AeroVironment (AVAV) Q3 2025 earnings summary

Executive summary

• Q3 FY25 revenue was $167.6M, down 10% year-over-year, mainly due to lower UxS sales and operational disruptions from severe weather in Southern California.

• Achieved record funded backlog of $764M, driven by major Switchblade and JUMP 20 contract wins, despite stop-work orders impacting $13M of funded backlog.

• Net loss for the quarter was $1.8M, compared to net income of $13.9M last year, with adjusted EBITDA at $21.8M and non-GAAP EPS at $0.30.

• Progressed toward BlueHalo acquisition, with regulatory and shareholder approvals pending; closing expected in Q2 2025.

• Transitioned away from Ukraine-driven revenue, with Ukraine expected to represent 6% of Q4 and 17% of FY25 revenue.

Financial highlights

• Q3 FY25 revenue was $167.6M, down from $186.6M, with LMS segment up 46% to $83.9M and UxS down 44% to $63.8M.

• Gross margin improved to 38% (from 36% prior year), with adjusted gross margin at 40%.

• Adjusted EBITDA for Q3 was $21.8M, down from $28.8M last year.

• Adjusted EPS was $0.30, down from $0.63 in Q3 FY24; net loss of $1.8M versus net income of $13.9M last year.

• Cash and cash equivalents at quarter-end were $47M, with $25M drawn on a $200M revolving credit facility.

Outlook and guidance

• FY25 revenue guidance is $780M–$795M, adjusted EBITDA $135M–$142M, and non-GAAP EPS $2.92–$3.13.

• Guidance excludes BlueHalo acquisition results and related expenses.

• Q4 expected to deliver record revenue, with FY26 positioned for organic revenue near $1B, excluding BlueHalo.

• Bookings for FY25 expected to exceed $1B; backlog as of January 25, 2025 was $763.5M funded and $1.43B unfunded.

• R&D expenses expected at 12–13% of revenue; adjusted gross margin at 40–41% for FY25.