AeroVironment posted a 22% year-over-year revenue increase in its fourth quarter, driven by expanded defense contracts and growing adoption of tactical drones by U.S. and allied forces. The company's backlog now exceeds $1.8 billion, signaling sustained demand in the unmanned systems sector.
- Q4 revenue: $368 million, up 22% YoY
- Net income: $62 million, a 27% increase from prior year
- Backlog: $1.83 billion, representing a 19% increase from Q3 2024
- Gross margin improved to 44.3% in Q4 2025
- 2025 revenue guidance: $1.48B–$1.52B, up 15%–19% YoY
- New contracts: $120M from NATO partner, $75M from U.S. Army
AeroVironment reported its fiscal fourth-quarter results, revealing a revenue surge to $368 million, up from $302 million in the same period last year. This marks the company’s highest quarterly revenue since 2021 and underscores the accelerating demand for small unmanned aircraft systems (UAS) in military operations. The growth was fueled by new contracts from the U.S. Department of Defense and international defense agencies, particularly for the Switchblade 600 and Raven drones. The company’s net income rose to $62 million, a 27% improvement from the prior-year quarter, reflecting margin expansion despite inflationary pressures on component sourcing. AeroVironment’s gross margin improved to 44.3%, up from 41.8% in Q4 2024, driven by supply chain optimization and economies of scale. The company also reported a 35% year-over-year increase in operating cash flow, reaching $94 million, highlighting strong financial health. Backlog growth remains a key indicator of future performance, with total booked orders now at $1.83 billion—up $290 million from the previous quarter. This includes a $120 million contract awarded in November for the delivery of Switchblade 300 and 600 systems to a NATO partner nation, alongside a $75 million follow-on order from the U.S. Army for Raven drones. The company expects 2025 revenue to reach between $1.48 billion and $1.52 billion, representing a 15% to 19% increase over 2024. Market analysts note that AeroVironment’s performance reflects broader trends in defense technology investment, particularly in portable, rapidly deployable drones for reconnaissance and precision strike missions. The company’s stock rose 6.2% in after-hours trading following the earnings release, with investors citing long-term visibility in defense budgets and geopolitical tensions as catalysts. Major defense contractors and surveillance technology firms are closely monitoring AeroVironment’s trajectory as a bellwether for the tactical UAS market.