AeroVironment, Inc. (NASDAQ:AVAV) stock rallies 20.43% (As on June 25, 11:19:12 AM UTC-4, Source: Google Finance) after the company reported fourth-quarter earnings that exceeded analyst expectations. Net income climbed to $16.7 million, or $0.59 per diluted share, up from $6.0 million, or $0.22 per share, a year earlier. Results included an $18.4 million non-cash goodwill impairment charge related to the Uncrewed Ground Vehicle unit. Gross margin for the fourth quarter of fiscal 2025 was $100.3 million, an increase of 33% as compared to $75.6 million for the fourth quarter of fiscal 2024, reflecting higher product margin of $26.9 million, partially offset by lower service gross margin of $2.3 million. Gross margin in the fiscal 2025 fourth quarter was negatively impacted by an accelerated intangible amortization expense of $4.6 million, resulting from a decrease in forecasted results of the Uncrewed Ground Vehicle (“UGV”) business. As a percentage of revenue, gross margin fell to 36% from 38%, primarily due to the UGV accelerated intangible amortization expense. Income from operations for the fourth quarter of fiscal 2025 was $13.8 million as compared to $5.9 million for the fourth quarter of last fiscal year. Net income for the fourth quarter of fiscal 2025 was $16.7 million, or $0.59 per diluted share, as compared to $6.0 million, or $0.22 per diluted share, in the prior-year period, respectively. As of April 30, 2025, funded backlog was $726.6 million, as compared to $400.2 million as of April 30, 2024. Bookings during the fiscal year ending April 30, 2025 were $1.2 billion.

AVAV in the fourth quarter of FY25 has reported the adjusted earnings per share of $1.61, beating the analysts’ estimates for the adjusted earnings per share of $1.40. The company had reported the adjusted revenue growth of 40 percent to $275.1 million in the fourth quarter of FY25, beating the analysts’ estimates for revenue of $242.14 million. This is primarily due to higher product sales of $77.6 million. From a segment standpoint, the year-over-year increase was due to revenue increases in Loitering Munitions Systems (“LMS”), MacCready Works (“MW”) and Uncrewed Systems (“UxS”) of 87%, 24% and 9%, respectively.

AeroVironment issued upbeat guidance for fiscal year 2026, projecting revenue of $1.9–2.0 billion and adjusted EPS of $2.80–3.00, both above consensus.

Despite earlier concerns about a drop in unfunded backlog, the company clarified that this stemmed from a shift in the U.S. Army contracting rather than a reduction in demand.