AeroVironment Q1 Revenue Reaches $480.5M With Record $1.5B Backlog

AeroVironment posted record fiscal first-quarter 2027 results, reporting $480.5 million in revenue and adjusted earnings of $0.59 per share. Both figures surpassed analyst expectations of $459.9 million and $0.30 per share, according to an Investing.com report. The performance relied on a record funded backlog of $1.5 billion, which is a 37% year-over-year increase and a book-to-bill ratio of 1.4.

"At under $10 per shot, LOCUST redefines the cost balance between offensive and defensive systems and provides the war fighter with an essentially unlimited magazine," said Wahid Nawabi, CEO of AeroVironment, in a statement regarding the quarterly results.

Directed Energy Wins and Segment Performance

A primary driver for the firm is the recent $464 million contract for the LOCUST laser weapon system. This is AeroVironment’s first directed energy production contract for the U.S. Army’s Enduring High Energy Laser program, marking a shift toward high-volume defense hardware.

The company’s segment performance varied. The Autonomous Systems division grew, but the Space, Cyber and Directed Energy segment reported a 21% decline in revenue to $134 million. Management attributed this downturn to the termination of the SCAR contract in March 2026 and the discontinuation of several legacy programs.

Capital Allocation and Production Scaling

To support its growing backlog, AeroVironment is prioritizing infrastructure investment. Management anticipates negative free cash flow for the remainder of fiscal year 2027, as the company plans to allocate 12% to 14% of its revenue toward capital expenditures. These funds are designated for scaling production capacity to meet the demands of its expanded order book.

What Is at Stake for Defense Manufacturing

The company's focus on high-volume, low-cost interceptors like LOCUST highlights an industry shift toward asymmetric warfare technology. By investing in manufacturing scale, AeroVironment is attempting to mitigate supply chain constraints that have historically hampered defense contractors, while positioning its hardware as a durable, budget-friendly alternative to traditional missile-based defense systems.