# AeroVironment Inc (AVAV) Informational only - not investment advice. CIK: 0001368622 SIC: 3721 Aircraft SIC breadcrumb: [Manufacturing](/division/D/) > [Transportation Equipment](/major-group/37/) > [SIC 3721 Aircraft](/industry/3721/) Latest 10-K filed: 2026-06-29 SEC page: https://www.sec.gov/edgar/browse/?CIK=1368622 Filing source: https://www.sec.gov/Archives/edgar/data/1368622/000110465926078906/avav-20260430x10k.htm ## At a glance FY2026 · period end 2026-04-30 · filed 2026-06-29 · accession 0001104659-26-078906 · source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001368622.json | Metric | Value | FY | Provenance | | --- | ---: | ---: | --- | | Revenue | 1,976,845,000 USD | 2026 | verified | | Net income | -265,122,000 USD | 2026 | verified | | Assets | 5,716,742,000 USD | 2026 | verified | | Free cash flow | -140,948,000 USD | 2026 | computed | | Net margin | -13.41% | 2026 | computed | | Operating margin | -15.73% | 2026 | computed | | Revenue YoY | +140.89% | 2026 | computed | | ROE | -6.02% | 2026 | computed | Computed values are grepcent-computed from the verified facts above and may differ from ratios the company itself reports. Free cash flow = operating cash flow − capital expenditures. Net margin = net income ÷ revenue. Operating margin = operating income ÷ revenue. Revenue YoY = FY2026 revenue ÷ FY2025 revenue − 1 (consecutive fiscal years only). ROE = net income ÷ period-end stockholders' equity. No market price, no rating, no forecast on this site. Not investment advice. ### Peer percentile fingerprint | Ratio | AVAV | Peer median | Percentile | N | | --- | ---: | ---: | ---: | ---: | | Net margin | -13.4% | 3.7% | 8 | 65 | | Operating margin | -15.7% | 7.3% | 11 | 57 | | Revenue growth | 140.9% | 5.6% | 97 | 73 | | FCF margin | -7.1% | 4.4% | 23 | 72 | | ROE | -6.0% | 6.0% | 25 | 72 | | ROA | -4.6% | 2.8% | 22 | 75 | | Liabilities / equity | 0.30 | 1.45 | 13 | 72 | | Current ratio | 4.30 | 2.20 | 86 | 71 | Percentile = share of the N covered peers reporting that ratio whose value is lower (ties counted half); computed among grepcent-covered companies in SIC major-group 37 Transportation Equipment, not the whole market. A higher percentile means a higher value of the ratio, not a better company. Ratios with fewer than 8 reporting peers are omitted. Latest reported values per company; fiscal periods may differ. Descriptive arithmetic - not a score, rating, or ranking. ## Selected Fundamentals | Metric | Value | Unit | FY | Filed | | --- | ---: | --- | ---: | --- | | Revenue | 1976845000 | USD | 2026 | 2026-06-29 | | Net income | -265122000 | USD | 2026 | 2026-06-29 | | Assets | 5716742000 | USD | 2026 | 2026-06-29 | ## Financials Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-06-29. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001368622.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts. | Metric | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | | --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | | Revenue | | | | | | | | 716,720,000 | 820,627,000 | 1,976,845,000 | | Net income | 13,078,000 | 17,647,000 | 47,419,000 | 41,070,000 | 23,345,000 | -4,185,000 | -176,167,000 | 59,666,000 | 43,619,000 | -265,122,000 | | Operating income | 20,766,000 | 30,426,000 | 33,826,000 | 47,135,000 | 43,313,000 | -9,887,000 | -178,663,000 | 71,824,000 | 40,795,000 | -310,995,000 | | Gross profit | 96,873,000 | 107,685,000 | 128,403,000 | 153,102,000 | 164,558,000 | 141,236,000 | 173,514,000 | 283,931,000 | 318,636,000 | 500,642,000 | | Diluted EPS | 0.56 | 0.75 | 1.97 | 1.71 | 0.96 | -0.17 | -7.04 | 2.18 | 1.55 | -5.40 | | Operating cash flow | | | | 25,097,000 | 86,532,000 | -9,618,000 | 11,400,000 | 15,292,000 | -1,318,000 | -78,404,000 | | Capital expenditures | 9,017,000 | 9,563,000 | 8,896,000 | 11,220,000 | 11,263,000 | 22,289,000 | 14,868,000 | 22,983,000 | 19,547,000 | 62,544,000 | | Assets | 432,500,000 | 473,418,000 | 508,844,000 | 584,954,000 | 928,566,000 | 914,200,000 | 824,577,000 | 1,015,860,000 | 1,120,567,000 | 5,716,742,000 | | Stockholders' equity | 383,314,000 | 409,056,000 | 462,575,000 | 509,901,000 | 612,107,000 | 608,210,000 | 550,970,000 | 822,745,000 | 886,507,000 | 4,400,400,000 | | Cash and cash equivalents | 79,904,000 | 143,517,000 | 172,708,000 | 255,142,000 | 148,741,000 | 77,231,000 | 132,859,000 | 73,301,000 | 40,862,000 | 377,325,000 | | Free cash flow | | | | 13,877,000 | 75,269,000 | -31,907,000 | -3,468,000 | -7,691,000 | -20,865,000 | -140,948,000 | ### Ratios ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported. | Metric | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | | --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | | Net margin | | | | | | | | 8.32% | 5.32% | -13.41% | | Operating margin | | | | | | | | 10.02% | 4.97% | -15.73% | | Return on equity | 3.41% | 4.31% | 10.25% | 8.05% | 3.81% | -0.69% | -31.97% | 7.25% | 4.92% | -6.02% | | Return on assets | 3.02% | 3.73% | 9.32% | 7.02% | 2.51% | -0.46% | -21.36% | 5.87% | 3.89% | -4.64% | | Liabilities / equity | 0.13 | 0.16 | 0.10 | 0.15 | 0.52 | 0.50 | 0.50 | 0.23 | 0.26 | 0.30 | | Current ratio | 7.37 | 6.43 | 10.47 | 7.53 | 4.18 | 3.64 | 3.93 | 3.56 | 3.52 | 4.30 | ## As-reported value updates 6 tracked differences above grepcent's stated thresholds were found between the earliest XBRL-filed value and the value currently on file for the same fiscal period. Ledger: /company/AVAV/revisions/ ## Quarterly Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-06-29. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001368622.json. Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived. | Quarter | End date | Revenue | Net income | Diluted EPS | Method | | --- | --- | ---: | ---: | ---: | --- | | 2021-Q3 | 2021-01-30 | | | 0.01 | reported discrete quarter | | 2022-Q1 | 2021-07-31 | | | -0.57 | reported discrete quarter | | 2022-Q2 | 2021-10-30 | | | 0.10 | reported discrete quarter | | 2022-Q4 | 2022-04-30 | | 7,212,000 | | derived Q4 = FY annual - nine-month YTD | | 2023-Q1 | 2023-07-29 | | 21,895,000 | 0.84 | reported discrete quarter | | 2023-Q2 | 2023-10-28 | | 17,840,000 | 0.66 | reported discrete quarter | | 2023-Q3 | 2024-01-27 | | 13,885,000 | 0.50 | reported discrete quarter | | 2025-Q1 | 2024-07-27 | | 21,166,000 | 0.75 | reported discrete quarter | | 2025-Q2 | 2024-10-26 | | 7,543,000 | 0.27 | reported discrete quarter | | 2025-Q3 | 2025-01-25 | | -1,754,000 | -0.06 | reported discrete quarter | | 2025-Q4 | 2025-04-30 | | 16,664,000 | | derived Q4 = FY annual - nine-month YTD | | 2026-Q1 | 2025-08-02 | 454,676,000 | -67,370,000 | -1.44 | reported discrete quarter | | 2026-Q2 | 2025-11-01 | 472,508,000 | -17,103,000 | -0.34 | reported discrete quarter | | 2026-Q3 | 2026-01-31 | 408,045,000 | -243,823,000 | -4.90 | reported discrete quarter | | 2026-Q4 | 2026-04-30 | 641,616,000 | 63,174,000 | | derived Q4 = FY annual - nine-month YTD | ## Filed narrative (10-K & 10-Q) ## Business Verbatim Item 1 Business section from AVAV's latest 10-K: [/company/AVAV/business/](/company/AVAV/business/). ## Risk Factors Verbatim Item 1A Risk Factors from AVAV's latest 10-K: [/company/AVAV/risk-factors/](/company/AVAV/risk-factors/). ## Latest quarter (10-Q) Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/1368622/000110465926025979/avav-20260131x10q.htm Extracted structurally from real Item 2 body heading to real Item 3/4 boundary. Confidence: high Filing date: 2026-03-11 Report date: 2026-01-31 ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ​ The following is a discussion and analysis of our financial condition and the results of operations as of and for the periods presented below. The following discussion and analysis should be read in conjunction with the “Condensed Consolidated Financial Statements” and notes thereto included elsewhere in this Quarterly Report on Form 10-Q. This section and other parts of this Quarterly Report on Form 10-Q contain forward-looking statements that involve risks and uncertainties. In some cases, forward-looking statements can be identified by words such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “will,” “would” or similar expressions. Such forward-looking statements are based on current expectations, estimates and projections about our industry, our management’s beliefs and assumptions made by our management. Forward-looking statements are not guarantees of future performance and our actual results may differ significantly from the results discussed in the forward-looking statements. Factors that might cause such differences include, but are not limited to, those discussed in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended April 30, 2025, as updated by our subsequent filings under the Securities and Exchange Act of 1934, as amended (the “Exchange Act”). ​ Unless required by law, we expressly disclaim any obligation to update publicly any forward-looking statements, whether as result of new information, future events or otherwise. ​ Critical Accounting Estimates ​ The following should be read in conjunction with the critical accounting estimates presented in our Annual Report on Form 10-K for the fiscal year ended April 30, 2025. ​ Management’s Discussion and Analysis of Financial Condition and Results of Operations discusses our condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. When we prepare these condensed consolidated financial statements, we are required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Some of our accounting policies require that we make subjective judgments, including estimates that involve matters that are inherently uncertain. Our most critical estimates include those related to revenue recognition, inventory reserves for excess and obsolescence, intangible assets acquired in a business combination, goodwill, and income taxes. We base our estimates and judgments on historical experience and on various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for our judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Our actual results may differ from these estimates under different assumptions or conditions. ​ 32 Table of Contents Revenue Recognition ​ Adjustments to original estimates for a contract’s revenue, estimated costs at completion and estimated profit or loss are often required as work progresses under a contract, as experience is gained and as more information is obtained, even though the scope of work required under the contract may not change, or if contract modifications, including the finalization of undefinitized contract actions, occur. The impact of revisions in estimate of completion and variable consideration for all types of contracts are recognized on a cumulative catch-up basis in the period in which the revisions are made. Changes in variable consideration associated with the finalization of undefinitized contract actions could result in cumulative catch up adjustments to revenue that could be material. During the three and nine months ended January 31, 2026 and January 25, 2025, changes in accounting estimates on contracts recognized using the over time method are presented below. Amounts representing contract change orders or claims are included in revenue if the order or claim meets the criteria of a contract or contract modification in accordance with ASU 2014-09, Revenue from Contracts with Customers (“ASC 606”). ​ For the three months ended January 31, 2026 and January 25, 2025, favorable and unfavorable cumulative catch-up adjustments included in revenue were as follows (in thousands): ​ [[GREPCENT_TABLE]] [["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["\u200b","\u200b","Three Months Ended"],["\u200b","\u200b \u200b \u200b","January 31,","\u200b \u200b \u200b","January 25,"],["\u200b","\u200b","2026","\u200b","2025"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Gross favorable adjustments","\u200b","$","12,453","\u200b","$","10,304","\u200b"],["Gross unfavorable adjustments","\u200b","","(7,994)","\u200b","","(1,154)","\u200b"],["Net (unfavorable) favorable adjustments","\u200b","$","4,459","\u200b","$","9,150","\u200b"]] [[/GREPCENT_TABLE]] ​ For the three months ended January 31, 2026, favorable cumulative catch-up adjustments of $12.5 million were primarily due to cost adjustments on 30 contracts. During the three months ended January 31, 2026, we revised our estimates of the total expected costs to complete an LMS contract and a Small UAS (“SUAS”) contract. The aggregate impact of these adjustments in contract estimates on revenue related to performance obligations satisfied or partially satisfied in previous periods was an increase to revenue of approximately $3.2 million. For the same period, unfavorable cumulative catch-up adjustments of $8.0 million were primarily related to higher than expected costs on 24 contracts, which individually were not material. ​ For the three months ended January 25, 2025, favorable cumulative catch-up adjustments of $10.3 million were primarily due to cost adjustments on three contracts. During the three months ended January 25, 2025, the Company revised its estimates of the total expected costs to complete three LMS contracts. The aggregate impact of these adjustments in contract estimates on revenue related to performance obligations satisfied or partially satisfied in previous periods was an increase to revenue of approximately $9.6 million. For the same period, unfavorable cumulative catch-up adjustments of $1.2 million were primarily related to higher than expected costs on 23 contracts, which individually were not material. ​ For the nine months ended January 31, 2026 and January 25, 2025, favorable and unfavorable cumulative catch-up adjustments included in revenue were as follows (in thousands): ​ [[GREPCENT_TABLE]] [["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["\u200b","\u200b","Nine Months Ended"],["\u200b","\u200b \u200b \u200b","January 31,","\u200b \u200b \u200b","January 25,"],["\u200b","\u200b","2026","\u200b","2025"],["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Gross favorable adjustments","\u200b","$","3,294","\u200b","$","11,600","\u200b"],["Gross unfavorable adjustments","\u200b","","(12,799)","\u200b","","(2,085)","\u200b"],["Net favorable (unfavorable) adjustments","\u200b","$","(9,505)","\u200b","$","9,515","\u200b"]] [[/GREPCENT_TABLE]] ​ For the nine months ended January 31, 2026, favorable cumulative catch-up adjustments of $3.3 million were primarily due to cost adjustments on 13 contracts, which individually were not material. For the same period, unfavorable cumulative catch-up adjustments of $12.8 million were primarily related to higher than expected costs on 31 contracts. 33 Table of Contents During the nine months ended January 31, 2026, we revised our estimates of the total expected costs to complete an LMS contract. The impact of these adjustments in contract estimates on revenue related to performance obligations satisfied or partially satisfied in previous periods was a decrease to revenue of approximately $1.9 million. The remaining adjustments individually were not material. ​ For the nine months ended January 25, 2025, favorable cumulative catch-up adjustments of $11.6 million were primarily due to cost adjustments on four contracts. During the nine months ended January 25, 2025, we definitized certain LMS undefinitized contract actions. The aggregate impact of these cumulative catch-up revenue adjustments for the contract definitization was an increase to revenue of approximately $9.9 million. The remaining adjustments individually were not material. For the same period, unfavorable cumulative catch-up adjustments of $2.1 million were primarily related to higher than expected costs on 30 contracts, which individually were not material. ​ Goodwill ​ Goodwill represents the excess of the cost of an acquired entity over the fair value of the acquired net assets. We test goodwill for impairment annually during the fourth quarter of our fiscal year or when events or circumstances change in a manner that indicates goodwill might be impaired. Events or circumstances that could trigger an impairment review include, but are not limited to, a significant adverse change in legal factors or in the business or political climate, an adverse action or assessment by a regulator, unanticipated competition, a loss of key personnel, significant changes in the manner of our use of the acquired assets or the strategy for our overall business, significant negative industry or economic trends or significant underperformance relative to projected future results of operations. ​ Our evaluation of goodwill for impairment involves the comparison of the fair value of each reporting unit to its carrying value. For the impairment test, we first assess qualitative factors, macroeconomic conditions, industry and market considerations, triggering events, cost factors, and overall financial performance, to determine whether it is necessary to perform a quantitative goodwill impairment test. Alternatively, we may bypass the qualitative assessment for some or all of our reporting units and apply the quantitative impairment test. If determined to be necessary, the quantitative impairment test shall be used to identify goodwill impairment and measure the amount of a goodwill impairment loss to be recognized (if any). For the quantitative impairment test, we estimate the fair value by weighting the results from the income approach and the market approach. These valuation approaches consider a number of factors that include, but are not limited to, prospective financial information, growth rates, terminal value, discount rates, and comparable multiples from publicly traded companies in our industry and require us to make certain assumptions and estimates regarding industry economic factors and future profitability of our business. ​ In January 2026, a stop-work order was received on the Company’s Other Transaction Agreement for the delivery of BADGER phased array antenna systems to support Space Force’s SCAR program. We concluded that the stop-work order represented a trigger event that indicated the carrying value of the Space reporting unit exceeded its fair value. As a result, we updated our estimates of the long-term cash flows of the Space reporting unit to reflect the reduced revenue associated with the stop-work order as well as an increase in expected research and development and capital investments to achieve product commercialization, which is expected to result in expanded opportunities and improve long term product margins. The changes in estimates resulted in the recognition of a goodwill impairment charge of approximately $151 million in the Space reportin [Excerpt truncated for page length; source filing is linked above.] ## Latest 10-K MD&A (excerpt) Latest 10-K Item 7 source: https://www.sec.gov/Archives/edgar/data/1368622/000110465926078906/avav-20260430x10k.htm Complete FY 2026 MD&A: /company/AVAV/mda/fy2026/ Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Confidence: high Filing date: 2026-06-29 Report date: 2026-04-30 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. ​ Introduction ​ The following discussion of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and notes thereto included herein as Item 8. This discussion contains forward-looking statements. Refer to Part I, “Forward-Looking Statements” on page 2 and Item 1A, “Risk Factors” beginning on page 14, for a discussion of the uncertainties, risks and assumptions associated with these statements. ​ Overview ​ We are a defense technology provider delivering integrated capabilities across air, land, sea, space, and cyber. We develop and deploy autonomous systems, precision strike systems, counter-UAS technologies, space-based platforms, directed energy systems, and cyber and electronic warfare capabilities. We operate an international manufacturing footprint, delivering proven systems and capabilities to markets that offer the potential for significant long-term growth. In addition, we believe that some of the innovative potential products, services and technologies in our R&D pipeline will emerge as new growth platforms in the future, creating additional market opportunities. ​ The success of our current product and service offerings stems from our investments in R&D to invent and deliver advanced solutions, utilizing proprietary and commercially available technologies, and in acquiring leading businesses that help our customers achieve their desired outcomes. We develop and acquire these highly innovative solutions by working closely with our key customers to solve their most important challenges related to our areas of expertise. Our core technological capabilities, developed by more than 50 years of innovation, include robotics and robotics systems autonomy; modular open systems architecture; sensor design, development, miniaturization and integration; embedded software and firmware; miniature, low power, secure wireless digital communications and networks; lightweight aerostructures; high-altitude systems design, integration and operations; machine vision, machine learning, AI and autonomy; land, maritime and air deployment of munitions and aircraft systems; design and qualification for robotics in extreme terrestrial and space environments; low SWaP (Size, Weight and Power) system design and integration; collaborative multi-robotic crewed and uncrewed mission operation; power electronics and electric propulsion systems; efficient electric power conversion, storage systems and high density energy packaging; controls and systems integration; vertical takeoff and landing for fixed wing and hybrid aircraft and rotocraft systems; image stabilization and target tracking; advanced flight control systems; fluid dynamics; human-machine interface development; modular dismounted, networked multi-domain robotic control interfaces and analytic processing architecture; and integrated mission solutions for austere environments. ​ The BlueHalo acquisition significantly enhanced our core technological capabilities, which now include advanced RF system design and development, software defined digital phased array antennas and radars, space qualified electronics, laser communication technologies, software defined radios, electronic warfare technology, target acquisition and tracking, directed energy-based weapons systems for counter uncrewed systems, RF-based systems for counter uncrewed, next generation counter uncrewed system missile technology, extended reality and virtual reality systems for training, modeling and simulation, hardware in the loop simulations, C2 sensing and tracking, uncrewed maritime platforms, uncrewed aerial platforms, full spectrum cyber operations, tactical mission networks, multi-int data analytics and threat intelligence, tools and analytics for GEOINT, SIGNINT, MASINT and OSINT, aerospace power and propulsion, material and processes, directed energy, photonics and electronics, biological and nanoscale technology, and health and human performance. ​ Our business focuses primarily on the design, development, production, marketing, support and operation of innovative autonomous systems, precision strike systems, counter-UAS technologies, space-based platforms, directed 58 Table of Contents energy systems and the provision of services for advanced cyber, intel, defense operations, solutions that deliver mission-critical expertise and prototype development. ​ Revenue ​ We generate our revenue primarily from the sale, support, design and operation of our UAS, PSDS, UUV, UGV, Space and Directed Energy products. Support for our products includes training, spare parts, product repair and product replacement. We refer to these support activities, in conjunction with customer-funded R&D and services provided for our Cyber and Mission Solutions customers, as our services operation. We derive most of our revenue from fixed-price and cost-plus-fee contracts with the majority from U.S. government and allied foreign governments. ​ Cost of Sales ​ Cost of sales consists of direct costs and allocated indirect costs. Direct costs include labor, materials, travel, subcontracts and other costs directly related to the execution of a specific contract. Indirect costs include overhead expenses, fringe benefits, depreciation of in-service ISR assets, inventory reserve for excess and obsolescence charges, amortization of acquired intangible assets and other costs that are not directly charged to a specific contract. ​ Gross Margin ​ Gross margin is equal to revenue minus cost of sales. We use gross margin as a financial metric to help us understand trends in our direct costs and allocated indirect costs when compared to the revenue we generate. ​ Selling, General and Administrative ​ Our selling, general and administrative expenses (“SG&A”), include salaries, fringe benefits, and other expenses related to selling, marketing and proposal activities, and other administrative costs and amortization of acquired intangible assets. Some SG&A expenses relate to marketing, commissions on certain direct commercial sales to international customers and business development activities that support both ongoing business areas as well as new and emerging market areas. These activities can be directly associated with developing requirements for and applications of capabilities created in our R&D activities. SG&A is an important financial metric that we analyze to help us evaluate the contribution of our selling, marketing and proposal activities to revenue generation. ​ Research and Development Expense ​ R&D is an integral part of our business model. We normally conduct significant internally funded R&D. Our R&D activities focus specifically on creating capabilities that support our existing product portfolio as well as new solutions. ​ Impairment of Goodwill ​ In January 2026, a stop-work order was received on an OTA for the delivery of BADGER phased array antenna systems to support Space Force’s SCAR program. Additionally, in March 2026, the customer terminated the agreement for convenience. We concluded that the stop-work order represented a trigger event that indicated the carrying value of the Space reporting unit exceeded its fair value. As a result, we updated the estimates of the long-term cash flows of the Space reporting unit to reflect the reduced revenue associated with the stop-work order and termination for convenience as well as an increase in expected research and development and capital investments to achieve product commercialization, which is expected to result in expanded opportunities and improve long term product margins. The changes in estimates resulted in the recognition of a goodwill impairment charge of approximately $241 million in the Space reporting unit. As part of our annual goodwill impairment and identifiable asset test during the fiscal quarter ended April 30, 2025, we determined the carrying value of the UGV reporting unit exceeded its fair value due to a decrease in forecasted results of the UGV reporting unit resulting from reduced probability and delays of obtaining certain opportunities as well 59 Table of Contents as an increase in forecast expenditures to support operational decisions identified during the fiscal quarter ended April 30, 2025. These changes in estimates resulted in the recognition of a goodwill impairment charge of $18.4 million during the three months ended April 30, 2025 in the UGV reporting unit. ​ For the fiscal year ended April 30, 2026, we determined that it was more likely than not that the fair value of each of the remaining reporting units were more than their carrying values as of the annual goodwill impairment test date. ​ Other (Loss) Income, net ​ Other (loss) income, net includes unrealized gains and losses associated with changes in the fair market value for equity security investments, realized gains and losses for the disposition of available-for-sale debt securities, interest income, and interest expense. ​ Provision for (Benefit from) Income Taxes ​ Our effective tax rates for fiscal years 2026 and 2025 were lower than the U.S. federal statutory rate of 21% primarily due to tax benefits from the U.S. federal research tax credit, excess benefits from stock-based compensation, and Foreign Derived Intangible Income deduction (“FDII”). ​ Equity Method Investment (Loss) Income, Net of Tax ​ Equity method investment (loss) income, net of tax, includes equity method income or loss related to our investment in limited partnership funds for which we have concluded we have influence for holding more than a minor interest. ​ Critical Accounting Policies and Estimates ​ This Management’s Discussion and Analysis of Financial Condition and Results of Operations discusses our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. When we prepare these consolidated financial statements, we are required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Some of our accounting policies require that we make subjective judgments, including estimates that involve matters that are inherently uncertain. Our most critical estimates include those related to revenue recognition, inventory reserves for excess and obsolescence, intangible assets acquired in a business combination, goodwill, and income taxes. We base our estimates and judgments on historical experience and on various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for our judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Our actual results may differ from these estimates under different assumptions or conditions. ​ We believe the following critical accounting estimates affect our more significant judgments and estimates used in preparing our consolidated financial statements. Refer to Note 1 to our consolidated financial statements entitled “Organization and Significant Accounting Policies,” which is included in Part II, Item 8 “Financial Statements and Supplementary Data” of this Annual Report. There have been no material changes made to the critical accounting estimates during the periods presented in the consolidated financial statements. ​ Revenue Recognition ​ Significant management judgments and estimates must be made and used in connection with the recognition of revenue in any accounting period. Material differences in the amount of revenue in any given period may result if these judgments or estimates prove to be incorrect or if m [Excerpt truncated for page length; the complete text is on the linked full-MD&A page.] Read the full FY 2026 MD&A: /company/AVAV/mda/fy2026/ All MD&A years: /company/AVAV/mda/ ## MD&A history Prior-year 10-K MD&A spans are extracted from SEC filings with the same bounded parser used for the latest filing. Each year's full verbatim text is on its own sub-page. - [FY 2025 MD&A](/company/AVAV/mda/fy2025/): filed 2025-06-25; accession 0001558370-25-008838 (https://www.sec.gov/Archives/edgar/data/1368622/000155837025008838/avav-20250430x10k.htm) - [FY 2024 MD&A](/company/AVAV/mda/fy2024/): filed 2024-06-27; accession 0001558370-24-009515 (https://www.sec.gov/Archives/edgar/data/1368622/000155837024009515/avav-20240430x10k.htm) - [FY 2023 MD&A](/company/AVAV/mda/fy2023/): filed 2023-06-28; accession 0001558370-23-011469 (https://www.sec.gov/Archives/edgar/data/1368622/000155837023011469/avav-20230430x10k.htm) - [FY 2022 MD&A](/company/AVAV/mda/fy2022/): filed 2022-06-29; accession 0001558370-22-010392 (https://www.sec.gov/Archives/edgar/data/1368622/000155837022010392/avav-20220430x10k.htm) ## Macro cross-references Indicators mapped to this company's SIC classification (industry 3721 Aircraft) by grepcent's deterministic macro-sector crosswalk. A navigational mapping, not a statistical or causal claim. - [INDPRO](/indicator/INDPRO/): Industrial Production: Total Index - [TCU](/indicator/TCU/): Capacity Utilization: Total Index - [PPIACO](/indicator/PPIACO/): Producer Price Index by Commodity: All Commodities - [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity Macro-to-micro threads including this sector: [Inflation (CPI / PCE / PPI)](/thread/inflation-cpi-pce-ppi/), [US labor market](/thread/us-labor-market/), [Growth & output](/thread/growth-output/), [Money & trade](/thread/money-trade/), [Government finances](/thread/government-finances/), [Sector employment](/thread/sector-employment/), [Industrial orders & inventories](/thread/industrial-orders/), [Trade & external](/thread/trade-external/). All macro indicators: /indicators/ ## For LLMs & downloads Markdown twin: /company/AVAV.md · JSON record: /company/AVAV.json · verified financials: /company/AVAV/financials.json / /company/AVAV/financials.csv · machine TOC for the whole site: /llms.txt