AeroVironment reported QQ1 2025 revenue of approximately $189.48 million, up 4.8% versus the prior-year quarter but down 3.8% sequentially. The quarter delivered a solid gross margin of roughly 42.1% and an operating margin near 12.2%, contributing to earnings per share of $0.75 and net income of about $21.17 million. Free cash flow was strong at $22.92 million, with operating cash flow of $28.35 million and capital expenditures of $5.43 million, underscoring durable cash generation and a cash balance of $81.16 million at period end. Net debt stood at negative $33.86 million, reflecting a conservative balance sheet with ample liquidity (current ratio 4.26; quick ratio 3.04).
The results demonstrate a robust profitability backbone supported by a 42% gross margin and disciplined cost management, even as top-line growth remains modest. The company continues to invest in R&D (~$24.6 million) to advance its UAS platforms and related services, balanced against a relatively steady SG&A cadence (~$33.8 million). While there is no explicit forward guidance in the provided data, AeroVironment appears well-positioned to benefit from defense and international demand in unmanned systems, supported by a strong liquidity buffer and positive free cash flow generation. Investors should monitor defense budget cycles, international orders, and product development progress (including M-UAS and HAPS initiatives) as potential catalysts or headwinds for the coming quarters.