AeroVironment Inc. recently released its 10-Q report. AeroVironment, Inc. is a defense technology company that designs, develops, produces, delivers and supports robotic systems and related services for government agencies and businesses in the United States and abroad. It operates through two segments, Autonomous Systems and Space, Cyber and Directed Energy, and sells uncrewed aircraft systems, counter-UAS and precision strike systems, autonomy and platform technologies, unmanned maritime and ground systems, space communications hardware, and cyber solutions.
For the three months ended Aug. 1, 2026, revenue rose 6% to $480.5 million from $454.7 million a year earlier. Product revenue increased $15.5 million and service revenue increased $10.3 million. UAS product revenue climbed $39.1 million on stronger global demand, while Space and Directed Energy product sales fell $18.1 million, mainly because of the prior-year termination of the SCAR program. Precision Strike and Defense Systems revenue declined $6.8 million, including a $56.9 million drop in Switchblade product revenue tied to order delays, partly offset by $41.8 million from the ESAero acquisition and $18.5 million of higher defense systems demand.
Cost of sales declined 1% to $355.9 million from $359.6 million, and gross margin widened to 26% from 21%. The company said cost of sales included $18.6 million of intangible amortization and other non-cash purchase accounting expenses, down from $37.4 million a year earlier. SG&A fell to $111.5 million from $131.3 million, helped by a $17.4 million reduction in intangible amortization and a $22.5 million drop in acquisition-related expenses tied to the BlueHalo deal, partly offset by about $9 million of higher employee costs and $4.4 million of bad debt expense. R&D expense dropped to $24.0 million from $33.1 million, which the company said reflected timing of planned spending.
Operating loss narrowed to $10.9 million from $69.3 million. Interest income, net, improved to $4.1 million from interest expense, net, of $17.4 million, reflecting higher cash and investment balances and lower debt balances. The company reported a net loss of $5.1 million, compared with a net loss of $67.4 million in the prior-year quarter.
Segment revenue in the quarter was $346.0 million for Autonomous Systems and $134.5 million for Space, Cyber and Directed Energy. Segment adjusted EBITDA was $62.3 million for Autonomous Systems and a loss of $8.9 million for Space, Cyber and Directed Energy, versus $52.8 million and $3.8 million, respectively, a year earlier.
Management said a January 2026 stop-work order on the BADGER phased array antenna systems contract for Space Force’s SCAR program triggered a goodwill impairment review. The company recorded a goodwill impairment charge of about $240 million in the Space reporting unit during the quarter ended Jan. 31, 2026. It also said favorable cumulative catch-up adjustments in the latest quarter totaled $8.2 million, while unfavorable adjustments totaled $11.5 million, for a net unfavorable impact of $3.2 million. The market has reacted to these announcements by moving the company's shares 9.76% to a price of $154.545. For the full picture, make sure to review AeroVironment Inc's 10-Q report.
