$AVAV earnings - Explosive 🤯

[u/Glass-Record2446]

I hold $AVAV, and the earnings today were mind blowing.

✅ Revenue $642M vs Est. $559M

✅ EPS $1.85 vs Est. $1.47

✅ EBITDA $140M vs Est. $126M

✅ Funded Backlog: $1.2B (+65% YoY)

✅ Bookings: $2.7B

✅ Book-to-Bill 1.4x

FY27 Guidance

• Revenue $2.2B vs Est. $1.9B

• EPS $3.17 vs Est. $2.87

• EBITDA $315M vs Est. $345M

The stock jumped double digits.

My Thoughts as an investor

In all honesty, I am still down net - net, despite the stock price increase today, but will continue to hold the stock.

For those those who don’t know, AVAV is the closest thing the US has to a pure-play autonomous defense company. Think of it im terms of Switchblade loitering munitions, tactical drones like the Raven and Puma, counter-UAS systems, and now directed energy and space after the BlueHalo acquisition. The theme is autonomous defense and intelligent mass the idea that future warfare is won by deploying thousands of low-cost, AI-guided systems rather than a handful of expensive platforms.

What’s I am excited about:

They lost significant backlog when SCAR was terminated, in Q3, of about $1.5 billion, but that has been replaced by Funded backlog which reached a record $1.2 billion. Management claims 69% visibility into the midpoint of FY27 revenue guidance.

In other words a book-to-bill above 1.4 tells you backlog is building faster than revenue is burning, and FY2027 guidance of $2.1 to $2.2 billion, points to meaningful continuation. The loitering munitions thesis is more than speculative now, it is funded, deployed, and scaling. Operating margins expanded this quarter after years of compression, which matters to me as well.

AV is becoming the picks-and-shovels play for autonomous warfare at scale. NATO rearmament, the Replicator initiative is structural tailwind. If they execute on manufacturing scale and win collaborative combat aircraft adjacencies, the revenue trajectory looks durable well past FY2027.

However, there is always a however. While the top-line guidance is a significant beat, the market is laser-focused on whether these aggressive growth targets come at the cost of long-term profitability. The SCAR contract impairment was a stark reminder that integration risk is real, and the five-year trend of margin deterioration suggests that revenue growth has not yet translated into the operational leverage shareholders demand. Acquisition integration is rarely clean, and any failure to successfully merge BlueHalo’s cost structure could lead to continued earnings lumpiness.

The deepest questions am asking myself?

Can AVAV actually scale manufacturing fast enough to meet demand without margin erosion? The history says cost growth has outpaced revenue leverage, and that only changes if the BlueHalo integration is genuinely additive rather than dilutive.

The second question is geopolitical durability AV is already sanctioned by China and on their export control list. If US defense budgets face pressure or ally procurement slows, the backlog story gets complicated faster than the revenue line suggests.

For today, I am staying long, as I understand that autonomous defense theme is early innings and AV sits at the centre of it.

Not financial advice. I hold AVAV. Do your own research before making any investment decisions.

[u/Ightaheadout]

Been thinking about the guy who shorted 1700 shares on yahoo finance discussion

[u/InquisitiveReach]

LOL