AeroVironment Swings to $241M Net Loss in Q3 FY2026 Amid Major Acquisition

AeroVironment (NASDAQ: AVAV), a tactical unmanned aircraft systems manufacturer, reported a net loss of $241 million for the nine months ending January 31, 2026, reversing from a $27.0 million profit in the same period last year. The company posted a $157.6 million operating loss for the quarter ending January 31, compared to a $3.1 million operating loss in the prior-year quarter. Read more earnings reports.

Revenue for the nine-month period climbed 145% to $1.34 billion from $545.6 million, driven by contributions from an acquisition completed during the fiscal year. Third-quarter revenue jumped 143% to $408 million from $167.6 million.

The company's balance sheet expanded dramatically as total assets reached $5.45 billion at January 31, up from $1.12 billion at the end of fiscal 2025. Goodwill surged to $2.46 billion from $256.8 million, while intangible assets climbed to $925.9 million from $48.7 million, reflecting the transformative acquisition.

Long-term debt ballooned to $727.9 million from $30.0 million at April 30, 2025, as the company took on $747.5 million in total long-term debt to finance the transaction. Cash and cash equivalents stood at $289.9 million at quarter-end, up from $40.9 million, with an additional $297.3 million in short-term investments.

Operating expenses surged as selling, general and administrative costs more than doubled to $329 million for the nine months from $115.5 million, while research and development spending rose 27% to $96.2 million from $75.8 million. For the third quarter alone, SG&A expenses reached $99.4 million, up from $43.8 million.

The company burned $173.9 million in cash from operations during the nine-month period, compared to $1.1 million in the prior year. Cash from financing activities totaled $1.65 billion, primarily from debt issuance and equity raises, while investing activities consumed $1.22 billion.

Shares outstanding increased to 49.9 million from 28.3 million at fiscal year-end. Diluted loss per share for the nine months was $4.94 compared to diluted earnings of $0.96 in the prior year. Third-quarter diluted loss per share was $3.15 versus a $0.06 loss.

Gross profit for the nine-month period was $298 million, or 22.3% of revenue, compared to $218.3 million, or 40.0% of revenue, in the same period last year. Third-quarter gross margin compressed to 24.2% from 37.7%.

Inventory more than doubled to $299.3 million from $144.1 million at fiscal year-end, while accounts receivable nearly doubled to $201 million from $102 million. Accounts payable increased to $109.6 million from $72.5 million.

Retained earnings declined to $33.3 million from $274.3 million at the end of fiscal 2025. Current assets reached $1.70 billion while current liabilities stood at $309.3 million.