AeroVironment, Inc.
AeroVironment, Inc. designs, develops, produces, delivers, and supports a portfolio of robotic systems and related services for government agencies and businesses in the United States and internationally. It operates in two segments, Autonomous Systems; and Space, Cyber and Directed Energy. The company provides uncrewed aircraft systems (UAS), which include small and medium UAS, and kinesis command and control software; and counter-UAS and precision strike, a loitering munitions solution that deliver actionable intelligence and precision firepower modern warfighters, including precision strike, radio frequency and kinetic C-UAS, and electronic warfare systems. It also offers autonomy, AI, and platform technologies; unmanned maritime; uncrewed ground systems; and high-altitude pseudo-satellites. The company provides digital beamforming technology, a multi-band/beam software defined antenna tile that allows simultaneous communication with multiple satellites; laser communications, a data transmission systems for space operations; space-qualified hardware for line of sight stabilization and control electronics in low, medium, and geostationary earth orbit, as well as cislunar orbits; phased array antenna technology to supports hypersonic telemetry and tracking, and other missile testing; and directed energy solution. It also offers cyber solution for national security and defense operations; and HaloCortex OSINT, an AI-powered OSINT analysis platform to provide insights and solve department of defense and commercial challenges. AeroVironment, Inc. was incorporated in 1971 and is headquartered in Arlington, Virginia.
What does it do?
AeroVironment makes small military drones and 'loitering munitions' — think of those as flying bombs that circle a target area and then strike on command. Their most famous product is the Switchblade, a drone that a soldier can carry in a backpack, launch from a tube, and guide into a target miles away. They also make tiny surveillance drones like the Raven, which troops use to peek over hills without risking lives. More recently they've expanded into space systems and electronic warfare technology.
The wars in Ukraine and Gaza have put small, cheap, lethal drones at the center of modern warfare — and AeroVironment is one of the few US companies that already makes them at scale. Governments worldwide are now racing to stockpile exactly the kind of systems AVAV sells, making this a rare defense company with real, immediate demand rather than decade-long procurement cycles. NATO allies boosting defense budgets after Ukraine is a direct spending tailwind for AVAV's export business.
How does it make money?
AeroVironment makes almost all of its roughly $800 million in annual revenue by selling drone hardware and related services to government customers, primarily the US military and allied nations. Their Autonomous Systems segment — drones and loitering munitions — is the core of the business, while a smaller Space, Cyber and Directed Energy segment is growing fast. Revenue grew about 14% year-over-year from $700 million to $800 million, driven by Switchblade orders and international sales. They also earn recurring revenue from training, support, and software subscriptions tied to their platforms.
Why do investors care?
The bull story is simple: small drones have proven decisive in modern conflict, global defense budgets are rising, and AVAV has years of battlefield-proven products that competitors can't quickly replicate. For the thesis to work, the US and its allies need to keep prioritizing drone procurement over traditional equipment, and AVAV needs to win contracts for next-generation systems. International expansion — selling to NATO allies and US-aligned partners — is the biggest growth lever, as it could meaningfully grow the addressable market beyond US defense budgets alone.
Deep Dive
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