AeroVironment Inc (AVAV) Reports Record Q2 Revenue and Raises FY2024 Guidance
AeroVironment Inc (NASDAQ:AVAV) announces a 62% year-over-year increase in Q2 revenue.
Company's gross margin jumps to 42%, with net income reaching $17.8 million.
Funded backlog grows to $487.0 million, up from $424.1 million at the end of the last fiscal year.
AVAV raises full-year revenue and earnings guidance, reflecting confidence in sustained demand.
On December 5, 2023, AeroVironment Inc (NASDAQ:AVAV) released its 8-K filing, announcing financial results for the fiscal second quarter ended October 28, 2023. The company reported a significant increase in revenue and net income, alongside a strong funded backlog, indicating robust demand for its products and services.
Financial Highlights and Performance
The second quarter of fiscal 2024 saw AeroVironment achieve the highest second quarter revenue in its history, with a remarkable 62% increase to $180.8 million compared to $111.6 million in the same quarter of the previous fiscal year. This surge was primarily driven by a substantial increase in product sales, which rose by $83.4 million, despite a slight decrease in service revenue.
The company's gross margin also saw a significant boost, climbing to 42% of revenue, up from 23% in the prior year's quarter. This improvement was attributed to a favorable product mix and a decrease in depreciation charges related to the closure of COCO site locations during the previous fiscal year. The gross margin was impacted positively by $7.1 million due to this decrease, although it faced a $3.2 million hit from intangible amortization expenses.
Income from operations turned around from a loss of $14.3 million in the second quarter of the last fiscal year to a gain of $25.2 million in the current quarter. This was primarily due to the higher gross margin, which offset increases in research and development and selling, general, and administrative expenses.
Strategic Developments and Outlook
AeroVironment's chairman, president, and CEO Wahid Nawabi commented on the quarter's success, stating,
Our results exceeded expectations, underscored by the highest second quarter revenue in company history combined with strong bottom-line performance."
He also highlighted the successful acquisition of Tomahawk Robotics and the company's progress in integrating AI and autonomy applications across its portfolio.
With a solid backlog and the addition of Tomahawk Robotics, AeroVironment has raised its revenue guidance for fiscal year 2024. The company now expects revenue between $685 million and $705 million, net income between $45 million and $51 million, and non-GAAP adjusted EBITDA between $119 million and $127 million.
Balance Sheet and Cash Flow
The balance sheet of AeroVironment remained strong, with total assets increasing to $1.006 billion from $824.6 million at the end of the last fiscal year. The company's cash and cash equivalents stood at $100.9 million, down from $132.9 million, reflecting cash used in operations and investments, partially offset by financing activities.
Net cash used in operating activities amounted to $25.6 million, while investing activities used $37.6 million, primarily due to business acquisitions and the purchase of property and equipment. Financing activities provided $31.5 million, largely from the proceeds of shares issued.
Conclusion and Investor Relations
AeroVironment's strong performance in the second quarter, marked by record revenue and a solid increase in net income, positions the company favorably for the remainder of fiscal 2024. The company's strategic acquisition and raised guidance reflect management's confidence in AeroVironment's growth trajectory and its ability to capitalize on increasing demand for unmanned systems.
Investors and interested parties can access the conference call and supplementary investor presentation via AeroVironment's Investor Relations page. For additional information, contact Jonah Teeter-Balin at +1 (805) 520-8350 x4278 or visit AeroVironment's contact page.
Explore the complete 8-K earnings release (here) from AeroVironment Inc for further details.
This article first appeared on GuruFocus.
