AeroVironment (AVAV) 5 Sep 232024 Q1 Earnings call transcript

Good day, and thank you for standing by. Welcome to the AeroVironment Fiscal Year 2024 First Quarter 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 like speaker to now Jonah today, would hand over the your I ahead. go Please

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

materially XX-K differ Further forward-looking actual SEC, Securities on involve filings Before to contains cause Litigation that such Risk of our from These note statements information of Reform risks this contained please meaning the portions and could the the begin, filings. these certain information Act expectations. is within we uncertainties on of many uncertainties presented results that Factors in call risks statements statement and in with and and particular, in the Private the forward-looking Company's XXXX. other

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

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

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

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

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

ever. we quarter, we're for first year report and are a to to on-track pleased our we believe that best I'm off very strong

are also as which of messages, earnings key presentation, Slide #X our included Our on follows: are

XX% increase quarter reflects First, first market revenue QX best our a rose AV's and leading This for intelligent domestically and in year-over-year demand our robust million, a $XXX unmanned systems abroad. to history.

funded our This million from of of reflects at new $XXX start up year million $XXX new a fiscal $XXX rose record of Second, backlog the quarter. in bookings to backlog XXXX. million first due

interface. privately-held Third, control enabling purchase of announced unmanned AV wide of will Tomahawk variety user we multi-domain recently that a solutions from Robotics one

guidance cover fiscal And fourth, I previously issued which XXXX we're raising year more in for our detail. will later

was and XX% quarter an year's XX% versus margin $XX.X in rose of to XXXX. XX% percentage as fiscal of first the million, $XX.X for sales increase from margin year last million, Gross our fiscal gross a

strong continue Overall favorable to remain to our year is to sales. expect year off mix on-track meet fiscal XXXX increased We product to the in to revenue for more and gross shifts great our a full-year. start, outlook as XXXX, squarely margins fiscal we're

for with In-line Robotics our deeper, both unmanned unmanned beyond. solutions, Company believe open Global to strategy, successfully solutions the million, a aim performance adoption control other will levels operate it to trends in long-term the a and our recently field. for we support acquire take to we AI-enabled agreed and simpler variety year We our AV this of and solutions, to $XXX leader robotic to own communication Tomahawk broader scale our this continue provide and in to technologies. broader new and customers of between transaction systems enable common integration a making standard easier in and

asset operating, to Tomahawk’s Tomahawk’s architecture that AI-enhanced greater utilizing their system provides unmanned achieve enabling efficient common control an providing of technology operating streamline open operator. systems, will simplicity. with family and picture any for capabilities unmatched a the operation the unmanned of Ecosystem that users Kinesis AV's tactical seamlessly missions integrates our

expect in across demand systems is approach, Kinesis an which achieve modular to open customers AV’s enable the by products globe. high elevated to We

common In means addition, Tomahawk Tomahawk’s with today. small combining AE. best platform unmanned technology on been B few most with Puma the have years system the features of family of ubiquitous market systems AV's together Crysalis controller with the the X aircraft operating Raven control the including past over AV unmanned system pairing and and Kinesis working integrating Kinesis AV's systems

and the partnership, our two gained experience we customers' meet firsthand emerging and and that combined that expertise of will we're solutions unmatched, have offers, of unmanned teams result exacting that Through knowledge our vehicles the expeditionary a our needs variety Tomahawk of confident in standards.

we Once the into an quarter, Vice occur led reporting and segment General Trace additional this Manager, our Systems Unmanned product will to transaction as line Senior expect Stevenson. later which Tomahawk by closes, operate President

We expect to the revenues, by synergies driven our adjacent integration technologies. market product transaction performance opportunities this drive incremental growth and prospective of

this value. of drive shareholder All should increased

to second transaction this anticipated year earnings the performance. reflecting our quarter provide impact will guidance XXXX We call during our fiscal updated of

Before segments beginning and three I Systems, the turning businesses Loitering MacCready Works. of remind line’s everyone reporting at consolidated into we fiscal want this the to our Munitions, to product results, Unmanned that year,

by Unmanned with a broad range particularly Shipments strong products, our demand which are quarter during segment, year-over-year grew systems, the our $XX.X overseas. were needed Starting Systems to revenue of across urgently record XX% million. Puma driven a

large to second and LE year's nearly a through portion be last Puma Puma $XXX sales are value with deliver the ceiling X the to million in AE foreign military Ukraine but systems through quarter. continue delivered We order,

our remains robust. Looking ahead, backlog

solution JUMP Army ship will platform capable in This is quarter and has also XX UAS XX Ukraine Moving our Initiative remain the JUMP first $XX most JUMP platform systems Defense of Assistance year. largest aircraft this so fiscal class. recently Ukraine. we during to U.S. our far. to its We confident USAI. Ukraine second that DoD or the these the the that U.S. Group to Department provided the of We U.S. plan is the by our mature to X the be secured a provided from Security system, XX million for contract

We and government support continue X Group forces also to training continue systems, Mexico future. AV for Mexico's foreseeable in XX-year the armed assistant only JUMP tactical allowing XX agreement Mexican upon rely forces recently providing through the their as The platform UAS XX our armed to finalized UAS a with to the JUMP of operations.

first to Netherlands With tEODor batch Ground We've XX and the prior under received a an that Unmanned Vehicles also which mix Defense we robot of XX of delivered are a UGV, another from the for order systems, the of UGV systems contract. nation. recently or Ministry telemax Danish robot five the initial for products, ground

to progress are to UGVs an on missions mark providing life-saving in EOD same field. accelerated which Ukraine, schedule the continue At we performing time, the

great Unmanned growing our the Given across entire for another backlog segment, we're on-track confident we're year. Systems

Loitering the latest globe. the driven allied to The the XXX depleted awarded support recently expanding for Munitions to USAI for pleased XXX countries anticipate our to sales DoD the through number to segment. Switchblade army the continue that and This contract USAI. continues time, government Switchblade us government. U.S. say increase across XXX we loitering and same with an At U.S. another U.S. will growth up in of XX% backfill been the of Moving stockpiles. Recent I'm Switchblade shipments reflects and year-over-year. demand largely has systems munitions

U.S. demand year responding we Overall, or Marine to international through of strong OPF Corps loitering to rest are for Precision a Information our program. U.S. we the Organic munitions Additionally, fiscal or remain Request to for and Fire anticipate both RFI the systems related XXXX.

significantly we Block shipped Block Switchblade is and Block Switchblade configuration XXX our also important to XXX last that XXC has XX the It the and delivered to mention a have features tablet-based customers. variant. is Fire been completed next generation now being Safety batch of more transitioned XX successfully to capabilities. enhanced has Block Certification Control System, performance XXX and XX Army Confirmation Switchblade U.S. the endurance, other

year-over-year segment grew to Works pleased to Moving million. report also that to our MacCready I'm revenues $XX.X segment, XX%

otherwise from in our tests We’re obtained and HAPS also we flight our not could aircraft. be of simulations. to successfully team of allow data, amounts These further version solid scale completed Solar new a program, which tests computer-based analyze making using Sunglider the smaller collect Stratospheric large progress

now (ph). to apply while next time generation the working the with our will We Sunglider FAA same Certification] Type these learnings at [for

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

highlights both website, is the our to Today, Wahid. be first our available will earnings Also, press I segments. new our refer results an you, Thank our into the quarter historical there on reviewing of release presentation available website. performance, I on recaps which occasionally and during will which the X-K

margins the started backlog, adjusted revenue, we extremely gross and adjusted terms of first Overall, in strong EBITDA. quarter

fiscal XXXX. to XXXX from mentioned the of Wahid was remarks, in million quarter first revenue $XXX.X as of quarter $XXX.X for the first of the XX% As compared fiscal million, an increase his

quarter. Slide presentation a by for five segment of the of earnings breakdown provides revenue the

Unmanned countries combination medium was is largest $XX.X systems XX% business or shipped Our of unit, quarter the segment eight UGV million, $XX.X revenue with UAS our and Systems, million during which year's of businesses from UMS, the driven of which an our increase by primarily last small UAS, UAS during small a quarter. to international

the increase quarter compared million LMS Systems during MacCready demand last recorded a the international $XX.X segment Revenue U.S. $XX.X strong Munitions last our Loitering Works XX% continues from of be first of million LMS in of or QX. year came and an to the fiscal revenue by $XX.X driven orders. at year. compared to million increase XX% to $XX from million,

strong We DoD vision, see various within for of S. MacCready capabilities. services the our increasing incorporation agencies in in demand U.S. of and to and U. AI computer continue demands autonomy particular, Works the government,

earnings revenue. between the breakdown of presentation, there's a service product five slide In and

notable XX% corresponding of product extent the Specifically, locations. accounted and a product MUAS lower to previous during revenues, UAS business from from due in small revenues our COCO total with strong service site year XX% closure operations the to lesser a of the quarter the from first the all revenues of for quarter, increase

of revenue, XXXX, product remain we above margins. the increase of lowering to have which will sales remainder total the of sales impact expect of but percentage as For fiscal overall LMS expect a sales to gross product product XX%

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

year. was quarter, margins. The in gross and In in previous XX% up the strong a improvement mix GAAP gross consolidated product improved margins service to margins XX%, result product largely the first of at finished compared gross GAAP

depreciation gross decrease of of In by favorably assets. a $X were margins addition, million on COCO ISR impacted

revenue the quarter margins adjusted also were for driven gross mix was first of last were XX% for UAS The of product fiscal product margin service mix last gross XX% XX% quarter to Adjusted the by margins from the year, products small in Adjusted year. the XX% the our a in the gross quarter. and again, during margins. compared to first of improved quarter improvement quarter in versus strong first gross higher

was margins, In terms of the quarter XX% -- quarter same adjusted Again, due sites. gross the the gross of to versus operation during closure at XX% last the COCO service year. MUAS first

the margins during up adjusted in however, during expect the gross half product We margins strong continue expect high-XXs the year, second the first be adjusted for half the to the end we of shifts gross to mix year, of year. our to

In EBITDA, was and GAAP XX%. expenses EBITDA favorable of first increase shows adjusted slide increase factors investments $XX contributing R&D. XXXX, the offset representing of million fiscal sales to earnings this by net partially to the higher incremental XX volume of of terms adjusted presentation The quarter EBITDA. SG&A adjusted of in and main million, were reconciliation was an $XX In our which sales mix, or income

acquisition quarter of of for intangible revenue to excluding expenses the fiscal and the related $XX XX% was $XX expense, or XXXX or XX% SG&A of first million, quarter compared million in revenue. amortization

in expense as modestly products XX% evolving expense existing year. meet of as dollar to corresponding run last invest of in R&D upgrades the to percentage new terms, customers. was products XX% quarter in revenue the of year-over-year and R&D we XX% While continue the needs will for our R&D a increased to versus full-year, closer to

income in generated investments. increase versus loss in $X.X In million first namely earnings. a gross $X.X $X.X of of $XX.X and margin, quarter, a same GAAP be a million $X.X last offset R&D rise $XX.X million to several driven volume by $XX.X intangible million million turning increase The net mix, a in sales the decrease a in decrease year. period amortization spending, improvement net related a can increase Now was recorded to increase a in income equity on partially million and a Company in in net of million the increase attributed factors unrealized in the million loss This revenue and million SG&A to $X.X taxes. $X.X expenses, by of

and $X the first per adjusted of first shows GAAP Company share non-GAAP fiscal XXXX. diluted the earnings reconciliation EPS. XX posted for versus of diluted $X.X Slide the loss of for or XXXX share fiscal quarter diluted per The of quarter

sheet. the the was balance XXXX. end fourth the of Turning fiscal Total from cash investments to decrease and which is $XXX.X the at million million $XX of of a quarter quarter

as quarter, inventory During remain chain to $XXX carry reduced result XXXX. Inventories increased long-term by in the for $XX prepare quarters at our of we debt we coming shipments million quarter $X million minimization. these fiscal million. during extra the levels Inventories will the risk of and supply

averages. COVID of are a as With recent that said, period backlog from averages, with in-line percentage historical down and inventory

$XXX $XXX million cash available our under and approximately working We a capital over and strong of continue to investments facility. with sheet million balance have

I'd with current eight provides Slide of our visibility. earnings like some XXXX our of summary highlights of presentation conclude metrics. backlog the fiscal to a

prior As guidance range setting Visibility the record in another of revised at well an from of $XXX funded over our first XXX%. million, revenue was the setting record to XX% quarter. increase positioned we and With Wahid XXXX mid-point is for record end revenue the of mentioned, are backlog, quarter FYXX a year fiscal our fiscal XXXX. our backlog growth the of

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

revenue Thanks, of $XXX strong follows. our of backlog orders fiscal Kevin. of growth. million anticipate $X.XX million million million. and in million investments This XXXX of With diluted very between for quarter, anticipate EBITDA XX% of after $X.XX $XX $XXX Net to revenue. and as due share. R&D and we're about between $XXX a guidance increased adjusted increasing a We or per strong unchanged We $XXX year first support guidance primarily non-GAAP is $XX remains representing at our income million to to record

$X.XX Non-GAAP share. earnings also guidance remains per diluted $X.XX unchanged and between

be to We of expect year. R&D fiscal revenue investments closer XX% this to

As XX% each a occur to reminder, fiscal revenues distribution roughly half expect we expected a balanced more with revenue new of of this year. in

have now midpoint the to revenue of nearly guidance. We XXX revised our visibility

in ability we're factors as to there with items. scale long our While to are at also numerous working guidance, to lead play. our we are well needs suppliers confident their achieve our overall results. growth securing come. match company includes line well business higher This positioned the margins should deliver years growth in making also to XX% year this remain We for continued position revenue, bottom nearly in and improved The investments to as

trends is fiscal could most While confidence a the battlefield platforms resolution nearing defense contract than overall towards geopolitical with timing. regularly of future, well U.S. our its of now We, significant greater environment the mindful that that year. support government as continuing not, as the use were is the more assume unmanned likely which end contractors, as in impact

AV that services. and for say support systems remains given would optimistic unequivocally fiscal I our broad However, year our XXXX about

prioritization particularly the provide contested to continue will mission in administration of supply, necessary for operations. current systems budget critical type unmanned the we believe the We environment dollars and

We are in-demand developing and offering solutions forefront autonomy, automatic recognition tracking. the and target at for of

and investing In Loitering are where addition, well in we positioned more is the to small thrive. systems unmanned U.S. DoD Munitions areas

Now let once again from key summarize call. me the today’s points

we to first which XXXX. quarter a fiscal provides First, year results, start delivered solid record

for reflecting funded record levels, our at backlog global historic demand strong solutions. Second, remains

have opens the ever overall, the of Tomahawk for across the growth XXXX begins business Congress fiscal avenues history positioned fundamentals continue as we're will Robotics laying than year solutions of to in And our trajectory growth they outlook acquisition product Third, interconnected new budget. our groundwork and look for the further unmanned portfolio. our the and improve better our for well fourth,

goes Directors bring would during capabilities. down And our our market deployment her service saying. instrumental to questions, over new excited especially my Admiral always, AV. as years and is Indo and Directors. extensive Board turning operations of call unparalleled for the professionals, defense she eight we to edge knowledge we're brings dedicated workforce to he meeting. future Phil the company's will Davidson of the were Before I Davidson Phil in to for tenure. to Board a team and also our forward appreciation welcome not to leading as upcoming her of we on position look strategic interest success such Without Her to without by We passion of that our in have annual stepping of theatre our the at and cutting talented thank Katharine advancements the Paycom would Admiral enjoy today. powered like vision to also the Marigold battlefield our technological of council

all our long XXXX The stakeholders our to do We will appreciate other investors fiscal day the year new drive believe and as future in heights. we standing continues look to we just bright every employees company company. and the

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

[Operator Instruction].

the Our from from of comes line Gregory first question Konrad Jefferies.

is open. Your line

Good and great evening quarter.

Thank Greg. you,

Maybe to quarter the outlook. been revenue just quarter, raise about risk one for there driving retirements? last you in. year? pretty it I and It's since big talk that start just what's outlook of mean, just Can kind changed some revenue a Is the outlook, on better has the maybe orders what's

Sure.

year pleased the first very first raised Greg. XXXX. quarter, for our performed There factors the first we've company. guidance why with and One historic is, on are several is this out how a we first for So, we're quarter, our quarter, our had great full team tremendous fiscal quarter

XXX%. historic also, we achieved a midpoint record And as QX. at our to our backlog, visibility have you that we at another guidance our then the of this a Second, is of levels record is saw, top nearly revised on

strong our and long range us achieve can to provided. the items, can to able secure lead fairly we at based guidance that at position this that we revised inventory ability on for we look time, feel be that you So, say and

I in inflection demand point defense it solutions very small is systems. abroad of the The aerospace healthy, for remain a unmanned and domestically when to both and think And industry whole comes

As the we last in two Munitions, a which distributed architecture invented decades. Loitering have as warfare essentially both categories, over of well the marketplace as

So, we're we that we to seems revenue positioned to this on we should outlook the well. line strong and, able our raise extremely higher fiscal beyond The even be achieve felt of to very guidance at levels that time, demand XXXX top the provided. be

just maybe then follow-up. a And

Progeny a hardware Tomahawk hardware? had about talk software you software think the and And kind view can more into from integration? you side the more addressable get versus and how expanding to that of as of you little market shift maybe bit, kind about you If control how you and just kind of the

There's highlight. to robotic to small, control robots, the remarks, and want glad One, be war question, for by it's control to are the medium, a here. and devices etcetera, trends difficult many, etcetera. many on It Tomahawk. mentioned stations fighter very etcetera, I'm ground becomes past, for systems, know the asked extra-large, are to to in able when which multiple because fighters way products you Loitering very the work reasons years. I an Sure. why as decided and we Greg, with important acquire that There my Munitions, ground tablets have customer talents carry and overall several UAVs. We point multiple with Progeny a overwhelmed very, are very well. Systems. many the reasons key really to them we few make their the I war known so large, the we It's to technology, similar

any customers, integrate of in what only able systems, battlefield to AeroVironment does, simplify life not a fighter. meaning robotic simply to be brand robotic of war allows to it but systems, So, the our together the also other Tomahawk

we also investing that, been enables In which whole a and enabled features well. AI bunch addition investing they're as in and of it to have technology,

extremely the well see AeroVironment witness category to that denied So, known area every GPS been battlefield not well and offering continue on this that one in we've years. thing in positioned we're Ukraine, expect has And day our is that and environments, for investing we autonomy, ones that we in operations, this really that. like about contested investing several been of

accelerate it and well to does, Tomahawk helps the better adoption and what So, need, customer's us meet than deployment that anybody.

So, allows and we a grow allows UAVs. and when in environment customers we're call their are faster value to this simplify further quarter. it's Obviously, to our acquisition. It order several they're us us signed more going multiple growth reasons just to to operating what deliver ecosystem and to there and close I

more it at color We expect financials to that on time. this close quarter we'll provide the and

Thank you.

Greg. welcome, You're

moment one next And question. for

next Our the of Peter from Baird. line comes from Arment question

open. line Your is

Yeah, results. thanks Wahid terrific afternoon, and Good much. so Kevin,

Peter. Thank you,

And a we've mix just the think question I on for in just the of of ever seen report, Wahid, have quarter products. the a don't -- you just kind XX% I'm just throughout this versus hitting kind is just how well about year, thinking product? what expect we wondering, given of is record forward just going should your this backlog new service levels,

yes, our as in said it's that higher it all a of I customers. majority we percentage products of in not products we we product sell in because a item, R&D more them to my in them, as justified the we enjoy you of be sales as Peter, a that as in our QX. know, because we favorable them, our commercial to and invest invest margin, regard, gross towards as expect revenue and And as generally our it remarks, product mix was

gross for we of be expect more for revenue favorable than mix this product year, the margin fiscal towards percentage So, year of and the XXXX. remainder services to the sales

backlog, you're you the backlog, record you've a FMS the opportunities seeing been the able about on how the in we the of activity the, just then and but UAS the, had forward? expand just FMS I Switchblade available how And huge helpful. little talk you've know the That's countries for. is think that about maybe installed bit there. a can is internationally, to going category small that And, base course, activity

Sure.

is growing and call. phenomenal over that our Many last yet, quarter. remain, of, maybe next or at the been not backlog be of allies backlog, in well working million XXXX. as how by quarter to our Loitering and in is built backlog. And almost Munitions. we several another earnings that overall, as We entering we've know, a mentioned It this orders on record $XXX our for first cases So, record We increased level I XXXX, FMS had terms beat from fiscal actually you securing even in that a quarter beyond performing believe our many additional contract quarters fiscal again.

more We countries orders contracting that the they will and and these, Munitions. they the see have Loitering placing demands for needs have

exclamation The systems Ukraine Russia. on of a near are kind put has Loitering peer conflict The and that essentially mark an how with effective facing Munitions conflict. and Unmanned one important small for a they are

beyond So our saying things. This we value acquiring this systems point vital something sorts work proposition We've been I go time. requirements is that's I needs starting and think that have inflection this this our long years incredibly company. to in and for a solution. that a very an we is into as for and been multiple of hard as our those believe their for And of believe We accelerating that realize are customers now.

short, in strong very backlog for So year. this is

It's many progress little help built, a contracted that's the pipeline in Those us a We whole very believe fiscal to but not will And throughout expect and to FMS cases to XXX the be going contracted I remain XXX, Switchblade that year. that be remains we year, strong as for additional yet. future. which longer, future take this years. in being cycles healthy throughout there's

it. Appreciate Thanks.

Peter. welcome, You're

from next Herbert from moment comes Ken Thank RBC. of question. And question the line our for One you. next our

open. is line Your

versus I or Yeah. other U.S. backlog customers Hey, and it Good the growth to direct question in could domestic I see maybe backlog Ukraine out the much on afternoon. aid ask Wahid. to of start possible U.S. a Is if is international parse again. opportunities? with out wanted to maybe how

unfortunately, I'm the say what sensitivity, strong really our in of our could I to into that and business in not what, able I is general, colors customer but Ken, backlog is backlog three further of of because segments. deeper all go the

segment. Munitions Works Our and Unmanned our our segment, Systems MacCready segment Loitering

in them. have all we significant of growth So, seen

The requests AI for only an sell Munitions because to case, international government, DoD all so through up the the backlog made decided we cases U.S. to U.S. U.S. is sell army. Loitering FMS or for those far primarily those including opportunities, has FMS coming through U.S.

the So and I'm in both mix our that and U.S. office comment really a way amounts of to or board. stay specific U.S. customers that the next around have systems them area because and going able is hopefully of believe not be to customers Switchblade been the international as the on beyond, the handles year it's sensitivity of broad. world that of remains the domestic army. to And But well. it's that The family and the across the pretty customers. I we our for healthy foreseeable contracting conflict of contract this for has and that military

because And of year on you nearly half and second basis. years to half primarily backlog one based our to level the of Because, we'll as and our build be continue to between load goal, backlog. I fifty-fifty we last several That's to could quarterly our first our of fundamental momentum priority said, revenue as continue to this see, our build a expect on also year,

on That's Vaso press of you I maybe but of of parts a be you're how government how the new the Marine about and and Corps meaningful well in fiscal and some you? these, within how starts talk if there's been they just Wahid. U.S. or around U.S. you can United the can could, States recently talk the for some And program perhaps you from efforts, these not much ‘XX positioned competitions it'd army whether newer other lot of others. the sure about with great. could newer I'm Thanks, or and believe be some the ‘XX replicator

So, these you for of terms in large, relevance I with the DoD. priority could U.S. more very Ken, high not focus areas the agree of

been been all tracking these. of that's You customers by our engaged We're a announced recently We're with Army. U.S. couple, closely. mentioned Lasso the very

their the customers to energy of can making an we One problems very, the better sure a is things that solve very anybody. pride we're lot way that than ourselves so our close that intimate possible best spend we of we

as And of some on are I squarely robotics. business pure can unmanned systems when has comes we portfolio the There's these play and that the the that planet area it that requirements as this think of around offering our of focused no to one a are a breadth and depth player.

of was acquire system. customers, is recently is the around several Pentagon, to DoD are that very replicator, by over example of U.S. next which of specifically, our much the just type focused much looking the and defense capabilities sort announced DoD U.S. very So, another years the that's

positioned we we're really not able customer's of course, that, details will to sensitive because in I and now to right I'm be well. business. quite it's these of to our early disclose think able and operations I The So, believe opportunities. participate

Thanks, Wahid.

Ken. You're welcome,

Thank And will from moment line Bryce from next the come question. question William of for Blair. Sandberg One our next you.

Your open. line is

Good Jonah. and Kevin Wahid, afternoon.

afternoon. Good

this referenced nearly is you $XXX Do you able Wahid, how fully Puma IDIQ the expect million renew contract? drawn. to to Ukraine be

So, is we on additional the answer are engaged already contracts.

of same amount? Ukraine. So the same going answer be yes. for and there's No. exact a exactly the our to But contract demand of the Is short definitely lot is for it type system

they a the fulfil DoD critical Switchblade U.S. defend with and workhorse public system very I all additional of in basis. the very, going their that statements Ukraine us engaged that's mentioned are several defend systems independence those our so on and that that U.S. There one requests for we DoD close believe systems our I Ukraine able needs working see to continue, Puma to be you and Ukraine our know, appropriate. are very family is to is far. them is has many as regular as against with and also their made As the nation has before, helped their capabilities

reflected see, As of also fact, backlog can is today. you some in our that

more and effective in include how backlog fighting expand platforms as inflection our move does countries, well of strong point. forward have their are as systems, the next they're for and with the systems to to small that more grow think much quarters and much want do and types So, I in other that, continue of because which I Many expand of these additional expect Russia. conflict said, what including an to than less UAS orders as over several trying they're far our to I more Munitions. more expensive unmanned Ukraine, they're we as But Loitering there's

Thanks, Great. Wahid.

welcome. You're

Skibitski you. Pete line Instructions]. question from And comes Alembic Thank [Operator Global. the of our from next

Your line open. is

guys. quarter Nice

Pete. Thanks,

guess, update in chain Wahid, touched Can you're what with are extended? you're as opening ramping any supply terms GUIs, in volume comments, issues I times your you issues. lead of, think, I you components having you're whose that other on us seeing

indicators guidance guidance gave, Pete, we're So, we're believe in today, achieve on that on confident going that based to pretty line. able the we revised the our we're the revised we be increased to -- top

our his DoD We extent, we have pretty because primarily some long secured much our as high U.S. intentionally very have lead well to raised as our items. high. in of urgency, and Kevin remarks, systems of in our inventory mentioned are as And allies sense most our but levels demand is within

systems. the deliver like they us, would As to they contract soon us as with

of the it So, it's entire game call sort a of well [whack issue. never (ph) supply managed chain week, new the some The the is and But perfect of, overall, every a a years Every mole] have game. throughout chain etcetera. supply constraint, a day, COVID handled this we pandemic, I there's extremely a this situation.

in every address good fiscal good we've things. for that try XXXX, day So, but a very of done managing and to we challenges and arise them. those job overall, we're really position. actually And a there's

are do facing, to of suppliers. and their for many strategic some our need smaller we has have sure bottlenecks. they've manufacturing or doesn't something over bring production us to production we to with revenue got And And with parts we're we don't them it the that And also the the we increase their up grown years. make And to overnight. to supply that two Another of our that is there, that any manage chain only scale also capacity, our last part, this and effort three considerably have growth, working to in make them that operations. challenge capacity sure we're making not that the in we their up that requires is happen sure of and are tackling are

as I to made we've priority years. we And on for able see a that team with growth concerted three deliver four And and as that the and starting a dividend the pay the been for effort we've think to, very making, progress as is and that our ourselves is of a to us and kind last achieve a I'm to our for focus it to for that team focus pleased Company leadership shareholders.

Tomahawk it's, maybe other question on why with young, one this some old. And Only appreciate an ongoing arrangement? or buy right? of me, buy five Why guess It's fairly I IP team systems, level my whole would deal, other pulled -- years basis share you from would competitors deal? thoughts would this their comfort this them so company. trigger It's the them is Okay. time instead Can on that on have it. business last is -- ground that of have why that. a have area hard it you to control the on high you your a I overcoming

Sure.

One, a So we've them in Pete. their very and we've known And for known as many, that's good since days, question, them you years. many founding fact. said,

personally objectives customers. I allows is well a one time. we our known course, why did our for accelerate and industry, reason to long it as through of because founders, for achieve as that the this faster the ourselves growth The us for So, of

the architecture down treatment system, unmanned selecting the the open of the the their level about customers, we with of to already more chosen As preferential won't And systems an independent the war Tomahawk and of company, mission to priority be to path most end while like as and go customers they as the fighters. it's manned connect day, at us, our multiple devices. of continue we have because of work would all getting

are for So sure a you tanks, to armored warfighter. for that a there picture UAVs, the where think battlefield robots, make operating provide common you about USVs, and the vehicles, etcetera, operator, ground need

brings lot also a and and introduces And them integrates and them things so, set. it what does connects those all Tomahawk it of predictive feature AI

the terms for was faster those So go. to that our also technology order in acquisition in and capabilities to we better our investments, customers product deliver deeper us way of roadmaps, the felt integrate to

we’d more I would to it's like Tomahawk talent. Florida talent. Robotics say our primarily lastly, growing that is and terms in of And of also based to access we're get an out area

So customers. their our outside site us they're workforce Florida expand to to allows our of in California where and closer areas

So years growth IT, to their there reasons, come. base, customers, our are their product, their to progress ability several in as with well the their as support talent

decision is So, or shareholders. outcome customers. It's a strongly good great this Company I feel our for really very that our for a also

the Tomahawk positive controller which it most far unmanned ubiquitous best, systems common the advanced very and is So by feedback has to be provider, system from AeroVironment, with solution technology an integrated most us for the enabled positions the AI been basically to our marry customers.

all the color. Thank Okay. Appreciate you.

welcome. You're

with further any like turn Jonah Thank in closing And no the for Teeter-Balin you. I'd to to call questions back the over remarks. queue,

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

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

participating. today's concludes conference for you Thank call. This

now may great have disconnect. a You Everyone, day.