AeroVironment CEO Says The Next Big Opportunity Isn't Just Building Drones, Stock Pops Over 21% After Hours: 'We're Just Getting Started'

AeroVironment Inc (NASDAQ: AVAV ) said Monday it was expanding manufacturing capacity ahead of anticipated demand as CEO Wahid Nawabi believes counter-drone systems could become the company’s next major growth engine.

Production ramps up ahead of expected contract wins During the company’s fourth-quarter earnings call, Nawabi said the drone maker was investing in additional manufacturing capacity across multiple products as it prepares for what it expects will be rising demand. “In fiscal year 2027, we are investing additional capital to further increase our manufacturing capacity across several products and platforms to meet anticipated rising demand,” Nawabi said.

He added that the company is “sensing strong customer indications” that its solutions “will receive significant contract wins in the next 12 to 24 months.” The company forecasts fiscal 2027 free cash flow to remain negative as it ramps capital spending to expand production capacity.

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Looking ahead, the company expects the business could eventually rival, or even surpass, the company’s existing drone franchise. “It will not surprise me in the next 3-5 years that our directed energy and our counter-UAS business would be equally as large, if not 2-3 times bigger.

That opportunity is ours to have,” Nawabi added.

Earnings Beat Wall Street Estimate The drone maker has benefited from increased global defense spending since Russia’s invasion of Ukraine in 2022, as governments ramped up investments in drones, loitering munitions and counter-drone capabilities.

AeroVironment reported fourth-quarter revenue of $641.62 million, beating estimates of $558.81 million, according to Pro.

Its adjusted earnings of $1.84 per share beat estimates of $1.46 per share.

The company guided for fiscal 2027 revenue of approximately $2.13 billion to $2.23 billion, versus estimates of $2.19 billion.

It expects adjusted earnings for the year of $3.02 to $3.34 per share versus estimates of $3.98 per share.

Price Action: Shares closed 0.76% higher on Monday at $139, and surged 21.49% in extended trading on the earnings announcement. edge rankings indicate AVAV has a Momentum score in the 2nd percentile, and a negative price trend across the short, medium and long term.

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