ARLINGTON, September 11 — AeroVironment shares jumped 10.4% in the afternoon session on Thursday, September 10, 2026, after the defense contractor reported record second-quarter revenue and a sharply higher funded backlog. The bottom line: revenue hit a record $480.5 million, up 5.7% year-over-year and 5% above the $457.6 million analyst consensus. Bookings of $0.7 billion produced a book-to-bill ratio of 1.4, pushing funded backlog to a record $1.5 billion — a 37% increase over the prior year.
The figure that matters most to investors is the earnings flow-through. Adjusted EBITDA reached $53.4 million, an 11.1% margin, beating estimates by nearly 37%.
Adjusted earnings came in at $0.59 per share against a $0.25 consensus. GAAP operating margins remained slightly negative at -2.3%, but that marked a substantial improvement from -15.2% a year earlier.
Cash burn narrows
Free cash flow improved to negative $35.95 million from negative $146.5 million in the prior-year period, a considerable narrowing of the company’s cash burn. The $7.10 billion defense contractor is demonstrating operational leverage as demand for its systems accelerates. Management reiterated full-year guidance, projecting revenue of $2.18 billion and adjusted EPS of $3.18 at the respective midpoints.
The full-year EBITDA guidance midpoint of $315 million landed slightly below the $318.2 million consensus — a detail investors will note even as the quarterly beat drove positive sentiment.
Volatility and the tariff backdrop
AeroVironment’s shares are extremely volatile and have had 63 moves greater than 5% over the last year. The previous big move covered by the same outlet came 17 days earlier, when the stock dropped 6.5% on news that trade negotiations between the United States and Canada broke down, sparking concerns over new 50% tariffs and retaliatory trade measures. Bilateral trade negotiations between Washington and Ottawa collapsed unexpectedly, triggering the implementation of 50% tariffs on approximately $20 billion worth of Canadian imports, including electrical equipment and building materials.
In addition, the White House signaled plans to impose 50% tariffs on Canadian vehicles, auto parts, and steel by 2027. Canadian Prime Minister Mark Carney vowed to retaliate dollar for dollar to defend domestic industries.
Analysts warned that widespread import duties and reciprocal trade barriers threaten to increase production input costs, disrupt operational logistics, and dampen demand for heavy machinery and industrial components. AeroVironment is down 39.2% since the beginning of the year, and at $155.73 per share it is trading 62% below its 52-week high of $409.83 from October 2025. Despite the year-to-date decline, investors who bought $1,000 worth of AeroVironment’s shares five years ago would now be looking at an investment worth $1,660.
What to watch next: whether the record backlog converts into sustained positive operating margins and whether the tariff dispute with Canada continues to weigh on the broader defense and industrial supply chain.
