AeroVironment, Inc. (NASDAQ:AVAV) stock fell 10.48% (As on December 10, 11:18:52 AM UTC-4, Source: Google Finance) after the company reported second-quarter adjusted earnings that significantly missed analyst expectations, despite posting record revenue growth fueled by its recent BlueHalo acquisition. The company’s BlueHalo acquisition, completed in May, contributed $245.1 million to the quarter’s revenue, while legacy revenue grew 21% YoY to $227.4 million. AeroVironment posted a GAAP net loss of $17.1 million, or -$0.34 per share, compared to a profit of $7.5 million, or $0.27 per share, in the same period last year. The quarter was negatively impacted by $48.2 million in intangible amortization and other related non-cash purchase accounting expenses. The company reported impressive bookings of $1.4 billion for the quarter, resulting in a book-to-bill ratio of 2.9, indicating strong future revenue potential. Funded backlog as of November 1 was $1.1 billion, up from $726.6 million at the end of April. Net loss for the second quarter of fiscal 2026 was $(17.1) million, or $(0.34) per diluted share, as compared to net income of $7.5 million, or $0.27 per diluted share, in the prior-year period, respectively.

AVAV in the second quarter of FY26 has reported the adjusted earnings per share of 44 cents, missing the analysts’ estimates for the adjusted earnings per share of 79 cents. The company had reported the adjusted revenue growth of 151 percent to $472.5 million in the second quarter of FY26, slightly beating the analysts’ estimates for revenue of $470.29 million.  The acquisition of BlueHalo on May 1, 2025 contributed to $134.4 million and $110.7 million of the current quarter product and service revenue, respectively. From a segment standpoint, Autonomous Systems (“AxS”) recorded revenue of $301.6 million and Space, Cyber and Directed Energy (“SCDE”) recorded revenue of $170.9 million. Gross margin for the second quarter of fiscal 2026 was $104.1 million, an increase of 41% as compared to $73.6 million for the second quarter of fiscal 2025, reflecting higher product margin of $19.5 million and higher service margin of $11.0 million. Loss from operations for the second quarter of fiscal 2026 was $(30.2) million as compared to income from operations of $7.0 million for the second quarter of last fiscal year.

For fiscal 2026, AeroVironment narrowed its revenue guidance to $1.95-2.0 billion, compared to the analyst consensus of $2 billion. The company expects a net loss between -$0.76 and -$0.61 per share, but adjusted earnings of $3.40 to $3.55 per share.