AeroVironment (AVAV) investor relations material

Strategic Positioning and Market Opportunity

• Defense sector is experiencing a once-in-a-generation opportunity due to underinvestment, rising global threats, and bipartisan support for increased spending, especially in autonomous and AI-driven systems.

• The company is positioned as a leader in innovation, agility, and scale, combining legacy experience with modern tech attributes to address evolving defense needs.

• Total addressable market (TAM) is estimated at $70–75 billion, with significant growth expected in offensive, defensive, uncrewed systems, and space technologies.

• Key product franchises, such as Switchblade, Red Dragon, Jump 20, Freedom Eagle One, and P550, are each targeting billion-dollar-plus opportunities.

• Scalable manufacturing capacity and a global footprint enable rapid production ramp-up for core platforms, with over 42,000 platforms fielded.

Technology and Product Innovation

• AV Halo is a modular, open-architecture, AI-powered software platform integrating autonomy and command across all domains, enabling unified warfighting ecosystems and rapid system integration.

• The software suite supports edge dominance, interoperability, and vertical/horizontal integration, with seven core services including command, vision, autonomy, and synthetic training.

• AV Halo is fielded, supporting both proprietary and third-party systems, and is designed for rapid updates and secure deployment in contested environments.

• Directed energy solutions (Locust) and laser communications are operational, modular, scalable, and in high demand, with over 260 systems on orbit and 23,000+ operational hours for laser weapons.

• The software stack integrates detection, decision, and delivery capabilities, fusing multi-domain sensor data for rapid, informed action.

Financial and Operational Outlook

• R&D investment is targeted at 6–7% of sales, with leverage expected from increased product sales and SG&A efficiency.

• Pricing power remains strong due to lowest-cost manufacturing, high reliability, and the ability to transition products from joint development to commercial items.

• Deep integration with BlueHalo leverages complementary products, expanded market access, and cross-selling opportunities, especially internationally.

• Major program wins include sole-source selection for Freedom Eagle One, a next-gen counter-UAS missile, and a $240 million laser communication award.

• Autonomous Systems segment reported $1.049B FY2025 pro forma revenue, and Space, Cyber, and Directed Energy segment achieved $646M FY2025 pro forma revenue.