at fair value with net unrealized gains and losses from changes in the fair value recognized in other (expense) income, net. Gains and losses realized on the disposition of investment securities are determined on the specific identification basis and credited or charged to income. Management determines the appropriate classification of securities at the time of purchase and reevaluates such designation as of each balance sheet date. ​ Fair Values of Financial Instruments ​ Fair values of cash and cash equivalents, accounts receivable, unbilled receivables, retentions and accounts payable approximate cost due to the short period of time to maturity. ​ Concentration of Credit Risk ​ Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of cash, cash equivalents, municipal bonds, U.S. government securities, U.S. government-guaranteed agency securities, U.S. government sponsored agency debt securities, highly rated corporate bonds, and accounts receivable. The Company currently invests in equity securities and limited partnership funds. The Company’s revenue and accounts receivable are with a limited number of corporations and governmental entities. In the aggregate, 76 %, 68 % and 66 % of the Company’s revenue came from agencies of the U.S. government for the years ended April 30, 2024, 2023 and 2022, respectively. These agencies accounted for 41 % and 42 % of the accounts receivable balances at April 30, 2024 and 2023, respectively. One such agency, the U.S. Army, accounted for 11 %, 6 % and 21 % of the Company’s consolidated revenue for the years ended April 30, 2024, 2023 and 2022, respectively. The Company performs ongoing credit evaluations of its commercial customers and maintains an allowance for potential losses. ​ Accounts Receivable, Unbilled Receivables and Retentions ​ Accounts receivable represents primarily U.S. government and allied foreign governments, and to a lesser extent commercial receivables, net of allowances for doubtful accounts. Unbilled receivables represent costs in excess of billings on incomplete contracts and, where applicable, accrued profit related to government long-term contracts on which revenue has been recognized, but for which the customer has not yet been billed. Unbilled receivables are considered contract assets. 90 Table of Contents ​ Retentions represent amounts withheld by customers until contract completion. At April 30, 2024 and 2023, the retention balances were $ 744,000 and $ 615,000 , respectively. The Company determines the allowance for doubtful accounts based on historical customer experience, age of receivable and other currently available evidence. When a specific account is deemed uncollectible, the account is written off against the allowance. The allowance for doubtful accounts reflects the Company’s best estimate of expected credit losses over the life of the receivable; such losses have historically been within management’s expectations. An account is deemed past due based on contractual terms rather than on how recently payments have been received. ​ Inventories ​ Inventories are stated at the lower of cost (using the weighted average costing method) or net realizable value. Inventory write-offs and write-down provisions are provided to cover risks arising from slow-moving items or technological obsolescence and for market prices lower than cost. The Company periodically evaluates the quantities on hand relative to current and historical selling prices and historical and projected sales volume. Based on this evaluation, provisions are made to write inventory down to its net realizable value. ​ Long-Lived Assets ​ Property and equipment are carried at cost. Depreciation of property and equipment, including amortization of leasehold improvements, are provided using the straight-line method over the following estimated useful lives: ​ ​ ​ ​ ​ Machinery and equipment 2 – 7 years Computer equipment and software 2 – 5 years ​ In-service ISR assets ​ 3 years ​ Furniture and fixtures 3 – 7 years ​ Leasehold improvements Lesser of useful life or term of lease ​ ​ Maintenance, repairs and minor renewals are charged directly to expense as incurred. 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 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. The estimated future cash flows are based upon, among other things, assumptions about expected future operating performance, and may differ from actual cash flows. 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. ​ 91 Table of Contents 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. The Company determines the appropriate useful life by performing an analysis of expected cash flows based on historical experience of the acquired businesses. Intangible assets are amortized over their estimated useful lives using the straight-line method which approximates the pattern in which the economic benefits are consumed. The estimated useful life for the Company’s intangible assets are as follows: ​ ​ ​ ​ ​ Technology 3 – 12 years Backlog ​ 1 year ​ Licenses 3 years ​ Customer relationships 3 – 5 years ​ In-process research and development ​ 3 years ​ Trademarks and tradenames 6 years ​ Non-compete agreements ​ Contractual term ​ ​ The Company monitors conditions related to these assets to determine whether events and circumstances warrant a revision to the remaining amortization period. The Company tests its intangible assets with finite lives for potential impairment whenever management concludes events or changes in circumstances indicate that the carrying amount may not be recoverable. The original estimate of an asset’s useful life and the impact of an event or circumstance on either an asset’s useful life or carrying value involve significant judgment. 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 ​ Goodwill represents the excess of the cost of an acquired entity over the fair value of the acquired net assets. Goodwill is tested at the reporting unit level for impairment annually during the fourth quarter of the Company’s fiscal year or when events or circumstances change in a manner that indicates goodwill might be impaired. Goodwill is assigned to the reporting units based on specific identification. Events or circumstances that could trigger an impairment review include, but are not limited to, a significant adverse change in legal factors or in the business or political climate, an adverse action or assessment by a regulator, unanticipated competition, a loss of key personnel, significant changes in the manner of the Company’s use of the acquired assets or the strategy for the Company’s overall business, significant negative industry or economic trends or significant underperformance relative to projected future results of operations. ​ 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, 92 Table of Contents 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. If determined to be necessary, the quantitative impairment test shall be used to identify goodwill impairment and measure the amount of a goodwill impairment loss to be recognized (if any). For the quantitative impairment test, the Company estimates the fair value by weighting the results from the income approach and the market approach. These valuation approaches consider a number of factors that include, but are not limited to, prospective financial information, growth rates, terminal value, discount rates, and comparable multiples from publicly traded companies in the Company’s industry and require the Company to make certain assumptions and estimates regarding industry economic factors and the future profitability of its business. ​ When performing the income approach for each reporting unit, the Company 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, which are updated at least annually and reviewed by management. 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. ​ When performing the market approach for each reporting unit, the Company utilizes the guideline public company method and the guideline transaction method. The guideline public company method incorporates revenue and earnings multiples from publicly traded companies with operations and other characteristics similar to each reporting unit. The selected multiples consider each reporting unit’s relative growth, profitability, size, and risk relative to the selected publicly traded companies. The guideline transaction method incorporates implied multiples based on transactions from publicly traded companies with similar characteristics to each reporting unit. ​ 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 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 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. ​ 93 Table of Contents 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 ​ The Company accrues an estimate of its exposure to warranty claims based upon both current and historical product sales data and warranty costs incurred. Product warranty reserves are recorded in other current liabilities. ​ Accrued Sales Commissions ​ As of April 30, 2024 and 2023, the Company accrued sales commissions in other current liabilities of $ 3,132,000 and $ 3,011,000 , respectively. ​ Self-Insurance Liability ​ The Company is self-insured for employee medical claims, subject to individual and aggregate stop loss policies. The Company estimates a liability for claims filed and incurred but not reported based upon recent claims experience and an analysis of the average period of time between the occurrence of a claim and the time it is reported to and paid by the Company. As of April 30, 2024 and 2023, the Company estimated and recorded a self-insurance liability in wages and related accruals of approximately $ 1,244,000 and $ 1,383,000 , respectively. ​ Income Taxes ​ Deferred income tax assets and liabilities are computed annually for differences between the financial statement and income tax bases of assets and liabilities that will result in taxable or deductible amounts in the future. The provision for income taxes reflects the taxes to be paid for the period and the change during the period in the deferred income tax assets and liabilities. The Company records a valuation allowance to reduce the deferred tax assets to the amount of future tax benefit that is more likely than not to be realized. For uncertain tax positions, the Company determines whether it is “more likely than not” that a tax position will be sustained upon examination by the appropriate taxing authorities before any part of the benefit can be recorded in the financial statements. For those tax positions where it is “not more likely than not” that a tax benefit will be sustained, no tax benefit is recognized. Where applicable, associated interest and penalties are also recorded. ​ Customer Advances ​ The Company receives advances, performance-based payments and progress payments from customers that may exceed costs incurred on certain contracts, including contracts with agencies of the U.S. government resulting in contract liabilities. These advances are classified as customer advances and will be offset against billings. ​ Revenue Recognition ​ The Company’s revenue is generated pursuant to written contractual arrangements to design, develop, manufacture and/or modify complex products, and to provide related engineering, technical and other services according to the specifications of the customers. These contracts may be firm fixed price (“FFP”), cost plus fixed fee (“CPFF”), or time and materials (“T&M”). The Company considers all such contracts to be within the scope of ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). ​ Performance Obligations ​ 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 94 Table of Contents 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. For contracts with multiple performance obligations, the Company allocates the contract’s transaction price to each performance obligation using its observable standalone selling price for products and services. When the standalone selling price is not directly observable, the Company uses its best estimate of the standalone selling price of each distinct good or service in the contract using the cost plus reasonable margin approach. This approach estimates the Company’s expected costs of satisfying the performance obligation and then adds an appropriate margin for that distinct good or service. ​ Contract modifications are routine in the performance of the Company’s contracts. In most instances, contract modifications are for additional goods and/or services that are distinct and, therefore, accounted for as new contracts. ​ 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 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. Contract services revenue is recognized over time as services are rendered. Typically, revenue is recognized over time using an input measure (e.g., costs incurred to date relative to total estimated costs at completion) to measure progress. Contract services revenue, including ISR services, is recognized over time as services are rendered. The Company elected the right to invoice practical expedient in which if an entity has a right to consideration from a customer in an amount that corresponds directly with the value to the customer of the entity’s performance completed to date, such as flight hours for ISR services, the entity may recognize revenue in the amount to which the entity has a right to invoice. Training services are recognized over time using an output method based on days of training completed. ​ For performance obligations satisfied over time, revenue is generally recognized using costs incurred to date relative to total estimated costs at completion to measure progress. Incurred costs represent work performed, which correspond with, and thereby best depict, transfer of control to the customer. Contract costs include labor, materials, subcontractors’ costs, other direct costs, and indirect costs applicable on government and commercial contracts. ​ 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 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. ​ On April 30, 2024, the Company had approximately $ 400,201,000 of remaining performance obligations under contracts with its customers, which the Company also refers to as backlog. The Company currently expects to recognize approximately 90 % of the remaining performance obligations as revenue in fiscal 2025 and an additional 10 % in fiscal 2026 . ​ The Company collects sales, value add, and other taxes concurrent with revenue producing activities, which are excluded from revenue when they are both imposed on a specific transaction and collected from a customer. ​ Contract Estimates ​ Accounting for contracts and programs primarily with a duration of less than six months involves the use of various techniques to estimate total contract revenue and costs. For long-term contracts, the Company estimates the total expected costs to complete the contract and recognizes revenue based on the percentage of costs incurred at period end. 95 Table of Contents Typically, revenue is recognized over time using costs incurred to date relative to total estimated costs at completion to measure progress toward satisfying the Company’s performance obligations. Incurred costs represent work performed, which corresponds with, and thereby best depicts, the transfer of control to the customer. Contract costs include labor, materials, subcontractors’ costs, other direct costs, and indirect costs applicable on government and commercial contracts. ​ Contract estimates are based on various assumptions to project the outcome of future events that may span several years. These assumptions include labor productivity and availability, the complexity of the work to be performed, the cost and availability of materials, the performance of subcontractors, and the availability and timing of funding from the customer. ​ The nature of the Company’s contracts gives rise to several types of variable consideration, including undefinitized contract actions which are within the scope of ASC 606 with final contract values to be negotiated, penalty fees and incentive awards generally for late delivery and early delivery, respectively. The Company generally estimates such variable consideration as the most likely amount. In addition, the Company includes the estimated variable consideration to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the related uncertainty is resolved. These estimates are based on historical award experience, anticipated performance and the Company’s best judgment at the time. Based on experience in estimating these amounts, they are included in the transaction price of the Company’s contracts and the associated remaining performance obligations. ​ As a significant change in one or more of these estimates could affect the profitability of the Company’s contracts, the Company regularly reviews and updates its contract-related estimates. Changes in cumulative revenue estimates, due to changes in the estimated transaction price or cost estimates including definitization of contracts, are recorded using a cumulative catch-up adjustment in the period identified. In the period undefinitized contract actions become definitized, a cumulative catch-up adjustment is recorded to reflect the final consideration, which could have a material positive or negative impact. ​ If at any time the estimate of contract profitability indicates an anticipated loss on the contract, the Company recognizes the total loss in the quarter it is identified, and it is recorded in other current liabilities. The balance of forward loss reserves as of April 30, 2024 and April 30, 2023 was $ 374,000 and $ 1,878,000 , respectively. The Company recorded the forward loss reserves as the total estimated costs to complete the contracts are in excess of the total remaining consideration of the contracts. No adjustment on the forward loss reserve for any one contract was material to the Company’s consolidated financial statements for the fiscal years ended April 30, 2024, 2023 or 2022. ​ 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 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. ​ 96 Table of Contents Revenue by Category ​ The following tables present the Company’s revenue disaggregated by segment, contract type, customer category and geographic location (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended April 30, Revenue by segment ​ 2024 2023 ​ 2022 UxS ​ $ 448,006 ​ $ 343,910 ​ $ 300,743 LMS ​ ​ 192,587 ​ ​ 120,624 ​ ​ 76,415 MW ​ ​ 76,127 ​ ​ 76,002 ​ ​ 68,574 Total revenue ​ $ 716,720 ​ $ 540,536 ​ $ 445,732 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended April 30, Revenue by contract type ​ 2024 2023 ​ 2022 FFP ​ $ 634,266 ​ $ 430,547 ​ $ 346,092 CPFF ​ ​ 77,458 ​ ​ 104,444 ​ ​ 93,428 T&M ​ 4,996 ​ 5,545 ​ 6,212 Total revenue ​ $ 716,720 ​ $ 540,536 ​ $ 445,732 ​ Each of these contract types presents advantages and disadvantages. Typically, the Company assumes more risk with FFP contracts. However, these types of contracts generally offer additional profits when the Company completes the work for less than originally estimated. CPFF contracts generally subject the Company to lower risk. Accordingly, the associated base fees are usually lower than fees on FFP contracts. Under T&M contracts, the Company’s profit may vary if actual labor hour rates vary significantly from the negotiated rates. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended April 30, Revenue by customer category ​ 2024 2023 ​ 2022 U.S. government ​ $ 544,885 ​ $ 366,895 ​ $ 294,941 Non-U.S. government ​ ​ 171,835 ​ ​ 173,641 ​ ​ 150,791 Total revenue ​ $ 716,720 ​ $ 540,536 ​ $ 445,732 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended April 30, Revenue by geographic location ​ 2024 2023 ​ 2022 Domestic ​ $ 271,727 ​ $ 251,428 ​ $ 262,258 International ​ ​ 444,993 ​ ​ 289,108 ​ ​ 183,474 Total revenue ​ $ 716,720 ​ $ 540,536 ​ $ 445,732 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended April 30, Revenue percentage by recognition method ​ 2024 2023 ​ 2022 Over time ​ ​ 43 % ​ ​ 51 % ​ ​ 57 % Point in time ​ ​ 57 % ​ ​ 49 % ​ ​ 43 % Total revenue ​ ​ 100 % ​ ​ 100 % ​ ​ 100 % ​ Contract Balances ​ The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables, and customer advances and deposits on the consolidated balance sheets. In the Company’s services contracts, amounts are billed as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals, which is generally monthly, or upon the achievement of contractual milestones. Generally, billing occurs subsequent to revenue recognition, resulting in contract assets recorded in unbilled receivables and retentions on the consolidated balance sheets. However, the Company sometimes receives advances or deposits from its customers before revenue is recognized, resulting in contract liabilities recorded in customer advances on the consolidated balance sheets. Contract liabilities are not a significant financing component as they are generally utilized to pay for contract costs 97 Table of Contents within a one-year period or are used to ensure the customer meets contractual requirements. These assets and liabilities are reported on the consolidated balance sheets on a contract-by-contract basis at the end of each reporting period. For the Company’s product revenue, the Company generally receives cash payments subsequent to satisfying the performance obligation via delivery of the product, resulting in billed accounts receivable. Changes in the contract asset and liability balances during the years ended April 30, 2024 or 2023 were not materially impacted by any other factors. For the Company’s contracts, there are no significant gaps between the receipt of payment and the transfer of the associated goods and services to the customer for material amounts of consideration. ​ Revenue recognized for the years ended April 30, 2024, 2023, and 2022 that was included in contract liability balances at the beginning of each year were $ 13,757,000 , $ 3,413,000 and $ 3,144,000 , respectively. ​ Cost to Fulfill a Contract with a Customer ​ The Company recognizes assets for the costs to fulfill a contract with a customer if the costs are specifically identifiable, generate or enhance resources used to satisfy future performance obligations, and are expected to be recovered in accordance with ASC 340-40 Other Assets and Deferred Costs: Contracts with Customers . 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, 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 ​ Stock-based compensation is measured at the grant date based on the fair value of the award and is recognized as expense over the requisite service period, which is generally the vesting period of the respective award. No compensation cost is ultimately recognized for awards for which employees do not render the requisite service and are forfeited. ​ Long-Term Incentive Awards ​ For long-term incentive awards outstanding as of April 30, 2024, the awards include time-based awards which vest equally over three years and performance-based awards which vest based on the achievement of a target payout established at the beginning of each performance period. The actual payout at the end of the performance period is calculated based upon the Company’s achievement of such targets. Payouts are made in shares of restricted stock which become immediately vested upon issuance. ​ At each reporting period, the Company reassesses the probability of achieving the performance targets. The estimation of whether the performance targets will be achieved requires judgment, and, to the extent actual results or updated estimates differ from the Company’s current estimates, the cumulative effect on current and prior periods of those changes will be recorded in the period estimates are revised. ​ Research and Development ​ Internally funded R&D costs sponsored by the Company relate to both U.S. government products and services and those for commercial and foreign customers. Internally funded R&D costs for the Company are recoverable and allocable under government contracts in accordance with U.S. government procurement regulations. ​ Customer-funded R&D costs are incurred pursuant to contracts (revenue arrangements) to perform research and development activities according to customer specifications. These costs are direct contract costs and are expensed to cost of sales when the corresponding revenue is recognized, which is generally as the research and development services are performed. Revenue from customer-funded R&D was approximately $ 82,104,000 , $ 97,880,000 and $ 84,247,000 for the years ended April 30, 2024, 2023 and 2022, respectively. 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. ​ 98 Table of Contents Lease Accounting ​ The Company leases certain buildings, land and equipment. At contract inception the Company determines whether the contract is, or contains, a lease and whether the lease should be classified as an operating or a financing lease. Operating leases are recorded in operating lease right-of-use assets, current operating lease liabilities and non-current operating lease liabilities. ​ The Company recognizes operating lease right-of-use assets and operating lease liabilities based on the present value of the future minimum lease payments over the lease term at commencement date. The Company uses its incremental borrowing rate based on the information available at commencement date to determine the present value of future payments and the appropriate lease classification. The Company defines the initial lease term to include renewal options determined to be reasonably certain. The Company’s leases have remaining lease terms of less than one year to seven years , some of which may include options to extend the lease for up to nine years , and some of which may include options to terminate the lease after three years . If the Company determines the option to extend or terminate is reasonably certain, it is included in the determination of lease assets and liabilities. For operating leases, the Company recognizes lease expense for these leases on a straight-line basis over the lease term. ​ Many of the Company’s real estate lease agreements contain incentives for tenant improvements, rent holidays, or rent escalation clauses. For tenant improvement incentives, if the incentive is determined to be a leasehold improvement owned by the lessee, the Company generally records incentive as a reduction to fixed lease payments thereby reducing rent expense. For rent holidays and rent escalation clauses during the lease term, the Company records rental expense on a straight-line basis over the term of the lease. For these lease incentives, the Company uses the date of initial possession as the commencement date, which is generally when the Company is given the right of access to the space and begins to make improvements in preparation for intended use. ​ The Company does not have any material restrictions or covenants in its lease agreements, sale-leaseback transactions, land easements or residual value guarantees. ​ In determining the inputs to the incremental borrowing rate calculation, the Company makes judgments about the value of the leased asset, its credit rating and the lease term including the probability of its exercising options to extend or terminate the underlying lease. Additionally, the Company makes judgments around contractual asset substitution rights in determining whether a contract contains a lease. ​ Advertising Costs ​ Advertising costs are expensed as incurred. Advertising expenses included in SG&A expenses were approximately $ 457,000 , $ 494,000 and $ 451,000 for the years ended April 30, 2024, 2023 and 2022, respectively. ​ Foreign Currency Transactions ​ Foreign currency transaction gains and losses are charged or credited to earnings as incurred. 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. ​ 99 Table of Contents The reconciliation of diluted to basic shares is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended April 30, ​ 2024 2023 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income (loss) attributable to AeroVironment, Inc. ​ $ 59,666,000 ​ $ ( 176,212,000 ) ​ $ ( 4,188,000 ) ​ Denominator for basic earnings per share: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average common shares ​ 27,203,417 ​ 25,044,881 ​ 24,685,534 ​ Dilutive effect of employee stock options, restricted stock and restricted stock units ​ 124,576 ​ — ​ — ​ Denominator for diluted earnings per share ​ 27,327,993 ​ 25,044,881 ​ 24,685,534 ​ ​ During the years ended April 30, 2024, 2023 and 2022, certain options, shares of restricted stock and restricted stock units were not included in the computation of diluted earnings per share because their inclusion would have been anti-dilutive. Due to the net loss for the fiscal years ended April 30, 2023 and 2022, no shares reserved for issuance upon exercise of stock options or shares of unvested restricted stock were included in the computation of diluted loss per share as their inclusion would have been anti-dilutive. 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 Issued Accounting Standards ​ 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. ​ ​ ​ 2. Investments ​ Investments consist of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ April 30, ​ 2024 2023 Long-term investments: ​ ​ ​ ​ ​ ​ Available-for-sale securities: ​ ​ ​ ​ ​ ​ Equity securities and warrants ​ ​ 1,027 ​ ​ 4,969 Total long-term available-for-sale securities investments ​ 1,027 ​ 4,969 Equity method investments ​ ​ ​ ​ ​ ​ Investments in limited partnership funds ​ 19,933 ​ 18,644 Total equity method investments ​ 19,933 ​ 18,644 Total long-term investments ​ $ 20,960 ​ $ 23,613 ​ 100 Table of Contents 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. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ Year Ended ​ ​ April 30, 2024 ​ April 30, 2023 Net losses recognized during the period on equity securities ​ $ ( 3,945 ) ​ $ ( 132 ) Less: Net loss recognized during the period on equity securities sold during the period ​ ​ — ​ ​ — Unrealized loss recognized during the period on equity securities still held at the reporting date ​ $ ( 3,945 ) ​ $ ( 132 ) ​ ​ 3. Fair Value Measurements ​ Fair value is the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value hierarchy contains three levels as follows: ​ ● Level 1—Inputs to the valuation based upon quoted prices (unadjusted) for identical assets or liabilities in active markets that are accessible as of the measurement date. ​ ● Level 2—Inputs to the valuation include quoted prices in either markets that are not active, or in active markets for similar assets or liabilities, inputs other than quoted prices that are observable, and inputs that are derived principally from or corroborated by observable market data. ​ ● Level 3—Inputs to the valuation that are unobservable inputs for the asset or liability. ​ The Company’s financial assets measured at fair value on a recurring basis at April 30, 2024, were as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair Value Measurement Using ​ ​ ​ ​ Significant ​ ​ ​ ​ ​ ​ ​ Quoted prices in ​ other ​ Significant ​ ​ ​ ​ ​ ​ active markets for ​ observable ​ unobservable ​ ​ ​ ​ ​ ​ identical assets ​ inputs ​ inputs ​ ​ ​ ​ Description ​ (Level 1) ​ (Level 2) ​ (Level 3) ​ Total ​ Equity securities ​ $ 937 ​ $ — ​ $ — ​ $ 937 ​ Warrants ​ ​ — ​ ​ 90 ​ ​ — ​ ​ 90 ​ Total ​ $ 937 ​ $ 90 ​ $ — ​ $ 1,027 ​ ​ 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): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair Value Measurement Using ​ ​ ​ Significant ​ ​ ​ ​ ​ ​ Quoted prices in ​ other ​ Significant ​ ​ ​ ​ ​ active markets for ​ observable ​ unobservable ​ ​ ​ ​ ​ identical assets ​ inputs ​ inputs ​ ​ ​ Description ​ (Level 1) ​ (Level 2) ​ (Level 3) ​ Total Equity securities ​ $ 4,714 ​ $ — ​ $ — ​ $ 4,714 Warrants ​ ​ — ​ ​ 255 ​ ​ — ​ ​ 255 Total ​ $ 4,714 ​ $ 255 ​ $ — ​ $ 4,969 101 Table of Contents ​ ​ 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 ​ ​ ​ ​ Significant ​ ​ ​ ​ ​ ​ ​ Quoted prices in ​ other ​ Significant ​ ​ ​ ​ ​ ​ active markets for ​ observable ​ unobservable ​ ​ ​ ​ ​ ​ identical assets ​ inputs ​ inputs ​ ​ ​ ​ Description ​ (Level 1) ​ (Level 2) ​ (Level 3) ​ Total ​ Contingent consideration ​ $ — ​ $ — ​ $ 2,109 ​ $ 2,109 ​ Total ​ $ — ​ $ — ​ $ 2,109 ​ $ 2,109 ​ ​ The following table provides a reconciliation between the beginning and ending balances of items measured at fair value on a recurring basis that used significant unobservable inputs (Level 3) (in thousands): ​ ​ ​ ​ ​ ​ ​ Fair Value ​ ​ Measurements Using ​ ​ Significant ​ ​ Unobservable Inputs ​ ​ ​ Liabilities ​ Description ​ (Level 3) Balance at May 1, 2023 ​ $ 2,109 ​ Business acquisition ​ ​ — ​ Transfers to Level 3 ​ — ​ Total fair value measurement adjustments (realized or unrealized) ​ ​ ​ ​ Included in selling, general and administrative ​ ​ 23 ​ Payments ​ ( 2,132 ) ​ Balance at April 30, 2024 ​ $ — ​ 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. The contingent consideration was valued using a Black-Scholes option-pricing model. The analysis considered, among other items, contractual terms of the ISG Purchase Agreement, the Company’s discount rate, the timing of expected future cash flows and the probability that the revenue targets required for payment of the contingent consideration will be achieved. During the fiscal year ended April 30, 2022, the targets for the first and second year were achieved, and during the fiscal year ended April 30, 2023, the target for the third year was achieved. The consideration was held and released from an escrow account not controlled by the Company and, therefore, not recorded on the consolidated balance sheets. The related consideration of $ 2,000,000 for the first year target was released from the escrow account during the fiscal year ended April 30, 2022. 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. 102 Table of Contents ​ 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. The privately placed, redeemable warrants have an exercise price of $ 12.50 and redemption price of $ 20.00 . The Company measures the fair value of the privately placed, redeemable warrants using the quoted market price of the public warrants which have an exercise price of $ 11.50 and a redemption price of $ 18.00 and classifies the warrants as a level 2 fair value measurement. ​ On September 9, 2022, the Company acquired 10,000 shares of Nauticus Robotics, Inc. for $ 100,000 . ​ ​ ​ 4. Inventories, net ​ Inventories consist of the following (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ April 30, ​ ​ 2024 2023 ​ ​ (In thousands) Raw materials ​ $ 57,218 ​ $ 67,775 ​ Work in process ​ 53,232 ​ 43,276 ​ Finished goods ​ 65,618 ​ 42,968 ​ Inventories, gross ​ 176,068 ​ 154,019 ​ Reserve for inventory excess and obsolescence ​ ( 25,900 ) ​ ( 15,205 ) ​ Inventories, net ​ $ 150,168 ​ $ 138,814 ​ ​ For the fiscal years ended April 30, 2024, 2023 and 2022, the Company recorded inventory reserve charges of $ 13,937,000 , $ 8,136,000 and $ 2,271,000 , respectively. ​ 5. Intangibles, net ​ The components of intangibles are as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ April 30, ​ April 30, ​ ​ 2024 2023 ​ Technology ​ $ 101,012 ​ $ 60,817 ​ Licenses ​ ​ 1,008 ​ ​ 1,008 ​ Customer relationships ​ ​ 77,313 ​ ​ 72,645 ​ Backlog ​ ​ 2,831 ​ ​ 2,895 ​ In-process research and development ​ ​ 550 ​ ​ 550 ​ Non-compete agreements ​ ​ 320 ​ ​ 320 ​ Trademarks and tradenames ​ ​ 1,668 ​ ​ 68 ​ Other ​ ​ 146 ​ ​ 150 ​ Intangibles, gross ​ ​ 184,848 ​ ​ 138,453 ​ Less accumulated amortization ​ ( 112,624 ) ​ ( 94,876 ) ​ Intangibles, net ​ $ 72,224 ​ $ 43,577 ​ ​ 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, 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, 103 Table of Contents 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. Refer to Note 21—Business Acquisitions for further details. ​ Estimated amortization expense for the next five years is as follows (in thousands): ​ ​ ​ ​ ​ ​ Year ending ​ ​ April 30, 2025 ​ $ 19,137 ​ 2026 ​ 15,001 ​ 2027 ​ 12,633 ​ 2028 ​ 11,919 ​ 2029 ​ 7,764 ​ ​ ​ $ 66,454 ​ ​ ​ ​ 6. Goodwill ​ The following table presents the changes in the Company’s goodwill balance (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ UxS ​ LMS ​ MW ​ Total Balance at April 30, 2023 ​ $ 161,547 ​ $ — ​ $ 19,254 ​ $ 180,801 Additions to goodwill ​ ​ 95,414 ​ ​ — ​ ​ — ​ ​ 95,414 Change to goodwill ​ ​ ( 563 ) ​ ​ — ​ ​ — ​ ​ ( 563 ) Balance at April 30, 2024 ​ $ 256,398 ​ $ — ​ $ 19,254 ​ $ 275,652 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ UxS ​ LMS ​ MW ​ Total Balance at April 30, 2022 ​ $ 315,093 ​ $ — ​ $ 19,254 ​ $ 334,347 Additions to goodwill ​ ​ 1,633 ​ ​ — ​ ​ — ​ ​ 1,633 Change to goodwill ​ ​ 838 ​ ​ — ​ ​ — ​ ​ 838 Impairment of goodwill ​ ​ ( 156,017 ) ​ ​ — ​ ​ — ​ ​ ( 156,017 ) Balance at April 30, 2023 ​ $ 161,547 ​ $ — ​ $ 19,254 ​ $ 180,801 ​ 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. ​ 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 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 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 104 Table of Contents 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. ​ 7. Property and Equipment, net ​ Property and equipment, net consist of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ April 30, ​ ​ 2024 2023 ​ ​ ​ (In thousands) ​ Leasehold improvements ​ ​ 26,921 ​ ​ 22,541 ​ Machinery and equipment ​ 132,862 ​ 124,845 ​ Furniture and fixtures ​ 5,896 ​ 4,756 ​ Computer equipment and software ​ 48,817 ​ 44,689 ​ Construction in process ​ 7,258 ​ 5,962 ​ Property and equipment, gross ​ 221,754 ​ 202,793 ​ Less accumulated depreciation and amortization ​ ( 175,152 ) ​ ( 162,998 ) ​ Property and equipment, net ​ $ 46,602 ​ $ 39,795 ​ ​ Depreciation expense for the years ended April 30, 2024, 2023 and 2022 was $ 17,098,000 , $ 41,803,000 and $ 30,493,000 , respectively. During the fiscal year ended April 30, 2023, the Company recorded accelerated the depreciation of $ 16,597,000 related to in-service ISR assets associated with the closure of all of the Company’s MUAS COCO sites. The Company reclassified certain in-service ISR assets determined to have an alternate business use to machinery and equipment. 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. ​ 8. Investments in Companies Accounted for Using the Equity Method ​ Investment in Limited Partnership Fund ​ In July 2019, the Company made its initial capital contribution to a limited partnership fund focusing on highly relevant technologies and start-up companies serving defense and industrial markets. Under the terms of the limited partnership agreement, the Company contributed a total of $ 10,000,000 during the fiscal years ended April 30, 2021 and 2022, and there were no further contribution commitments to this fund as of April 30, 2022. In March 2022, the Company entered into a limited partnership agreement with a second limited partnership fund also focusing on highly relevant technologies and start-up companies serving defense and industrial markets. Under the terms of the limited partnership agreement, the Company is committed to contributions totaling $ 20,000,000 over an expected five year period. During the fiscal 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, 2024, 2023 and 2022, the 105 Table of Contents 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. ​ Investment in Altoy ​ On September 15, 2021, the Company entered into a Share Sale and Purchase Agreement with Toygun whereby the Company sold 35 % of the common shares of Altoy to Toygun. On October 14, 2022, the company sold an additional 35 % of the common shares of Altoy to Toygun. 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 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, 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. ​ In December 2017, the Company and SoftBank formed a joint venture, HAPSMobile, which is a Japanese corporation. Concurrent with the formation of HAPSMobile, the Company executed a Design and Development Agreement (the “DDA”) with HAPSMobile. In connection with the formation of the joint venture on December 27, 2017, the Company initially purchased shares of HAPSMobile representing a 5 % ownership. On December 4, 2019, the Company purchased additional shares of HAPSMobile to increase its ownership stake to approximately 7 %. In March 2022, the Company sold its 7 % equity interest in HAPSMobile to SoftBank, for 808,008,000 yen ($ 6,497,000 ) and a gain was recorded in sale of ownership in HAPSMobile Inc. joint venture. Following the sale, SoftBank owns 100 % of HAPSMobile, and, therefore, the Company no longer applies the equity method of accounting. ​ On May 29, 2021, the Company entered into an amendment to the DDA with HAPSMobile. The parties agreed to the amendment in anticipation of the Company and SoftBank entering into a Master Design and Development Agreement (“MDDA”) with each other to continue the design and development of the Solar High Altitude Pseudo-Satellite (“Solar HAPS”) aircraft developed under the DDA. Pursuant to the MDDA, which has a five-year term, SoftBank will issue orders to the Company for the Company to perform design and development services and produce deliverables as specified in the applicable order(s). Upon the execution of the MDDA, SoftBank issued to the Company, and the Company accepted, the first order under the MDDA which has a maximum value of approximately $ 51,200,000 . Concurrent with the execution of the MDDA, each of SoftBank and the Company agreed to lend HAPSMobile loans which are convertible into shares of HAPSMobile under certain conditions, and to cooperate with each other to explore restructuring and financing options for HAPSMobile to continue the development of Solar HAPS. The Company committed to lend 500,000,000 yen. On June 7, 2021 the Company funded 130,000,000 yen ($ 1,195,000 ) of the loan agreement. On August 13, 2021, the Company made the second payment of the loan agreement in the amount of 180,000,000 yen ($ 1,638,000 ). On October 29, 2021, the Company made the final payment under the loan agreement in the amount of 190,000,000 yen ($ 1,674,000 ). On March 1, 2022, HAPSMobile repaid the Company the loan in full plus accrued interest in the amount of 503,832,000 yen ($ 4,345,000 ). 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. ​ 106 Table of Contents 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: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ April 30, ​ ​ ​ ​ ​ 2024 2023 ​ ​ ​ ​ ​ ​ (In thousands) Current assets ​ ​ ​ ​ ​ $ 5,452 ​ $ 1,908 Noncurrent assets ​ ​ ​ ​ ​ 144,457 ​ 132,198 Current liabilities ​ ​ ​ ​ ​ $ 2,450 ​ $ 1,691 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended April 30, ​ ​ ​ 2024 2023 2022 ​ ​ ​ (In thousands) Revenues ​ ​ $ 2,719 ​ $ 3,788 ​ $ 187 Gross margin ​ ​ ​ ( 303 ) ​ ​ 1,607 ​ ​ ( 13,113 ) Realized and unrealized (losses) gains on investments ​ ​ ​ ( 13,914 ) ​ ​ ( 23,967 ) ​ ​ 63,314 Net (loss) income ​ ​ $ ( 14,455 ) ​ $ ( 22,585 ) ​ $ 40,349 ​ ​ ​ ​ 9. Warranty Reserves ​ Warranty reserve activity is summarized as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ April 30, ​ ​ ​ 2024 2023 ​ ​ (In thousands) Beginning balance ​ $ 3,642 ​ $ 2,190 ​ Balance acquired from acquisition ​ ​ 40 ​ ​ — ​ Warranty expense ​ 4,364 ​ 3,052 ​ Warranty costs settled ​ ( 2,508 ) ​ ( 1,600 ) ​ Ending balance ​ $ 5,538 ​ $ 3,642 ​ ​ ​ ​ 10. Employee Savings Plan ​ The Company has an employee 401(k) savings plan covering all eligible employees. The Company expensed approximately $ 8,554,000 , $ 6,994,000 and $ 6,842,000 in contributions to the plan for the years ended April 30, 2024, 2023 and 2022, respectively. ​ 11. Debt ​ In connection with the consummation of the Arcturus Acquisition on February 19, 2021, the Company, as borrower, and Arcturus, as guarantor, entered into a Credit Agreement with certain lenders, letter of credit issuers, Bank of America, N.A., as the administrative agent and the swingline lender, and BofA Securities, Inc., JPMorgan Chase Bank, N.A., and U.S. 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 $ 100,000,000 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. Upon execution of the Credit Agreement, the Company drew the full principal of the Term Loan Facility for use in the acquisition of Arcturus. The Term Loan Facility requires payment of 5 % of the outstanding obligations in each of the first four loan years, with the remaining 80 % payable in loan year five, consisting of three quarterly payments of 1.25 % each, with the remaining outstanding principal amount of the Term Loan Facility due and 107 Table of Contents payable on the final maturity date. Proceeds from the Term Loan Facility were used in part to finance a portion of the cash consideration for the Arcturus Acquisition. Borrowings under the Revolving Facility may be used for working capital and other general corporate purposes. ​ Any borrowing under the Credit Agreement may be repaid, in whole or in part, at any time and from time to time without premium or penalty other than customary breakage costs, and any amounts repaid under the Revolving Facility may be reborrowed. Mandatory prepayments are required under the revolving loans when borrowings and letter of credit usage exceed the aggregate revolving commitments of all lenders. Mandatory prepayments are also required in connection with the disposition of assets to the extent not reinvested and unpermitted debt transactions. ​ In support of its obligations pursuant to the Credit Facilities, the Company has granted security interests in substantially all of the personal property of the Company and its domestic subsidiaries, including a pledge of the equity interests in its subsidiaries (limited to 65 % of outstanding equity interests in the case of foreign subsidiaries), and the proceeds thereof, with customary exclusions and exceptions. The Company’s existing and future domestic subsidiaries, including Arcturus, are guarantors for the Credit Facilities. ​ The Credit Agreement contains certain customary representations and warranties and affirmative and negative covenants, including certain restrictions on the ability of the Company and its subsidiaries (as defined in the Credit Agreement) to incur any additional indebtedness or guarantee indebtedness of others, to create liens on properties or assets, or to enter into certain asset and stock-based transactions. In addition, the Credit Agreement includes certain financial maintenance covenants, requiring that (x) the Consolidated Leverage Ratio (as defined in the Credit Agreement) shall not be more than 3.00 to 1.00 as of the end of any fiscal quarter and (y) the Consolidated Fixed Charge Coverage Ratio (as defined in the Credit Agreement) shall not be less than 1.25 to 1.00 as of the end of any fiscal quarter. ​ On February 4, 2022, the Company entered into a First Amendment to Credit Agreement and Waiver relating to its existing Credit Agreement (the “First Amendment to Credit Agreement”). The First Amendment to Credit Agreement waives any event of default that may have occurred as a result of the potential failure by the Company to comply with the consolidated leverage ratio covenant set forth in the Credit Agreement for the fiscal quarter ended January 29, 2022. In addition, the parties amended the maximum permitted Consolidated Leverage Ratio, such that such ratio may not exceed 4.00 to 1.00 for the Company’s fiscal quarters ended January 29, 2022 and April 30, 2022; 3.50 to 1.00 for any of the Company’s fiscal quarters ending during the period from May 1, 2022 to October 31, 2022; 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 $ 10,000,000 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. ​ The First Amendment to Credit Agreement also implemented certain secured overnight financing rate (“SOFR”) interest rate mechanics and interest rate reference benchmark replacement provisions in order to effectuate the transition from LIBOR as a reference interest rate. Following the First Amendment to Credit Agreement, the Company has a choice of interest rates between (a) Term SOFR (with a 0% floor) plus the Applicable Margin; or (b) Base Rate (defined as the highest of (a) the Federal Funds Rate plus one-half percent ( 0.50 %), (b) the Bank of America prime rate, and (c) the one (1) month SOFR plus one percent ( 1.00 %)) plus the Applicable Margin. The Applicable Margin is based upon the Consolidated Leverage Ratio (as defined in the Credit Agreement) and whether the Company elects SOFR (ranging from 1.50 – 2.50 %) or Base Rate (ranging from 0.50 – 1.50 %). The Company may choose interest periods of one, three or six months with respect to Term SOFR and all such rates will include a 0.10 % SOFR adjustment. 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 % 108 Table of Contents 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. ​ Long-term debt and the current period interest rates were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ April 30, ​ April 30, ​ ​ 2024 2023 ​ ​ (In thousands) ​ (In thousands) Term loan ​ $ 28,000 ​ $ 135,000 Revolving credit facility ​ ​ — ​ ​ — Total debt ​ ​ 28,000 ​ ​ 135,000 Less current portion ​ ​ 10,000 ​ ​ 7,500 Total long-term debt, less current portion ​ ​ 18,000 ​ ​ 127,500 Less unamortized debt issuance costs–term loans ​ ​ 908 ​ ​ 1,596 Total long-term debt, net of unamortized debt issuance costs–term loans ​ $ 17,092 ​ $ 125,904 Unamortized debt issuance costs–revolving credit facility ​ $ 511 ​ $ 795 Current period interest rate ​ ​ 6.9 % ​ ​ 7.1 % ​ Future contractual long-term debt principal payments at April 30, 2024 were as follows: ​ ​ ​ ​ ​ ​ ​ (In thousands) 2025 ​ $ 10,000 2026 ​ 18,000 ​ ​ $ 28,000 ​ ​ 12. Leases ​ The components of lease costs recorded in cost of sales and SG&A expense were as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ Year Ended ​ ​ April 30, ​ April 30, ​ 2024 ​ 2023 Operating lease cost ​ $ 10,400 ​ $ 8,048 Short term lease cost ​ ​ 1,198 ​ ​ 862 Variable lease cost ​ ​ 1,678 ​ ​ 1,820 Sublease income ​ ​ — ​ ​ — Total lease costs, net ​ $ 13,276 ​ $ 10,730 ​ Supplemental lease information was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ Year Ended ​ ​ April 30, ​ April 30, ​ 2024 ​ 2023 ​ ​ (In thousands) ​ (In thousands) Cash paid for amounts included in the measurement of operating lease liabilities ​ $ 9,626 ​ $ 7,690 Right-of-use assets obtained in exchange for new lease liabilities ​ $ 10,193 ​ $ 7,463 ​ ​ ​ ​ ​ ​ ​ Weighted average remaining lease term ​ ​ 51 months ​ ​ 53 months Weighted average discount rate ​ ​ 5.4 % ​ ​ 4.3 % ​ 109 Table of Contents Maturities of operating lease liabilities as of April 30, 2024 were as follows (in thousands): ​ ​ ​ ​ ​ 2025 ​ $ 10,722 2026 ​ 8,358 2027 ​ 7,628 2028 ​ 5,608 2029 ​ 4,503 Thereafter ​ ​ 1,628 Total lease payments ​ ​ 38,447 Less: imputed interest ​ ​ ( 5,861 ) Total present value of operating lease liabilities ​ $ 32,586 ​ ​ 13. Stock-Based Compensation ​ For the years ended April 30, 2024, 2023 and 2022, the Company recorded stock-based compensation expense of approximately $ 17,069,000 , $ 10,765,000 and $ 5,390,000 , respectively. ​ On September 24, 2021, the stockholders of the Company approved the 2021 Equity Incentive Plan (“2021 Plan”) effective September 24, 2021, for officers, directors, key employees and consultants. Under the 2021 Plan, incentive stock options, nonqualified stock options, restricted stock awards, stock appreciation right awards, performance share awards, performance stock unit awards, dividend equivalents awards, stock payment awards, deferred stock awards, restricted stock unit awards, other stock-based awards, performance bonus awards or performance-based awards may be granted at the discretion of the compensation committee, which consists of outside directors. The sum of any cash compensation, or other compensation, and the value of awards granted to a non-employee director as compensation for services as a non-employee director during any fiscal year may not exceed $ 500,000 , which amount is increased to $ 700,000 in the fiscal year of a non-employee director’s initial year of service as a non-employee director. The exercise price for any incentive stock option shall not be less than 100 % of the fair market value on the date of grant. Vesting of awards is established at the time of grant. ​ On January 14, 2007, the stockholders of the Company approved the 2006 Equity Incentive Plan (“2006 Plan”) effective January 21, 2007, for officers, directors, key employees and consultants. On September 29, 2011, the stockholders of the Company approved an amendment and restatement of the 2006 Plan (“Restated 2006 Plan”). Under the Restated 2006 Plan, incentive stock options, nonqualified stock options, restricted stock awards, stock appreciation right awards, performance share awards, performance stock unit awards, dividend equivalents awards, stock payment awards, deferred stock awards, restricted stock unit awards, other stock-based awards, performance bonus awards or performance-based awards may be granted at the discretion of the compensation committee, which consists of outside directors. A maximum of 4,884,157 shares of stock may be issued pursuant to awards under the Restated 2006 Plan. The maximum number of shares of common stock with respect to one or more awards that may be granted to any one participant during any twelve month period is 2,000,000 . A maximum of $ 5,000,000 may be paid in cash to any one participant as a performance-based award during any twelve month period. The exercise price for any incentive stock option shall not be less than 100 % of the fair market value on the date of grant. Vesting of awards is established at the time of grant. The Restated 2006 Plan expired in July 2021. ​ The fair value of stock options granted previously was estimated at the grant date using the Black-Scholes option pricing model. Assumptions included in the Black-Scholes option pricing model included the expected term of stock options, the expected volatility, the risk-free interest rate, and the expected dividend yield. The expected term of stock options represents the weighted average period the Company expects the stock options to remain outstanding, based on the Company’s historical exercise and post-vesting cancellation experience and the remaining contractual life of its outstanding options. 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. Treasury zero-coupon bond with a remaining term that approximates the expected term of the option. The expected dividend yield of zero reflects that the Company has not paid any cash dividends since inception and does not anticipate paying cash dividends in the foreseeable future. ​ 110 Table of Contents Information related to the stock option plans at April 30, 2024, 2023 and 2022, and for the years then ended is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ Restated 2006 Plan ​ ​ Weighted ​ ​ ​ ​ Average ​ ​ ​ ​ Exercise ​ ​ Shares ​ Price Outstanding at April 30, 2021 280,526 ​ 24.57 Options granted — ​ — Options exercised ( 114,362 ) ​ 24.28 Options canceled — ​ — Outstanding at April 30, 2022 166,164 ​ 24.78 Options granted — ​ — Options exercised ( 100,000 ) ​ 22.77 Options canceled — ​ — Outstanding at April 30, 2023 66,164 ​ 27.82 Options granted — ​ — Options exercised — ​ — Options canceled — ​ — Outstanding at April 30, 2024 66,164 ​ 27.82 Options exercisable at April 30, 2024 66,164 ​ $ 27.82 ​ The total intrinsic value of all options exercised during the years ended April 30, 2024, 2023 and 2022 was approximately $ 0 , $ 7,369,000 , and $ 4,785,000 , respectively. 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, 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. That cost is expected to be recognized over an approximately two-year period or a weighted average period of approximately 2.1 years. ​ No options were granted during the fiscal years ended April 30, 2024, 2023 and 2022. The total fair value of shares vesting during the years ended April 30, 2024, 2023 and 2022 was $ 6,170,000 , $ 6,264,000 and $ 5,901,000 , respectively. ​ 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 $ 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: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Options Outstanding ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average ​ ​ ​ ​ Options Exercisable ​ ​ ​ ​ Remaining Weighted ​ Weighted ​ ​ ​ ​ ​ As of ​ Contractual ​ Average ​ As of ​ Average ​ ​ ​ ​ ​ April 30, ​ Life In ​ Exercise ​ April 30, ​ Exercise Range of Exercise Prices ​ 2024 ​ Years ​ Price ​ 2024 ​ Price $ 26.70 - 28.99 50,000 1.15 ​ $ 26.70 50,000 ​ $ 26.70 ​ ​ 29.00 - 31.27 16,164 0.25 ​ 31.27 16,164 ​ 31.27 ​ $ 26.70 - 31.27 66,164 0.93 ​ $ 27.82 66,164 ​ $ 27.82 ​ ​ The remaining weighted average contractual life of exercisable options at April 30, 2024 was 0.9 years. ​ 111 Table of Contents Information related to the Company’s restricted stock awards at April 30, 2024 and for the year then ended is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2021 Plan ​ Restated 2006 Plan ​ ​ Weighted ​ ​ Weighted ​ ​ ​ ​ Average ​ ​ ​ Average ​ ​ ​ ​ Grant Date ​ ​ ​ Grant Date ​ ​ Shares ​ Fair Value ​ Shares ​ Fair Value Unvested stock at April 30, 2023 95,599 ​ $ 85.90 ​ 44,080 ​ $ 99.62 ​ Stock granted 149,502 ​ 99.89 ​ — ​ — ​ Stock vested ( 43,692 ) ​ 64.72 ​ ( 31,910 ) ​ 99.92 ​ Stock canceled ( 9,802 ) ​ 91.03 ​ ( 2,268 ) ​ 116.95 ​ Unvested stock at April 30, 2024 191,607 ​ $ 101.38 ​ 9,902 ​ $ 94.67 ​ ​ Information related to the Company’s restricted stock units at April 30, 2024 and for the year then ended is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Restated 2021 Plan ​ Restated 2006 Plan ​ ​ Weighted ​ Weighted ​ ​ ​ ​ Average ​ ​ ​ Average ​ ​ ​ ​ Grant Date ​ ​ ​ Grant Date ​ ​ Shares ​ Fair Value ​ Shares ​ Fair Value Unvested stock at April 30, 2023 814 ​ $ 85.91 2,688 ​ $ 97.69 ​ Stock granted 2,873 ​ 104.30 — ​ — ​ Stock vested ( 272 ) ​ 85.91 ( 1,339 ) ​ 97.69 ​ Stock canceled — ​ — — ​ — ​ Unvested stock at April 30, 2024 3,415 ​ $ 101.38 1,349 ​ $ 97.69 ​ ​ ​ 14. Long-Term Incentive Awards ​ 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 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 adjusted EBITDA 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, 2024 the Company recorded $ 3,916,000 of compensation expense related to the Fiscal 2024 LTIP PRSUs. 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 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 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. 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 adjusted EBITDA targets for the performance period. Settlement of the PRSUs 112 Table of Contents 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 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”). Awards under the Fiscal 2022 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) 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. 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. Settlement of the PRSUs will be made in fully-vested shares of the Company’s common stock. 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 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, 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. At each reporting period, the Company reassesses the probability of achieving the performance targets. The estimation of whether the performance targets will be achieved requires judgment, and, to the extent actual results or updated estimates differ from the Company’s current estimates, the cumulative effect on current and prior periods of those changes will be recorded in the period estimates are revised. ​ 15. Income Taxes ​ The components of (loss) income before income taxes are as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended April 30, ​ ​ 2024 ​ 2023 ​ 2022 Domestic ​ $ 68,968 ​ $ ( 187,647 ) ​ $ ( 10,187 ) ​ Foreign ​ ​ ( 5,737 ) ​ ( 730 ) ​ ( 8,956 ) ​ (Loss) income before income taxes ​ ​ 63,231 ​ ​ ( 188,377 ) ​ ​ ( 19,143 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Equity method investment (loss) income ​ ​ ( 1,674 ) ​ ​ ( 2,453 ) ​ ​ 5,889 ​ Total (loss) income before income taxes ​ $ 61,557 ​ $ ( 190,830 ) ​ $ ( 13,254 ) ​ ​ The Company expects any foreign earnings to be reinvested in such foreign jurisdictions and, therefore, no deferred tax liabilities for U.S. income taxes on undistributed earnings are recorded. The foreign subsidiaries do not have 113 Table of Contents 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: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended April 30, ​ ​ 2024 ​ 2023 2022 ​ U.S. federal statutory income tax rate 21.0 % ​ 21.0 % ​ 21.0 % Foreign rate differential ​ ( 0.5 ) ​ ​ ( 0.1 ) ​ ​ 4.9 ​ State and local income taxes, net of federal benefit 0.9 ​ ​ 0.2 ​ ​ 40.8 ​ R&D and other tax credits ( 7.8 ) ​ ​ ( 1.8 ) ​ ​ 23.0 ​ Valuation allowance 1.5 ​ ​ 1.1 ​ ​ ( 37.4 ) ​ Return to provision adjustments ​ 1.6 ​ ​ — ​ ​ ( 0.9 ) ​ Limit on executive compensation ​ 2.7 ​ ​ ( 0.4 ) ​ ​ ( 2.4 ) ​ Permanent items ​ 0.6 ​ ​ ( 0.3 ) ​ ​ ( 0.9 ) ​ Foreign derived intangible income ​ ( 16.0 ) ​ ​ 2.3 ​ ​ — ​ Excess benefit of equity awards ​ ( 0.6 ) ​ ​ 0.8 ​ ​ 5.2 ​ Goodwill impairment ​ — ​ ​ ( 17.2 ) ​ ​ — ​ Unrecognized tax benefit ​ ( 0.6 ) ​ ​ 2.0 ​ ​ — ​ Other 0.2 ​ ​ 0.2 ​ ​ 0.9 ​ Effective income tax rate 3.0 % ​ 7.8 % ​ 54.2 % ​ The components of the provision for (benefit from) income taxes are as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended April 30, ​ 2024 2023 2022 Current: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Federal ​ $ 20,990 ​ $ 1,510 ​ $ ( 3,025 ) ​ State ​ 1,511 ​ 1,474 ​ 165 ​ Foreign ​ ​ ( 76 ) ​ ​ 2,273 ​ ​ 279 ​ ​ ​ 22,425 ​ 5,257 ​ ( 2,581 ) ​ Deferred: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Federal ​ ( 18,844 ) ​ ( 17,226 ) ​ ( 5,764 ) ​ State ​ ( 625 ) ​ ( 1,488 ) ​ 483 ​ Foreign ​ ​ ( 1,065 ) ​ ​ ( 1,206 ) ​ ​ ( 2,507 ) ​ ​ ​ ( 20,534 ) ​ ( 19,920 ) ​ ( 7,788 ) ​ Total income tax (benefit) expense ​ $ 1,891 ​ $ ( 14,663 ) ​ $ ( 10,369 ) ​ ​ 114 Table of Contents Significant components of the Company’s deferred income tax assets and liabilities are as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ April 30, ​ 2024 2023 Deferred income tax assets: ​ ​ ​ ​ ​ ​ ​ Accrued expenses ​ $ 2,542 ​ $ 2,153 ​ Stock based compensation ​ ​ 3,391 ​ ​ 2,380 ​ Allowances, reserves, and other ​ 1,001 ​ ( 1,032 ) ​ Outside basis difference ​ ​ ( 33 ) ​ ​ — ​ Unrealized loss on securities ​ 3,588 ​ 3,528 ​ Net operating loss and credit carry-forwards ​ 19,800 ​ 20,430 ​ Capitalized research and development costs ​ ​ 42,788 ​ ​ 24,962 ​ Reserve for inventory excess and obsolescence ​ 5,577 ​ 3,185 ​ Lease liability ​ ​ 7,628 ​ ​ 6,960 ​ Total deferred income tax assets ​ 86,282 ​ 62,566 ​ Deferred income tax liabilities: ​ ​ ​ ​ ​ ​ ​ Fixed asset basis ​ ( 3,516 ) ​ ( 4,999 ) ​ Right-of-use asset ​ ​ ( 7,053 ) ​ ​ ( 6,478 ) ​ Intangibles basis ​ ​ ( 11,239 ) ​ ​ ( 3,109 ) ​ Total deferred income tax liabilities ​ ( 21,808 ) ​ ( 14,586 ) ​ Valuation allowance ​ ( 23,835 ) ​ ( 22,503 ) ​ Net deferred tax assets ​ $ 40,639 ​ $ 25,477 ​ ​ 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 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 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. ​ At April 30, 2024 and 2023, the Company had approximately $ 13,601,000 and $ 12,841,000 , respectively, of unrecognized tax benefits of which $ 5,139,000 would impact the Company’s rate and $ 6,517,000 would result in an increase in valuation allowance. The Company estimates that $ 1,616,000 of its unrecognized tax benefits will decrease in the next twelve months due to statute of limitation expiration. ​ 115 Table of Contents The following table summarizes the activity related to the Company’s gross unrecognized tax benefits for the years ended April 30, 2024 and 2022 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ April 30, ​ 2024 2023 Balance as of May 1 ​ $ 12,841 ​ $ 17,806 ​ Increases related to prior year tax positions ​ — ​ — ​ Decreases related to prior year tax positions ​ ( 59 ) ​ ( 379 ) ​ Increases related to current year tax positions ​ 2,060 ​ 1,257 ​ Decreases related to lapsing of statute of limitations ​ ( 1,241 ) ​ ( 5,843 ) ​ Balance as of April 30 ​ $ 13,601 ​ $ 12,841 ​ ​ The Company records interest and penalties on uncertain tax positions to income tax expense. As of April 30, 2024 and 2023, the Company had accrued approximately $ 283,000 and $ 282,000 , respectively, of interest and penalties related to uncertain tax positions. The 2020 to 2023 tax years remain open to examination by the IRS for federal income taxes. The tax years 2013 and 2019 to 2023 remain open for major state taxing jurisdictions. ​ 16. Share Repurchase Plan and Issuances ​ The Company’s share repurchase program announced September 2015 was terminated by the Company’s Board of Directors in September 2022. ​ 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. ​ 17. Accumulated Other Comprehensive Loss ​ The components of accumulated other comprehensive loss are as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Accumulated ​ ​ ​ ​ ​ ​ Other ​ ​ ​ Foreign Currency ​ Comprehensive ​ ​ Translation Adjustments ​ Loss ​ Total accumulated other comprehensive loss balance as of April 30, 2023 ​ $ ( 4,452 ) ​ $ ( 4,452 ) ​ Changes in foreign currency translation adjustments ​ ​ ( 1,140 ) ​ ​ ( 1,140 ) ​ Total accumulated other comprehensive loss balance as of April 30, 2024 ​ $ ( 5,592 ) ​ $ ( 5,592 ) ​ ​ ​ 18. Changes in Accounting Estimates ​ During the years ended April 30, 2024, 2023 and 2022, the Company revised its estimates at completion of various contracts recognized using the over time method, which resulted in cumulative catch up adjustments during the year in which the change in estimate occurred. 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 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 116 Table of Contents $ 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 . ​ 19. Related Party Transactions ​ Pursuant to a consulting agreement, the Company paid a board member approximately $ 76,000 and $ 36,000 for fiscal years ended April 30, 2023 and 2022, respectively, for consulting services independent of his board service. ​ Related party transactions are defined as transactions between the Company and entities either controlled by the Company or that the Company can significantly influence. Prior to the Company’s sale of all of its equity interest in HAPSMobile in March 2022, the Company determined that it had the ability to exercise significant influence over HAPSMobile. As such, HAPSMobile and SoftBank were considered related parties of the Company prior to the sale. Subsequent to the sale, the Company had no ownership stake in HAPSMobile, and SoftBank and HAPSMobile are no longer considered related parties. Under the DDA and related efforts with HAPSMobile, the Company designed and built prototype solar powered high altitude aircraft and ground control stations for HAPSMobile and conducted low altitude and high altitude flight tests of the prototype aircraft on a best efforts basis. The Company will continue the development of Solar HAPS with SoftBank under the MDDA. 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 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. ​ 20. Commitments and Contingencies ​ Commitments ​ The Company’s operations are conducted in leased facilities. Refer to Note 12—Leases for additional information. ​ Contingencies ​ The Company is subject to legal proceedings and claims which arise out of the ordinary course of its business. Although adverse decisions or settlements may occur, the Company, in consultation with legal counsel, believes that the final disposition of such matters will not have a material adverse effect on the consolidated financial position, results of operations or cash flows of the Company. ​ At April 30, 2024 and 2023, the Company had outstanding letters of credit totaling $ 15,668,000 and $ 8,076,000 , respectively. ​ On June 29, 2018, the Company completed the sale of substantially all of the assets and related liabilities of its efficient energy systems business segment (the “EES Business”) to Webasto Charging Systems, Inc. (“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 117 Table of Contents 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. On June 2, 2021, the Company filed an answer to Webasto’s second amended complaint filed in May 2021. ​ In order to avoid the future cost, expense, and distraction of continued litigation, the Company engaged in settlement negotiations with Webasto in May 2021. The Company established a litigation reserve, which reflected the scope of a rejected offer intended to communicate the Company’s serious and good faith intention to attempt to reach a settlement for the stated purposes. 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 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. As a result of the agreement in principle to settle the litigation, the Company recorded additional litigation reserve expenses in the amount of $ 10,000,000 during the three months ended October 30, 2021, in other expense on the consolidated statements of operations and in other current liabilities on the consolidated balance sheet. The Company executed a written settlement agreement with Webasto effective December 16, 2021 to officially and fully settle all claims in the lawsuit. Under the terms of the written settlement agreement, the Company’s payment of the settlement amount of $ 20,000,000 occurred over a 24-month period from the effective date of the settlement agreement, and Webasto retained the Holdback. As of April 30, 2023, the entire settlement amount has been paid. ​ Contract Cost Audits ​ Payments to the Company on government cost reimbursable contracts are based on provisional, or estimated indirect rates, which are subject to an annual audit by the Defense Contract Audit Agency (“DCAA”). The cost audits result in the negotiation and determination of the final indirect cost rates that the Company may use for the period(s) audited. The final rates, if different from the provisional rates, may create an additional receivable or liability for the Company. ​ For example, during the course of its audits, the DCAA may question the Company’s incurred costs, and if the DCAA believes the Company has accounted for such costs in a manner inconsistent with the requirements under Federal Acquisition Regulations, the DCAA auditor may recommend to the Company’s administrative contracting officer to disallow such costs. Historically, the Company has not experienced material disallowed costs as a result of government audits. However, the Company can provide no assurance that the DCAA or other government audits will not result in material disallowances for incurred costs in the future. ​ The Company’s revenue recognition policy calls for revenue recognized on all cost reimbursable government contracts to be recorded at actual rates unless collectability is not reasonably assured. At April 30, 2024 and 2023, the Company had no reserve for open incurred cost claim audits. ​ 21. Business Acquisitions ​ 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 118 Table of Contents 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 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, ​ ​ 2023 Fair value of assets acquired: ​ ​ ​ Accounts receivable $ 2,314 Unbilled receivable ​ ​ 993 Inventories, net ​ ​ 2,882 Prepaid and other current assets ​ ​ 148 Property and equipment, net ​ ​ 1,789 Operating lease assets ​ ​ 1,337 Other assets ​ ​ 71 Technology ​ ​ 39,000 Customer relationship ​ ​ 4,800 Trademarks ​ ​ 1,600 Deferred tax asset ​ ​ 2,865 Goodwill ​ ​ 95,414 Total identifiable net assets ​ $ 153,213 ​ ​ ​ ​ Fair value of liabilities assumed: ​ ​ ​ Accounts payable ​ ​ 3,788 Wages and related accruals ​ ​ 620 Customer advances ​ ​ 1,648 Current operating lease liabilities ​ ​ 482 Other current liabilities ​ ​ 411 Non-current operating lease liabilities ​ ​ 855 Other non-current liabilities ​ ​ 7 Deferred income taxes ​ ​ 11,035 Total liabilities assumed ​ ​ 18,846 Total identifiable net assets ​ $ 134,367 ​ ​ ​ ​ Fair value of consideration transferred: ​ ​ ​ Equity consideration ​ $ 109,820 Cash consideration, net of cash acquired ​ ​ 24,157 Holdback ​ ​ 390 Total consideration ​ $ 134,367 ​ 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. For 119 Table of Contents 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): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ ​ April 30, ​ April 30, ​ ​ ​ 2024 ​ 2023 ​ Revenue ​ $ 727,241 ​ $ 551,845 ​ Net income (loss) attributable to AeroVironment, Inc. ​ $ 57,273 ​ $ ( 190,658 ) ​ ​ 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. ​ 120 Table of Contents 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): ​ ​ ​ ​ ​ ​ ​ August 17, ​ ​ 2022 Fair value of assets acquired: ​ ​ ​ Technology $ 3,200 Backlog ​ ​ 700 Inventories ​ ​ 109 Other assets ​ ​ 19 Property and equipment, net ​ ​ 13 Goodwill ​ ​ 1,633 Total identifiable net assets ​ $ 5,674 ​ ​ ​ ​ Fair value of liabilities assumed: ​ ​ ​ Customer advances ​ ​ 69 Total liabilities assumed ​ ​ 69 Total identifiable net assets ​ $ 5,605 ​ ​ ​ ​ Fair value of consideration transferred: ​ ​ ​ Cash ​ $ 5,105 Holdback ​ ​ 500 Total consideration ​ $ 5,605 ​ 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. 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 Planck and expected future customers in the MUAS market. For tax purposes the acquisition was treated as an asset acquisition and the goodwill is deductible. ​ Planck Supplemental Pro Forma Information (unaudited) ​ 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. The following unaudited pro forma summary presents consolidated information of the Company as if the business acquisition had occurred on May 1, 2021 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ April 30, ​ April 30, ​ ​ 2023 ​ 2022 Revenue ​ $ 544,961 ​ $ 448,367 Net loss attributable to AeroVironment, Inc. ​ $ ( 173,277 ) ​ $ ( 5,798 ) ​ 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. 121 Table of Contents ​ 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 31, 2021, reflecting the additional amortization that would have been charged and including the results of Planck prior to acquisition. ​ 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 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. ​ Telerob Acquisition ​ 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 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; (b) transaction-related fees and costs incurred by the Telerob Seller, including change in control payments triggered by the transaction; and (c) 50% of the cost of obtaining the RWI Policy. In addition, at closing the Company paid off approximately € 7,811,000 (approximately $ 9,468,000 ), of certain indebtedness of Telerob, which amount was paid in combination to the Telerob Seller and the lender under an agreement between Telerob GmbH and the lender providing for a reduced payoff amount. This indebtedness was offset by cash on hand at Telerob at closing. The escrow amount is to be released to the Telerob Seller, less any amounts paid or reserved, 30 months following the closing date. ​ 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 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. 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. 122 Table of Contents 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): ​ ​ ​ ​ ​ ​ ​ May 3, ​ ​ 2021 Fair value of assets acquired: ​ ​ ​ Accounts receivable $ 1,045 Unbilled receivable ​ ​ 829 Inventories, net ​ ​ 15,074 Prepaid and other current assets ​ ​ 314 Property and equipment, net ​ ​ 1,571 Operating lease assets ​ ​ 1,508 Other assets ​ ​ 494 Technology ​ ​ 11,500 Backlog ​ ​ 2,400 Customer relationships ​ ​ 5,000 Other intangible assets ​ ​ 102 Goodwill ​ ​ 20,800 Total assets acquired ​ $ 60,637 ​ ​ ​ ​ Fair value of liabilities assumed: ​ ​ ​ Accounts payable ​ $ 1,136 Wages and related accruals ​ ​ 560 Customer advances ​ ​ 1,243 Current operating lease liabilities ​ ​ 361 Other current liabilities ​ ​ 3,310 Non-current operating lease liabilities ​ ​ 1,147 Other non-current liabilities ​ ​ 224 Deferred income taxes ​ ​ 5,617 Total liabilities assumed ​ ​ 13,598 Total identifiable net assets ​ $ 47,039 ​ ​ ​ ​ Fair value of consideration: ​ ​ ​ Cash consideration, net of cash acquired ​ $ 46,150 Contingent consideration ​ ​ 889 Total ​ $ 47,039 ​ 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 best estimate 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 Telerob and expected future customers in the UGV market. For tax purposes the acquisition was treated as a stock purchase and the goodwill is not deductible. ​ 123 Table of Contents 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. The following unaudited pro forma summary presents consolidated information of the Company as if the business acquisition had occurred on May 1, 2020 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ April 30, ​ April 30, ​ ​ 2022 2021 Revenue ​ $ 445,732 ​ $ 428,353 Net income attributable to AeroVironment, Inc. ​ $ 2,334 ​ $ 17,345 ​ 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 August 1, 2020, reflecting the additional amortization that would have been charged assuming the fair value adjustments to intangible assets had been applied from May 1, 2020 with the consequential tax effects and including the results of Telerob prior to acquisition. ​ 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 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. ​ 22. Pension ​ As part of the Telerob acquisition, the Company acquired a small foreign-based defined benefit pension plan. The Rheinmetall-Zusatzversorgung (“RZV”) service plan covers three former employees based on individual contracts issued to the employees. No other employees are eligible to participate. The Company has reinsurance policies taken out for participating former employees, which were pledged to the employees. The measurement date for the Company’s pension plan was April 30, 2024. ​ The table below includes the projected benefit obligation and fair value of plan assets. The net fair value of plan assets is recorded in other assets on the consolidated balance sheets. ​ ​ ​ ​ ​ ​ ​ April 30, ​ ​ 2024 ​ ​ (In thousands) Projected benefit obligation ​ $ ( 3,246 ) Fair value of plan assets ​ 3,636 Funded status of the plan ​ $ 390 124 Table of Contents ​ Change in projected benefit obligation (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ Pension benefit obligation balance as of April 30, 2023 and April 30, 2022, respectively ​ $ ( 3,192 ) ​ $ ( 3,322 ) Interest cost ​ ( 119 ) ​ ( 70 ) Actuarial loss ​ ​ ( 206 ) ​ ​ 167 Benefits paid ​ ​ 190 ​ ​ 167 Foreign currency exchange rate changes ​ ​ 81 ​ ​ ( 134 ) Pension benefit obligation balance as of April 30, 2024 and April 30, 2023, respectively ​ $ ( 3,246 ) ​ $ ( 3,192 ) ​ Change in plan assets (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ Fair value of plan assets as of April 30, 2023 and April 30, 2022, respectively ​ $ 3,870 ​ $ 3,395 Expected return on plan assets ​ ​ 52 ​ ​ 472 Benefits paid ​ ​ ( 190 ) ​ ​ ( 167 ) Foreign currency exchange rate changes ​ ​ ( 96 ) ​ ​ 170 Fair value of plan assets as of April 30, 2024 and April 30, 2023, respectively ​ $ 3,636 ​ $ 3,870 ​ The accumulated benefit obligation is approximately equal to the projected benefit obligation. The plan assets consist of reinsurance policies for each of the three pension commitments. The reinsurance policies are fixed-income investments considered a level 2 fair value hierarchy based on observable inputs of the policy. The Company does not expect to make any contributions to the Plan in the fiscal year ending April 30, 2025. The projected benefit obligation and projected fair value of plan assets include the assumptions in the table below. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ Year Ended ​ ​ ​ April 30, ​ ​ April 30, ​ ​ ​ 2024 ​ ​ 2023 Discount rate ​ ​ 3.9 % ​ ​ 2.4 % In-payment benefits ​ 2.5 % ​ 1.5 % Expected return on plan assets ​ ​ 2.9 % ​ ​ 2.9 % ​ Expected benefits payments as of April 30, 2024 (in thousands): ​ ​ ​ ​ ​ 2025 ​ $ 188 2026 ​ ​ 192 2027 ​ 195 2028 ​ 197 2029 ​ ​ 199 2030-2034 ​ 1,014 Total expected benefit payments ​ $ 1,985 ​ Net periodic benefit cost is recorded in interest (expense) income, net. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ April 30, ​ April 30, ​ April 30, ​ ​ 2024 ​ 2023 ​ 2022 ​ ​ (In thousands) ​ (In thousands) ​ (In thousands) Expected return on plan assets ​ $ 52 ​ $ 472 ​ $ 108 Interest cost ​ ( 119 ) ​ ( 70 ) ​ ( 39 ) Actuarial loss ​ ​ ( 206 ) ​ ​ 167 ​ ​ 179 Net periodic benefit cost ​ $ ( 273 ) ​ $ 569 ​ $ 248 125 Table of Contents ​ ​ 23. Segments ​ 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: ​ 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 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 ​ UxS LMS MW Total Revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Product sales ​ $ 415,074 ​ $ 168,863 ​ $ 1,834 ​ $ 585,771 Contract services ​ ​ 32,932 ​ ​ 23,724 ​ ​ 74,293 ​ ​ 130,949 ​ ​ $ 448,006 ​ $ 192,587 ​ $ 76,127 ​ $ 716,720 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Segment adjusted income (loss) from operations ​ $ 93,122 ​ $ 24,062 ​ $ ( 24,706 ) ​ $ 92,478 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Depreciation and amortization ​ $ 27,595 ​ $ 2,808 ​ $ 5,346 ​ $ 35,749 126 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended April 30, 2023 ​ UxS LMS MW Total Revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Product sales ​ $ 268,021 ​ $ 84,686 ​ $ 355 ​ $ 353,062 Contract services ​ ​ 75,889 ​ ​ 35,938 ​ ​ 75,647 ​ ​ 187,474 ​ ​ $ 343,910 ​ $ 120,624 ​ $ 76,002 ​ $ 540,536 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Segment adjusted income from operations ​ $ 30,568 ​ $ 8,074 ​ $ 3,664 ​ $ 42,306 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Depreciation and amortization ​ $ 249,925 ​ $ 2,788 ​ $ 3,303 ​ $ 256,016 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended April 30, 2022 ​ UxS LMS MW Total Product sales ​ $ 194,517 ​ $ 46,162 ​ $ 4 ​ $ 240,683 Contract services ​ ​ 106,226 ​ ​ 30,253 ​ ​ 68,570 ​ ​ 205,049 Revenue ​ $ 300,743 ​ $ 76,415 ​ $ 68,574 ​ $ 445,732 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Segment adjusted income (loss) from operations ​ $ 28,703 ​ $ ( 2,823 ) ​ $ 5,794 ​ $ 31,674 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Depreciation and amortization ​ $ 54,324 ​ $ 2,694 ​ $ 3,807 ​ $ 60,825 ​ The following table (in thousands) provides a reconciliation from segment adjusted income from operations to income (loss) before taxes: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended April 30, ​ ​ 2024 2023 2022 Segment adjusted income from operations ​ $ 92,478 ​ $ 42,306 ​ $ 31,674 Impairment of goodwill and accelerated amortization ​ ​ — ​ ​ ( 190,166 ) ​ ​ — Amortization of acquired intangible assets and other purchase accounting adjustments ​ ​ ( 18,558 ) ​ ​ ( 29,418 ) ​ ​ ( 36,707 ) Acquisition-related expenses ​ ​ ( 2,096 ) ​ ​ ( 1,385 ) ​ ​ ( 4,854 ) Interest expense, net ​ ​ ( 4,220 ) ​ ​ ( 9,368 ) ​ ​ ( 5,440 ) Other expense, net ​ ​ ( 4,373 ) ​ ​ ( 346 ) ​ ​ ( 10,313 ) Sale of ownership in HAPSMobile Inc. joint venture ​ ​ — ​ ​ — ​ ​ 6,497 Income (loss) before income taxes ​ $ 63,231 ​ $ ( 188,377 ) ​ $ ( 19,143 ) ​ Segment assets are summarized in the table below. 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 ​ UxS LMS MW Corporate ​ Total Identifiable assets ​ $ 590,619 ​ $ 165,413 ​ $ 50,767 ​ $ 209,061 ​ $ 1,015,860 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ April 30, 2023 ​ UxS LMS MW Corporate ​ Total Identifiable assets ​ $ 474,417 ​ $ 103,375 ​ $ 39,650 ​ $ 207,135 ​ $ 824,577 127 Table of Contents ​ Capital expenditures are summarized in the table below (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ UxS LMS MW Corporate ​ Total Year Ended April 30, 2024 ​ $ 9,630 ​ $ 5,078 ​ $ 4,521 ​ $ 3,754 ​ $ 22,983 Year Ended April 30, 2023 ​ $ 8,191 ​ $ 2,700 ​ $ 3,045 ​ $ 932 ​ $ 14,868 Year Ended April 30, 2022 ​ $ 14,637 ​ $ 4,936 ​ $ 1,655 ​ $ 1,061 ​ $ 22,289 ​ ​ ​ 24. Geographic Information ​ Sales to non-U.S. customers, including U.S. 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. 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. ​ ​ 128 Table of Contents SUPPLEMENTARY DATA ​ SCHEDULE II— VALUATION AND QUALIFYING ACCOUNTS ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additions ​ ​ ​ ​ ​ ​ ​ Balance at Balance ​ Charged to Charged to ​ ​ Balance at ​ ​ Beginning ​ Acquired from ​ Costs and ​ Other ​ ​ ​ ​ End of Description ​ of Period ​ Acquisition ​ Expenses ​ Accounts ​ Deductions ​ Period ​ ​ (In thousands) Allowance for doubtful accounts for the year ended April 30: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 ​ $ 595 ​ $ 5 ​ $ 52 ​ $ — ​ $ ( 60 ) ​ $ 592 ​ 2023 ​ $ 592 ​ $ — ​ $ 124 ​ $ — ​ $ ( 560 ) ​ $ 156 ​ 2024 ​ $ 156 ​ $ — ​ $ 89 ​ $ — ​ $ ( 86 ) ​ $ 159 ​ Warranty reserve for the year ended April 30: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 ​ $ 2,341 ​ $ 256 ​ $ 1,089 ​ $ — ​ $ ( 1,496 ) ​ $ 2,190 ​ 2023 ​ $ 2,190 ​ $ — ​ $ 3,052 ​ $ — ​ $ ( 1,600 ) ​ $ 3,642 ​ 2024 ​ $ 3,642 ​ $ 40 ​ $ 4,364 ​ $ — ​ $ ( 2,508 ) ​ $ 5,538 ​ Reserve for inventory excess and obsolescence for the year ended April 30: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 ​ $ 10,289 ​ $ 1,561 ​ $ 2,271 ​ $ — ​ $ ( 1,787 ) ​ $ 12,334 ​ 2023 ​ $ 12,334 ​ $ — ​ $ 8,136 ​ $ — ​ $ ( 5,265 ) ​ $ 15,205 ​ 2024 ​ $ 15,205 ​ $ — ​ $ 13,937 ​ $ — ​ $ ( 3,242 ) ​ $ 25,900 ​ Reserve for self-insured medical claims for the year ended April 30: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 ​ $ 1,293 ​ $ — ​ $ 14,724 ​ $ — ​ $ ( 14,364 ) ​ $ 1,653 ​ 2023 ​ $ 1,653 ​ $ — ​ $ 13,863 ​ $ — ​ $ ( 14,133 ) ​ $ 1,383 ​ 2024 ​ $ 1,383 ​ $ — ​ $ 16,365 ​ $ — ​ $ ( 16,504 ) ​ $ 1,244 ​ ​ ​ 129 Table of Contents Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. ​ Not applicable. ​ Item 9A. Controls and Procedure s. ​ Evaluation of Disclosure Controls and Procedures ​ We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can only provide reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. As required by Rules 13a-15(e) and 15d-15(e) under the Exchange Act, we have carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective and were operating at a reasonable level. ​ Management’s Report on Internal Control Over Financial Reporting ​ Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, our principal executive and principal financial officers and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that: ​ ● Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; ​ ● Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and ​ ● Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements. ​ Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. ​ Under the supervision and with the participation of management, including our principal executive and financial officers, we have assessed our internal control over financial reporting as of April 30, 2024, based on criteria for effective internal control over financial reporting established in Internal Control—Integrated Framework , issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (“COSO”). Based on this assessment, management concluded that the Company maintained effective internal control over financial reporting as of April 30, 2024 based on the specified criteria. ​ 130 Table of Contents 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. ​ Changes in 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. ​ Item 9B. 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. ​ Item 9C. Disclosure Regarding Foreign Jurisdictions That Prevent Inspections ​ Not applicable. ​ ​ 131 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ​ To the shareholders and the Board of Directors of AeroVironment, Inc. ​ Opinion on Internal Control over Financial Reporting ​ We have audited the internal control over financial reporting of AeroVironment, Inc. and subsidiaries (the “Company”) as of April 30, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of April 30, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO. ​ We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended April 30, 2024, of the Company and our report dated June 26, 2024, expressed an unqualified opinion on those financial statements. ​ Basis for Opinion ​ The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. ​ We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. ​ Definition and Limitations of Internal Control over Financial Reporting ​ A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. ​ Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. ​ ​ /s/ Deloitte & Touche LLP ​ Los Angeles, California June 26, 2024 132 Table of Contents ​ PART III ​ Item 10. Directors, Executive Officer s, and Corporate Governance. ​ 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 ​ We have adopted a Code of Business Conduct and Ethics (“Code of Conduct”). The Code of Conduct is posted on our website, http://investor.avinc.com/corporate-governance. We intend to disclose on our website any amendments to, or waivers of, the Code of Conduct covering our Chief Executive Officer, Chief Financial Officer and/or Controller promptly following the date of such amendments or waivers. A copy of the Code of Conduct may be obtained upon request, without charge, by contacting our Secretary at (805) 520-8350 or by writing to us at AeroVironment, Inc., Attn: Secretary, 900 Innovators Way, Simi Valley, California 93065. The information contained on or connected to our website is not incorporated by reference into this Annual Report and should not be considered part of this or any reported filed with the SEC. ​ No family relationships exist among any of our executive officers or directors. ​ There have been no material changes to the procedures by which security holders may recommend nominees to our board of directors. ​ 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. ​ Item 11. Executive Compensation. ​ 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. ​ Item 12. Security Ownership of Certain Beneficial Owner s and Management and Related Stockholder Matters. ​ The information required by Item 201(d) and Item 403 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. ​ Item 13. Certain Relationships and Related Transactions, and Director Independence. ​ The information required by Item 404 and Item 407(a) 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. ​ Item 14. Principal Accounting Fees and Services. ​ Our independent public accounting firm is Deloitte & Touche LLP, Los Angeles, California, PCAOB Auditor ID 34. The information required by this Item 14 of Form 10-K will be included in the definitive proxy statement for our 2024 Annual Meeting of Stockholders, and that information is incorporated by reference herein. 133 Table of Contents PART IV ​ Item 15. Exhibits, Financial Statement Schedules. ​ (a) The following are filed as part of this Annual Report: ​ 1. Financial Statements ​ The following consolidated financial statements are included in Item 8: ​ ● Report of Independent Registered Public Accounting Firm ​ ● Consolidated Balance Sheets at April 30, 2024 and 2023 ​ ● 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 ​ ● Consolidated Statements of Cash Flows for the Years Ended April 30, 2024, 2023 and 2022 ​ ● Notes to Consolidated Financial Statements ​ 2. Financial Statement Schedules ​ The following Schedule is included in Item 8: ​ ● Schedule II—Valuation and Qualifying Accounts ​ All other schedules have been omitted since the required information is not present, or not present in amounts sufficient to require submission of the schedule, or because the information required is included in the consolidated financial statements or the Notes thereto. ​ 3. Exhibits ​ See Item 15(b) of this report below. ​ (b) Exhibits ​ Exhibit Number Exhibit 2.1*(26) ​ 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. 3.1(1) ​ Amended and Restated Certificate of Incorporation of AeroVironment, Inc. 3.3 (22) ​ Fourth Amended and Restated Bylaws of AeroVironment, Inc., amended as of December 1, 2022 4.1(3) ​ Form of AeroVironment, Inc.’s Common Stock Certificate 4.2(4) ​ Description of Registrant’s Securities 10.1#(5) ​ Form of Director and Executive Officer Indemnification Agreement ​ ​ ​ 10.2#(3) ​ AeroVironment, Inc. 2006 Equity Incentive Plan 10.3#(6) ​ AeroVironment, Inc. 2006 Equity Incentive Plan, as amended and restated effective September 29, 2011 10.4#(7) ​ AeroVironment, Inc. 2006 Equity Incentive Plan, as amended and restated effective September 30, 2016 10.5#(3) ​ Form of Stock Option Agreement pursuant to the AeroVironment, Inc. 2006 Equity Incentive Plan 134 Table of Contents Exhibit Number Exhibit 10.6#(3) ​ Form of Performance Based Bonus Award pursuant to the AeroVironment, Inc. 2006 Equity Incentive Plan 10.7#(8) ​ Form of Long-Term Compensation Award Grant Notice and Long-Term Compensation Award Agreement pursuant to the AeroVironment, Inc. 2006 Equity Incentive Plan 10.8#(9) ​ Form of Restricted Stock Award Grant Notice and Restricted Stock Award Agreement (Severance Plan Participants) pursuant to the AeroVironment, Inc. 2006 Equity Incentive Plan 10.9#(9) ​ Form of Restricted Stock Award Grant Notice and Restricted Stock Award Agreement (Non-Severance Plan Participants) pursuant to the AeroVironment, Inc. 2006 Equity Incentive Plan 10.10#(9) ​ Form of Restricted Stock Award Grant Notice and Restricted Stock Award Agreement (Non-Management Directors) pursuant to the AeroVironment, Inc. 2006 Equity Incentive Plan 10.11#(9) ​ Form of Performance Restricted Stock Unit Award Grant Notice and Performance Restricted Stock Unit Award Agreement pursuant to the AeroVironment, Inc. 2006 Equity Incentive Plan 10.12#(10) ​ AeroVironment, Inc. 2021 Equity Incentive Plan 10.13#(10) ​ Form of Stock Option Grant Notice and Stock Option Agreement pursuant to the AeroVironment, Inc. 2021 Equity Incentive Plan 10.14#(10) ​ Form of Restricted Stock Award Grant Notice and Restricted Stock Award Agreement pursuant to the AeroVironment, Inc. 2021 Equity Incentive Plan (Severance Plan Participants) 10.15#(10) ​ Form of Restricted Stock Award Grant Notice and Restricted Stock Award Agreement pursuant to the AeroVironment, Inc. 2021 Equity Incentive Plan (Non-Severance Plan Participants) 10.16#(10) ​ Form of Restricted Stock Award Grant Notice and Restricted Stock Award Agreement pursuant to the AeroVironment, Inc. 2021 Equity Incentive Plan (Non-Employee Directors) 10.17#(10) ​ Form of Performance Restricted Stock Award Grant Notice and Performance Restricted Stock Award Agreement pursuant to the AeroVironment, Inc. 2021 Equity Incentive Plan 10.18(23) ​ Lease, dated March 11, 2022, between AeroVironment, Inc. and BCORE Defender CA1W01, LLC, for the property located at 85 Moreland Road, Simi Valley, California 10.19(27) ​ 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. 10.20(11) ​ Standard Industrial/Commercial Single-Tenant Lease, dated March 3, 2008, between AeroVironment, Inc. and Hillside Associates III, LLC, for the property located at 900 Enchanted Way, Simi Valley, California, including the addendum thereto 10.21(12) ​ First Amendment to Lease Agreement (900 Enchanted Way, Simi Valley, CA 93065) dated as of December 1, 2013, by and between the Company and Hillside III LLC, and related agreements 10.22(4) ​ Second Amendment to Lease Agreement dated as of May 13, 2020, by and between the Company and Hillside III LLC for the property located at 900 Enchanted Way, Simi Valley, CA 93065 10.23(11) ​ Standard Industrial/Commercial Single-Tenant Lease, dated April 21, 2008, between AeroVironment, Inc. and Hillside Associates II, LLC, for the property located at 994 Flower Glen Street, Simi Valley, California, including the addendum thereto 10.24(12) ​ First Amendment to Lease Agreement (994 Flower Glen Street, Simi Valley, CA 93065) dated as of December 1, 2013, by and between the Company and Hillside II LLC, and related agreements 10.25(13) ​ Second Amendment to Lease Agreement (994 Innovators Way, Simi Valley, CA 93065) dated as of June 1, 2021, by and between the Company and Hillside Associates II, LLC, and related agreements 10.26(12) ​ Lease Agreement (996 Flower Glen Street, Simi Valley, CA 93065) dated as of December 1, 2013, by and between the Company and Hillside II LLC, and related agreements 10.27(13) ​ First Amendment to Lease Agreement (996 Innovators Way, Simi Valley, CA 93065) dated as of June 1, 2021, by and between the Company and Hillside Associates II, LLC, and related agreements 10.28(14) ​ Lease dated March 28, 2018 between AeroVironment, Inc. and Princeton Avenue Holdings, LLC for property located at 14501 Princeton Avenue, Moorpark, California, including addendums thereto 10.29(15) ​ First Amendment to Lease dated October 26, 2018 between AeroVironment, Inc. and Princeton Avenue Holdings, LLC for property located at 14501 Princeton Avenue, Moorpark, California 10.30(22) ​ Second Amendment to Lease dated October 26, 2018 between AeroVironment, Inc., Princeton Avenue Holdings, LLC and Princeton Avenue Holdings II, LLC for property located at 14501 Princeton Avenue, Moorpark, California 10.31#(3) ​ Retiree Medical Plan 135 Table of Contents Exhibit Number Exhibit 10.32(16) ​ Form of Director Letter Agreement by and between AeroVironment, Inc. and certain non-employee director ​ 10.33(14) ​ Asset Purchase Agreement by and between Webasto Charging Systems, Inc. and AeroVironment, Inc. dated as of June 1, 2018 10.34(15) ​ Side Letter Agreement by and between Webasto Charging Systems, Inc. and AeroVironment, Inc. dated as of June 29, 2018 10.35#(17) ​ AeroVironment, Inc. Executive Severance Plan and Summary Description, effective January 1, 2019 10.36#(18) ​ Special Consulting Agreement by and between AeroVironment, Inc. and Kirk Flittie dated as of July 13, 2019 10.37*(19) ​ Stock Purchase Agreement, dated January 11, 2021, by and among AeroVironment, Inc., Arcturus UAV, Inc., and the shareholders and other equity interest holders of Arcturus UAV, Inc. 10.38(13) ​ Loan commitment letter, dated January 11, 2021, by and among AeroVironment, Inc., Bank of America, N.A., BofA Securities, Inc., JPMorgan Chase Bank, N.A., and U.S. Bank National Association. 10.39*(13) ​ Credit Agreement, dated February 19, 2021, by and among AeroVironment, Inc., certain lenders, letter of credit issuers, Bank of America, N.A., as the administrative agent and the swingline lender, and BofA Securities, Inc., JPMorgan Chase Bank, N.A., and U.S. Bank National Association, as joint lead arrangers and joint bookrunners 10.40ǂ(13) ​ Security and Pledge Agreement, dated February 19, 2021, by and among AeroVironment, Inc., certain obligors, and Bank of America, N.A., as the administrative agent 10.41(20) ​ First Amendment to Credit Agreement and Waiver, dated February 4, 2022, by and among AeroVironment, Inc., certain lenders, letter of credit issuers, Bank of America, N.A., as the administrative agent and the swingline lender, and BofA Securities, Inc., JPMorgan Chase Bank, N.A., and U.S. Bank National Association 10.42(24) ​ Second Amendment to Credit Agreement and Waiver, dated June 6, 2023, by and among AeroVironment, Inc., certain lenders, letter of credit issuers, Bank of America, N.A., as the administrative agent and the swingline lender, and BofA Securities, Inc., JPMorgan Chase Bank, N.A., and U.S. Bank National Association 10.43(27) ​ Joinder Agreement, dated October 30, 2023, between AeroVironment, Inc. and Bank of America, N.A. 10.44ǂ*(21) ​ 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 10.45(25) ​ AeroVironment, Inc. 2023 Employee Stock Purchase Plan 19 ​ Insider Trading Policy 21.1 ​ Subsidiaries of AeroVironment, Inc. 23.1 ​ Consent of Deloitte & Touche LLP, independent registered public accounting firm 24.1 ​ Power of Attorney (incorporated by reference to the signature page of this Annual Report) 31.1 ​ Certification Pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934 31.2 ​ Certification Pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934 32.1 ​ Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 97 ​ Nasdaq Rule 5608 Equity Incentive Compensation Recovery Policy 101.INS ​ Inline XBRL Instance Document 101.SCH ​ Inline XBRL Taxonomy Extension Schema Document 101.CAL ​ Inline XBRL Taxonomy Calculation Linkbase Document 101.DEF ​ Inline XBRL Taxonomy Extension Definition Linkbase Document 101.LAB ​ Inline XBRL Taxonomy Label Linkbase Document 101.PRE ​ Inline XBRL Taxonomy Presentation Linkbase Document 104 ​ Cover Page Interactive Data File formatted as Inline XBRL and contained in Exhibit 101 ​ (1) Incorporated by reference herein to the exhibits to the Company’s Quarterly Report on Form 10-Q filed March 9, 2007 (File No. 001-33261). ​ 136 Table of Contents (2) Incorporated by reference herein to the exhibits to the Company’s Current Report on Form 8-K filed March 3, 2022 (File No. 001-33261). ​ (3) Incorporated by reference herein to the exhibits to the Company’s Registration Statement on Form S-1 (File No. 333-137658). ​ (4) Incorporated by reference herein to the exhibits to the Company's Annual Report on Form 10-K filed June 24, 2020 (File No. 001-33261). ​ (5) Incorporated by reference herein to the exhibits to the Company’s Annual Report on Form 10 K filed on June 29, 2016 (File No. 001 33261). ​ (6) Incorporated by reference to the exhibits to the Company’s Current Report on Form 8-K filed on October 5, 2011 (File No. 001-33261). ​ (7) Incorporated by reference herein to the exhibits to the Company’s Annual Report on Form 10-K filed June 28, 2017 (File No. 001-33261). ​ (8) Incorporated by reference herein to the exhibits to the Company’s Current Report on Form 8-K filed July 28, 2010 (File No. 001-33261). ​ (9) Incorporated by reference herein to the exhibits to the Company’s Annual Report on Form 10-K filed June 26, 2019 (File No. 001-33261). ​ (10) Incorporated by reference herein to the exhibits to the Company’s Registration Statement on Form S-8 filed October 13, 2021 (File No. 333-260227). ​ (11) Incorporated by reference herein to the exhibits to the Company’s Annual Report on Form 10-K filed June 26, 2008 (File No. 001-33261). ​ (12) Incorporated by reference herein to the exhibits to the Company’s Quarterly Report on Form 10-Q filed March 5, 2014 (File No. 001-33261). ​ (13) Incorporated by reference herein to the exhibits to the Company’s Annual Report on Form 10-K filed June 29, 2021 (File No. 001-33261). ​ (14) Incorporated by reference herein to the exhibits to the Company’s Quarterly Report on Form 10-Q filed September 6, 2018 (File No. 001-33261). ​ (15) Incorporated by reference herein to the exhibits to the Company’s Quarterly Report on Form 10-Q filed November 30, 2018 (File No. 001 33261). ​ Incorporated by reference herein to the exhibits to the Company’s Quarterly Report on Form 10-Q filed March 9, 2016 (File No. 001-33261). The representations and warranties contained in the Asset Purchase Agreement were made for the purposes of allocating contractual risk between the parties and not as a means of establishing facts and are qualified by information in disclosure schedules that the parties exchanged in connection with the signing of the Asset Purchase Agreement. Moreover, the representations and warranties were made only as of the date of execution of the Asset Purchase Agreement and information concerning the subject matter of the representations and warranties may change after the date of the Asset Purchase Agreement. Only parties to the Asset Purchase Agreement have a right to enforce the agreement. Accordingly, security holders should not rely on the representations and warranties in the Asset Purchase Agreement. ​ 137 Table of Contents (16) All schedules (or similar attachments) have been omitted from this filing pursuant to Item 601 of Regulation S-K. The Company will furnish copies of any schedules to the Securities and Exchange Commission upon request. ​ (17) Incorporated by reference herein to the exhibits to the Company’s Quarterly Report on Form 10-Q filed March 7, 2018 (File No. 001-33261). ​ (18) Incorporated by reference herein to the exhibits to the Company’s Current Report on Form 8-K/A filed October 22, 2019 (File No. 001-33261). ​ (19) Incorporated by reference herein to the exhibits to the Company's Annual Report on Form 10-K filed June 29, 2021 (File No. 001-33261). ​ The representations and warranties contained in the Stock Purchase Agreement were made for the purposes of allocating contractual risk between the parties and not as a means of establishing facts and are qualified by information in disclosure schedules that the parties exchanged in connection with the signing of the Stock Purchase Agreement. Moreover, the representations and warranties were made only as of the date of execution of the Stock Purchase Agreement and information concerning the subject matter of the representations and warranties may change after the date of the Stock Purchase Agreement. Only parties to the Stock Purchase Agreement have a right to enforce the agreement. Accordingly, security holders should not rely on the representations and warranties in the Stock Purchase Agreement. ​ All schedules (or similar attachments) have been omitted from this filing pursuant to Item 601 of Regulation S-K. The Company will furnish copies of any schedules to the Securities and Exchange Commission upon request. ​ (20) Incorporated by reference herein to the exhibits to the Company's Quarterly Report on Form 10-Q filed March 4, 2022 (File No. 001-33261). ​ (21) Incorporated by reference herein to the exhibits to the Company's Annual Report on Form 10-K filed June 29, 2021 (File No. 001-33261). ​ The representations and warranties contained in the Share Purchase Agreement were made for the purposes of allocating contractual risk between the parties and not as a means of establishing facts and are qualified by information in disclosure schedules that the parties exchanged in connection with the signing of the Share Purchase Agreement. Moreover, the representations and warranties were made only as of the date of execution of the Share Purchase Agreement and information concerning the subject matter of the representations and warranties may change after the date of the Stock Purchase Agreement. Only parties to the Share Purchase Agreement have a right to enforce the agreement. Accordingly, security holders should not rely on the representations and warranties in the Share Purchase Agreement. ​ All schedules (or similar attachments) have been omitted from this filing pursuant to Item 601 of Regulation S-K. The Company will furnish copies of any schedules to the Securities and Exchange Commission upon request. ​ (22) Incorporated by reference herein to the exhibits to the Company's Quarterly Report on Form 10-Q filed December 7, 2022 (File No. 001-33261). ​ (23) Incorporated by reference herein to the exhibits to the Company's Annual Report on Form 10-K filed June 28, 2022 (File No. 001-33261). ​ (24) Incorporated by reference herein to the exhibits to the Company's Annual Report on Form 10-K filed June 27, 2023 (File No. 001-33261). ​ 138 Table of Contents (25) Incorporated by reference herein to Appendix A to the Company’s Definitive Proxy Statement on Schedule 14A filed August 17, 2023 (File No. 001-33261). ​ (26) Incorporated by reference herein to the exhibits to the Company's Current Report on Form 8-K filed August 22, 2023 (File No. 001-33261). ​ (27) Incorporated by reference herein to the exhibits to the Company's Quarterly Report on Form 10-Q filed December 5, 2023 (File No. 001-33261). ​ ǂ 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. ​ # Indicates management contract or compensatory plan. ​ * Schedules (or similar attachments) to this Exhibit have been omitted in accordance with Items 601(a)(5) and/or 601(b)(2) of Regulation S-K. The Registrant agrees to furnish supplementary a copy of all omitted schedules to the Securities and Exchange Commission on a confidential basis upon request. ​ (c) Financial Statement Schedules and Separate Financial Statements of Subsidiaries Not Consolidated and Fifty Percent or Less Owned Persons Not applicable. ​ Item 16. Form 10-K Summary ​ Not applicable. ​ 139 Table of Contents SIGNATURES ​ 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. ​ ​ AEROVIRONMENT, INC. ​ ​ Date: June 26, 2024 ​ /s/ Wahid Nawabi ​ By: Wahid Nawabi ​ Its: Chief Executive Officer and President ​ ​ (Principal Executive Officer) ​ POWER OF ATTORNEY ​ KNOW ALL PERSONS BY THESE PRESENTS, that each of the persons whose signature appears below hereby constitutes and appoints Wahid Nawabi and Kevin P. McDonnell, each of them acting individually, as his attorney-in-fact, each with full power of substitution, for him in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys- in-fact, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming our signatures as they may be signed by our said attorney-in-fact and any and all amendments to this Annual Report on Form 10-K. ​ Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. ​ Name Title Date ​ ​ ​ ​ ​ /s/ Wahid Nawabi ​ President, Chief ​ June 26, 2024 Wahid Nawabi ​ Executive Officer and Chairman ​ ​ ​ ​ (Principal Executive Officer) ​ ​ ​ ​ ​ ​ ​ /s/ Kevin P. McDonnell ​ Senior Vice President and ​ June 26, 2024 Kevin P. McDonnell ​ Chief Financial Officer (Principal ​ ​ ​ ​ Financial Officer) ​ ​ ​ ​ ​ ​ ​ /s/ Brian C. Shackley ​ Vice President and ​ June 26, 2024 Brian C. Shackley ​ Chief Accounting Officer (Principal ​ ​ ​ ​ Accounting Officer) ​ ​ ​ ​ ​ ​ ​ /s/ Edward R. Muller ​ Director ​ June 26, 2024 Edward R. Muller ​ ​ ​ ​ ​ ​ ​ ​ ​ /s/ Cindy Lewis ​ Director ​ June 26, 2024 Cindy Lewis ​ ​ ​ ​ ​ ​ ​ ​ ​ /s/ Stephen F. Page ​ Director ​ June 26, 2024 Stephen F. Page ​ ​ ​ ​ ​ ​ ​ ​ ​ /s/ Mary Beth Long ​ Director ​ June 26, 2024 Mary Beth Long ​ ​ ​ ​ ​ ​ ​ ​ ​ /s/ Joseph L. Votel ​ Director ​ June 26, 2024 Joseph L. Votel ​ ​ ​ ​ ​ ​ ​ ​ ​ /s/ Charles Thomas Burbage ​ Director ​ June 26, 2024 Charles Thomas Burbage ​ ​ ​ ​ ​ ​ ​ ​ ​ /s/ Philip S. Davidson ​ Director ​ June 26, 2024 Philip S. Davidson ​ ​ ​ ​ ​ 140