AeroVironment Inc Q2 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Peter Arment - Robert W. Baird & Co Inc - Analyst : Hey. Good afternoon, Wahid, Kevin, Jonah. Wahid, can we dig in a little bit on the uncrewed category? This is, I think, the lowest revenue quarter that you had that in the last, I think, like eight quarters. So maybe just -- can you describe what you're seeing from the demand environment there? And -- because I guess we're not really expecting any revenues from P550 maybe this fiscal year, but it seems like it's going to be a great product for what we saw at AUSA. Just what can you describe about what you're seeing? And how do you think you're positioned in that category?

Question: Peter Arment - Robert W. Baird & Co Inc - Analyst : Okay. I appreciate the color there. And just as my follow-up. Could you talk a little bit about where you stand on, I guess, replicated deliveries? And if you've started to ship to Taiwan? And any comments that you can make on the protest that was put against the IDIQ contract?

Question: Peter Arment - Robert W. Baird & Co Inc - Analyst : Appreciate the details. I'll jump back in the queue. Thanks.

Question: Louie DiPalma - William Blair & Co - Analyst : Wahid, Kevin, and Jonah, good afternoon.

Question: Louie DiPalma - William Blair & Co - Analyst : Good afternoon. Have you been making progress in terms of adding the Switchblade to the Kinesis ecosystem? You discussed the very robust growth for the Switchblade portfolio as it relates to Replicator and less so and for foreign military sales. And we're just wondering how you're making investments on the software front for Switchblade. Thanks.

Question: Louie DiPalma - William Blair & Co - Analyst : Great. And along those lines, in terms of integrating Kinesis with third-party products, do you feel that Kinesis will be able to provide a common operating system for the many different BlueHalo product lines as well and tie those together with the Switchblade and the Puma and JUMP 20 product lines?

Question: Louie DiPalma - William Blair & Co - Analyst : Great. And one final one. You discussed pressure from Ukraine for the uncrewed systems segment. And we were wondering how did Ukraine impact the loitering munition segment? And just in general, what are the overall expectations for Ukraine funding and contributions to your business for this year and for future years given all the discussions of a potential ceasefire there? Thanks.

Question: Louie DiPalma - William Blair & Co - Analyst : Sounds good. Thanks, everyone.

Question: Greg Konrad - Jefferies LLC - Analyst : Good afternoon.

Question: Greg Konrad - Jefferies LLC - Analyst : Maybe just to start on international Switchblade. I think you called out three additional allies as part of that $55 million task order and also called out Taiwan and Greece. Can you maybe just remind us where you stand? I think in the past, you've talked about 20 potential customers just in terms of converting the rest of the international pipeline. And then also with the awards that you did get, how do you think about those building over time? I'm assuming those were just initial quantities.

Question: Greg Konrad - Jefferies LLC - Analyst : And then maybe just to clarify one remark you made in the prepared ones. I mean, you talked about risk due to a change in administration. 40% of H2 revenues in Q3, but said you had 95% visibility for the year. I mean, how do you think about that risk materializing? And is that captured in the current guidance? How much of that's in the order front? And how does that materialize? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 04, 2024 / 9:30PM, AVAV.OQ - Q2 2025 AeroVironment Inc Earnings Call

Question: Greg Konrad - Jefferies LLC - Analyst : Thank you.

Question: Peter Skibitski - Alembic Global Advisors - Analyst : Hi there. Congrats. Hi.

Question: Peter Skibitski - Alembic Global Advisors - Analyst : So hey, Wahid, I want to ask about a couple of Army programs that I don't think you were involved in and just maybe you can give us some context. The first was this Army short-range reconnaissance program. I think it's a program of record, I believe, Red Cat won. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 04, 2024 / 9:30PM, AVAV.OQ - Q2 2025 AeroVironment Inc Earnings Call But you guys didn't really talk about it as far as I can recall. So it leads me to believe that maybe you didn't compete for it at all. Maybe you could validate that and give us a sense of why you chose not to invest or compete there? And then I have a follow-up.

Question: Peter Skibitski - Alembic Global Advisors - Analyst : Okay. Okay. I appreciate all that color. And then just one follow-up. The other thing that we've seen over the last few months or so is the Army making an award. I think the two companies were, I believe it was for company-level UAVs. And I know Anduril, I think, got one award. I forgot the name of the other company, I have to look it up again. But this seemed to be maybe a nonprogram of record. -- I know short turnaround type of an effort maybe. Can you give us a sense for what the Army is thinking here? And would this niche turn into a program of record? And is it a threat to the LRR program? I just wanted to -- if you could give us some context. Thank you.

Question: Peter Skibitski - Alembic Global Advisors - Analyst : Okay. Thanks so much for the color. I appreciate it.

Question: Andre Madrid - BTIG - Analyst : Wahid, Kevin, thanks for the question. I know previously, you guys have called out that Ukraine was roughly about 40% of sales at some point. Could you maybe call out roughly how much attributed to this past quarter sales?

Question: Andre Madrid - BTIG - Analyst : Perfect. That's helpful. And on your final remarks on the number of countries you announced, I asked about this last quarter, you previously had said something around half a dozen plus different countries in which you're actively engaging with and in the red zone with, so to speak. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 04, 2024 / 9:30PM, AVAV.OQ - Q2 2025 AeroVironment Inc Earnings Call Where does this number stand out now? Have there been additions with some of those that we've seen finalization with? How should we think about how many we have in the red zone right now?

Question: Andre Madrid - BTIG - Analyst : Really appreciate the color. Thank you, Wahid. I'll jump back in the queue.