AeroVironment Inc. received a $500 million firm-fixed-price contract from the U.S. Department of Defense to supply counter-unmanned aerial systems. The award, announced Wednesday by the Army Contracting Command, sent shares higher in after-hours trading. The contract runs through June 2029.
AeroVironment Inc. received a $500 million firm-fixed-price contract from the U.S. Department of Defense to supply counter-unmanned aerial systems. The award, announced Wednesday by the Army Contracting Command, sent shares higher in after-hours trading. The contract runs through June 2029.
AeroVironment Inc. shares surged in after-hours trading Wednesday after the Pentagon awarded the drone maker a $500 million contract for counter-unmanned aerial systems.
"The Pentagon continues to prioritize counter-drone defense as low-cost aerial threats proliferate across modern battlefields," Chief Executive Officer Wahid Nawabi said in a recent interview. "Now we're playing catch-up at a very fast pace."
The firm-fixed-price contract covers commercial counter-unmanned aerial systems and counter-small-UAS capabilities, with work locations and funding to be determined per order. The Army Contracting Command in Detroit Arsenal, Michigan, is the contracting activity under number W912CH-26-D-A073. The contract has an estimated completion date of June 29, 2029.
The award comes as AeroVironment rides a wave of defense spending on unmanned systems. The company posted fiscal fourth-quarter revenue of $642 million, up 133% year over year, and carries a funded backlog of $1.2 billion. Shares, which closed at $172.44, remain down more than 40% year to date even with the after-hours gain.
The contract adds to a string of recent wins for the Simi Valley, California-based company, which specializes in unmanned aircraft and tactical missile systems. AeroVironment's acquisition of defense firm BlueHalo and aerospace platform specialist ESAero contributed more than $282 million in quarterly revenue, showing the payoff from its expansion strategy.
For fiscal 2027, management guided revenue of $2.13 billion to $2.23 billion, with adjusted earnings per share of $3.02 to $3.34. The profit forecast trailed the $3.94 consensus, which company officials attributed to investments in production capacity and international sales infrastructure.
The U.S. Department of War's annual budget for drone programs could top $75 billion next year, Nawabi said, pointing to a large addressable market for the company's offerings. Rivals including Kratos Defense & Security Solutions and General Atomics are also competing for a share of the growing counter-drone market.
This article is for informational purposes only and does not constitute investment advice.
