AEVEX Q2 2026 Earnings Call Transcript

AEVEX (NYSE: AVEX ) released second-quarter financial results and hosted an earnings call on Wednesday. Read the complete transcript below. This transcript is brought to you APIs. For real-time access to our entire catalog, please visit for a consultation.

7 million, driven by higher UAS production. The company announced the proposed acquisition of Black Sea Technologies for $650 million, aimed at enhancing its portfolio in unmanned surface and subsea capabilities, complementing AEVEX's existing air systems. 5 million, citing robust demand and a strong backlog, with 95% of expected revenue already covered. The acquisition of Black Sea is expected to create one of the largest multi-domain unmanned systems providers, leveraging combined capabilities and market access to expand in the maritime domain.

5 billion in opportunities. Full Transcript OPERATOR Hello everyone. Thank you for joining us and welcome to AEVEX's second quarter 2026 earnings conference call. After today's prepared remarks, we will host a question and answer session.

If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I will now hand the conference over to Jason Gursky, Vice President of Investor Relations. Please go ahead.

Jason Gursky, Vice President of Investor Relations Thank you for joining AEVEX's second quarter 2026 earnings conference call. I'm Jason Gursky, Vice President of Investor Relations. Joining me on the call today are Brian Raduenz, Executive Chairman, Roger Wells, Chief Executive Officer, and Todd Booth, Chief Financial Officer. Before we begin, please note that on this call certain information presented contains forward-looking statements, including those related to the proposed acquisition of Black Sea Technologies, multi-domain strategy and technology integration, our 2026 outlook, backlog, growth and M&A strategy, and capital allocation priorities.

Our forward-looking statements are based on current expectations, forecasts, and assumptions and they involve risks and uncertainties that could cause actual results to differ materially. Additional information concerning these risks are described in AEVEX's reports filed with the SEC. I'd also like to note that we will discuss a number of non-GAAP financial measures on this call. The earnings press release and presentation, which were also published earlier today and can be found on the Investor Relations section of our company's website, contain a reconciliation of any non-GAAP financial measures to the most directly comparable GAAP measure.

The content of this conference call relates to information that is accurate only as of today, August 12, 2026. Except to the extent required by law, the company undertakes no obligation to make any revision to any forward-looking statements contained in our remarks today or to update them to reflect the events or circumstances occurring after the date of this conference call. I would like to now turn the call over to Brian for some opening remarks. Brian, go ahead.

Brian Raduenz, Founder and Executive Chairman Thanks, Jason. Good afternoon everyone. AEVEX delivered another very strong quarter, our second consecutive beat and raise. Driven by sustained demand and strong execution across the business, we're scaling production, expanding mission and customer reach, and strengthening our position as one of the most impactful providers of autonomous capability in the market today.

And our momentum is being recognized. AEVEX was recently identified by the Department of Defense as one of a select few defense technology primes, accelerating the development and production of systems for real-world missions. Roger was invited to brief the Secretary and his staff at the Pentagon, outlining how we will continue to make an impact for the warfighter. It's a powerful validation of the role AEVEX is playing as the Department moves decisively toward autonomous, affordable, multi-domain solutions, which is exactly what we built this company to provide.

Against that backdrop, today we're announcing another meaningful step forward: the proposed acquisition of Black Sea Technologies. S. Navy, SOCOM, and various other customers. Their USV platforms are among the most widely produced and most operationally deployed systems in the Navy's inventory.

Just as AEVEX has established leadership in Group 2 and Group 3 unmanned aerial systems, Black Sea has likewise established leadership in unmanned surface and subsea capability, delivering fielded systems at scale with real operational history. By bringing these two organizations together, we will unite two battle-tested air, surface, and subsea portfolios in the market at exactly the moment the Department is accelerating procurement of unmanned systems. Both companies are delivering in theater, both are producing at volume with additional capacity beyond today's deliveries.

Together, we expect to expand our ability to support customers across domains, including meaningful new access to maritime pathways where AEVEX has not previously participated. This acquisition is another major proof point of the strategy we've laid out: building one of the nation's most impactful providers of autonomous and unmanned systems capability. It reinforces our momentum, it strengthens our trajectory, and it advances the larger vision of what we set out to build—a company with the scale, relevance, and operational credibility to lead in this new era of defense.

We could not be more excited about what this combined team can do together and we can't wait to get started. With that, I'll hand it over to Roger to walk through the strategic rationale and transaction details, as well as a review of our very strong second quarter. Roger Wells, Chief Executive Officer Thanks, Brian, and good afternoon everyone. As Brian mentioned, today marks two important milestones for AEVEX.

We've entered into a definitive agreement to acquire Black Sea Technologies, and we announced our second quarter results, posting robust growth and strong operational performance across the business, leading us to raise our outlook for the year based on continuing strong demand signals and significant deployment of our mission-critical systems in theater. What Todd and I plan to do today is walk through the strategic rationale for the acquisition and to provide more details on both the transaction and the company. We will then quickly review our second quarter results and open the line to your questions.

Our remarks today will be a bit longer than normal, given the importance of both events. Let's go to slide 4 in the presentation deck. The transaction story is straightforward and clear. By bringing these two leading companies together, we believe we will create one of the largest and most comprehensive multi-domain unmanned systems providers in the market.

We expect this merger to deliver significant production capacity, access to new markets, and the ability to credibly deliver a broader portfolio of multi-domain unmanned capabilities, all underpinned by AEVEX's core autonomy stack, Compass X. In addition, both AEVEX and Black Sea employ a hybrid business model that can both produce and operate assets for our customers. This provides predictable long-term revenue and valuable operational insights to feed back into platform development. Very few companies can credibly claim a multi-domain unmanned portfolio of this scope, and even fewer can claim one that's actually in the fight.

Finally, we expect to retain strong financial flexibility post-transaction, which will allow us to continue to invest in innovation, production capacity, and future M&A. , delivering effects to the battlefield across air, surface, and subsea domains. At a time when the Department of Defense is leaning into unmanned system spending, this transaction aligns perfectly with our strategic direction and our mission-focused culture, and also represents the kind of opportunity we signaled we'd pursue. With that as a strategic framework, let me turn it over to Todd to walk through the transaction itself.

Todd Booth, Chief Financial Officer Thanks, Roger, and good afternoon everyone. Please turn to slide 5. Let me walk you through the key economic terms. AEVEX intends to acquire Black Sea Technologies for a total consideration of up to 650 million, structured in three components.

First, approximately 250 million in cash at closing. 7 million shares issued to the sellers. Lastly, the transaction also includes a 50 million earnout that is contingent on the achievement of certain performance targets by Black Sea through fiscal year 2027. We designed the earnout to align incentives so that the incremental 50 million becomes payable only if Black Sea's financial performance creates long-term shareholder value.

We expect the transaction to be accretive to earnings per share in the near term before giving effect to non-cash purchase accounting amortization. Black Sea is expected to generate approximately 150 million in revenue in fiscal year 2026 with adjusted EBITDA margin roughly in line with AEVEX. While we are not providing formal guidance for Black Sea for fiscal year 2027 today, we expect its growth to be at least in line with its addressable markets. I think it's worthwhile noting that Black Sea's leadership and shareholders were particularly excited about the opportunity to be a part of AEVEX and share our go-forward vision.

As such, the equity consideration was very important to them and we feel the purchase price was quite favorable given those dynamics. A few other items worth noting: we expect the transaction to close in September 2026, subject to the expiration of the HSR waiting period and satisfaction of our customary closing conditions. Black Sea will operate as a third business unit within AEVEX, which we believe will preserve the mission focus and customer relationships that make the business valuable. I'd like to note that Bob Pudney, Black Sea CEO, is expected to stay on to lead the business at AEVEX.

Roger, back to you. Roger Wells, Chief Executive Officer Thanks, Todd. Please turn to Slide Six. When our team evaluated this transaction, we came back to five reasons why this combination is so compelling for us and I want to spend some time on each one.

First, this acquisition is expected to create one of the largest providers of battle—proven autonomous air and maritime platforms at a moment when unmanned system spending is entering into what we believe is a genuine global defense super cycle. The operational needs from the Department of Defense, the combatant commands, and our allied forces across the globe have moved from experimental projects to shorter—cycle, high—production procurements as they work to get systems fielded. Being one of the largest battle—proven providers matters because in this environment, customers are buying from companies that have proven solutions and can deliver at scale today.

Second, the capabilities are highly complementary, not overlapping. AEVEX delivers launched effects, precision—strike loitering munitions, and full—scope ISR capabilities. Black Sea brings unmanned surface, subsurface, and contested logistics vessels to the market. From a growth perspective, based on our due diligence, Black Sea has deep relationships with all key maritime USV and UUV customers.

Not only do we believe that Black Sea and AEVEX will benefit from an anticipated increase in funding for USVs and UUVs, we expect the combination to also unlock a large Navy UAS market for AEVEX, which is an exciting expansion opportunity for us. Third, Black Sea brings well—capitalized facilities, infrastructure, and tooling to deliver USVs and UUVs at scale. I will walk you through the company's footprint in a few minutes, but the short version is that we are not acquiring a prototype shop like AEVEX. Black Sea is a company already producing at significant industrial scale, in line with the DoD's objectives for the defense industrial base.

Fourth, Black Sea comes with significant backlog that gives us real visibility into above—market growth in fiscal year 27. As of today, Black Sea has more than 110 million in funded backlog and over 250 million in unfunded backlog tied to programs associated with the production, sustainment, and operations of the company's marquee small USV, the Global Autonomous Reconnaissance Craft, or GARC, and its Block 2 variant, Chaser, as well as contested logistics vessels contracts such as the recently awarded Sea—Based Petroleum Distribution System, or SPDs. This isn't driven by speculation on whether a market will develop; it's anchored on contracted demand.

As mentioned before, the transaction further diversifies our program portfolio and customer access, opening new growth opportunities for both companies. And fifth, and this is one that's easy to overlook, Black Sea has an exceptional management team and a mission—focused culture that is genuinely aligned with AEVEX. To realize a successful M&A transaction, cultural fit is critical. It's a major driver of value creation.

We spent significant time with Black Sea's leadership and, like the AEVEX team, they are firmly committed to the mission and the warfighter, and we are confident that they will continue to thrive as part of the AEVEX family. With that, let me tell you a little bit more about Black Sea, its platforms, and its track record. Please turn to Slide 7. When you look at Black Sea, the first thing that stands out is that this is a company measured in outputs.

They have delivered more than 350 USVs since inception, an installed base that we believe is unmatched among American USV manufacturers. In addition, we understand that those platforms have accumulated more than 25,000 operational hours, including nearly 500 hours in support of Operation Epic Fury. As mentioned earlier, the company is expected to generate approximately 150 million of revenue in fiscal year 26, and it does all of this with a workforce of approximately 275 highly skilled and motivated employees, the vast majority of whom hold active security clearances. S.

Special Operations Command, and the Intelligence Community, to name a few. As one of the first movers in the USV market, Black Sea has developed deep relationships with key customers that have been forged in real—world operations. While the company is primarily known for its flagship USV, the GARC, Black Sea continues to innovate in the small USV space with Chaser and Comet and in the undersea space with Raptor. In addition, Black Sea is a first mover in the growing contested logistics market where it has developed a number of platforms including Nitrain, Revenge, and SPDs.

Not only does Black Sea develop and manufacture these platforms, it also employs a highly technical team with deep operational experience with the ability to deploy, operate, and sustain USVs and UUVs in support of real—world missions. This has provided a significant force multiplier for our customers, as well as a valuable feedback loop that has helped to enhance these platforms. The pattern here is important. Black Sea does not sell hardware and walk away.

They both deploy platforms and support their customers in the field, who then come back with bigger, longer, and more strategic scope of work. That's the flywheel that underpins our growth expectations for the business. The takeaway on this slide is simple. We're buying a company that is already delivering, already deployed, and already trusted, with the infrastructure, workforce, and customer relationships to keep scaling.

Please turn to Slide 8. Building on the last slide, I want to give you a sense of the product roadmap, because this is where near—term revenue is expected to meet long—term value creation. The GARC platform, the one that has generated the operational track record we just discussed, is designed to carry a payload of up to 1,000 pounds, has a range of more than 640 miles, cruises at 40 knots, is survivable through sea state 7, and can operate for up to 10 days at a time. That is a highly capable platform, and it is in the fight today.

Chaser is the successor to GARC, offering next—generation capabilities. Relative to GARC, Chaser offers approximately 38% more payload weight, 33% more payload volume, 25% greater range at cruise, and does so at an estimated 10% lower unit cost, all while adding advanced platform autonomy and next—generation perception. And critically, it's packable in a standard 20—foot ISO container, which is a real logistics advantage for rapid global deployment. In addition, Black Sea has delivered specialized variants with custom capabilities and proprietary intellectual property for classified customers.

And importantly, Black Sea's platforms, like those at AEVEX, are built on a modular open systems architecture, which is exactly aligned with the Department mandates to drive rapid capability insertion and interoperability.