AeroVironment Stock Plunges After Mixed Q2 Results, FY22 Outlook Cut

AeroVironment, Inc. AVAV reported second-quarter revenue growth of 32% year-over-year to $122.01 million, missing the consensus of $130.83 million.

• The company attributed the higher revenue to revenue from the Medium Unmanned Aircraft Systems segment of $26.5 million and the Unmanned Ground Vehicles product line of $6.5 million due to acquisitions Arcturus UAV and Telerob GmbH.
• Adjusted EPS improved to $0.78 from $0.48 in 2Q21, beating the consensus of $0.62.
• The gross margin contracted by around 930 bps to 34.8%. The operating income decreased to $3.34 million from $13.89 million a year ago, and the margin contracted by 1,226 bps to 2.7%.
• On an adjusted basis operating margin declined by 432 bps to 11.9%.
• AeroVironment cash used in operating activities year-to-date was $3.34 million, compared to cash generated $58.59 million a year ago.
• As of October 30, 2021, the funded backlog was $252 million, compared to $211.8 million as of April 30, 2021.
• “While we achieved second quarter and first-half results in line with our expectations, headwinds to our business have intensified in recent months, requiring us to reduce our full-year outlook,” commented CEO Wahid Nawabi.
• FY22 Outlook: AeroVironment expects revenue of $440 million -$460 million (prior expectation $560 million-$580 million) vs. consensus of $569.62 million.
• It sees net loss of $(12) million - $(8) million (prior net income of $29 million -$34 million).
• It expects Non-GAAP adjusted EBITDA of $59 million -$65 million (prior $105 million - $110 million). Non-GAAP EPS of $1.23 - $1.37 (prior $2.50 - $2.70.) vs. consensus of $2.62.
• Price Action: AVAV shares are trading lower by 28.3% at $57.33 on the last check Tuesday.