AeroVironment’s QQ1 2026 results show a pronounced top-line expansion with revenue of $313.5 million, up 65.5% year over year, signaling continued demand for its unmanned systems portfolio among U.S. government agencies and international partners. However, the quarter also features a material margin deterioration, with negative operating income of $69.3 million and a net loss of $67.4 million, translating to an EPS of -$1.44. The profitability drag is largely associated with strategic investments and acquisition-related activity, including substantial cash outflows for acquisitions (AcquisitionsNet of -$844.6 million) and ongoing R&D and SG&A expenditures. The company generated negative operating cash flow of $123.7 million, but financing activity provided a sizable cash inflow of $1.645 billion, resulting in a net cash increase and a strong cash balance of roughly $686 million at period end.
The balance sheet reflects a high goodwill and intangible asset base (Goodwill $2.54 billion; Intangibles $1.12 billion), underscoring recent acquisitions and expansion efforts. Total debt stands at $829.7 million with net debt of $143.9 million, and liquidity remains robust given a current ratio near 6x. Near-term investors should focus on the rate of margin recovery as integration and scale effects take hold, the trajectory of operating cash flow as the company absorbs acquisition-related costs, and the evolution of orders/backlog in its UAS, MUAS, TMS, and HAPS platforms. Absent forward-looking guidance in the data provided, the investment thesis hinges on continued top-line momentum accompanied by a path to margin stabilization and cash flow normalization over the coming quarters.