AeroVironment (AVAV) 27 Jun 232023 Q4 Earnings call transcript

Good day and thank you for standing by. Welcome to the AeroVironment Fiscal Year 2023 Fourth Quarter and Full Year Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. (Operator Instructions) Please be advised that today's conference is being recorded.

to Teeter-Balin conference with like speaker to now Jonah today AeroVironment. would hand over the your I Please go ahead.

full This Thanks, and of year and fiscal Welcome Corporate to earnings good afternoon, Relations. ladies XXXX and Development and fourth Senior Jonah Teeter-Balin, is gentlemen. Investor AeroVironment's year Director call. quarter

certain please of Private this Securities Reform presented Act call meaning contains Before we information the the begin, forward-looking of XXXX. note that on statements within Litigation

differ the to from These and with could and in many cause Factors forward-looking particular Further statements on our other the in risks that information and filings. results involve statements expectations. uncertainties uncertainties and actual is company's filings materially of these risks sections such Risk SEC contained the in XX-K these

SEC or under at with presentation to the from AeroVironment This the the of team. Relations Investors available posted from website Presentations. Investor earnings we are also avinc.com a website afternoon section presentation Events release and and Copies the filed our our slide on our

The company remarks is of them XXXX. contained any our accurate statements XXth, time-sensitive to today, or events to June content this only The information that forward-looking call call. to after this no any revision reflect conference as obligation in make to circumstances of update the or today undertakes contains conference occurring

and Joining from President Vice Senior and Nawabi; Executive Chief Kevin Chief Wahid McDonnell. today me Officer, Mr. AeroVironment are and Chairman, Officer, Financial Mr. President,

Wahid remarks begin now will from with Wahid? We Nawabi.

Kevin XXXX, our information our XXXX results will quarter Kevin, by and questions. will I for start related detail. recent take after and I you, performance which, everyone, Thank provide your fiscal will fiscal financial expectations then conference earnings summarizing Jonah. Welcome, review I year Jonah call. to greater our which, after fourth in will to our year achievements,

we to records metrics. expectations that exceeded many of quarter the key across results fourth I'm and most set pleased report financial our

as three presentation follows. slide our which key of on are messages, are included earnings number Our

quarter the revenue a million, fourth increase XX% to just the rose Fourth doubled product under million. revenue nearly to XXXX compared year while fiscal year-over-year to $XXX quarter, $XXX

full top million last the year, of growth. year, sixth years line for Second, increased $XXX to This growth. versus makes representing consecutive million revenue it XX% $XXX

funded doubled set or to our another year led backlog more at or bookings backlog year TMS by fiscal SUAS, Tactical million. XXXX, from solutions $XXX This reflecting for businesses. driven Third, demand also million was XXXX strong throughout Missile by $XXX record than fiscal Systems our small our and UAS in

beyond. into and quarters, year XXXX for our And of fourth, significant in strong higher growth given visibility upcoming results. line reflects our and expansion year we're creation fiscal are XXXX business we're guidance improved providing nearly recent XX% fiscal margins fundamentals that performance The value and trends revenue, and bottom and well-positioned in

due higher The demand than improvement compared in more prior products. was revenue ongoing the primarily Puma our to reflect and SUAS fourth respectively XXX% TMS [XX%] to year sales up quarter These results and and period. Switchblade for the (ph)

million. for million, was fiscal XX% $XX.X of last $XX.X margin increase Gross versus quarter year's fourth an the

a as of both approximately periods. sales XX% percentage margin gross was Our in

margins favorable more to shift to product fiscal sales. we mix revenue discussed, remain previously our As continues in gross as XXXX, to expect year strong

revenues, improvement operating bottom line offset expenses. As were stronger was in which pro This a Kevin than moment, will our much driven increased this more primarily cover forma quarter. also profitability higher metrics by

inflationary shortages, of accelerated AeroVironment. few year caps for This chain our constraints, a growth pressures, such success. challenges labor managing By and years quarter as and have we past supply through record carefully the

this continued inflection we to support, our point of I for at enter new portfolio investors the want new and the thank Given stand demand our innovative current we growth. phase for chapter. solutions, backlog a their robust broad of of especially company's as unmanned

we're committed our delivering to to our always, and visibility into As shareholders progress. value

country proud including honored have we're the of level growing our provided to assistance we Finally, of Ukraine. and allies and deeply extremely

not Before the by Aircraft Army Future each news we with US X otherwise proceed to Systems, discuss segment, further the Increment I as was that address of the to selected FTUAS. Tactical want recent Unmanned known AeroVironment

we're process fully assessed we the for While further disappointed, submitted US have request a evaluation Army's and clarification.

current solution that Group the today continue focus is our and versatile XX meeting will needs market confident UAS remain most We JUMP customers. X on and UAS the the X, and the to of cost-effective

the We package. only to and as X, the support US solution defense honored humbled the recent in Ukraine efforts are UAS named aid Group X

been have comprise we MUAS not non-cash a million the quarter Increments to $XXX.X business and details related of for FTUAS AeroVironment. discuss will date to fourth revenue shortly. in further significant did awarded its Kevin The charge We recorded the

army's impact decision the will have a near-term Importantly, on growth. not material revenue

other improve we can we we focused portfolio As winning ahead, focus our our look ensure areas key customers' of the leverage continuing by will unmanned remain programs to where to on needs. strength of robust solutions. innovative meet Further, we on we

exit international on and potential in or market significant Despite multiple perform product Medium pursuing ability on currently The bullish on its our MUAS from line. remain are we which it's to JUMP payloads years. Group contested domestic environments carry in growth Increment are capacity we an believe our solution XX UAS coming today. unmatched X, with the best the and opportunities, X, FTUAS we present the to stands in that X There apart

gears shifting product to other Now lines.

and systems and of record of award a themselves year have support for proven weapon systems providing scouting proud are delivered US our We're support business and Ukraine. foreign SUAS back performance deployed in and largest-ever again the all our of Ukraine. artillery sales supplied military battlefield the again on Our on that Puma

revenue expect to SUAS year XXXX. We in strong remain fiscal

and component to launched revenues. also to meaningful these expect additional a have We portfolio and future sales several new of enhancements solutions our be of SUAS products

in only more Switchblade our the the adoption but success doubled munitions. Our for is TMS business trend accelerated growth Total line Ukraine global the opportunity conflict year-over-year, battlefield significant and quarter product than on represents towards increased this company. of TMS The start. has a the revenue loitering for the

allied from nations. four orders now We have

approved the importantly, has Switchblades market XX from allied year. last US nearly recently countries, us and up More to sell XX government countries to

level the to forward. in TMS global record and a we leading current growth be moving demand expect interest, the our for Given company of Switchblade, backlog business growing driver the

resulting telemax And tEODor performing Unmanned segment, ground accelerated product vehicles these Our We're in doubled Similar the line performance to more UGV vehicles fourth than or UGV providing solid inception. are best to the Ukraine our well record also on Vehicles Ground year quarter. and levels of since year-over-year, achieved battlefield. schedule. its unit's progress TMS an the in revenue under marking

another fiscal for year expect this year We growth business in XXXX.

a Sunglider, commercialized product and stratospheric-based SoftBank. to HAPS line services the telecommunication continues Our partnership solid development of progress with in make successfully next-generation

also are capability received our actively contract We from recently multiple US and other opportunities. defense first this the for pursuing unique DoD

conflicts supply opportunity current solutions. represents with world, and that around positioned large this our the we're for market well Given the highly the HAPS dollar long-term to defense differentiated believe HAPS we market growth a multi-billion Solar

a Solutions global And of continues finally, our unmanned learning Works supplier autonomy-powered machine MacCready AI, to leading establish AeroVironment systems. and Advanced as

with evolve AV the of systems anticipate With needs that is team, designing our the of and this will support military.

battle link operations sense, our navigate persistent that allow space. autonomous artificial that can expandable without continue to algorithms capabilities and radio UAS include the analyze, advanced machine intelligence and These learning and

We product already in the expect have some within deployed lines our capabilities and these more of future.

grew see continues Works also of business as for line and robotics MacCready new logistics significantly fiscal own XXXX AeroVironment. become in and and top to new expect year additional such growth exciting segments segment to that of XXXX. fiscal the year pursue This their space we lines could contested business in

Before define call our the fiscal of note to larger segments like AeroVironment nature our their end will associated and the starting over would in services differently I to turning QX year broader of to Kevin, and products this that reflect markets.

and three on will color product Systems Combining lines provide a segments. into UGV MUAS, will we forward, segment. Unmanned our combined new be SUAS, Going

look our Our now current forward Munition operations will We and will the on Loitering with R&D Works programs. quarter. new sharing include to segmentation other Tactical HAPS segment Works and MacCready Missile along this next MacCready customer-funded more Systems systems become

to would quarter With fourth review the that, the Kevin turn for I Kevin? to call over McDonnell of like financials. a now

I Today fiscal XXXX fourth to presentation during will on available and performance, which occasionally website. year and I our highlights our of full reviewing refer Wahid. quarter be you, Thank the earnings our will press release

up We ended EBITDA. bookings, adjusted the in extremely revenue for terms will FY'XX. Wahid guidance set backlog, for of strong the margins gross But year strong and growth in a are revenue, we and over FY'XX next. go EBITDA adjusted

non-cash will However, to cover fourth business. a Wahid in Medium shortly. these mentioned, charges recorded quarter I UAS related as our the we

-- quarter quarter. some detail the me Let the by providing more begin revenue on on

of the provides breakdown new a at of Revenue fourth $XXX fiscal for five XXXX an from the of the was a of revenue quarter quarter million, for XXXX. XX% presentation earnings increase fiscal of quarter. segment Slide by level the record of fourth

Our of largest with during the last $XX.X up was segment million UAS revenue, a record $XX.X Small year's quarter million. from

within strong a remainder and are from business we with the over just Small UAS demand new to Ukraine Ukraine. saw and other beyond healthy of In mix existing words, upgrades We just shipments seeing customers XX% customers.

just the Missile TMS we for QX, or million, $XXX over of It million of the QX. $XX.X showing revenue received strength the to that products. also year million Systems year for million worth for $XXX our total Switchblade global compared in domestic Tactical to last recorded noting TMS demand during bringing $XX.X is the of orders and products

HAPS increased of $XX.X other quarter $XX.X which Revenue segment, from the includes versus XXXX. businesses million Works year-over-year the MacCready to million fourth in fiscal and UGV,

result UAS of XX% the for Our to of a decrease finished year The was quarter 'XX. fiscal Medium revenue of the revenue. the of segment million, compared lower $X.X reduction with revenue a service quarter COCO fourth

revenues XX% a fiscal $XXX.X million, For higher hit XXXX. the than record which is year,

$XXX organic growth We global our mostly products. bookings strong at demand million. also for had over the This reflects for year record the revenue

we Turning of a service show to revenues. margins. between slide In five and the product breakdown presentation, earnings gross

XX% revenues Specifically was UAS quarter, mix from TMS substantial of The during due in and for Small revenues, increase of to in sales increase expected the the the product XX% shift total corresponding previous of year. an the fourth product accounted quarter products.

and margins, the service non-cash items. Slide reconciles expense XX gross the six earnings while accounting other gross excludes purchase shows gross the intangible adjusted and the product of GAAP margins, to margins Slide amortization adjusted of presentation which trend

the XX%, previous quarter, In remained quarter of margins identical GAAP fourth at fourth to steady the the year. gross

in non-GAAP XX% hand, attributed XX% other to the last gross adjusted for the the gross quarter versus year. be The Adjusted decreased to XX% decline adjusted the product XX% of slightly gross in higher the margins fourth quarter revenue. TMS from mix the year-over-year prior fiscal in were year. can On margins margin product of

XX% versus depreciation XX% of In last to the service to during the fourth million. adjusted quarter at our the terms of margins, $X.X charges due assets service accelerated primarily same gross related quarter was year, COCO

XXXX For due at to the ended from gross XX% as gross and of primarily year full margins margins UAS decreased in GAAP $[XX.X] million fiscal fiscal year, XX% depreciation from level from decrease last to was COCO assets. accelerated the same adjusted (ph) our -- The in the adjusted gross XX%. margins Medium

FY'XX gross expect margins to to the in level. service more a revenues shift with the product adjusted more to We improve transition margins of to high and normal 'XXs

of adjusted XXXX, increase the reconciliation The was of main this GAAP million, by presentation R&D. adjusted loss of our a volumes, $XX terms representing EBITDA, fiscal the year. investments In increased adjusted EBITDA contributing factor to fourth over expenses in of quarter net increase was and last offset shows higher SG&A which XX to of from partially slide was earnings In XX% sales EBITDA. the

XX% the of million, year. fiscal representing For EBITDA the year increase $XX was from full XXXX, adjusted last

full of for revenue SG&A of quarter of intangible X% for revenue XXXX year the fiscal XX% fourth revenue. year acquisition-related was XXXX. and the XX% and fiscal expense, fiscal amortization compared R&D excluding XXXX, to of was for expense for revenue of XX% XX% quarter and expenses year the fourth full

the range to evolving existing needs in as in customers. products XX% of XX% to we our to and continue the upgrades meet invest products We new R&D to run will

Now turning to earnings. GAAP

related business. a the accelerated a amortization the During result intangible total net the Of the million reported loss as $XXX.X of of amortization the expense a acceleration in of company $XX.X which quarter, charges encountered million was asset UAS This was related charge, was non-cash of $XXX.X Medium particular quarter. customer. SG&A non-cash to fourth a to million, the

Increment as of revaluation the X million recasting loss. the was a a a $XXX of the flows charge goodwill the of FTUAS result Arcturus The the Medium remaining total from the goodwill UAS of acquisition cash non-cash from result adjustment future as of

Although dictate current short adjustments. the UAS we business remain optimistic about these the conditions in long-term, Medium both business and

was of GAAP previously. both GAAP for share shows per discussed EPS $X.XX the charges or quarter EPS. in the loss non-GAAP and diluted share per the XX loss the of and adjusted a reconciliation Slide year, non-cash reflecting $X.XX

company terms earnings adjusted quarter $X.XX fourth non-GAAP $X.XX In the fiscal for fourth per $X.XX per year share for XXXX adjusted fiscal EPS of diluted posted in versus $X.XX versus of per diluted EPS, the XXXX. was share per Full of of share the XXXX. share fiscal quarter

Turning balance sheet. an the $XXX.X of cash million third restricted from at end to was our increase fiscal $XX.X XXXX. cash, investments of and quarter Total is the million, of quarter which the

by over reduced our we million addition, debt In XXXX. $XX fiscal during

the related in increase sales working during We driven the capital to see receivable by did fourth volume. quarter, primarily accounts increased higher an

expect working exposure we increases a business level and chain supply support the to to continued to lead higher prior times. long quarters, and indicated As capital inventories see issues and minimize other in of in

strong We of cash with $XXX no have cash, balance. outstanding $XXX million facility and and to with continue restricted a over sheet balance working capital investments million

Now to I'd Wahid. turn like things to back

has support continues against drones Ukraine Thanks, adoption by demonstrating unmanned The of adoption distributed trends adversaries. conflict towards to solutions such effectiveness greater their of existing greater small munitions accelerated Kevin. The as macro-environment loitering well-equipped and solutions.

with typically highly deterrent larger provide these are to force enable and impactful, far Further, capabilities manned adversaries. but expensive, traditional systems. budgets effective and defense a structure lead secure compared solutions have shorter defensive solutions enable to These agile an less times with smaller countries

We for for XXXX combined our on guidance XXXX our shown market-leading growth follows. will and believe number in I'm solutions slide support fiscal fiscal come. global these with unmanned pleased now to trends, year year seven, provide technology-driven years our as to

diluted between assets of $XX We $XXX amortization to income and diluted non-GAAP $XXX between share, million $X.XX intangible $X.XX million. between and $XX share $XXX diluted million forecast one-time of $XXX million between or share. costs, and Non-GAAP million $X.XX. acquisition-related of to per earnings and net and other anticipate per revenue EBITDA expenses excluding per We $X.XX million of adjusted

between deliver EBITDA full investment for to R&D revenue XX% anticipated XX% fiscal to expect XX% XX% year, between adjusted of the while of and remain We of is to revenue.

at funded Our XXXX of record fiscal was the backlog end year a $XXX million.

us guidance range of at visibility fiscal visibility our fiscal 'XX year As up strong to XXXX. XX%. a midpoint result, This the year is revenue sets for a

first almost expect of XX% full QX half revenues. the first account year. for We to Further, represent should fiscal revenue revenue half nearly XX% of

once points turning questions, Before me summarize call. the today's for the call key from let over again

First, fourth our we met delivered exceeded record quarter expectations. and or performance

year of a also line sixth was consecutive year record, revenue marking growth. full Second, top our

yet expect strong our record backlog ever for the as funded demand and global our be solutions, and business are is our the at Third, reflecting company. to levels, fundamentals of fourth, for year as XXXX setting strong they've year another we been, record fiscal

joined and recently informed Davidson's customers qualifications Admiral us Admiral that our excited his Board in expertise guidance, relevant key in Davidson also opportunities you be Phil themselves. will credentials by speak outstanding for enabling and capitalizing us. better of significant inform while His to support on front extensive our I'm the to military Directors. of

of us the I would our team our the customers, best a believe investors, their perseverance, like shape delivering faith by missions. returns year customers ongoing XXXX. We in vital investors. dedication setting entrusted to achieve and superior Based in thank work their committed we and support for our fiscal ever the to remain helping record hard we're for and their on our for talented our

now and And with that, will questions. take your Jonah I Kevin,

Markets. with RBC Capital question you. first [Operator comes Instructions] from Ken Thank Herbert Our

You may proceed.

Jonah. Wahid Kevin good and Hey, afternoon, and

Good afternoon, Ken.

Ken. Hi,

if Wahid. guidance you the the fiscal provide current could of can revenue within end Hey, 'XX. a growth for more on little wondered nice fiscal of year, SUAS segments? I granularity comment and you assumptions the for implied the specifically, sort TMS on And

Ken. Thanks,

as job. and 'XX. toward another pretty the fiscal XX% Very did the for of team we've all revenue, midpoint in the that for a results up our especially board, of more year really, And well mentioned, course, quarter, with strong guidance. achievements terms much in visibility 'XX, record the the our sets it very fiscal large across had again of really importantly, fantastic Of backlog, backlog a challenges you us proud given year record-funded

broad our internationally. In terms TMS the expect product the and United but pretty systems products States, or are of growth, also we SUAS lines the significant The demand and both our to unmanned just for not have systems in year. board coming across growth and in

our to portfolio of diversified driving million close pretty year. opportunities fueling a year, growth. on a significantly to it's growth set that's strong of next expect customers, We $XXX product and very very and obviously almost grow So top

the the evenly And slightly to the backlog close also half's is us really is us thing and the of half second quarters, to maybe allowing quarter first half, roughly XX% than important to visibility allows but it almost the first is that revenue. lower other to note XX%, that's load a being half, then have strong first and level which first

the an So as the to wars and unmanned where all in systems as a change in paradigm, as the our way those think small across is defend about inflection strong market for prepared see market loitering result fight in the well I products the munitions things a that point demand themselves really of here military really and changing getting future.

the I all or comment think, countries? an capturing sales the of Can many think as runway how that you approval system countries into been now just think I obviously countries. your about Switchblade what's eventually mentioned Yeah. you've getting you selling got to actually you've of those into? Wahid. XX on sell sort XX And -- Thanks, And into, you the

Sure.

far orders I have allied booked we we mentioned, so that countries have So Ken, to date. from four as

the us market However, last countries approval Department eventually to XX to close list, you're basically given than countries to DoD the year the grown. has right, an more of list and to The State US that from has now. before XX doubled and sell

We're actively involved.

capability like very of record itself they has large a in in that the and is and this this Ukraine lots that's US capability, the increase, our So shows, countries need value by b) have are of it track and would performance a of and that and military a) system. are and there the this demonstrated with to

and And that so XX been has encouraging increase very list us of countries. DoD supporting and to US positive

I how to UAS has I think faster over In through gone terms of the similar it although follow this last as Small many our countries do decade. very a going it's be think little going happen? bit is a trend, to might

last Small now. XX small the countries over recall, from of to our well Over grown decade, has UAS number if countries you a very

has I engaged a And the this Munition the interest in several call that acquiring potential. TMS in several have going business across the countries and We're capability. similar think to we're Asia them and countries, of future, many Loitering both world, and or that getting it actively with Europe

So we're two, or very going come. the growth increase to number years is for and a set year the healthy to continue I this next up think in over the to business countries of

I'll it Great. Thanks, back Wahid. pass there.

Ken. welcome, You're

Ken. Thanks,

you. Thank

William Louie next with Blair. question Our comes from DiPalma

You may proceed.

afternoon. Wahid, Jonah, Kevin and good

Louie. Hi,

Hi, there, Louie.

the these helicopter takeoff the your Day, carrying are a an munition. several VAPOR products? Jackal air-launched Analyst and of some a Can loitering Wahid, you Puma, including development also munitions how new you payload capable a on of development and vertical working turbojet products, small new on of discussed at update provide you landing of

what much mentioned. very Sure, accurate Louie. That you is just

Analyst -- as our to orders started several And them customers our some have that to in report of received for we products products actually new pleased We those to to well. and ship here introduced last are we've Day.

product take so because time SUAS launching and products cycle as going of and my mentioned of some acquisition decent a the it's to remarks, for And portion market. we're to Obviously, line will based up I revenue that in be enhancements time our frames. these to customers' new the ramp future on that new

we industry customers Switchblades performance VAPOR that is has far, that the of products its best from been The we feedback off helicopter, our capability just strong. even their in also to so powered of of are demonstrated launch is, very terms It electrically have it. XX MX launched. category But a

pretty my to in a that is and itself or so far, critical matched by form. not that knowledge, So size that capability shape is, is really

is partnering it's obviously, Long a And course, immediate. that for a of Northrop we're after Precision making to Army, And Jackal, product with LRPM. specific called the we're in not is solid Munition, the years US The of is Grumman going large that. it program that opportunity that progress a name program we're a with come, record Range

version And of Switchblade the a of as is Switchblade the that's roughly loiter. size more that a obviously of XXX sprint

high then speeds other and it advantages a So and hand the destination it launch Puma's in gives Puma the set it us it without actually travels to battlefield. the target, down, or of launching when gets without on significant allows which obviously, slows to them. VTOL runway capabilities and And

a where we've to base So ahead, years see them we'll given invest in especially very and not great the for our because others, is for we're continue we of on need these the these capitalize demand many installed customers. up, a large down. customers' and that, systems going amongst been And investing position to products, in

GPS-denied So launched. all in we've targets without systems that information automatic and autonomy pass several where software target to I can on to communications mentioned Switchblade as our team that the work Switchblade operations And Puma area be a and investing and to operator cohesively in a that being is a find I automatically been for recognition. at AI, target, the also work to able identify do that want another work remarks, last fact, over allowing in to years my these mention analytics,

inoperable unique gives of against and have to is family a competitors advantage really, whole. intelligent the us as because capabilities largest extent, these our an and So integrated solutions is and some system we that

forward to these reporting come. in investments to our look in we So the been areas more going, and have that's progress quarters really where

million able that Thanks, Kevin, Thanks. And investors how how Switchblade worth roughly is think, looking there were that, that are product progressing. XXX? the excitement lot there's of mentioned points $XXX you terms Wahid. to share for fiscal obviously XXXX. data related a of you over And for as orders to was TMS Are of XXX I much in investor the of

Louie. for don't products. question, we Thanks the the particular backlog But orders out break really or the by

I different think and hope really both both well. have we they products markets sell

Yeah. And XXX, Blackwing, well all we so far US submarine strong as with have the you Switchblade very of as -- within our well-received had models know, both three our a the success Switchblade fairly variants, Switchblade Louie product it's community. XXX, as

Switchblade XXX, large. that very The But feel we is for about it. very good market

and We meet happy customers, product they're customers. have continue our needs our shipped and of it, the and to production growing to we that increase quite capacity with to

Sounds Kevin. Wahid, good. thanks, and Thanks,

Louie. you, Thank

Thank you, Louie.

Louie. Thanks,

Thank you.

next Our Konrad Jefferies. with from comes question Greg

may proceed. You

Good evening and nice quarter.

Thank you, Greg.

Thanks, Greg.

Hey, Greg.

profit balanced and how How the commentary ability within start thinking going on that to the in awards start. demand with any chain do are supply forward only the 'XX? international about you is being and And the international, ramp? just does quarter revenue around into the have on doubling as fiscal out And segment those Maybe impact given TMS, to called that mix you year ramp?

on we're progress pleased very we've with Greg, So making TMS. yes, been the

inflection an to this consider point munitions general. loitering I also be for in said, I As

can that track is and one. battle sort loitering of far, proven so battle product number performance success Our the there most match the record product out its nothing proven munitions market. and line in There's

is growth in though last year expect do the just had a significant beginning fiscal view. for 'XX very strong TMS, backlog we we even in two, that's on very, but our year Number my and year, very TMS strong

to years, several continue over TMS the I think grow. is going the next to business

point it's an indicators this and It's this a could market. grow. us engagements to going market very at multibillion view in to be dollar that customer large. and their that a we're my continue in inflection got for demand of We've lot Really, tells worldwide,

the even Switchblade for far off vehicles come next-generation effects, to penetrated Manned such as we And as helicopters, well addressed from market fighter Vehicle. air next-generation the ground launch market of the or as of helicopters, as jets the Fighting haven't Optionally such capability so

lead long. times, but have we that is slight a the constantly into for terms are the put next The some can is year products And for of In that challenge. some chain working versus does lead how this times be a year. of growth supply little much to our on continues we limitation that,

So nonetheless, very I healthy 'XX. that And fiscal we're at in beyond the in this fiscal strong growth business, an a coming inflection 'XX, the opportunities excited expect continue going we're believe about year, years. and our growth for that's we very and to point

have we line on the And guidance think we of chain sight supply levels. meet our necessary to

For yes. year, this

Yes.

there either we've upgrade of think advances. to can what advances more trying Just the a the Or through around areas then get systems? And of called going mean seen a as of for sense out and I is progress. that how number opportunities? forward, mean think I AI, you've do you selling that portfolio about monetizing that

Sure.

with it terms So that a players you're I'm claim this. of have that's important there's lot asking. market a they because that asking that question, of in in Greg, a lot capability and of a different really, really critical who glad autonomy of the I you're and hype all think lot

the AeroVironment has we of been in somewhat capability that developing what I actually making with in terms world and quiet and real humble solutions. the our deliver capability this area call sure in

to can at that all. Puma products allows system can a be One of called signal this you Puma Visual that essentially And It's rely was on our of installed buy System. launched not in existing year kit we that this it modular Navigation all past Puma first on a space the systems essentially. GPS

location its needs to an to find go It instructions based reliance operator's literally can away get GPS. and it to and without space to where on on chart

more this software expect hardware a to the over of both just additional do years continue kits enhancements and And to and and that's several the this next area. grow I lot we space. ability announce the in So beginning. products, have this and new the capability to

of hardware up you and primarily as know, made Today, services. our business is

We expect and really whether really us our our lot in customers' eventually think selling TBD process. it competitors. we that But that and positive software include on good a be and subscription momentum acquisition over as item, apart or change have I a area about could I feel a to in that from on of really this license time good a fact depends sets

Thank you.

you. Thank

with Engelbrecht Our next question comes from Jan-Frans Baird.

You may proceed.

Wahid, on Kevin afternoon, today. I'm for and Good Jonah. Peter

afternoon. Good

afternoon. Good

afternoon. good Hey,

Yeah. Congrats great on a quarter.

just So Switchblade get to on XXX. question wanted a I the

ago. of you order can where of sort you in I with DoD indication an initially give has order. being sort a replenishment? $XX the unnamed much latest us really nation in of, come getting know France us sent variants. full be you just that saw XXX months and majority breakdown allied XXX sense other don't couple we And been know you the the how also replenished, give we will Can million of a And in the of of because drones fully of sit terms that that

So Jan-Frans, that thank you for question.

has forces. inventory. Number very been DoD more a been with have have they're that's provided for happening them. far, fully to more So of and number dynamics one, quite in who there. US Switchblades DoD's delivered turn really few so lot asking a to And the we they've the replenished Ukraine and US happy we not them There's them far of of

to continue we So do that.

B) and need need. DoD have countries. fulfill year than And additional be US we several inventories than beyond year the to going before; DoD C) replenish 'XX, a also that process really with need fronts demand to them replenish The will from their my several fiscal It's to to is most our the US A) in and there's one be on we're process. going exhausted likely to working they the continue additional more opinion. bigger

obviously, product how and year, grows, And think as growth extent, and Switchblade it's the the limited primarily year use of on get. to couple so that get years. as times our some warhead and benefit healthy products next well they grow countries to next many those as in warheads to of family very And going can adoption their I to based lead this we as experience is

year's we're needs, this on year. still for our this But that. working secured have We for beyond needs

course, price for OMFV going demand. lastly, be all continue from So all to number XXX other systems. I such both them up. of is has one overall now to family will selling as think of to versus and or demand platforms, US one more. two the then, and going Ukraine then of are LRPM go demand our variants and inventories layer additional the GDLS, several Switchblade Replenishment that is average platforms And deploy benefit The international of the other XXX programs Switchblade higher an those to of a drivers. and with

Perfect. Thank if really have quick just I And That's a could you. helpful. follow-up.

of terms segment JUMP the system a in XX Just and MUAS as the whole.

flown. all XXXX lot hours the revenue but of a have by XX JUMP material durable, system had contribution sort of So accounts, from been FTUAS, wouldn't has highly

seems of surprising system obviously, you plugging So, the segment a just a can MUAS onwards it in foreign segment a product? that for XXXX the terms interest that And you're like for thinking and in there. decision how nations. But XXXX there's just of give sense orders? sort sort how and us thinking from you with if a of lot shortfall FMS of tell you're us But beyond whole could of as

Jan-Frans. Sure,

that category, in. customer's was Medium clarification still but Number bullish our the absolutely, more surprised we're asking one on this we Group We're already engaged really in opportunity. So as engaged X internationally UAS have provide We other respect one, why. to that. But them potential several to very UAS. really, by currently decision, X, we're our opportunities we're

US to Ukraine program. have US other Army's to X, only programs besides well to And DoD provide conflict. JUMP UAV we that specifically as has of the record for several Group we're chasing the XX selected their X

the outcome a in disappointed X, market, are that world. going we're We're with kind competition. Group because going to of that believe strong is growth invest it's We believe UAS to best to continue going very it that actually capability given while X in the market. on around So we conflicts specifically of the the be

a than multibillion-dollar at and us endurance ISR TAM X, for X actually as and X, have opportunity system, to The large even the fairly on the footprint. X, fraction of is a total JUMP UAS is XX Group it's Group category going the addressable X, markets. logistical cost other an market it's There's X of especially market. large, a a many persistent UAS growing fraction for even and Ultra at Group whole missions conduct a faster of long the very greater to and

in our investment it's So intact overall, continue in going our X it. thesis and UAS and We're bullish. to and Group X, Medium business to is UAS very invest still

have to customers improvements with enhancements the do series upgrades we're multiple those a in and to planned also have we on and capitalize We space, engaged that of internationally opportunities. and

experimented of against that and to have capability JUMP is competitors. its they you competitive the said, evaluated all them the as And offerings. it do proposition all best-in-class value believe comes many when And and XX the

we feel that about bullish So still.

Thanks really in for jump detail. I I'll great. appreciate queue. back the it. Okay, the

You're welcome, Jans.

[Operator Instructions] back remarks. to I'd call Thank And Jonah any closing to the you. for turn now like Teeter-Balin over

Thank interest once conference you AeroVironment. your joining for in and again today's and you thank call for

an be version SEC and website our forward relevant good found with again speaking look a reminder, quarter's to you at and you archived news avinc.com. following a can you. Thank As on of filings evening results. call, We all next this wish

everybody. you, Thank

Thank you.

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