AeroVironment, Inc. (AVAV) on Q3 2021 Results - Earnings Call Transcript
Steven Gitlin: Good afternoon, ladies and gentlemen and welcome to AeroVironment's Third Quarter Fiscal Year 2021 Earnings Call. This is Steven Gitlin, Chief Marketing Officer and Vice President of Investor Relations for AeroVironment. At this time, all participants are in a listen-only mode. We will conduct a question-and-answer session after management's remarks. As a reminder, this conference call is being recorded for replay purposes. Before we begin, please note that on this call certain information presented contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include without limitation any statement that may predict, forecast, indicate or imply future results, performance or achievements and may contain words such as believe, anticipate, expect, estimate, intend, project, plan or words or phrases with similar meaning. Forward-looking statements are based on current expectations, forecasts, and assumptions that involve risks and uncertainties, including but not limited to, economic, competitive, governmental, and technological factors outside of our control that may cause our business strategy or actual results to differ materially from the forward-looking statements. Wahid Nawabi: Thank you, Steve. Welcome to our third quarter fiscal year 2021 earnings conference call. On today's call, I will emphasize three key messages included on Slide number 3 of our earnings presentation. First, our team continues to deliver strong results despite the continued challenges presented by the COVID-19 pandemic. Second, we're on track to achieve our fiscal year 2021 objectives while delivering our fourth consecutive year of profitable double-digit top line growth. And third, we're successfully executing our long-term growth strategy through our recent transformative acquisitions that will accelerate our success over the near and long-term. Now let's review our financial performance in the quarter, which is outlined on Slide number 4 of our earnings presentation. We delivered third quarter revenue of $78.8 million, an increase of 27% year-over-year and consistent with our expectations. Earnings per diluted share of $0.01, increased from a loss of $0.04 in the prior year primarily due to an increase in revenue and product margin. Non-GAAP earnings per diluted share for the third quarter was $0.14, an increase of $0.15 as compared to the prior year. Our team continued to build on our positive momentum supporting our U.S. and more than 50 allied customers and simultaneously executing on transformative acquisitions. While the pandemic continued to shift some orders due mainly to travel restrictions, we're still delivering on our commitments and working toward a fourth consecutive year of profitable growth. Kevin McDonnell: Thank you, Wahid. Today, I will be reviewing the highlights of our third quarter and year-to-date financial performance. I'll be referring to both our press release and earnings presentation available on our website. Revenue for the third quarter of fiscal 2021 was $78.8 million, an increase of 27% from the third quarter of fiscal 2020 revenue of $61.9 million. The breakdown of revenue by product area is contained on Slide 6 of the quarterly earnings presentation. During the quarter, we showed especially strong performance in our TMS product line, which was up 148% from the same period last year. Small UAS was also up 37% from the same period last year. These higher sales were partially offset by lower HAPS and other revenue. Revenue for the first three quarters of fiscal 2021 was $258.9 million, an increase of 12% from the first three quarters of fiscal 2020 revenue of $232.1 million. Again, the revenue growth was largely due to the 125% year-over-year increase in TMS sales, which were partially offset by reduced HAPS revenue. Turning to gross margin. Slide 7 of the quarterly earnings presentation shows our product service mix and overall gross margin trends over the past five quarters. Gross margin for the third quarter was $28.6 million or 36% of revenue compared to $23.5 million or 38% of revenue for the prior year third quarter. The lower year-over-year gross margin percentage was primarily due to an unfavorable product mix, which was partially offset by a higher proportion of product versus service revenue. Wahid Nawabi: Thanks, Kevin. The global demand for our unique and broad set of solutions remains healthy. In overseas locations where the U.S. military has reduced its footprint, we have seen increased demand for ISR solutions including UAS and ISR services, which our MUAS product line team delivers. To highlight this point, today, we announced the latest task order award from U.S. SOCOM for it MEUAS IV program valued at approximately $7 million for our MEUAS ISR services. We have also seen increased demand from allied nations for our capabilities to help them operate when faced with a smaller U.S. military presence. Supported by 95% visibility to the midpoint of our guidance range, we are narrowing our full fiscal year 2021 revenue expectations to between $400 million and $410 million as summarized on Slide number 9 of our earnings presentation. This range corresponds to the upper half of our prior fiscal year 2021 revenue expectations. Our revised expectations include revenue from the acquired Arcturus UAV and ISG businesses and the pending Telerob acquisition, which we anticipate to close prior to the end of the current fiscal year. We expect that our full year revenue excluding incremental revenue from our acquired businesses will achieve the low-end of our prior revenue guidance range. We now expect to deliver adjusted EBITDA of $64 million to $69 million, earnings per diluted share of $0.76 to $0.96, and non-GAAP earnings per diluted share, which excludes acquisition related expenses, amortization of acquired intangible assets, and the HAPSMobile investment impairment of between $1.74 and $1.94. Achieving these results will represent our fourth consecutive year of profitable double-digit revenue growth. Consistent with last quarter's guidance, the revenue mix will result in a lower gross margin percentage in fiscal year 2021 as compared to the prior year. We now expect research and development investments to total approximately 12% of revenue for this fiscal year. Our strategic acquisitions increase the talent pool across our team and make us a stronger company with a more expansive portfolio of solutions to address a wider variety of customer missions. We have carefully selected dedicated and capable leaders to manage each of these new businesses and are confident in their ability to integrate our new team members into AeroVironment and execute our strategy for near and long-term value creation. As a result of the significant portfolio shaping, we have undertaken to position us for continued growth and success, we're now providing preliminary expectations for fiscal year 2022 based on our current view of market conditions as follows. We expect $560 million to $580 million in revenue, $110 million to $115 million in adjusted EBITDA, earnings per diluted share between $1.38 and $1.58, non-GAAP earnings per diluted share between $2.50 and $2.70, and research and development investments of around 10% of revenue. We may provide more refined revenue and EPS expectations in our fourth quarter and full fiscal year 2021 earnings release in late June after the completion of all acquisitions and associated purchase accounting. We continue to evolve our business and shape our portfolio to achieve our future stated objectives of delivering a range of intelligent, multi-domain robotic systems. The three acquisitions I have discussed today represent major steps toward achieving that future state. Ultimately, our goal is to provide the solutions our customers increasingly will rely upon to achieve their objectives and thereby advance our growth and value creation strategy. In summary, to reiterate our main points for today's call. First, our team continues to deliver strong results despite the continued challenges presented by the COVID-19 pandemic. Second, we are on track to achieve our fiscal year 2021 objectives while delivering our fourth consecutive year of profitable double-digit top line growth. And third, we're successfully executing our long-term growth strategy through our recent transformative acquisitions that will accelerate our success over the near and long-term. Before opening Q&A, I want to thank our talented team across the entire organization for their ongoing commitment to serving our customers and their dedication to doing so during this unprecedented pandemic. Thank you to our customers for continuing to rely on us to help them succeed and to our shareholders for your ongoing trust. Our commitment to all of our stakeholders remains to help you proceed with certainty. Kevin, Steve, and I will now take your questions. A - Steven Gitlin: Thank you, Wahid. We will now begin the question-and-answer session. Our first question this afternoon comes from Peter Arment of Robert Baird. Peter? Peter Arment: Wahid, Kevin. Wahid, thanks for giving us kind of an initial sneak peek at fiscal 2022. I think it's obviously helpful given all the M&A efforts that you've talked about, but obviously you had to come up with some sort of basis of what the operations would be. I think when you came into fiscal 2021 you had a 60% visibility kind of on that revenue range? Maybe if you don't want to breakdown the specifics of the acquisitions, maybe you could just talk about some of the key pieces around that increase when we're thinking about fiscal 2022? Thanks. Wahid Nawabi: Thanks Peter. Sure, so as I mentioned on my remarks, this will be the fourth consecutive year of profitable double-digit top line growth and our core businesses before the acquisitions are also within our guidance range. In terms of fiscal year 2022, given the significant positive impact of these acquisitions on our business, we believe it is very helpful for our investors to understand how this will translate into our next fiscal year's anticipated results. So, for that matter, we figured it will be helpful if we could provide some level of clarity as a preliminary outlook for next year. In terms of the overall visibility, we will provide that in amongst other details as we always do on our fourth and full year fiscal year earnings call late in June. What I can tell you is, that across our business, demand for our solutions, both domestically and internationally remain strong. These three acquisitions coupled with our existing portfolio of solutions and positions really, position us incredibly well for a very large set of long-term growth and opportunities and value creation opportunities for us. So we're delighted, these are very deliberate and very carefully selected moves that we've made and I firmly believe in the long-term value creation opportunities that these will provide for us and the value that it delivers to our customers' missions, Peter. Peter Arment: Thank you for that. Just as a follow-up if I could on, just related to the Switchblade 300 to the first allied nation. Obviously, we've seen in the past how you've been able to just kind of continue to expand the opportunities with your core UAS platforms internationally. Does this follow a similar path or is it something different just given that it's a loitering ammunition and how do you expect that to kind of be adopted? Thanks. Wahid Nawabi: Sure, thanks Peter. Yes, the short answer is, absolutely yes. As I've said before, first and foremost, the international market adoption for our Switchblade - the entire family actually just not the Switchblade 300, but now also the expansion into our Switchblade 600 and other variants definitely represents - equal if not larger opportunity for us globally, internationally outside of domestic markets. We are extremely delighted that after a very long many years of hard work that we were able to achieve - successfully obtaining an export license for an allied nation for our Switchblade 300. We are not in a position to be able to disclose the name of that customer for sensitivity purposes, but this is absolutely a paradigm shift in terms of the future of our TMS business and this disruptive capability that we brought to the market. We also are engaged as I've said in my remarks with multiple other allied countries. Obviously, these things take lot time, but I think that the opportunity is great and our team has been incredibly good at executing our plans as we have said before. So, we look forward to updating you in the future on that. Steven Gitlin: Thank you, Peter. And our next question comes from Pete Skibitski of Alembic Global. Pete? Pete Skibitski: Good afternoon guys and congrats on all the - accomplishing all the hard work this quarter? Wahid Nawabi: Good afternoon. Thank you, Peter. Pete Skibitski: Just wanted to ask a little - just a follow-up on Peter's questions, for both fiscal 2021 and fiscal 2022 in your revenue guidance? Are you assuming kind of some incremental - you touched on this Wahid a little bit in your opening remarks, but are you kind of assuming some incremental headwind from international small UAS? Wahid Nawabi: Actually, what I mentioned in my remark, Pete, is that in general, primarily because of the COVID pandemic and the restrictions that it has placed for our domestic and international customers to travel, to come for acceptance tests and flight demos and do trainings, we have seen some delays because of that restriction in terms of contract timing. We've seen some in our supply chain, but we've really managed all of those and mitigated them extremely well. I'm very proud of our team's achievements in that regard. Going into next fiscal year, we have a very healthy pipeline of opportunities internationally for our small UAS. No doubt that the change in the U.S. posture and the drawdown of our troops has also motivated our international customers to take a harder look in terms of equipping themselves with ISR services and capabilities to sort of make up for that. So I think that going into fiscal 2022, we have a very healthy pipeline of international opportunities that's pretty diverse and robust in terms of size and volume of customers as well. And I don't see any major issues, especially if we can get this pandemic behind us, sometime hopefully towards the end of the summer or so. But in general, we've seen some delays and overall, pretty good, pretty healthy demand overall. Pete Skibitski: Okay, great. I appreciate that just one follow-up. Just on the HAPS, it sounded like the test events are coming along nicely. You're going to make some improvements. Should we expect kind of a new contract at some point for kind of the next kind of uprated in the next couple of quarters or so? What's the right way to think about that? Wahid Nawabi: Yes, so as I mentioned on the remarks Pete that, both companies are committed to the long-term value creation opportunity of the HAPS and what value it brings and how large of a multi-billion-dollar market it is going after and attacking. In terms of the short-term, we are working with our partner. We've had five consecutive successful flights as I said, and we have an enormous amount of learning from that. There is tremendous amount of data that we've collected all of which was - our original plan to incorporate into the building and designing of the next generation of that airplane. It's very, very natural in terms of the development exercise and progression of that. So, we are working with our customer to figure out a way to either augment the existing contract or put in place a new contract to continue to work. We do not foresee any disruptions there short-term, but obviously, we're entering a phase where we're going to be continuing to improve the product and prove its certification chances and improve its ability to be able to manufacture it more reliably and cost effectively and we'll keep you updated. And I'm very proud of the team, again, despite the COVID pandemic, how well we've executed throughout these difficult times this very critical program in our business so far. Steven Gitlin: Thank you, Pete. Our next question comes from Ken Herbert at Canaccord Genuity. Ken? Ken Herbert: Wahid, I wanted to just first ask the guidance - the initial look at 2022 implies some nice margin expansion, but does the guidance imply maybe a step down in the margins with the contribution as a percentage from Arcturus as you have that for a full year? Wahid Nawabi: Hi, Ken. I would say that we're very, very delighted with the potential outlook for fiscal 2022, both in terms of our core business and on the acquisitions. Overall, I would say it's very much in line with what we expected. And the progress that we're already making so far with both MEUAS IV program, which we announced an award, a $7 million award today and a very successful demonstration that we did for the Army's FTUAS program. So it gives me a lot of confidence that we're positioned extremely well. Keep in mind, these are strategic long-term moves and acquisitions that we've done. Not only are they actually bringing and delivering incremental significant both top-line and bottom-line EBITDA improvements in our financials, but they also represent a very large opportunity long-term, you know, billions of dollars of market opportunities. The MEUAS alone represents over a $1 billion market opportunity for us. So, what we're trying to do is we just closed the acquisition. We're engaged with the team. Everything that we're engaged with them so far looks quite good, but there is a lot more work to be done and we'll keep you updated throughout next quarter as we go forward. Ken Herbert: Okay, that's great. And if I could, just a follow-up on the FTUAS, what should we expect in terms of the next milestones or timelines? And can you give any more sort of any more detail around the demo flights a few weeks ago and how the system performed? Wahid Nawabi: Sure, so this was actually a formal invitation by the U.S. Army to conduct a demonstration. All the key selected players to come in and demonstrate their capability. This was primarily to see how far along and mature the solution sets are from various competitors as well as to inform them in terms of the requirements that they're going to sort of finalize and conclude before they actually really hold the competition in terms of a formal RFI or RFP. They haven't announced any specific milestones as a result of this so far. It is a longer-term program, which I believe it's expected to be able to be awarded within another year and a half to two years, but in general, what really impressed me and what I'm very pleased about is that our solution set performed extremely well despite the very difficult challenges in terms of the environmental conditions, wind conditions in the scenarios that the customer obviously creates for us. We believe that our team and our system really performed well. So, that is a fairly positive sign for us that - at least positions us quite well. We still have to compete and we are no - we're not unfamiliar with that. We're very familiar with that, but I think we're positioned quite well. Steven Gitlin: Thank you, Ken. Now, we'll turn to Louie DiPalma at William Blair. Hi, Louie. Louie DiPalma: Over the past three months, there has been increased investor appetite for next generation space technologies. Many investors view AeroVironment with Sunglider in this next-gen space category? Can you discuss the competitive environment for Sunglider and how your aircraft stands versus others that are pursuing the same type of HAPS aircraft? And on this topic, do you have specific patents on the aircraft engineering that will prevent like other aerospace giants from attempting to copy what you have done after you've been doing what appears to be all of the heavy lifting and like certification process? Thanks. Wahid Nawabi: Louie, so great questions, let me address both of them well, one at a time. The first one in terms of the competitive landscape and the value proposition of our Sunglider versus all the other near space alternatives and competitive platforms, I can tell you that both our partner, strategic partner and ourselves feel quite confident. This is a space or a category where AeroVironment has an enormous amount of track record and successful experiences which is unmatched in the entire industry and the world. There is nobody that I know of that has achieved as much as we have and as much progress we've made so far as we have in the space. We also feel very strongly about the competitive differentiators of Sunglider against not only other solar HAPS platforms, but also other competitive alternatives such as balloons or micro or geosynchronous or LEO satellites. And we really believe that HAPS has a compelling value proposition in that space. In terms of patent and our ability to sustain that differentiated competitive advantage, it is fundamentally part of our strategy from the beginning to defend and have a competitive advantage in that area. We have numerous, numerous patents from past as well as from the last two to three years' work that we filed both jointly at HAPSMobile also separately with AeroVironment. So there are a number of patents that we have in terms of the design of the architecture, the constellation, the different subsystems of the airplane, the way it actually even provides communication et cetera, et cetera. So if you like, we could provide you with more details in a separate discussion later. But in general, these are stuff that we file publicly and they are available and we feel very good about our competitive position, in terms of us versus all the other players who claim that they can compete in this space and we welcome that competition. Louie DiPalma: Thanks, Wahid and I also wanted to say congrats on the Switchblade export approval. That is something that many investors have been waiting for a long time. And my last question is, does the preliminary fiscal 2022 guidance assume any contributions from those three program competitions that you referenced like such as the Telerob explosive disposal competition, the long-range precision fires mounted or the FTUAS, like are there assumed contributions from those competitions in the forward guidance? Wahid Nawabi: So Louie, we will provide you with a lot more details in our next earnings conference call when we go into detailed summary of our outlook for fiscal year 2022. We believe that the current preliminary numbers that we provided you because of the significant strategic moves that we've made that has an impact on our next fiscal year. We felt that this was - this level of visibility at this time was critical for shareholders and analysts. In general, I can tell you that we have a very large portfolio of opportunities, both in our core businesses and in our acquired businesses that we're integrating with the rest of our businesses. Our position in the space is incredibly strong. Our breadth and depth of our portfolio of opportunities is pretty large and diversified. We're very fortunate to have access to such large opportunities at various different ends of the spectrum. And I believe that we're uniquely positioned against all other competitors in the space to provide a multi-domain, intelligent robotic system solution coupled with AI and autonomy and artificial intelligence capabilities. So, as you saw from our comments, revenue range of about $560 million to $580 million is a significant growth on our current numbers. And obviously, a very strong growth in our non-GAAP earnings per diluted share going all the way up to $2.50 and $2.70 range so, we look forward to providing more details on the next call. Steven Gitlin: Thank you, Louie. . And our next question comes from Joe DeNardi at Stifel. Good afternoon, Joe. Joseph DeNardi: Wahid yes, sorry to kind of beat this one to death, but I think it's what - folks are kind of focused on a little bit. And just to clarify, you said that absent the acquisitions, you would have come in at the low-end of the FY 2021 revenue guidance, is that right? And then can you just quantify how much organic revenue growth is implied in the FY 2022 guidance for us? Wahid Nawabi: Joe, as I said on my remarks that yes, if you look at our original guidance that we provided at the beginning of our fiscal year 2021 about a year ago from now. Our organic businesses, our core businesses that we referred to it as that would still be within our guidance range although on the lower-end. Again, that's a - there is a variety of outcomes at any given time that we look at that gives us a probability of - risk-adjusted probability of where we think we're going to land. With these acquisitions, although one of them are still not closed, but we expect that to close this quarter, which is this month. We still believe that we're going to be within our guidance, but at the upper limit. So, we're very pleased with that. One of the things that has affected us, and as I've said throughout the entire year is that this pandemic has had some timing delays on the actual timing of these orders. We have a very healthy pipeline. We're involved with lots of different customers and opportunities across our entire portfolio. We've got a pretty significant quarter which we're ready for and we expected as we planned and we look forward to delivering that. So again, this will be a fourth consecutive year of double-digit top-line profitable growth. And I can't think of another company that's positioned so well as we are in our space for the long-term value creation opportunities that we have in front of us. The size of the markets, the breadth of our solution, the ability for us to solve our customers' problems end-to-end is really, really unmatched in the industry. So, we look forward to that for the long run. Joseph DeNardi: Okay and the organic revenue growth implied in the FY 2022 guidance? Wahid Nawabi: We will be providing those details, Joe, as we said on our fourth quarter and full fiscal year earnings conference call coming up in the next one. At this point, we've provided the amount of preliminary information that we can based on what we see. Keep in mind, we still haven't closed one of the acquisitions, we still haven't finished this year, which we intend to do and deliver on our commitments and our expectations and look forward to another year. And again, the amount of progress we've made on our key growth initiatives is remarkably impressive based on what we've done so far given all that headwinds with the COVID pandemic, change of administration, change of political parties in terms of power in the Congress et cetera, et cetera, but we're - in a good position. Steven Gitlin: We have no further questions at this time. And so, we thank you for your attention and for your interest in AeroVironment. An archived version of this call, all SEC filings, and relevant company and industry news can be found on our website avinc.com. We wish you a good day and look forward to speaking with you again following next quarter's results.AVAV Ratings Summary
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AeroVironment Shares Gain 5% Following Q4 Earnings
AeroVironment (NASDAQ:AVAV) stock surged more than 5% intra-day today after the company reported its Q4 earnings results, with revenue of $186 million beating the Street estimate of $164.97 million. EPS came in at $0.99, compared to the Street estimate of $1.02.
The company provided its full 2024 year outlook, anticipating EPS to be in the range of $2.30-$2.60, compared to the Street estimate of $2.04, and revenue in the range of $630-$660 million, compared to the Street estimate of $600 million.
CEO Wahid Nawabi expressed confidence in AeroVironment's prospects for strong growth in fiscal 2024, citing the company's record-setting revenue and backlog. Although AeroVironment was not chosen to move forward with increment 2 of FTUAS (Future Tactical Unmanned Aircraft Systems), Nawabi emphasized that the company's current position bodes well for its future. He stated that AeroVironment has never been in better shape in terms of its future outlook than it is today.
AeroVironment Shares Gain 5% Following Q4 Earnings
AeroVironment (NASDAQ:AVAV) stock surged more than 5% intra-day today after the company reported its Q4 earnings results, with revenue of $186 million beating the Street estimate of $164.97 million. EPS came in at $0.99, compared to the Street estimate of $1.02.
The company provided its full 2024 year outlook, anticipating EPS to be in the range of $2.30-$2.60, compared to the Street estimate of $2.04, and revenue in the range of $630-$660 million, compared to the Street estimate of $600 million.
CEO Wahid Nawabi expressed confidence in AeroVironment's prospects for strong growth in fiscal 2024, citing the company's record-setting revenue and backlog. Although AeroVironment was not chosen to move forward with increment 2 of FTUAS (Future Tactical Unmanned Aircraft Systems), Nawabi emphasized that the company's current position bodes well for its future. He stated that AeroVironment has never been in better shape in terms of its future outlook than it is today.
AeroVironment Reports Q2 Miss, Provides Guidance
AeroVironment (NASDAQ:AVAV) reported its Q2 results, with EPS of $0.00 coming in worse than the Street estimate of $0.20. Revenue was $111.6 million (down 9% year-over-year), missing the Street estimate of $113.43 million.
Top-line results were impacted by lower product sales and service revenue primarily due to decreases in SUAS (Small unmanned aircraft systems). The company highlighted $197 million in Q2/23 bookings, with a total backlog approaching approximately $400 million.
The company expects full-year EPS to be in the range of $1.26-$1.58, compared to the Street estimate of $1.57. Revenue is expected in the range of $505-525 million, compared to the Street estimate of $510.24 million.
AeroVironment Reports Q2 Miss, Provides Guidance
AeroVironment (NASDAQ:AVAV) reported its Q2 results, with EPS of $0.00 coming in worse than the Street estimate of $0.20. Revenue was $111.6 million (down 9% year-over-year), missing the Street estimate of $113.43 million.
Top-line results were impacted by lower product sales and service revenue primarily due to decreases in SUAS (Small unmanned aircraft systems). The company highlighted $197 million in Q2/23 bookings, with a total backlog approaching approximately $400 million.
The company expects full-year EPS to be in the range of $1.26-$1.58, compared to the Street estimate of $1.57. Revenue is expected in the range of $505-525 million, compared to the Street estimate of $510.24 million.
AeroVironment Shares Drop 4% on Q4 Miss & Soft 2023 Outlook
AeroVironment, Inc. (NASDAQ:AVAV) shares closed more than 4% lower on Wednesday following the company’s reported Q4 results, with EPS of $0.30 coming in worse than the Street estimate of $0.39. Revenue was $132.6 million, compared to the Street estimate of $135.3 million.
The company provided a relatively soft 2023 outlook, which highlighted continued supply chain disruptions as a significant revenue headwind, especially in its TMS business. For the full year, the company expects EPS to be in the range of $1.35-$1.65, compared to the Street estimate of $1.75, and revenue in the range of $490-520 million, compared to the Street estimate of $513 million.
According to the analysts at RBC Capital, the demand outlook across the company's portfolio is strong, with now over 20 countries approved for the Switchblade. The analysts continue to believe the company has seen a positive inflection in the demand for its small UAS and TMS products, and maintain their outperform rating and $100 price target.
AeroVironment Shares Up 8% Following its Biggest Sell-Off in 12 Years
AeroVironment, Inc. (NASDAQ:AVAV) shares recovered on Wednesday, trading more than 8% higher in the afternoon, following the sell-off yesterday (its biggest selloff in 12 years), which was followed by the company’s reported Q3 results.
Although the Q3 results were strong, with both EPS and revenues of $0.78 and $122.01 million beating the consensus estimates, the company’s 2022 outlook was disappointing.
Much of the revenue growth was due to the 2021 acquisitions of Arcturus (February 2021) and Telerob (May 2021).
The company materially lowered its 2022 outlook, expecting revenue of $450 million, down from prior guidance of $570 million. The EPS estimates were lowered to $1.23 - $1.37. The magnitude of the reduction is surprising considering that the company had visibility on around 66% of its prior full year $570 million revenue guidance exiting fiscal Q1.
