AeroVironment (NASDAQ:AVAV) Posts Record Q1 Revenue of $480.5M, Adjusted EPS Doubles Consensus

AeroVironment (NASDAQ: AVAV) delivered record first-quarter revenue and a funded backlog milestone for its fiscal 2027 first quarter ended August 1, 2026, with adjusted EPS of $0.59 more than doubling the $0.29 Wall Street consensus. Revenue of $480.5 million grew 5.7% year-over-year from $454.7 million, as gross margin improved sharply and non-cash acquisition-related charges continued to unwind.

Q1 FY2027 Results

• Revenue: $480.5 million, up 5.7% from $454.7 million in Q1 FY2026, driven by $15.5 million in higher product sales and $10.3 million in higher service revenue.
• Adjusted EPS: $0.59, versus $0.32 in the prior-year period and the $0.29 consensus estimate; GAAP EPS was $(0.10), compared to $(1.44) a year ago.
• Gross margin: $124.6 million, up 31% from $95.1 million, with gross margin as a percentage of revenue rising to 26% from 21%.
• GAAP operating loss: $(10.9) million, a sharp improvement from $(69.3) million in Q1 FY2026, as intangible amortization and non-cash purchase accounting charges fell from $79.7 million to $43.4 million.
• Funded backlog: $1.5 billion as of August 1, 2026, up 37% year-over-year and up from $1.2 billion at April 30, 2026; bookings of $0.7 billion produced a book-to-bill ratio of 1.4 for the quarter.

What Drove the Results

Adjusted EPS of $0.59 beat the $0.29 consensus by 103.4%, while revenue of $480.5 million exceeded the $467.7 million estimate by 2.69%. The operating loss improvement from $(69.3) million to $(10.9) million reflected three concurrent cost tailwinds: gross margin expansion of $29.5 million, a $19.8 million reduction in selling, general and administrative expense (including a $17.4 million decline in intangible amortization and a $22.5 million drop in acquisition-related expenses), and a $9.2 million reduction in research and development expense. On a GAAP basis, the net loss narrowed to $(5.1) million, or $(0.10) per diluted share, from $(67.4) million, or $(1.44) per diluted share, with the current quarter still burdened by $43.4 million, or $0.69 per diluted share, of intangible amortization and non-cash purchase accounting expenses.

From a segment perspective, Autonomous Systems recorded revenue of $346.0 million and Space, Cyber and Directed Energy contributed $134.5 million. The record $1.5 billion funded backlog, defined as remaining performance obligations under firm orders with currently appropriated funding, represents a forward demand indicator that grew 37% year-over-year. Interest expense also swung meaningfully, with net interest income of $4.1 million in the current quarter compared to net interest expense of $(17.4) million a year ago, reflecting the refinancing of acquisition-related term and revolver debt with convertible notes and equity in July 2025.

Wall Street View

Chairman, President and Chief Executive Officer Wahid Nawabi stated that fiscal 2027 "is off to a strong start, with record first-quarter revenue and funded backlog and landmark strategic wins," adding that customers are fielding autonomous capabilities at increasing scale and that the company's priority is expanding manufacturing capacity and strengthening its supply chain. AeroVironment maintained its full-year fiscal 2027 guidance, continuing to project revenue of $2.125 billion to $2.225 billion, GAAP net income of $10 million to $27 million, non-GAAP adjusted EBITDA of $305 million to $325 million, GAAP EPS of $0.21 to $0.53, and non-GAAP EPS of $3.02 to $3.34.

Investor Takeaway

The Q1 adjusted EPS beat is largely a function of declining non-cash purchase accounting charges from prior acquisitions rather than a step-change in underlying operating leverage, a distinction investors should weigh when modeling the remainder of the fiscal year. The record $1.5 billion funded backlog and a 1.4 book-to-bill ratio provide concrete evidence of near-term revenue visibility, while maintained full-year guidance suggests management sees no material upside or downside revision warranted at this early stage of FY2027. Shares fell -5.36% on Wednesday, September 9, 2026, while the S&P 500 declined 0.46%.