AeroVironment Inc. (NASDAQ: AVAV) rallied almost 20% in extended trading Monday after the military drone maker delivered a blowout fiscal fourth-quarter report that trounced Wall Street estimates on both revenue and profit, propelled by red-hot global demand for unmanned defense systems.
The Simi Valley, California-based company posted fiscal Q4 2026 revenue of $642 million, a 133% year-over-year surge that sailed past the $559 million consensus forecast from analysts polled by LSEG. Adjusted earnings per share came in at $1.84, roughly 25% above the Street’s $1.47 estimate. On a GAAP basis, net income jumped nearly 280% to $63.2 million, or $1.25 per diluted share, compared with $16.66 million, or 59 cents per share, in the year-ago period.
The explosive top-line growth was driven by strength across its core portfolio and recent acquisitions. Revenue from autonomous systems reached $492 million, handily beating the $402 million projection from StreetAccount. Purchases of next-generation defense firm BlueHalo and unmanned aerospace platform specialist ESAero combined to add more than $282 million in quarterly revenue, marking a swift payoff from the company’s expansion strategy.
AeroVironment’s funded backlog — firm, appropriated orders set to convert to future revenue — climbed 65% year over year to $1.2 billion. Much of the backlog is tied to contracts with the U.S. Army, providing high visibility and reliable cash flow for the coming quarters.
For full fiscal 2027, management issued guidance of $2.13 billion to $2.23 billion in revenue, with adjusted EPS ranging from $3.02 to $3.34. The revenue outlook marks continued growth from fiscal 2026’s roughly $1.98 billion total, though the profit forecast fell short of the $3.94 per share consensus. Company officials said near-term margins will be pressured by investments in production capacity and international sales infrastructure, moves designed to capture a larger share of the fast-growing global market.
In an interview with CNBC, CEO Wahid Nawabi said recent global conflicts have permanently reshaped the fundamentals of warfare, bringing a long-expected inflection point for drone, counter-drone and space technology to the forefront. “All of our allies are behind the eight ball in terms of adoption and deployment,” Nawabi said. “Now we’re playing catch-up. Our military is playing catch-up in a very fast pace.”
He noted that the U.S. Department of Defense’s annual budget for drone programs alone could top $75 billion next year, pointing to a massive addressable market for the company’s offerings.
Even with Monday’s after-hours surge, AeroVironment shares remain down more than 40% year to date. Investors are framing the stronger-than-expected quarterly results as a key turning point for the company’s fundamentals, as structural defense spending shifts further toward unmanned and autonomous systems.
