{"url_path":"/sec/avav/10-k/2026/item-6","section_key":"item-6","section_title":"Item 6 **","topic":"sec","document":{"doc_type":"10-K","doc_date":"2026-06-29","source_url":"https://www.sec.gov/Archives/edgar/data/1368622/0001104659-26-078906-index.html","accession_number":"0001104659-26-078906","cik":"0001368622","ticker":"AVAV","issuer_name":"AeroVironment Inc","edgar_url":"https://www.sec.gov/Archives/edgar/data/1368622/0001104659-26-078906-index.html","primary_entity_key":"0001368622","primary_entity_name":"AeroVironment Inc"},"word_count":40729,"has_tables":true,"body_markdown":"**Item 6.**\n\n​\n\nReserved.\n\n​\n\n​\n\n**Item ****7. Management’s Discussion and Analysis****of Financial Condition and Results of Operations.**\n\n​\n\n**Introduction**\n\n​\n\nThe following discussion of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and notes thereto included herein as Item 8. This discussion contains forward-looking statements. Refer to Part I, “Forward-Looking Statements” on page 2 and Item 1A, “Risk Factors” beginning on page 14, for a discussion of the uncertainties, risks and assumptions associated with these statements.\n\n​\n\n**Overview**\n\n​\n\nWe are a defense technology provider delivering integrated capabilities across air, land, sea, space, and cyber. We develop and deploy autonomous systems, precision strike systems, counter-UAS technologies, space-based platforms, directed energy systems, and cyber and electronic warfare capabilities. We operate an international manufacturing footprint, delivering proven systems and capabilities to markets that offer the potential for significant long-term growth. In addition, we believe that some of the innovative potential products, services and technologies in our R&D pipeline will emerge as new growth platforms in the future, creating additional market opportunities.\n\n​\n\nThe success of our current product and service offerings stems from our investments in R&D to invent and deliver advanced solutions, utilizing proprietary and commercially available technologies, and in acquiring leading businesses that help our customers achieve their desired outcomes. We develop and acquire these highly innovative solutions by working closely with our key customers to solve their most important challenges related to our areas of expertise. Our core technological capabilities, developed by more than 50 years of innovation, include robotics and robotics systems autonomy; modular open systems architecture; sensor design, development, miniaturization and integration; embedded software and firmware; miniature, low power, secure wireless digital communications and networks; lightweight aerostructures; high-altitude systems design, integration and operations; machine vision, machine learning, AI and autonomy; land, maritime and air deployment of munitions and aircraft systems; design and qualification for robotics in extreme terrestrial and space environments; low SWaP (Size, Weight and Power) system design and integration; collaborative multi-robotic crewed and uncrewed mission operation; power electronics and electric propulsion systems; efficient electric power conversion, storage systems and high density energy packaging; controls and systems integration; vertical takeoff and landing for fixed wing and hybrid aircraft and rotocraft systems; image stabilization and target tracking; advanced flight control systems; fluid dynamics; human-machine interface development; modular dismounted, networked multi-domain robotic control interfaces and analytic processing architecture; and integrated mission solutions for austere environments.\n\n​\n\nThe BlueHalo acquisition significantly enhanced our core technological capabilities, which now include advanced RF system design and development, software defined digital phased array antennas and radars, space qualified electronics, laser communication technologies, software defined radios, electronic warfare technology, target acquisition and tracking, directed energy-based weapons systems for counter uncrewed systems, RF-based systems for counter uncrewed, next generation counter uncrewed system missile technology, extended reality and virtual reality systems for training, modeling and simulation, hardware in the loop simulations, C2 sensing and tracking, uncrewed maritime platforms, uncrewed aerial platforms, full spectrum cyber operations, tactical mission networks, multi-int data analytics and threat intelligence, tools and analytics for GEOINT, SIGNINT, MASINT and OSINT, aerospace power and propulsion, material and processes, directed energy, photonics and electronics, biological and nanoscale technology, and health and human performance.\n\n​\n\nOur business focuses primarily on the design, development, production, marketing, support and operation of innovative autonomous systems, precision strike systems, counter-UAS technologies, space-based platforms, directed\n\n58\n\n[Table of Contents](#Toc)\n\nenergy systems and the provision of services for advanced cyber, intel, defense operations, solutions that deliver mission-critical expertise and prototype development.\n\n​\n\n**Revenue**\n\n​\n\nWe generate our revenue primarily from the sale, support, design and operation of our UAS, PSDS, UUV, UGV, Space and Directed Energy products. Support for our products includes training, spare parts, product repair and product replacement. We refer to these support activities, in conjunction with customer-funded R&D and services provided for our Cyber and Mission Solutions customers, as our services operation. We derive most of our revenue from fixed-price and cost-plus-fee contracts with the majority from U.S. government and allied foreign governments.\n\n​\n\n**Cost of Sales**\n\n​\n\nCost of sales consists of direct costs and allocated indirect costs. Direct costs include labor, materials, travel, subcontracts and other costs directly related to the execution of a specific contract. Indirect costs include overhead expenses, fringe benefits, depreciation of in-service ISR assets, inventory reserve for excess and obsolescence charges, amortization of acquired intangible assets and other costs that are not directly charged to a specific contract.\n\n​\n\n**Gross Margin**\n\n​\n\nGross margin is equal to revenue minus cost of sales. We use gross margin as a financial metric to help us understand trends in our direct costs and allocated indirect costs when compared to the revenue we generate.\n\n​\n\n**Selling, General and Administrative**\n\n​\n\nOur selling, general and administrative expenses (“SG&A”), include salaries, fringe benefits, and other expenses related to selling, marketing and proposal activities, and other administrative costs and amortization of acquired intangible assets. Some SG&A expenses relate to marketing, commissions on certain direct commercial sales to international customers and business development activities that support both ongoing business areas as well as new and emerging market areas. These activities can be directly associated with developing requirements for and applications of capabilities created in our R&D activities. SG&A is an important financial metric that we analyze to help us evaluate the contribution of our selling, marketing and proposal activities to revenue generation.\n\n​\n\n**Research and Development Expense**\n\n​\n\nR&D is an integral part of our business model. We normally conduct significant internally funded R&D. Our R&D activities focus specifically on creating capabilities that support our existing product portfolio as well as new solutions.\n\n​\n\n**Impairment of Goodwill******​\n\nIn January 2026, a stop-work order was received on an OTA for the delivery of BADGER phased array antenna systems to support Space Force’s SCAR program. Additionally, in March 2026, the customer terminated the agreement for convenience. We concluded that the stop-work order represented a trigger event that indicated the carrying value of the Space reporting unit exceeded its fair value. As a result, we updated the estimates of the long-term cash flows of the Space reporting unit to reflect the reduced revenue associated with the stop-work order and termination for convenience as well as an increase in expected research and development and capital investments to achieve product commercialization, which is expected to result in expanded opportunities and improve long term product margins. The changes in estimates resulted in the recognition of a goodwill impairment charge of approximately $241 million in the Space reporting unit.\n\nAs part of our annual goodwill impairment and identifiable asset test during the fiscal quarter ended April 30, 2025, we determined the carrying value of the UGV reporting unit exceeded its fair value due to a decrease in forecasted results of the UGV reporting unit resulting from reduced probability and delays of obtaining certain opportunities as well\n\n59\n\n[Table of Contents](#Toc)\n\nas an increase in forecast expenditures to support operational decisions identified during the fiscal quarter ended April 30, 2025. These changes in estimates resulted in the recognition of a goodwill impairment charge of $18.4 million during the three months ended April 30, 2025 in the UGV reporting unit.\n\n​\n\nFor the fiscal year ended April 30, 2026, we determined that it was more likely than not that the fair value of each of the remaining reporting units were more than their carrying values as of the annual goodwill impairment test date.\n\n​\n\n**Other (Loss) Income, net**\n\n​\n\nOther (loss) income, net includes unrealized gains and losses associated with changes in the fair market value for equity security investments, realized gains and losses for the disposition of available-for-sale debt securities, interest income, and interest expense.\n\n​\n\n**Provision for (Benefit from) Income Taxes**\n\n​\n\nOur effective tax rates for fiscal years 2026 and 2025 were lower than the U.S. federal statutory rate of 21% primarily due to tax benefits from the U.S. federal research tax credit, excess benefits from stock-based compensation, and Foreign Derived Intangible Income deduction (“FDII”).\n\n​\n\n**Equity Method Investment (Loss) Income, Net of Tax**\n\n​\n\nEquity method investment (loss) income, net of tax, includes equity method income or loss related to our investment in limited partnership funds for which we have concluded we have influence for holding more than a minor interest.\n\n​\n\n**Critical Accounting Policies and Estimates**\n\n​\n\nThis Management’s Discussion and Analysis of Financial Condition and Results of Operations discusses our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. When we prepare these consolidated financial statements, we are required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Some of our accounting policies require that we make subjective judgments, including estimates that involve matters that are inherently uncertain. Our most critical estimates include those related to revenue recognition, inventory reserves for excess and obsolescence, intangible assets acquired in a business combination, goodwill, and income taxes. We base our estimates and judgments on historical experience and on various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for our judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Our actual results may differ from these estimates under different assumptions or conditions.\n\n​\n\nWe believe the following critical accounting estimates affect our more significant judgments and estimates used in preparing our consolidated financial statements. Refer to Note 1 to our consolidated financial statements entitled “Organization and Significant Accounting Policies,” which is included in Part II, Item 8 “Financial Statements and Supplementary Data” of this Annual Report. There have been no material changes made to the critical accounting estimates during the periods presented in the consolidated financial statements.\n\n​\n\n**Revenue Recognition**\n\n​\n\nSignificant management judgments and estimates must be made and used in connection with the recognition of revenue in any accounting period. Material differences in the amount of revenue in any given period may result if these judgments or estimates prove to be incorrect or if management’s estimates change on the basis of development of the business or market conditions. Management judgments and estimates have been applied consistently and have been reliable historically. We believe that there are two key factors which impact the reliability of management’s estimates.\n\n60\n\n[Table of Contents](#Toc)\n\nThe first of those key factors is that a significant number of our contracts are typically less than six months. The short-term nature of such contracts reduces the risk that material changes in accounting estimates will occur on the basis of market conditions or other factors. The second key factor is that we have hundreds of contracts in any given accounting period, which reduces the risk that any one change in an accounting estimate on one or several contracts would have a material impact on our consolidated financial statements.\n\n​\n\nThe substantial majority of our revenue is generated pursuant to written contractual arrangements to design, develop, manufacture and/or modify complex products, and to provide related engineering, technical and other services according to customer specifications. These contracts may be fixed price, cost-reimbursable, or time and materials. We account for all revenue contracts in accordance with ASC 606. A performance obligation is a promise in a contract to transfer distinct goods or services to a customer, and it is the unit of account in ASC 606. A contract’s transaction price is allocated to each distinct performance obligation and revenue is recognized when each performance obligation under the terms of a contract is satisfied. For contracts with multiple performance obligations, we allocate the contract’s transaction price to each performance obligation using observable standalone selling prices for similar products and services. When the standalone selling price is not directly observable, we use our best estimate of the standalone selling price of each distinct good or service in the contract using the cost plus reasonable margin approach.\n\n​\n\nOur performance obligations are satisfied over time or at a point in time. Product revenue for certain Precision Strike products including LMS, Space, Directed Energy and Cyber and Mission Solution product deliveries and customization of UGV transport vehicles is recognized over time as costs are incurred. Contract services revenue is recognized over time and composed of revenue recognized on contracts for the provision of services, including repairs and maintenance, training, engineering design, development and prototyping activities, technical support services, ISR services, and customer-funded R&D contracts. For performance obligations satisfied over time, revenue is generally recognized using costs incurred to date relative to total estimated costs at completion to measure progress. Incurred costs represent work performed, which correspond with, and thereby best depict, transfer of control to the customer. Contract costs include labor, materials, subcontractors’ costs, other direct costs, and indirect costs applicable on government and commercial contracts. We elected the right to invoice practical expedient in which if an entity has a right to consideration from a customer in an amount that corresponds directly with the value to the customer of the entity’s performance completed to date, the entity may recognize revenue in the amount to which the entity has a right to invoice. Certain training services are recognized over time using an output method based on days of training completed. Warranty agreements which meet the definition of a performance obligation are recognized straight line over the warranty period. LMS product revenue is currently recognized over time as the product is considered to not have alternative use as the U.S. government is the only current customer including FMS sales. Once LMS products receive a DCS contract, which is expected during fiscal year 2027, the products are considered to have alternative use and revenue will be recognized at a point in time.\n\n​\n\nFor performance obligations which are not satisfied over time per the aforementioned criteria above, revenue is recognized at the point in time in which each performance obligation is fully satisfied. Our product sales revenue is primarily composed of revenue recognized on contracts for the delivery of UAS, UGV, UUV, IAMD, and EW systems and spare parts, respectively. Revenue is recognized at the point in time when control transfers to the customer, which generally occurs when title and risk of loss have passed to the customer.\n\n​\n\nWe review cost performance, estimates to complete and variable consideration at least quarterly and in many cases more frequently. Adjustments to original estimates for a contract’s revenue, estimated costs at completion and estimated profit or loss are often required as work progresses under a contract, as experience is gained and as more information is obtained, even though the scope of work required under the contract may not change, or if contract modifications, including the finalization of undefinitized contract actions, occur. The impact of revisions in estimate of completion and variable consideration for all types of contracts are recognized on a cumulative catch-up basis in the period in which the revisions are made. Changes in variable consideration associated with the finalization of undefinitized contract actions or unpriced change orders could result in cumulative catch up adjustments to revenue that could be material. During the fiscal years ended April 30, 2026, 2025 and 2024, changes in accounting estimates on contracts recognized using the over time method are presented below. Amounts representing contract change orders or claims are included in revenue if the order or claim meets the criteria of a contract or contract modification in accordance with ASC 606. Incentives or penalties and awards applicable to performance on contracts are considered in\n\n61\n\n[Table of Contents](#Toc)\n\nestimating revenue and profit rates, and are recorded when there is sufficient information to assess anticipated contract performance.\n\n​\n\nFor the years ended April 30, 2026, 2025 and 2024, favorable and unfavorable cumulative catch-up adjustments included in revenue were as follows (in thousands):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year Ended April 30,**\n\n** **\n\n​\n\n​\n\n**2026**\n\n**  ​ ​ ​**\n\n**2025**\n\n**  ​ ​ ​**\n\n**2024**\n\n​\n\n​\n\n**  ​ ​ ​**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n** **\n\nGross favorable adjustments\n\n​\n\n$\n\n14,339\n\n​\n\n$\n\n11,106\n\n​\n\n$\n\n7,359\n\n​\n\nGross unfavorable adjustments\n\n​\n\n \n\n(16,896)\n\n​\n\n \n\n(5,104)\n\n​\n\n \n\n(1,951)\n\n​\n\nNet adjustments\n\n​\n\n$\n\n(2,557)\n\n​\n\n$\n\n6,002\n\n​\n\n$\n\n5,408\n\n​\n\n​\n\nFor the year ended April 30, 2026, favorable cumulative catch up adjustments of $14.3 million were primarily due to favorable adjustments on 18 contracts, of which one contract had individually material adjustments. A Space and Directed Energy contract had a favorable adjustment due to lower expected costs and an increase in profitability which increased revenue by approximately $6.7 million. For the same period, unfavorable cumulative catch up adjustments of $16.9 million were primarily related to unfavorable adjustments on 25 contracts, of which one contract had individually material adjustments. A Cyber and Mission Solutions contract had an adjustment due to revised estimates of the total expected costs to complete the contracts, which decreased revenue by approximately $(3.1) million.\n\nFor the year ended April 30, 2025, favorable cumulative catch up adjustments of $11.1 million were primarily due to favorable adjustments on eight contracts, of which four LMS undefinitized contract actions were definitized during the year ended April 30, 2025, which resulted in cumulative catch-up revenue adjustments that increased revenue by approximately $9.9 million. The remaining adjustments individually were not material. For the same period, unfavorable cumulative catch up adjustments of $5.1 million were primarily related to unfavorable adjustments on 17 contracts for higher revised estimates of the total expected costs to complete the contract, including one LMS contract, which decreased revenue by approximately $2.9 million. The remaining adjustments individually were not material.\n\nFor the year ended April 30, 2024, favorable cumulative catch up adjustments of $7.4 million were primarily due to final cost adjustments on 17 contracts, of which we revised our estimates of the total expected costs to complete two LMS contracts during the year ended April 30, 2024. The aggregate impact of these adjustments in contract estimates on revenue related to performance obligations satisfied or partially satisfied in previous periods was an increase to revenue of approximately $2.7 million. For the same period, unfavorable cumulative catch up adjustments of $2.0 million were primarily related to higher than expected costs on 11 contracts, which individually were not material.\n\n​\n\n**Inventories Reserves for Excess and Obsolescence**\n\n​\n\nOur policy for valuation of inventory, including the determination of obsolete or excess inventory, requires us to perform a detailed assessment of inventory at each balance sheet date, which includes a review of, among other factors, an estimate of future demand for products within specific time horizons, valuation of existing inventory, as well as product lifecycle and product development plans. Inventory reserves are also provided to cover risks arising from slow-moving items. We write down our inventory for estimated obsolescence or unmarketable inventory equal to the difference between the cost of inventory and the estimated net realizable value based on assumptions about future demand and market conditions and record to cost of sales. We may be required to record additional inventory write-downs if actual market conditions are less favorable than those projected by our management.\n\n​\n\n**Goodwill**\n\n​\n\nGoodwill represents the excess of the cost of an acquired entity over the fair value of the acquired net assets. We test goodwill for impairment annually during the fourth quarter of our fiscal year or when events or circumstances change in a manner that indicates goodwill might be impaired. Events or circumstances that could trigger an impairment review include, but are not limited to, a significant adverse change in legal factors or in the business or political climate, an adverse action or assessment by a regulator, unanticipated competition, a loss of key personnel, significant changes in\n\n62\n\n[Table of Contents](#Toc)\n\nthe manner of our use of the acquired assets or the strategy for our overall business, significant negative industry or economic trends or significant underperformance relative to projected future results of operations.\n\n​\n\nOur evaluation of goodwill for impairment involves the comparison of the fair value of each reporting unit to its carrying value. For the impairment test, we first assess qualitative factors, macroeconomic conditions, industry and market considerations, triggering events, cost factors, and overall financial performance, to determine whether it is necessary to perform a quantitative goodwill impairment test. Alternatively, we may bypass the qualitative assessment for some or all of its reporting units and apply the quantitative impairment test. If determined to be necessary, the quantitative impairment test shall be used to identify goodwill impairment and measure the amount of a goodwill impairment loss to be recognized (if any). For the quantitative impairment test we estimate the fair value by weighting the results from the income approach and the market approach. These valuation approaches consider a number of factors that include, but are not limited to, prospective financial information, growth rates, terminal value, discount rates, and comparable multiples from publicly traded companies in our industry and require us to make certain assumptions and estimates regarding industry economic factors and future profitability of its business.\n\n​\n\nIn January 2026, a stop-work order was received on an OTA for the delivery of BADGER phased array antenna systems to support Space Force’s SCAR program. Additionally, in March 2026, the customer terminated the agreement for convenience. We concluded that the stop-work order represented a trigger event that indicated the carrying value of the Space reporting unit exceeded its fair value. As a result, we updated our estimates of the long-term cash flows of the Space reporting unit to reflect the reduced revenue associated with the stop-work order and termination for convenience as well as an increase in expected research and development and capital investments to achieve product commercialization, which is expected to result in expanded opportunities and improve long term product margins. The changes in estimates resulted in the recognition of a goodwill impairment charge of approximately $241 million in the Space reporting unit. Due to the trigger event, we also performed a recoverability test on the long-lived assets, inclusive of the intangibles, of the Space reporting unit for impairment in accordance with ASC 360. The undiscounted cash flows exceeded the carrying value and no impairment was recorded.\n\nAs part of our annual goodwill impairment and identifiable asset test during the fiscal quarter ended April 30, 2025, we determined the carrying value of the UGV reporting unit exceeded its fair value due to a decrease in forecasted results of the UGV reporting unit resulting from reduced probability and delays of obtaining certain opportunities as well as an increase in forecast expenditures to support operational decisions identified during the fiscal quarter ended April 30, 2025. These changes in estimates resulted in the recognition of a full goodwill impairment charge of $18.4 million during the three months ended April 30, 2025 in the UGV reporting unit.\n\n​\n\nAs of April 30, 2026, our Space reporting unit has a goodwill balance of approximately $291 million. During the most recent annual impairment test during the fourth quarter of fiscal year 2026, the estimated fair value of all reporting units with goodwill from acquisitions in previous years substantially exceeded their carrying value. The reporting units from the BlueHalo and ESAero acquisitions were recently recorded at estimated fair value during the fiscal year ended April 30, 2026 and, other than the Space unit, no triggering event for goodwill impairment was since identified.\n\n​\n\nThe estimates and assumptions used to determine the fair value of our reporting units are highly subjective in nature. Actual results can be materially different from the estimates and assumptions. If actual market conditions are less favorable than those projected by the industry or by us, or if events occur or circumstances change that would reduce the estimated fair value of our indefinite-lived intangible assets below the carrying amounts, we could recognize future impairment charges, the amount of which could be material.\n\n​\n\n**Intangible Assets – Acquired in Business Combinations**\n\n​\n\nWe perform valuations of assets acquired and liabilities assumed on each acquisition accounted for as a business combination and allocate the purchase price of each acquired business to our respective net tangible and intangible assets. Acquired intangible assets include technology, backlog, in-process research and development, customer relationships, licenses, trademarks and tradenames, and non-compete agreements. We use valuation techniques to value these intangibles assets, with the primary technique being a discounted cash flow analysis. A discounted cash\n\n63\n\n[Table of Contents](#Toc)\n\nflow analysis requires us to make various assumptions and estimates including projected revenue, gross margins, operating costs, growth rates, useful lives and discount rates. Intangible assets are amortized over their estimated useful lives using the straight-line method which approximates the pattern in which the economic benefits of such assets are consumed. As part of our annual goodwill impairment and identifiable asset test, performed during the quarter ended April 30, 2025, a decrease in forecasted results for the UGV reporting unit resulting from reduced probability and delays of obtaining certain opportunities as well as an increase in forecast expenditures to support operational decisions identified during the fiscal quarter ended April 30, 2025 was concluded to be a triggering event for impairment assessment and resulted in accelerated intangible amortization expenses of $4.3 million which were recorded during the three months ended April 30, 2025. Due to the trigger event, the Company performed a recoverability test on the long-lived assets of the Space reporting unit, inclusive of the intangibles, for impairment in accordance with ASC 360. The undiscounted cash flows exceeded the carrying value and no impairment was recorded for long-lived assets. Due to the SCAR trigger event in January 2026, the Company performed a recoverability test on the long-lived assets of the Space reporting unit, inclusive of the intangibles, for impairment in accordance with ASC 360. The undiscounted cash flows exceeded the carrying value and no impairment was recorded for long-lived assets.\n\n​\n\n**Income Taxes**\n\n​\n\nOur income tax provision and related income tax assets and liabilities are based on actual and expected future income, U.S. and foreign statutory income tax rates, and tax regulations and planning opportunities in the various jurisdictions in which it operates. Significant judgment is required in interpreting tax regulations in the United States and in foreign jurisdictions, evaluating our worldwide uncertain tax positions, and assessing the likelihood of realizing certain tax benefits. Actual results could differ materially from those judgments, and changes in judgments could materially affect our consolidated financial statements.\n\n​\n\nWe are required to estimate our income taxes, which includes estimating our current income taxes as well as measuring the temporary differences resulting from different treatment of items for tax and accounting purposes. We currently have significant deferred tax assets, which are subject to periodic recoverability assessments. Realizing our deferred tax assets principally depends on our achieving projected future taxable income. We may change our judgments regarding future profitability due to future market conditions and other factors, which may result in recording a valuation allowance against those deferred tax assets. We record a valuation allowance to reduce our deferred tax assets if, based on the weight of available evidence, we believe expected future taxable income is not likely to support the use of a deduction or credit in that jurisdiction. We evaluate the level of our valuation allowances during the interim and annually.\n\n​\n\nWe record unrecognized tax benefits for U.S. federal, state, local, and foreign tax positions related primarily to tax credits claimed and tax nexus. For each reporting period, we apply a consistent methodology to measure unrecognized tax benefits and all unrecognized tax benefits are reviewed periodically and adjusted as circumstances warrant. Our measurement of our unrecognized tax benefits is based on our assessment of all relevant information, including prior audit experience, the status of audits, conclusions of tax audits, lapsing of applicable statutes of limitations, identification of new issues, and any administrative guidance or developments. We recognize unrecognized tax benefits in the first financial reporting period in which information becomes available indicating that such benefits will more likely than not (a greater than 50% likelihood) be realized.\n\n​\n\nWe have various foreign subsidiaries to conduct or support our business outside the United States. We do not provide for U.S. income taxes on undistributed earnings for our foreign subsidiaries as we expect the foreign earnings will be indefinitely reinvested in such foreign jurisdictions.\n\n​\n\n**Fiscal Periods**\n\n​\n\nOur fiscal year ends on April 30. Due to our fixed year end date of April 30, our first and fourth quarters each consist of approximately 13 weeks. The second and third quarters each consist of exactly 13 weeks. Our first three quarters end on a Saturday.\n\n​\n\n64\n\n[Table of Contents](#Toc)\n\n**Results of Operations**\n\n​\n\nThe following table sets forth certain historical consolidated income statement data expressed in dollars (in thousands) and as a percentage of revenue for the periods indicated. Certain amounts may not sum due to rounding.\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Fiscal Year Ended April 30,**\n\n** **\n\n​\n\n​\n\n**2026**\n\n** **\n\n​\n\n**2025**\n\n** **\n\n​\n\n**2024**\n\n** **\n\nRevenue\n\n  ​ ​ ​\n\n$\n\n1,976,845\n\n  ​ ​ ​\n\n100\n\n%\n\n​\n\n$\n\n820,627\n\n  ​ ​ ​\n\n100\n\n%\n\n​\n\n$\n\n716,720\n\n  ​ ​ ​\n\n100\n\n%\n\nCost of sales\n\n​\n\n \n\n1,476,203\n\n​\n\n75\n\n%\n\n​\n\n \n\n501,991\n\n​\n\n61\n\n%\n\n​\n\n \n\n432,789\n\n​\n\n60\n\n%\n\nGross margin\n\n​\n\n \n\n500,642\n\n​\n\n25\n\n%\n\n​\n\n \n\n318,636\n\n​\n\n39\n\n%\n\n​\n\n \n\n283,931\n\n​\n\n40\n\n%\n\nSelling, general and administrative\n\n​\n\n \n\n443,251\n\n​\n\n22\n\n%\n\n​\n\n \n\n158,753\n\n​\n\n19\n\n%\n\n​\n\n \n\n114,420\n\n​\n\n16\n\n%\n\nResearch and development\n\n​\n\n \n\n127,678\n\n​\n\n6\n\n%\n\n​\n\n \n\n100,729\n\n​\n\n12\n\n%\n\n​\n\n \n\n97,687\n\n​\n\n14\n\n%\n\nImpairment of goodwill\n\n​\n\n​\n\n240,708\n\n​\n\n12\n\n%\n\n​\n\n​\n\n18,359\n\n​\n\n2\n\n%\n\n​\n\n​\n\n—\n\n​\n\n—\n\n%\n\n(Loss) income from operations\n\n​\n\n \n\n(310,995)\n\n​\n\n(16)\n\n%\n\n​\n\n \n\n40,795\n\n​\n\n5\n\n%\n\n​\n\n \n\n71,824\n\n​\n\n10\n\n%\n\nInterest expense, net\n\n​\n\n \n\n(5,613)\n\n​\n\n—\n\n%\n\n​\n\n \n\n(2,188)\n\n​\n\n—\n\n%\n\n​\n\n \n\n(4,220)\n\n​\n\n(1)\n\n%\n\nOther income (expense), net\n\n​\n\n​\n\n10,986\n\n​\n\n1\n\n%\n\n​\n\n \n\n1,057\n\n​\n\n—\n\n%\n\n​\n\n \n\n(4,373)\n\n​\n\n(1)\n\n%\n\n(Loss) income before income taxes\n\n​\n\n \n\n(305,622)\n\n​\n\n(15)\n\n%\n\n​\n\n \n\n39,664\n\n​\n\n5\n\n%\n\n​\n\n \n\n63,231\n\n​\n\n9\n\n%\n\nProvision for (benefit from) income taxes\n\n​\n\n \n\n(23,059)\n\n​\n\n(1)\n\n%\n\n​\n\n \n\n882\n\n​\n\n—\n\n%\n\n​\n\n \n\n1,891\n\n​\n\n—\n\n%\n\nEquity method investment income (loss), net of tax\n\n​\n\n​\n\n17,441\n\n​\n\n1\n\n%\n\n​\n\n​\n\n4,837\n\n​\n\n1\n\n%\n\n​\n\n​\n\n(1,674)\n\n​\n\n—\n\n%\n\nNet (loss) income\n\n​\n\n​\n\n(265,122)\n\n​\n\n(13)\n\n%\n\n​\n\n​\n\n43,619\n\n​\n\n5\n\n%\n\n​\n\n​\n\n59,666\n\n​\n\n8\n\n%\n\n​\n\nEffective May 1, 2025, we reorganized our segments in connection with our acquisition of BlueHalo. The reorganization was implemented to drive additional operational improvements, foster synergies and provide leaders with greater autonomy over their business units. Our reportable segments are AxS and SCDE. AxS includes the historical AeroVironment businesses UxS, LMS and MW as well as IAMD, EW, UUV, and Autonomous R&D from the BlueHalo acquisition. SCDE includes the Space, Cyber and Mission Solutions, and Directed Energy businesses from the BlueHalo acquisition. Effective May 1, 2026 Autonomous R&D is included in the SCDE segment.\n\n​\n\nAlso effective May 1, 2025, due to the increased size and complexity of the businesses, the significant amount of debt to finance the acquisition and the related debt covenants, the Chief Operating Decision Maker’s (“CODM”) measure of profitability is Segment Adjusted EBITDA, defined as segment income (loss) from operations before depreciation and amortization and adjusted for the impact of certain other non-cash items, including goodwill impairment, amortization of implementation of cloud computing arrangements, stock-based compensation, other purchase accounting adjustments, and cash items including acquisition related expenses and certain one-time non-operating expense or income such as legal expense. The following table (in thousands) sets forth our revenue and segment adjusted EBITDA generated by each reporting segment for the periods indicated. Prior period segment information has been revised to align with the new segment measure of profitability and the new reportable segments.\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year Ended April 30, 2026**\n\n​\n\n​\n\n**AxS**\n\n**  ​ ​ ​**\n\n**SCDE**\n\n​\n\n**Total**\n\nRevenue\n\n​\n\n$\n\n1,358,077\n\n​\n\n$\n\n618,768\n\n​\n\n$\n\n1,976,845\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nSegment adjusted EBITDA\n\n​\n\n$\n\n288,652\n\n​\n\n$\n\n(2,596)\n\n​\n\n$\n\n286,056\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year Ended April 30, 2025**\n\n​\n\n​\n\n**AxS**\n\n**  ​ ​ ​**\n\n**SCDE**\n\n​\n\n**Total**\n\nRevenue\n\n​\n\n$\n\n820,627\n\n​\n\n$\n\n—\n\n​\n\n$\n\n820,627\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nSegment adjusted EBITDA\n\n​\n\n$\n\n146,424\n\n​\n\n$\n\n—\n\n​\n\n$\n\n146,424\n\n​\n\n65\n\n[Table of Contents](#Toc)\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**  ​ ​ ​**\n\n**Year Ended April 30, 2024**\n\n​\n\n​\n\n**AxS**\n\n**  ​ ​ ​**\n\n**SCDE**\n\n​\n\n**Total**\n\nRevenue\n\n​\n\n$\n\n716,720\n\n​\n\n$\n\n—\n\n​\n\n$\n\n716,720\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nSegment adjusted EBITDA\n\n​\n\n$\n\n127,753\n\n​\n\n$\n\n—\n\n​\n\n$\n\n127,753\n\n​\n\nWe recorded intangible amortization expense and other purchase accounting adjustments in the following categories on the accompanying consolidated statements of income (loss):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**  ​ ​ ​**\n\n**  ​ ​ ​**\n\n**Year Ended April 30,**\n\n​\n\n​\n\n​\n\n**2026**\n\n**  ​ ​ ​**\n\n**2025**\n\n​\n\n**2024**\n\nCost of sales:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nProduct sales\n\n​\n\n​\n\n$\n\n81,220\n\n​\n\n$\n\n15,018\n\n​\n\n$\n\n8,214\n\nContract services\n\n​\n\n​\n\n​\n\n11,489\n\n​\n\n​\n\n4,387\n\n​\n\n​\n\n5,334\n\nSelling, general and administrative\n\n​\n\n​\n\n​\n\n130,431\n\n​\n\n​\n\n4,001\n\n​\n\n​\n\n5,010\n\nTotal\n\n​\n\n​\n\n$\n\n223,140\n\n​\n\n$\n\n23,406\n\n​\n\n$\n\n18,558\n\n​\n\n**Fiscal Year Ended April 30, 2026 Compared to Fiscal Year Ended April 30, 2025**\n\n​\n\n**Revenue.** Revenue for the fiscal year ended April 30, 2026 was $1,976.8 million, as compared to $820.6 million for the fiscal year ended April 30, 2025, representing an increase of $1,156.2 million, or 141%. The increase in revenue was due to an increase in product revenue of $722.6 million, and an increase in service revenue of $433.6 million. The increase in product revenue was primarily due to an increase of $526.0 million related to the acquisitions of BlueHalo and ESAero. Legacy AV product revenue included in the AxS segment increased by $196.6 million driven by an increase in LMS, MacCready Works, and MUAS products due to increase in domestic and international demand, partially offset by a decrease in SUAS due to a decrease in international sales. The increase in service revenue was primarily due to the $413.2 million service revenue resulting from our acquisition of BlueHalo. Legacy AV service revenue, included in the AxS segment, increased by $20.4 million driven by an increase in customer funded R&D and engineering services of $22.6 million, partially offset by a decrease training and repair services primarily due to the decrease in SUAS product revenue. The proportion of service revenue to product revenue is expected to remain higher following the acquisition of BlueHalo.\n\n​\n\n**Cost of Sales.** Cost of sales for the fiscal year ended April 30, 2026 was $1,476.2 million, as compared to $502.0 million for the fiscal year ended April 30, 2025, representing an increase of $974.2 million, or 194%. The increase in cost of sales was a result of an increase in product cost of sales of $554.9 million and an increase in service costs of sales of $419.3 million. The increase in product costs of sales was primarily due to an increase of $345.0 million related to the acquisitions of BlueHalo and ESAero and an increase of $66.2 million intangible amortization related to the BlueHalo and ESAero acquisitions. Legacy AV product cost of sales increased $143.7 million. The increase in legacy product costs of sales was primarily due to an increase of approximately $111 million due to the increase in sales volume and approximately $34 million due to mix shift to a higher proportion of lower margin products driven by the increase in Switchblade production. The increase in service cost of sales was primarily due to an increase of $398.8 million associated with the BlueHalo acquisition and an increase of $7.1 million intangible amortization related to the BlueHalo acquisition. Legacy AV service cost of sales increased $13.4 million primarily due to an increase of approximately $15 million related to service volume. Cost of sales for the fiscal year ended April 30, 2026 included $92.7 million of intangible amortization and other related non-cash purchase accounting expenses as compared to $19.4 million for the fiscal year ended April 30, 2025. As a percentage of revenue, cost of sales increased from 61% to 75% primarily due to increased amortization and other non-cash purchase accounting expenses and an increase in the proportion of service revenue resulting from the effect of the BlueHalo acquisition, resulting in gross margin decreasing from 39% to 25%.\n\n​\n\n**Gross Margin.** Gross margin is equal to revenue minus cost of sales.\n\n​\n\n**Selling, General and Administrative.** SG&A expense for the fiscal year ended April 30, 2026 was $443.0 million, or 22% of revenue, as compared to SG&A expense of $158.8 million, or 19% of revenue, for the fiscal year\n\n66\n\n[Table of Contents](#Toc)\n\nended April 30, 2025. The increase in SG&A expense was primarily due to an increase of $126.4 million of intangible amortization expense primarily related to the BlueHalo acquisition, an increase of approximately $48 million of employee related expenses related to the increase in headcount, and an increase of $26.4 million of acquisition related expenses related to the BlueHalo and ESAero acquisitions.\n\n​\n\n**Research and Development.** R&D expense for the fiscal year ended April 30, 2026 was $127.7 million, or 6% of revenue, as compared to R&D expense of $100.7 million, or 12% of revenue, for the fiscal year ended April 30, 2025. R&D expense increased by $27 million, or 27%, for the fiscal year ended April 30, 2026, primarily due to an increase in development activities regarding enhanced capabilities for our products, development of new product lines and to support our acquired businesses.\n\n​\n\n**Impairment of Goodwill.** During the fiscal year ended April 30, 2026, a goodwill impairment charge of $240.7 million was recorded resulting from a decrease in forecasted results of the Space reporting unit due to the Space Force’s decision to cancel the contract related to the delivery of BADGER phased array antenna systems to support the SCAR program. During the fiscal year ended April 30, 2025, a goodwill impairment charge of $18.4 million was recorded resulting from a decrease in forecasted results of the UGV reporting unit.\n\n​\n\n**Interest Expense, net.** Interest expense, net for the fiscal year ended April 30, 2026 was $5.6 million, as compared to interest expense net of $2.2 million for the fiscal year ended April 30, 2025. The increase was driven by the interest expense related to the Term Loan and Revolver Facility obtained on May 1, 2025 in conjunction with the BlueHalo acquisition and the unamortized debt issuance costs allocated to the Term Loan Facility of $6.7 million, which were expensed upon repayment of the Term Loan Facility in July 2025 using the proceeds from the convertible notes and common stock issuances in July 2025. The increase in interest expense was partially offset by an increase in interest income due to a combination of higher cash and investment balances and lower interest bearing debt balances.\n\n​\n\n**Other Income, net.** Other income, net for the fiscal year ended April 30, 2026 was $11.0 million, as compared to $1.1 million for the fiscal year ended April 30, 2025. The increase in other income, net is primarily due to realized gains associated with the sale of equity security investments of $11.7 million.\n\n​\n\n**Income Taxes.** Our effective income tax rate was 7.5% for the fiscal year ended April 30, 2026 as compared to 2.2% for the fiscal year ended April 30, 2025. The change in our effective income tax rate was primarily attributable to the increase in net loss before income taxes, inclusive of the goodwill impairment loss which is non-deductible, combined with a decrease in FDII deductions. The effective income tax rate for the fiscal year ended April 30, 2026, was primarily attributable to the goodwill impairment loss, which is non-deductible, partially offset by R&D tax credits.\n​\n\n**Equity method investment income, net of tax.** Equity method investment income, net of tax for the fiscal year ended April 30, 2026 was $17.4 million, as compared to $4.8 million for the fiscal year ended April 30, 2025.\n\n​\n\n**Business Segment Results of Operations**\n\n​\n\n**AxS**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year Ended**\n\n​\n\n​\n\n**April 30,**\n\n​\n\n**April 30,**\n\n​\n\n**  ​ ​ ​**\n\n**2026**\n\n​\n\n**2025**\n\nRevenue:\n\n​\n\n$\n\n1,358,077\n\n​\n\n$\n\n820,627\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nSegment adjusted EBITDA\n\n​\n\n$\n\n288,652\n\n​\n\n$\n\n146,424\n\n​\n\nAxS Segment****Revenue. AxS revenue for the year ended April 30, 2026 was $1,358.1 million, as compared to $820.6 million for the year ended April 30, 2025, representing an increase of $537.5 million, or 65%. The increase in revenue was due to an increase in product and service revenues of $450.1 million and $87.4 million, respectively. The increase in product revenue was primarily due to the $253.5 million of product revenue resulting from our acquisitions of BlueHalo and ESAero. Legacy AV product revenue included in the AxS segment increased by $196.6 million driven by an increase in LMS, MacCready Works, and MUAS products due to increase in domestic and international demand,\n\n67\n\n[Table of Contents](#Toc)\n\npartially offset by a decrease in SUAS due to a decrease in international sales. The increase in service revenue was primarily due to the $67.0 million of service revenue resulting from our acquisition of BlueHalo. Legacy AV service revenue, included in the AxS segment, increased by $20.4 million driven by an increase in customer funded R&D and engineering services of $22.6 million, partially offset by a decrease training and repair services primarily due to the decrease in SUAS product revenue. Proportion of service revenue to product revenue is expected to remain higher following the acquisition of BlueHalo.\n\n​\n\nAxS Segment Adjusted EBITDA. AxS segment adjusted EBITDA for the year ended April 30, 2026 was $288.7 million, as compared to $146.4 million for the year ended April 30, 2025, representing an increase of $142.3 million, or 97%. The increase in AxS segment adjusted EBITDA was primarily due to an increase in revenue of $537.5 million. The increase in revenue was partially offset by an increase in adjusted cost of sales of $340.8 million, adjusted SG&A of $36.7 million primarily due employee related costs driven by the increased headcount, and R&D of $12.3 million. The increase in adjusted cost of sales was primarily due to an increase of approximately $197.7 million associated with the BlueHalo and ESAero acquisitions. Legacy AV adjusted cost of sales increased $157.8 million driven by approximately $127 million due to the increase in sales volume and approximately $30 million due to mix shift to a higher proportion of lower margin products driven by the increase in Switchblade production, partially offset by $14 million of stock-based compensation and depreciation not included in adjusted cost of sales.\n\n​\n\n**SCDE**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year Ended**\n\n​\n\n​\n\n**April 30,**\n\n​\n\n**April 30,**\n\n​\n\n**  ​ ​ ​**\n\n**2026**\n\n​\n\n**2025**\n\nRevenue:\n\n​\n\n$\n\n618,768\n\n​\n\n$\n\n—\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nSegment adjusted EBITDA\n\n​\n\n$\n\n(2,596)\n\n​\n\n$\n\n—\n\n​\n\nRevenue. SCDE revenue for the year ended April 30, 2026 was $618.8 million, as compared to $0 for the year ended April 30, 2025. The SCDE segment consists of business units obtained in the BlueHalo acquisition on May 1, 2025, and the increase in revenue is a result of the acquisition.\n\n​\n\nSCDE Segment Adjusted EBITDA. SCDE segment adjusted EBITDA for the year ended April 30, 2026 was $(2.6) million, as compared to $0 for the year ended April 30, 2025. The SCDE segment consists of business units obtained in the BlueHalo acquisition on May 1, 2025, and the increase in segment adjusted EBITDA is a result of the acquisition.\n\n**Fiscal Year Ended April 30, 2025 Compared to Fiscal Year Ended April 30, 2024**\n\n​\n\n**Revenue.** Revenue for the fiscal year ended April 30, 2025 was $820.6 million, as compared to $716.7 million for the fiscal year ended April 30, 2024, representing an increase of $103.9 million, or 14%. The increase in revenue was due to an increase in product revenue of $107.0 million, partially offset by a decrease in service revenue of $3.0 million. The increase in product revenue was primarily due to an increase of $164.7 million from the production of our Switchblade products, driven by increased global demand for our LMS associated with the current global conflicts as well as U.S. DoD. resupply and an increase of $4.4 million from the delivery of MW products driven by demand for new product releases, partially offset by a decrease of $62.1 million of product deliveries of our UxS products, primarily due to a decrease in international sales to Ukraine. Fiscal 2025 also included favorable cumulative catch-up revenue adjustments of $12.0 million due to changes in estimates associated with the definitization of certain LMS contracts. The decrease in service revenue was primarily due to a decrease of $2.8 million in other engineering services and customer-funded R&D activities primarily associated with the shift from development to production of certain LMS products.\n\n​\n\n**Cost of Sales.** Cost of sales for the fiscal year ended April 30, 2025 was $502.0 million, as compared to $432.8 million for the fiscal year ended April 30, 2024, representing an increase of $69.2 million, or 16%. The increase in cost of sales was a result of an increase in product cost of sales of $64.2 million and an increase in service costs of sales of $5.0 million. The increase in product cost of sales was primarily due to approximately $62 million associated with the increase in product sales volume, $4.6 million due to the UGV accelerated intangible amortization expenses, partially\n\n68\n\n[Table of Contents](#Toc)\n\noffset by a decrease of approximately $3 million due to product mix shift primarily to the definitization of LMS contracts. The increase of $5.0 million in service costs of sales was primarily due to approximately $7 million increase due to mix shift associated with a higher proportion of engineering services, partially offset by approximately $2 million associated with the decreased service volume. Cost of sales for the fiscal year ended April 30, 2025 included $19.4 million of intangible amortization as compared to $13.5 million of intangible amortization and other related non-cash purchase accounting expenses for the fiscal year ended April 30, 2024. As a percentage of revenue, cost of sales increased from 60% to 61%, primarily due to the accelerated amortization of UGV intangibles of $4.6 million, partially offset by an increase in the proportion of product revenue to total revenue, resulting in a decrease in gross margin from 40% to 39%.\n\n​\n\n**Gross Margin.** Gross margin is equal to revenue minus cost of sales.\n\n​\n\n**Selling, General and Administrative.** SG&A expense for the fiscal year ended April 30, 2025 was $158.8 million, or 19% of revenue, as compared to SG&A expense of $114.4 million, or 16% of revenue, for the fiscal year ended April 30, 2024. The increase in SG&A expense was primarily due to an increase of $17.2 million in acquisition related expenses related to the BlueHalo acquisition, an increase in employee related expenses of $10.0 million driven by an increase in average headcount and expansion of our global business development team, and an increase in sales and marketing expense of $9.4 million driven by an increase in bid and proposal efforts associated with the higher sales volume.\n\n​\n\n**Research and Development.** R&D expense for the fiscal year ended April 30, 2025 was $100.7 million, or 12% of revenue, as compared to R&D expense of $97.7 million, or 14% of revenue, for the fiscal year ended April 30, 2024. R&D expense increased by $3.0 million, or 3%, for the fiscal year ended April 30, 2025, primarily due to an increase in development activities regarding enhanced capabilities for our products, development of new product lines and to support our acquired businesses.\n\n​\n\n**Impairment of Goodwill.** A goodwill impairment charge of $18.4 million resulting from a decrease in forecasted results of the UGV reporting unit identified during our annual goodwill impairment test during the three months ended April 30, 2025 in the UGV reporting unit.\n\n​\n\n**Interest Expense, net.** Interest expense, net for the fiscal year ended April 30, 2025 was $2.2 million, as compared to interest expense net of $4.2 million for the fiscal year ended April 30, 2024. The decrease in interest expense, net was primarily due to a decrease of $5.0 million in interest expense primarily due to lower average outstanding balances on our debt facility, partially offset by a decrease in interest income of $2.5 million primarily due to lower interest rates and a decrease in our average investment balances. On May 1, 2025, in connection with the closing of the BlueHalo acquisition, we entered into a new Term A Loan and borrowed from our revolving credit facility (the “Revolving Credit Facility,” and together with the Term A Loan, the “Credit Facilities”). As of May 1, 2025, the outstanding balance of the Credit Facilities was $955.0 million, which bears a variable interest rate.\n\n​\n\n**Other Income (Expense), net.** Other income, net for the fiscal year ended April 30, 2025 was $1.1 million, as compared to other expense, net of $4.4 million for the fiscal year ended April 30, 2024. The increase in other income, net is primarily due to a decrease in unrealized losses associated with increases in fair market value for equity security investments of $4.1 million.\n\n​\n\n**Income Taxes.** Our effective income tax rate was 2.2% for the fiscal year ended April 30, 2025 as compared to 3.0% for the fiscal year ended April 30, 2024. The decrease in our effective tax rate in fiscal 2025 compared with fiscal 2024 was primarily due to a decrease in net income, a decrease in our FDII deduction, offset by non-deductible goodwill impairment expense from our foreign subsidiary.\n​\n\n**Equity method investment gain (loss), net of tax.** Equity method investment gain, net of tax for the fiscal year ended April 30, 2025 was $4.8 million, as compared to equity method investment loss of $(1.7) million for the fiscal year ended April 30, 2024.\n\n​\n\n69\n\n[Table of Contents](#Toc)\n\n**Business Segment Results of Operations**\n\n​\n\n**AxS**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year Ended**\n\n​\n\n​\n\n**April 30,**\n\n​\n\n**April 30,**\n\n​\n\n**  ​ ​ ​**\n\n**2025**\n\n​\n\n**2024**\n\nRevenue:\n\n​\n\n$\n\n820,627\n\n​\n\n$\n\n716,720\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nSegment adjusted EBITDA\n\n​\n\n$\n\n146,424\n\n​\n\n$\n\n127,753\n\n​\n\nAxS Revenue**.** AxS Revenue for the fiscal year ended April 30, 2025 was $820.6 million, as compared to $716.7 million for the fiscal year ended April 30, 2024, representing an increase of $103.9 million, or 14%. The increase in revenue was due to an increase in product revenue of $107.0 million, partially offset by a decrease in service revenue of $3.0 million. The increase in product revenue was primarily due to an increase of $164.7 million from the production of our Switchblade products, driven by increased global demand for our LMS associated with the current global conflicts as well as U.S. DoD. resupply and an increase of $4.4 million from the delivery of MW products driven by demand for new product releases, partially offset by a decrease of $62.1 million of product deliveries of our UxS products, primarily due to a decrease in international sales to Ukraine. Fiscal 2025 also included favorable cumulative catch-up revenue adjustments of $12.0 million due to changes in estimates associated with the definitization of certain LMS contracts. The decrease in service revenue was primarily due to a decrease of $2.8 million in other engineering services and customer-funded R&D activities primarily associated with the shift from development to production of certain LMS products.\n\n​\n\nAxS Segment Adjusted EBITDA. AxS segment adjusted EBITDA for the year ended April 30, 2025 was $146.4 million, as compared to $127.8 million for the year ended April 30, 2024, representing an increase of $18.6 million, or 15%. The increase in AxS segment adjusted EBITDA was primarily due to an increase in revenue of $103.9 million. The increase in revenue was partially offset by an increase in adjusted cost of sales of $60.1 million, adjusted SG&A of $25.5 million primarily due employee related costs driven by the increased headcount, and R&D of $3.0 million. The increase in adjusted cost of sales was primarily due to an increase of approximately $58 million due to the increase in sales volume and approximately $2 million due to mix shift to a higher proportion of lower margin products driven by the increase in Switchblade production.\n\n​\n\n**SCDE.**SCDE was formed as a segment May 1, 2025 with no results prior to this date.\n\n​\n\n**Liquidity and Capital Resources**\n\n​\n\nIn May 2025, in connection with the consummation of the BlueHalo acquisition, the Company entered into a Fourth Amendment to Credit Agreement with BofA NA, the administrative agent and the swingline lender, JPM, U.S. Bank, Citibank, BMO, Citizens and RBC. The Amended Credit Agreement provides for an aggregate $700.0 million term loan and an aggregate $350.0 million revolving credit facility. Upon effectiveness of the Amended Credit Agreement, we drew $225.0 million from the amended Revolving Facility and the full $700.0 million of the Term Loan Facility. The proceeds from the Term Loan Facility and the Revolving Facility were used to repay certain outstanding indebtedness of BlueHalo and to pay for certain related transaction costs. In June 2025, we drew an additional $10.0 million under the Revolving Facility.\n\n​\n\nIn July 2025, we issued 4,057,460 shares of common stock at a public offering price of $248.00 per share (the “Common Stock Offering”) and issued $747,500,000 aggregate principal amount of 0% convertible senior notes due 2030 (the “Notes Offering”). The aggregate net proceeds from the Common Stock Offering and the Notes Offering, after deducting underwriting discounts and debt and equity issuance costs, was approximately $1.70 billion. The Company used approximately $965.3 million of the net proceeds from the Common Stock Offering and the Notes Offering to repay indebtedness under the Term Loan Facility and outstanding borrowings under the Revolving Credit Facility, and the remainder is expected to be used for general corporate purposes, including to increase manufacturing capacity.\n\n​\n\n70\n\n[Table of Contents](#Toc)\n\nThe $700.0 million term loan has been repaid in full and closed; although new term loans can be renegotiated and issued under the Credit Facility. Our ability to borrow under the Revolving Facility is reduced by outstanding letters of credit of $13.2 million as of April 30, 2026. As of April 30, 2026, approximately $336.8 million was available under the Revolving Facility. Refer to Note 10—Debt to our unaudited condensed consolidated financial statements in Part I, Item 1 of this Annual Report on Form 10-K for further details. In addition, Telerob has a line of credit of €9.0 million ($10.5 million) available for borrowing or issuing letters of credit of which €2.2 million ($2.6 million) was outstanding as of April 30, 2026.\n\n​\n\nWe anticipate funding our normal recurring trade payables, accrued expenses, ongoing R&D costs and obligations under the Credit Facilities through our existing working capital and funds provided by operating activities. The majority of our purchase obligations are pursuant to funded contractual arrangements with our customers. We believe that our existing cash, cash equivalents, cash provided by operating activities and other financing sources will be sufficient to meet our anticipated working capital, capital expenditure requirements. There can be no assurance, however, that our business will continue to generate cash flow at current levels. If we are unable to generate sufficient cash flow from operations, then we may be required to sell assets, reduce capital expenditures or draw on our Credit Facilities. We anticipate that existing sources of liquidity, Credit Facilities, and cash flows from operations will be sufficient to satisfy our cash needs for the foreseeable future.\n\n​\n\nThe Company is party to a receivables purchase agreement with Citibank, N.A., with an aggregate capacity of $100 million. As of April 30, 2026, no receivables have been sold, proceeds collected, or purchase discount fees incurred.\n\n​\n\nOur primary recurring liquidity needs are for financing working capital, investing in capital expenditures, supporting product development efforts, introducing new products and enhancing existing products, marketing acceptance and adoption of our products and services, and possible acquisitions of entities or strategic assets. Our future capital requirements, to a certain extent, are also subject to general conditions in or affecting the defense industry and are subject to general economic, political, financial, competitive, legislative and regulatory factors that are beyond our control. Moreover, to the extent that existing cash, cash equivalents, cash from operations, and cash from our Credit Facilities are insufficient to fund our future activities, we may need to raise additional funds through public or private equity or debt financing, subject to the limitations specified in the Amended Credit Agreement. In addition, we may also need to seek additional equity funding or debt financing if we become a party to any agreement or letter of intent for potential investments in, or acquisitions of, businesses, services or technologies.\n\n​\n\nOur working capital requirements vary by contract type. On Cost Plus and T&M contracts, we typically bill our incurred costs and fees monthly as work progresses, and therefore working capital investment is minimal. On FFP contracts, we typically are paid as we deliver products, and working capital is needed to fund labor and expenses incurred during the lead time from contract award until contract deliveries begin. Certain contracts have negotiated progress payments, which facilitates billing and collection as work is completed.\n\n​\n\nDue to the July 2025 reconciliation bill, commonly known as the One Big Beautiful Bill Act (“OBBA”), which allows R&D expenditures to be deducted, our cash taxes paid for U.S. federal income taxes are significantly reduced for the fiscal year ending April 30, 2026.\n\n​\n\nIn May 2026, we notified the lessor of our intent to exercise the purchase option in the 100 Quality Circle, Huntsville, Alabama lease agreement and plan to purchase the building for $16.3 million.\n\n71\n\n[Table of Contents](#Toc)\n\n**Cash Flows**\n\n​\n\nThe following table provides our cash flow data from continuing operations for the periods ended:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Fiscal Year Ended April 30,**\n\n** **\n\n​\n\n​\n\n**2026**\n\n**  ​ ​ ​**\n\n**2025**\n\n**  ​ ​ ​**\n\n**2024**\n\n​\n\n​\n\n** **\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n** **\n\n​\n\n​\n\n**(In thousands)**\n\n** **\n\nNet cash (used in) provided by operating activities\n\n​\n\n$\n\n(78,404)\n\n​\n\n$\n\n(1,318)\n\n​\n\n$\n\n15,292\n\n​\n\nNet cash used in investing activities\n\n​\n\n$\n\n(1,232,671)\n\n​\n\n$\n\n(28,490)\n\n​\n\n$\n\n(51,714)\n\n​\n\nNet cash provided by (used in) financing activities\n\n​\n\n$\n\n1,647,178\n\n​\n\n$\n\n(2,856)\n\n​\n\n$\n\n(22,852)\n\n​\n\n​\n\n**Cash (Used in) Provided by Operating Activities.** Net cash used in operating activities for the fiscal year ended April 30, 2026 increased by $77.1 million to $78.4 million, as compared to net used in operating activities of $1.3 million for the fiscal year ended April 30, 2025. This decrease in net cash provided by operating activities was primarily due to a decrease in changes in operating assets and liabilities of $236.6 million, largely resulting from increases in inventories due to increased demand and accounts receivable and unbilled receivables and retentions due to year over year timing differences, and a decrease in net income of $308.7 million. The decrease in cash provided by operating activities was partially offset by an increase in non-cash expenses of $468.3 million, primarily due to an increase in depreciation and amortization and goodwill impairment charges.\n\n​\n\nNet cash used in operating activities for the fiscal year ended April 30, 2025 increased by $16.6 million to $1.3 million, as compared to net cash provided by operating activities of $15.3 million for the fiscal year ended April 30, 2024. This decrease in net cash provided by operating activities was primarily due to a decrease in net income of $16.0 million and changes in operating assets and liabilities, largely resulting from increases in accounts receivable and income tax receivable and a decrease in other liabilities, partially offset by a decrease in inventories and an increase in accounts payable due to year over year timing differences. The decrease in cash provided by operating activities was partially offset by an increase in non-cash expenses of $10.9 million, primarily due to a goodwill impairment of $18.4 million in the fiscal year ended April 30, 2025, an increase in stock-based compensation and depreciation and amortization, partially offset by a decrease in stock inventory reserve charges.\n\n​\n\n**Cash Used in Investing Activities.** Net cash used in investing activities increased by $1,204.2 million to $1,232.7 million for the fiscal year ended April 30, 2026, compared to $28.5 million for the fiscal year ended April 30, 2025. The increase in net cash used in investing activities was primarily due to business acquisitions, net of cash acquired of $871.5 million related to the BlueHalo and ESAero acquisitions in the fiscal year ended April 30, 2026 and net purchase investments of $283.4 million. During the fiscal years ended April 30, 2026 and 2025, we used cash to purchase property and equipment totaling $62.5 million and $22.8 million, respectively.\n\n​\n\nNet cash used in investing activities decreased by $23.2 million to $28.5 million for the fiscal year ended April 30, 2025, compared to $51.7 million for the fiscal year ended April 30, 2024. The decrease in net cash used in investing activities was primarily due to a decrease in business acquisitions, net of cash acquired of $24.2 million related to the Tomahawk acquisition in the fiscal year ended April 30, 2024. During the fiscal years ended April 30, 2025 and 2024, we used cash to purchase property and equipment totaling $22.8 million and $23.0 million, respectively.\n\n​\n\n**Cash Provided by (Used in) Financing Activities.** Net cash provided by financing activities increased by $1,650.0 million to $1,647.2 million for the fiscal year ended April 30, 2026, compared to net cash used in financing activities of $2.9 million for the fiscal year ended April 30, 2025. The increase in net cash used in financing activities was primarily due to proceeds from shares issued, net of issuance costs of $968.5 million proceeds and proceeds from the convertible notes of $726.9 million, partially offset by net principal payments of the credit facility of $39.9 million.\n\n​\n\nNet cash used in financing activities decreased by $20.0 million to $2.9 million for the fiscal year ended April 30, 2025, compared to net cash provided by financing activities of $22.9 million for the fiscal year ended April 30, 2024. The decrease in net cash used in financing activities was primarily due to a decrease in the principal payments on the credit facility of $69.0 million and an increase in proceeds from the credit facility of $40.0 million, partially offset by\n\n72\n\n[Table of Contents](#Toc)\n\na decrease in the proceeds from shares issued, net of issuance costs of $88.4 million in the fiscal year ended April 30, 2024.\n\n​\n\n**Contractual Obligations**\n\n​\n\nThe following table describes our commitments to settle contractual obligations as of April 30, 2026:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Payments Due By Period (2)**\n\n** **\n\n​\n\n**  ​ ​ ​**\n\n​\n\n​\n\n**  ​ ​ ​**\n\n**Less Than**\n\n**  ​ ​ ​**\n\n​\n\n​\n\n**  ​ ​ ​**\n\n​\n\n​\n\n**  ​ ​ ​**\n\n**More Than**\n\n** **\n\n​\n\n​\n\n**Total**\n\n​\n\n**1 Year**\n\n​\n\n**1 to 3 Years**\n\n​\n\n**3 to 5 Years**\n\n​\n\n**5 Years**\n\n** **\n\n​\n\n​\n\n**(In thousands)**\n\n** **\n\nOperating lease obligations\n\n​\n\n$\n\n134,344\n\n​\n\n$\n\n23,263\n\n​\n\n$\n\n47,592\n\n​\n\n$\n\n29,400\n\n​\n\n$\n\n34,089\n\n​\n\nPurchase obligations(1)\n\n​\n\n \n\n680,159\n\n​\n\n \n\n662,673\n\n​\n\n \n\n17,486\n\n​\n\n \n\n—\n\n​\n\n \n\n—\n\n​\n\nLong-term debt obligations\n\n​\n\n​\n\n747,500\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n747,500\n\n​\n\n​\n\n—\n\n​\n\nTotal\n\n​\n\n$\n\n1,562,003\n\n​\n\n$\n\n685,936\n\n​\n\n$\n\n65,078\n\n​\n\n$\n\n776,900\n\n​\n\n$\n\n34,089\n\n​\n\n​\n\n(1)Consists of all cancelable and non-cancelable purchase orders as of April 30, 2026.\n\n(2)Not included in the table above is additional capital contributions of $0.9 million committed under the terms of a limited partnership agreement. Additionally, subsequent to the reporting period in May 2026, the Company entered into a new limited partnership and committed to contributions totaling $20.0 million over an expected five year period.\n\n​\n\n**Recently Adopted Accounting Standards**\n\n​\n\nIn December 2023, the FASB issued ASU 2023-09, *Income Taxes (Topic 740): Improvements to Income Tax Disclosures* (“ASU 2023-09”). ASU 2023-09 requires updates to the rate reconciliation, income taxes paid and other disclosures. Effective April 30, 2026, we adopted the ASU 2023-09 retrospectively. The Company’s adoption of ASU 2023-07 did not have a material impact on the Company’s consolidated financial statements.\n\n​\n\n**New Accounting Standards**\n\n​\n\nIn November 2024, the FASB issued ASU 2024-03, *Income Statement—Reporting Comprehensive Income— Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses* (“ASU 2024-03”). ASU 2024-03 requires disclosure, in the notes to financial statements, of specified information about certain costs and expenses included in each expense caption on the face of the income statement at interim and annual reporting periods. The new standard is effective for fiscal years beginning after December 15, 2026, interim periods within fiscal years beginning after December 15, 2027, and should be applied either prospectively to financial statements issued for reporting periods after the effective date of this ASU or retrospectively to any or all prior periods presented in the financial statements. We do not expect this guidance to have a material impact on our financial position or results of operations; however, it will result in additional disclosures in the notes to our consolidated financial statements.\n\n​\n\nIn September 2025, the FASB issued ASU 2025-06, *Targeted Improvements to the Accounting for Internal-Use Software* (“ASU 2025-06”), which better aligns the accounting guidance to how software is developed by eliminating project stages from capitalization criteria. The new standard is effective for annual reporting periods beginning after December 15, 2027 and interim periods within those annual reporting periods. The standard allows for prospective, modified, or retrospective transition. Early adoption is permitted. We are currently evaluating the impact of adopting this new pronouncement.\n\n​\n\nIn December 2025, the FASB issued ASU 2025-11, *Interim Reporting* (“ASU 2025-11”), which is intended to improve the navigability of required interim disclosures and clarify when that guidance is applicable, and also to provide additional guidance on what disclosures should be provided in interim reporting periods. The new standard is effective for annual reporting periods beginning after December 15, 2027 and interim periods within those annual reporting periods. The standard allows for prospective or retrospective transition. Early adoption is permitted. We do not expect this guidance to have a material impact on our financial position or results of operations.\n\n​\n\n73\n\n[Table of Contents](#Toc)\n\n**Item ****7A. Quantitative and Qualitative****Disclosures About Market Risk.**\n\n​\n\n**Interest Rate Risk**\n\n​\n\nIn July 2025, we issued $747.5 million of convertible notes. We used the proceeds from the Notes Offering as well as the Common Stock Offering to repay indebtedness under our Term Loan Facility and outstanding borrowings under the Revolving Facility. The convertible notes have a zero percent coupon rate. The Revolving Facility has no current outstanding balance.\n\n​\n\n**Foreign Currency Exchange Rate Risk**\n\n​\n\nSince a significant part of our sales and expenses are denominated in U.S. dollars, we have not experienced significant foreign exchange gains or losses to date. We currently do not engage in forward contracts or other derivatives in foreign currencies to limit our exposure on non-U.S. dollar transactions. As our German subsidiary, Telerob conducts sales denominated in Euros, we are exposed to future foreign exchange gains or losses, and we will consider methods to limit our exposure on non-U.S. dollar transactions in the future.\n\n​\n\n74\n\n[Table of Contents](#Toc)\n\n**Item ****8. Financial Statements and Supplementary Dat****a.**\n\n​\n\n**AeroVironment, Inc.**\n\n**Audited Consolidated Financial Statements**\n\n**Index to Consolidated Financial Statements and Supplementary Data**\n\n​\n\n​\n\n**  ​ ​ ​**\n\n**Page**\n\n** **\n\n[Report of Independent Registered Public Accounting Firm](#REPORTOFINDEPENDENTREGISTEREDPUBLICACCOU) (PCAOB 34)\n\n​\n\n76\n\n​\n\n[Consolidated Balance Sheets at April 30, 2026 and 2025](#BALANCESHEETS_49983)\n\n​\n\n80\n\n​\n\n[Consolidated Statements of Income (Loss) for the Years Ended April 30, 2026, 2025 and 2024](#INCOME_269433)\n\n​\n\n81\n\n​\n\n[Consolidated Statements of Comprehensive Income (Loss) for the Years Ended April 30, 2026, 2025 and 2024](#COMPREHENSIVEINCOME_840393)\n\n​\n\n82\n\n​\n\n[Consolidated Statements of Stockholders’ Equity for the Years Ended April 30, 2026, 2025 and 2024](#EQUITY_35897)\n\n​\n\n83\n\n​\n\n[Consolidated Statements of Cash Flows for the Years Ended April 30, 2026, 2025 and 2024](#CASHFLOWS_771986)\n\n​\n\n84\n\n​\n\n[Notes to Consolidated Financial Statements](#NOTESTOTHECONSOLIDATEDFINANCIALSTATEMENT)\n\n​\n\n85\n\n​\n\n[**Supplementary Data**](#SUPPLEMENTARYDATA_725343)\n\n​\n\n​\n\n​\n\n[Financial Statement Schedule: Schedule II—Valuation and Qualifying Accounts](#SCHEDULEIIV_451658)\n\n​\n\n126\n\n​\n\n​\n\n**All other schedules are omitted because they are not applicable, not required or the information required is included in the Consolidated Financial Statements, including the notes thereto.**\n\n​\n\n​\n\n75\n\n[Table of Contents](#Toc)\n\n**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**\n\n​\n\nTo the stockholders and the Board of Directors of AeroVironment, Inc.\n\n​\n\n**Opinion on the Financial Statements**\n\n​\n\nWe have audited the accompanying consolidated balance sheets of AeroVironment, Inc. and subsidiaries (the \"Company\") as of April 30, 2026 and 2025, the related consolidated statements of income (loss), comprehensive income (loss), stockholders' equity, and cash flows, for each of the three years in the period ended April 30, 2026, and the related notes and the schedule listed in the Index at Item 15(a) (collectively referred to as the \"financial statements\"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of April 30, 2026 and 2025, and the results of its operations and its cash flows for each of the three years in the period ended April 30, 2026, in conformity with accounting principles generally accepted in the United States of America.\n\n​\n\nWe have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of April 30, 2026, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated June 29, 2026, expressed an adverse opinion on the Company's internal control over financial reporting because of material weaknesses.\n\n​\n\n**Basis for Opinion**\n\n​\n\nThese financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.\n\n​\n\nWe conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.\n\n​\n\n**Critical Audit Matters**\n\n​\n\nThe critical audit matters communicated below are a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing a separate opinion on the critical audit matters or on the accounts or disclosures to which they relate.\n\n​\n\nRevenue Recognition — Contract Estimates on Select Contracts - Refer to Note 1 to the financial statements\n\n​\n\n*Critical Audit Matter Description*\n\n​\n\nAs further described in Note 1 to the financial statements, for performance obligations satisfied over time, revenue is generally recognized using costs incurred to date relative to total estimated costs at completion to measure progress. Contract estimates are based on various assumptions to project the outcome of future events that may span several years. Contract costs include labor, materials, subcontractors’ costs, other direct costs, and indirect costs applicable on government and commercial contracts. Additionally, the nature of the Company’s contracts gives rise to several types of variable consideration, which are within the scope of ASC 606 with final contract values to be negotiated, penalty fees and\n\n76\n\n[Table of Contents](#Toc)\n\nincentive awards generally for late delivery and early delivery, respectively. The Company regularly reviews and updates its contract-related estimates. Changes in cumulative revenue estimates, due to changes in the estimated transaction price or cost estimates, are recorded using a cumulative catch-up adjustment in the period identified. We analyzed the Company’s contract portfolio to identify contracts that we believe had elevated financial or performance risk. For those contracts identified, the evaluation of one or more contract estimate assumptions used to recognize revenue required extensive audit effort due to the complexity of the contracts and a high degree of auditor judgments.\n\n​\n\n*How the Critical Audit Matter Was Addressed in the Audit*\n\n​\n\nOur audit procedures related to the contract estimates for these contracts identified included the following, among others:\n\n​\n\n●We tested the design and operating effectiveness of management’s controls over the significant assumptions and judgments underlying the contract estimates associated with these contracts.\n\n​\n\n●Based on the risk characteristic identified on an individual contract, we evaluated certain contract estimates by:\n\n​\n\noReading the underlying contract and any amendments or modifications to understand the contractual requirements and performance obligations.\n\n​\n\noAssessing the reasonableness of the contract estimates based on contract terms, relevant historical trends, and performing inquiries with the Company’s program and business management regarding their basis of estimates including work plans and supplier status, actual performance to date, and any recent correspondence between the company and the customer.\n\n​\n\noEvaluating the appropriateness of the timing and amounts of changes in select contract estimates by obtaining supporting documentation.\n\n​\n\noAssessing the completeness and accuracy of information utilized to develop contract estimates.\n\n​\n\noTesting the mathematical accuracy of management’s calculation of revenue recognized during the period for the selected contracts, and the cumulative catch-up adjustment.\n\n​\n\nGoodwill — Refer to Note 1 and Note 6 to the financial statements\n\n​\n\n*Critical Audit Matter Description*\n\n​\n\nIn January 2026, a stop-work order was received on the Company’s Other Transaction Agreement for the delivery of BADGER phased array antenna systems to support Space Force’s Satellite Communication Augmentation Resource (“SCAR”) program. The Company concluded that the stop-work order represented a trigger event that indicated the carrying value of the Space reporting unit exceeded its fair value. The Company estimates the fair value by weighting the results from the income approach and the market approach. These valuation approaches consider a number of factors that include prospective financial information, growth rates, terminal value, discount rates, and comparable multiples from publicly traded companies in the Company’s industry. The Company updated their estimates of the long-term cash flows of the Space reporting unit to reflect the reduced revenue associated with the stop-work order as well as an increase in expected research and development and capital investments to achieve product commercialization. The changes in estimates resulted in the recognition of a goodwill impairment charge of approximately $240,708,000 in the Space reporting unit.\n\n​\n\nWe identified the significant judgments made by management related to the amount and timing of future revenue projections used to determine the fair value of the Space reporting unit as a critical audit matter. This required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists, when performing audit procedures to evaluate the reasonableness of management’s estimates and assumptions related to future revenue projections.\n\n​\n\n77\n\n[Table of Contents](#Toc)\n\n*How the Critical Audit Matter Was Addressed in the Audit*\n\n​\n\nOur audit procedures related to the expected amount and timing of future revenue projections used to estimate the fair value of the Space reporting unit included the following, among others:\n\n​\n\n●We tested the design and effectiveness of management’s controls over their goodwill impairment evaluation, including those over the determination of the fair value of the Space reporting unit, such as controls related to management’s review of forecasts of future revenues.\n\n​\n\n●We inquired of appropriate individuals, both within and outside of finance, regarding the revenue projections.\n\n​\n\n●We assessed the reasonableness of management’s forecasts of future revenues by comparing the projections to historical results, third-party industry forecasts, contractual agreements and internal communications to management and the Company’s Board of Directors.\n\n​\n\n●With the assistance of our fair value specialists, we compared applicable industry forecasted long-term revenue growth rates to management’s projected revenues used within the valuation model.\n\n​\n\n●We evaluated management’s ability to estimate future revenues by comparing actual revenues to management’s historical forecasts.\n\n​\n\nBusiness Acquisitions — Refer to Note 1 and Note 19 to the financial statements\n\n​\n\n*Critical Audit Matter Description*\n\n​\n\nOn May 1, 2025, the Company closed its acquisition of BlueHalo for merger consideration, net of cash acquired, of $3,484,945,000. The Company accounted for the acquisition under the acquisition method of accounting for business combinations. Accordingly, the purchase price was allocated to the fair value of the assets acquired and liabilities assumed, resulting in developed technology of $480,400,000, customer relationships of $499,500,000, backlog of $49,900,000, and goodwill of $2,367,428,000.\n\n​\n\nManagement used valuation techniques to value these intangibles assets, with the primary technique being a discounted cash flow analysis. A discounted cash flow analysis requires Management to make various assumptions and estimates including projected revenue, gross margins, operating costs, growth rates, useful lives and discount rates.\n\n​\n\nWe identified the significant judgements made by management related to the amount and timing of future revenue projections used in the valuation of certain developed technology and customer relationship assets to be a critical audit matter. This required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists, when performing audit procedures to evaluate the reasonableness of management’s estimates and assumptions related to future revenue projections.\n\n​\n\n*How the Critical Audit Matter Was Addressed in the Audit*\n\n​\n\nOur audit procedures related to the expected amount and timing of future revenue used to estimate the fair value of the intangible assets acquired included the following, among others:\n\n​\n\n●We tested the design and effectiveness of management’s controls over the valuation of intangibles, including management’s controls over the estimates of the amount and timing of expected future revenues.\n\n​\n\n●We assessed the reasonableness of management’s forecasts of future revenues relating to certain developed technology and customer relationship assets by performing inquiries of appropriate individuals outside of the accounting organization, comparing the projections to historical results, contractual agreements, third-party industry forecasts, and internal communications to management and the Company’s Board of Directors.\n\n​\n\n●With the assistance of our fair value specialists, we compared applicable industry forecasted long-term revenue growth rates to management’s projected revenues used within the valuation model.\n\n78\n\n[Table of Contents](#Toc)\n\n​\n\n●We evaluated management’s ability to estimate future revenues by comparing actual revenues to estimates assumed in the valuation model.\n\n​\n\n/s/ Deloitte & Touche LLP\n\n​\n\nLos Angeles, California\n\nJune 29, 2026\n\n​\n\nWe have served as the Company’s auditor since fiscal 2020.\n\n​\n\n​\n\n79\n\n[Table of Contents](#Toc)\n\n**AEROVIRONMENT, INC.**\n\n**CONSOLIDATED BALANCE SHEET****S**\n\n**(In thousands except share data)**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**April 30,**\n\n​\n\n​\n\n​\n\n**2026**\n\n​\n\n**2025**\n\n​\n\n**Assets**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nCurrent assets:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nCash and cash equivalents\n\n​\n\n$\n\n377,325\n\n​\n\n$\n\n40,862\n\n​\n\nShort-term investments\n\n​\n\n​\n\n254,972\n\n​\n\n​\n\n—\n\n​\n\nAccounts receivable, net of allowance for credit losses of $1,961 at April 30, 2026 and $203 at April 30, 2025\n\n​\n\n​\n\n316,167\n\n​\n\n​\n\n101,967\n\n​\n\nUnbilled receivables and retentions\n\n​\n\n​\n\n570,408\n\n​\n\n​\n\n290,009\n\n​\n\nInventories, net\n\n​\n\n​\n\n312,856\n\n​\n\n​\n\n144,090\n\n​\n\nIncome taxes receivable\n\n​\n\n​\n\n6,210\n\n​\n\n​\n\n622\n\n​\n\nPrepaid expenses and other current assets\n\n​\n\n​\n\n52,485\n\n​\n\n​\n\n28,966\n\n​\n\nTotal current assets\n\n​\n\n​\n\n1,890,423\n\n​\n\n​\n\n606,516\n\n​\n\nLong-term investments\n\n​\n\n​\n\n81,128\n\n​\n\n​\n\n31,627\n\n​\n\nProperty and equipment, net\n\n​\n\n​\n\n166,719\n\n​\n\n​\n\n50,704\n\n​\n\nOperating lease right-of-use assets\n\n​\n\n​\n\n100,392\n\n​\n\n​\n\n31,879\n\n​\n\nDeferred income taxes\n\n​\n\n​\n\n—\n\n​\n\n​\n\n61,460\n\n​\n\nIntangibles, net\n\n​\n\n​\n\n929,826\n\n​\n\n​\n\n48,711\n\n​\n\nGoodwill\n\n​\n\n​\n\n2,493,678\n\n​\n\n​\n\n256,781\n\n​\n\nOther assets\n\n​\n\n​\n\n54,576\n\n​\n\n​\n\n32,889\n\n​\n\nTotal assets\n\n​\n\n$\n\n5,716,742\n\n​\n\n$\n\n1,120,567\n\n​\n\n**Liabilities and stockholders’ equity**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nCurrent liabilities:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nAccounts payable\n\n​\n\n$\n\n160,507\n\n​\n\n$\n\n72,462\n\n​\n\nWages and related accruals\n\n​\n\n​\n\n98,056\n\n​\n\n​\n\n44,253\n\n​\n\nCustomer advances\n\n​\n\n​\n\n79,607\n\n​\n\n​\n\n15,952\n\n​\n\nCurrent operating lease liabilities\n\n​\n\n​\n\n17,594\n\n​\n\n​\n\n10,479\n\n​\n\nIncome taxes payable\n\n​\n\n​\n\n524\n\n​\n\n​\n\n356\n\n​\n\nOther current liabilities\n\n​\n\n​\n\n82,949\n\n​\n\n​\n\n28,659\n\n​\n\nTotal current liabilities\n\n​\n\n​\n\n439,237\n\n​\n\n​\n\n172,161\n\n​\n\nLong-term debt\n\n​\n\n​\n\n728,967\n\n​\n\n​\n\n30,000\n\n​\n\nNon-current operating lease liabilities\n\n​\n\n​\n\n88,228\n\n​\n\n​\n\n23,812\n\n​\n\nOther non-current liabilities\n\n​\n\n​\n\n1,986\n\n​\n\n​\n\n2,026\n\n​\n\nLiability for uncertain tax positions\n\n​\n\n​\n\n7,430\n\n​\n\n​\n\n6,061\n\n​\n\nDeferred income taxes\n\n​\n\n​\n\n50,494\n\n​\n\n​\n\n—\n\n​\n\nCommitments and contingencies\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nStockholders’ equity:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nPreferred stock, $0.0001 par value:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nAuthorized shares—10,000,000; none issued or outstanding at April 30, 2026 and April 30,2025\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\nCommon stock, $0.0001 par value:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nAuthorized shares—100,000,000\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nIssued and outstanding shares—50,610,514 shares at April 30, 2026 and 28,267,517 shares at April 30, 2025\n\n​\n\n​\n\n6\n\n​\n\n​\n\n4\n\n​\n\nAdditional paid-in capital\n\n​\n\n​\n\n4,396,845\n\n​\n\n​\n\n618,711\n\n​\n\nAccumulated other comprehensive loss\n\n​\n\n​\n\n(5,635)\n\n​\n\n​\n\n(6,514)\n\n​\n\nRetained earnings\n\n​\n\n​\n\n9,184\n\n​\n\n​\n\n274,306\n\n​\n\nTotal stockholders’ equity\n\n​\n\n​\n\n4,400,400\n\n​\n\n​\n\n886,507\n\n​\n\nTotal liabilities and stockholders’ equity\n\n​\n\n$\n\n5,716,742\n\n​\n\n$\n\n1,120,567\n\n​\n\n​\n\nSee accompanying notes to consolidated financial statements.\n\n80\n\n[Table of Contents](#Toc)\n\n**AEROVIRONMENT, INC.**\n\n**CONSOLIDATED STATEMENTS OF INCOM****E (LOSS)**\n\n**(In thousands except share and per share data)**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year Ended April 30,**\n\n** **\n\n​\n\n​\n\n**2026**\n\n**  ​ ​ ​**\n\n**2025**\n\n**  ​ ​ ​**\n\n**2024**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nRevenue:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nProduct sales\n\n​\n\n$\n\n1,415,349\n\n​\n\n$\n\n692,722\n\n​\n\n$\n\n585,771\n\n​\n\nContract services\n\n​\n\n \n\n561,496\n\n​\n\n \n\n127,905\n\n​\n\n \n\n130,949\n\n​\n\n​\n\n​\n\n \n\n1,976,845\n\n​\n\n \n\n820,627\n\n​\n\n \n\n716,720\n\n​\n\nCost of sales:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nProduct sales\n\n​\n\n \n\n959,230\n\n​\n\n \n\n404,347\n\n​\n\n \n\n340,174\n\n​\n\nContract services\n\n​\n\n \n\n516,973\n\n​\n\n \n\n97,644\n\n​\n\n \n\n92,615\n\n​\n\n​\n\n​\n\n \n\n1,476,203\n\n​\n\n \n\n501,991\n\n​\n\n \n\n432,789\n\n​\n\nGross margin:\n\n​\n\n \n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nProduct sales\n\n​\n\n​\n\n456,119\n\n​\n\n​\n\n288,375\n\n​\n\n​\n\n245,597\n\n​\n\nContract services\n\n​\n\n​\n\n44,523\n\n​\n\n​\n\n30,261\n\n​\n\n​\n\n38,334\n\n​\n\n​\n\n​\n\n \n\n500,642\n\n​\n\n \n\n318,636\n\n​\n\n \n\n283,931\n\n​\n\nSelling, general and administrative\n\n​\n\n \n\n443,251\n\n​\n\n \n\n158,753\n\n​\n\n \n\n114,420\n\n​\n\nResearch and development\n\n​\n\n \n\n127,678\n\n​\n\n \n\n100,729\n\n​\n\n \n\n97,687\n\n​\n\nImpairment of goodwill\n\n​\n\n​\n\n240,708\n\n​\n\n​\n\n18,359\n\n​\n\n​\n\n—\n\n​\n\n(Loss) income from operations\n\n​\n\n \n\n(310,995)\n\n​\n\n \n\n40,795\n\n​\n\n \n\n71,824\n\n​\n\nOther income (loss):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nInterest expense, net\n\n​\n\n \n\n(5,613)\n\n​\n\n \n\n(2,188)\n\n​\n\n \n\n(4,220)\n\n​\n\nOther income (expense), net\n\n​\n\n \n\n10,986\n\n​\n\n \n\n1,057\n\n​\n\n \n\n(4,373)\n\n​\n\n(Loss) income before income taxes\n\n​\n\n \n\n(305,622)\n\n​\n\n \n\n39,664\n\n​\n\n \n\n63,231\n\n​\n\n(Benefit from) provision for income taxes\n\n​\n\n​\n\n(23,059)\n\n​\n\n \n\n882\n\n​\n\n \n\n1,891\n\n​\n\nEquity method investment income (loss), net of tax\n\n​\n\n \n\n17,441\n\n​\n\n \n\n4,837\n\n​\n\n \n\n(1,674)\n\n​\n\nNet (loss) income\n\n​\n\n​\n\n(265,122)\n\n​\n\n​\n\n43,619\n\n​\n\n​\n\n59,666\n\n​\n\nNet (loss) income per share\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nBasic\n\n​\n\n$\n\n(5.40)\n\n​\n\n$\n\n1.56\n\n​\n\n$\n\n2.19\n\n​\n\nDiluted\n\n​\n\n$\n\n(5.40)\n\n​\n\n$\n\n1.55\n\n​\n\n$\n\n2.18\n\n​\n\nWeighted-average shares outstanding:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nBasic\n\n​\n\n \n\n49,087,346\n\n​\n\n \n\n28,018,656\n\n​\n\n \n\n27,203,417\n\n​\n\nDiluted\n\n​\n\n \n\n49,087,346\n\n​\n\n \n\n28,173,488\n\n​\n\n \n\n27,327,993\n\n​\n\n​\n\nSee accompanying notes to consolidated financial statements.\n\n​\n\n81\n\n[Table of Contents](#Toc)\n\n​\n\n**AEROVIRONMENT, INC.**\n\n**CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOM****E (LOSS)**\n\n**(In thousands)**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year Ended April 30,**\n\n** **\n\n​\n\n​\n\n**2026**\n\n**  ​ ​ ​**\n\n**2025**\n\n**  ​ ​ ​**\n\n**2024**\n\n​\n\n​\n\n** **\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n** **\n\nNet (loss) income\n\n​\n\n$\n\n(265,122)\n\n​\n\n$\n\n43,619\n\n​\n\n$\n\n59,666\n\n​\n\nOther comprehensive income (loss):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nUnrealized loss on available-for-sale investments, net of deferred tax expense of $0 for the fiscal year ended April 30, 2026\n\n​\n\n​\n\n(215)\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\nChange in foreign currency translation adjustments\n\n​\n\n​\n\n1,094\n\n​\n\n​\n\n(922)\n\n​\n\n​\n\n(1,140)\n\n​\n\nTotal comprehensive (loss) income\n\n​\n\n$\n\n(264,243)\n\n​\n\n$\n\n42,697\n\n​\n\n$\n\n58,526\n\n​\n\n​\n\nSee accompanying notes to consolidated financial statements.\n\n​\n\n82\n\n[Table of Contents](#Toc)\n\n**AEROVIRONMENT, INC.**\n\n**CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUIT****Y**\n\n**(In thousands except share data)**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Accumulated**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Additional**\n\n​\n\n​\n\n​\n\n​\n\n**Other**\n\n​\n\n**Total**\n\n​\n\n​\n\n​\n\n**Common Stock**\n\n​\n\n**Paid-In**\n\n​\n\n**Retained**\n\n​\n\n**Comprehensive**\n\n​\n\n**AeroVironment, Inc.**\n\n​\n\n​\n\n**  ​ ​ ​**\n\n**Shares**\n\n**  ​ ​ ​**\n\n**Amount**\n\n**  ​ ​ ​**\n\n**Capital**\n\n**  ​ ​ ​**\n\n**Earnings**\n\n**  ​ ​ ​**\n\n**(Loss) Income**\n\n​\n\n**Equity**\n\n​\n\nBalance at April 30, 2023\n\n \n\n26,216,897\n\n​\n\n$\n\n4\n\n​\n\n$\n\n384,397\n\n​\n\n$\n\n171,021\n\n​\n\n$\n\n(4,452)\n\n​\n\n$\n\n550,970\n\n​\n\nNet income\n\n \n\n—\n\n​\n\n \n\n—\n\n​\n\n \n\n—\n\n​\n\n \n\n59,666\n\n​\n\n \n\n—\n\n​\n\n​\n\n59,666\n\n​\n\nForeign currency translation\n\n​\n\n—\n\n​\n\n \n\n—\n\n​\n\n \n\n—\n\n​\n\n \n\n—\n\n​\n\n \n\n(1,140)\n\n​\n\n​\n\n(1,140)\n\n​\n\nRestricted stock awards\n\n \n\n151,113\n\n​\n\n \n\n—\n\n​\n\n \n\n—\n\n​\n\n \n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\nRestricted stock awards forfeited\n\n \n\n(11,470)\n\n​\n\n \n\n—\n\n​\n\n \n\n—\n\n​\n\n \n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\nTax withholding payment related to net share settlement of equity awards\n\n​\n\n(15,471)\n\n​\n\n \n\n—\n\n​\n\n \n\n(1,596)\n\n​\n\n \n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n(1,596)\n\n​\n\nShares issued, net of issuance costs\n\n​\n\n807,370\n\n​\n\n \n\n—\n\n​\n\n \n\n87,956\n\n​\n\n \n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n87,956\n\n​\n\nIssuance of common stock for business acquisition\n\n​\n\n985,999\n\n​\n\n​\n\n—\n\n​\n\n​\n\n109,820\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n109,820\n\n​\n\nStock-based compensation\n\n \n\n—\n\n​\n\n \n\n—\n\n​\n\n \n\n17,069\n\n​\n\n \n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n17,069\n\n​\n\nBalance at April 30, 2024\n\n \n\n28,134,438\n\n​\n\n$\n\n4\n\n​\n\n$\n\n597,646\n\n​\n\n$\n\n230,687\n\n​\n\n$\n\n(5,592)\n\n​\n\n$\n\n822,745\n\n​\n\nNet income\n\n \n\n—\n\n​\n\n \n\n—\n\n​\n\n \n\n—\n\n​\n\n \n\n43,619\n\n​\n\n \n\n—\n\n​\n\n​\n\n43,619\n\n​\n\nForeign currency translation\n\n​\n\n—\n\n​\n\n \n\n—\n\n​\n\n \n\n—\n\n​\n\n \n\n—\n\n​\n\n \n\n(922)\n\n​\n\n​\n\n(922)\n\n​\n\nEmployee stock purchase plan contributions\n\n​\n\n14,598\n\n​\n\n​\n\n—\n\n​\n\n​\n\n1,910\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n1,910\n\n​\n\nStock options exercised\n\n​\n\n66,164\n\n​\n\n​\n\n—\n\n​\n\n​\n\n1,841\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n1,841\n\n​\n\nRestricted stock awards\n\n \n\n75,499\n\n​\n\n \n\n—\n\n​\n\n \n\n—\n\n​\n\n \n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\nRestricted stock awards forfeited\n\n \n\n(10,453)\n\n​\n\n \n\n—\n\n​\n\n \n\n—\n\n​\n\n \n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\nTax withholding payment related to net share settlement of equity awards\n\n \n\n(12,729)\n\n​\n\n \n\n—\n\n​\n\n \n\n(4,147)\n\n​\n\n \n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n(4,147)\n\n​\n\nStock based compensation\n\n \n\n—\n\n​\n\n \n\n—\n\n​\n\n \n\n21,461\n\n​\n\n \n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n21,461\n\n​\n\nBalance at April 30, 2025\n\n \n\n28,267,517\n\n​\n\n$\n\n4\n\n​\n\n$\n\n618,711\n\n​\n\n$\n\n274,306\n\n​\n\n$\n\n(6,514)\n\n​\n\n$\n\n886,507\n\n​\n\nNet loss\n\n \n\n—\n\n​\n\n \n\n—\n\n​\n\n \n\n—\n\n​\n\n \n\n(265,122)\n\n​\n\n \n\n—\n\n​\n\n​\n\n(265,122)\n\n​\n\nUnrealized loss on investments\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n(215)\n\n​\n\n​\n\n(215)\n\n​\n\nForeign currency translation\n\n​\n\n—\n\n​\n\n \n\n—\n\n​\n\n \n\n—\n\n​\n\n \n\n—\n\n​\n\n \n\n1,094\n\n​\n\n​\n\n1,094\n\n​\n\nEmployee stock purchase plan contributions\n\n​\n\n27,737\n\n​\n\n​\n\n—\n\n​\n\n \n\n4,355\n\n​\n\n \n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n4,355\n\n​\n\nRestricted stock awards\n\n \n\n186,855\n\n​\n\n \n\n—\n\n​\n\n \n\n—\n\n​\n\n \n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\nRestricted stock awards forfeited\n\n \n\n(18,010)\n\n​\n\n \n\n—\n\n​\n\n \n\n—\n\n​\n\n \n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\nTax withholding payment related to net share settlement of equity awards\n\n \n\n(7,972)\n\n​\n\n \n\n—\n\n​\n\n \n\n(10,928)\n\n​\n\n \n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n(10,928)\n\n​\n\nIssuance of common stock for business acquisitions\n\n \n\n18,096,927\n\n​\n\n \n\n2\n\n​\n\n \n\n2,779,527\n\n​\n\n \n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n2,779,529\n\n​\n\nShares issued, net of issuance costs\n\n​\n\n4,057,460\n\n​\n\n​\n\n—\n\n​\n\n​\n\n966,846\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n966,846\n\n​\n\nStock based compensation\n\n \n\n—\n\n​\n\n \n\n—\n\n​\n\n \n\n38,334\n\n​\n\n \n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n38,334\n\n​\n\nBalance at April 30, 2026\n\n \n\n50,610,514\n\n​\n\n$\n\n6\n\n​\n\n$\n\n4,396,845\n\n​\n\n$\n\n9,184\n\n​\n\n$\n\n(5,635)\n\n​\n\n$\n\n4,400,400\n\n​\n\n​\n\nSee accompanying notes to consolidated financial statements.\n\n​\n\n83\n\n[Table of Contents](#Toc)\n\n**AEROVIRONMENT, INC.**\n\n**CONSOLIDATED STATEMENTS OF CASH FLOW****S**\n\n**(In thousands)**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year Ended April 30,**\n\n** **\n\n​\n\n** **\n\n**2026**\n\n**  ​ ​ ​**\n\n**2025**\n\n**  ​ ​ ​**\n\n**2024**\n\n** **\n\n**Operating activities**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nNet (loss) income\n\n​\n\n$\n\n(265,122)\n\n​\n\n$\n\n43,619\n\n​\n\n$\n\n59,666\n\n​\n\nAdjustments to reconcile net (loss) income to cash used in operating activities:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nDepreciation and amortization\n\n​\n\n​\n\n265,037\n\n​\n\n​\n\n40,998\n\n​\n\n​\n\n35,749\n\n​\n\nImpairment of goodwill\n\n​\n\n​\n\n240,708\n\n​\n\n​\n\n18,359\n\n​\n\n​\n\n—\n\n​\n\n(Gain)/Loss from equity method investments\n\n​\n\n​\n\n(17,441)\n\n​\n\n​\n\n(4,837)\n\n​\n\n​\n\n1,674\n\n​\n\nAmortization of debt issuance costs\n\n​\n\n​\n\n11,408\n\n​\n\n​\n\n1,195\n\n​\n\n​\n\n1,009\n\n​\n\nProvision for credit losses\n\n​\n\n​\n\n1,986\n\n​\n\n​\n\n43\n\n​\n\n​\n\n4\n\n​\n\nReserve for inventory excess and obsolescence\n\n​\n\n​\n\n8,460\n\n​\n\n​\n\n2,882\n\n​\n\n​\n\n13,937\n\n​\n\nOther non-cash expense, net\n\n​\n\n​\n\n5,306\n\n​\n\n​\n\n2,606\n\n​\n\n​\n\n1,316\n\n​\n\nNon-cash lease expense\n\n​\n\n​\n\n25,426\n\n​\n\n​\n\n10,163\n\n​\n\n​\n\n10,400\n\n​\n\nLoss on foreign currency transactions\n\n​\n\n​\n\n18\n\n​\n\n​\n\n491\n\n​\n\n​\n\n22\n\n​\n\n(Gain) loss on sale of equity securities, net\n\n​\n\n​\n\n(11,720)\n\n​\n\n​\n\n(177)\n\n​\n\n​\n\n3,945\n\n​\n\nDeferred income taxes\n\n​\n\n​\n\n(27,111)\n\n​\n\n​\n\n(20,157)\n\n​\n\n​\n\n(23,290)\n\n​\n\nStock-based compensation\n\n​\n\n​\n\n38,334\n\n​\n\n​\n\n21,461\n\n​\n\n​\n\n17,069\n\n​\n\nLoss on disposal of property and equipment\n\n​\n\n​\n\n2,136\n\n​\n\n​\n\n311\n\n​\n\n​\n\n621\n\n​\n\nAmortization of debt securities\n\n​\n\n​\n\n(879)\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\nChanges in operating assets and liabilities, net of acquisitions:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nAccounts receivable\n\n​\n\n​\n\n(128,697)\n\n​\n\n​\n\n(31,761)\n\n​\n\n​\n\n19,208\n\n​\n\nUnbilled receivables and retentions\n\n​\n\n​\n\n(158,980)\n\n​\n\n​\n\n(90,514)\n\n​\n\n​\n\n(92,850)\n\n​\n\nInventories\n\n​\n\n​\n\n(111,610)\n\n​\n\n​\n\n2,966\n\n​\n\n​\n\n(23,045)\n\n​\n\nIncome taxes receivable\n\n​\n\n​\n\n(1,364)\n\n​\n\n​\n\n(590)\n\n​\n\n​\n\n—\n\n​\n\nPrepaid expenses and other assets\n\n​\n\n​\n\n(19,940)\n\n​\n\n​\n\n(21,010)\n\n​\n\n​\n\n(20,279)\n\n​\n\nAccounts payable\n\n​\n\n​\n\n28,081\n\n​\n\n​\n\n22,331\n\n​\n\n​\n\n12,968\n\n​\n\nOther liabilities\n\n​\n\n​\n\n37,560\n\n​\n\n​\n\n303\n\n​\n\n​\n\n(2,832)\n\n​\n\nNet cash (used in) provided by operating activities\n\n​\n\n​\n\n(78,404)\n\n​\n\n​\n\n(1,318)\n\n​\n\n​\n\n15,292\n\n​\n\n**Investing activities**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nAcquisition of property and equipment\n\n​\n\n​\n\n(62,544)\n\n​\n\n​\n\n(19,547)\n\n​\n\n​\n\n(22,983)\n\n​\n\nAcquisition of capitalized software to be sold\n\n​\n\n​\n\n(23,674)\n\n​\n\n​\n\n(3,269)\n\n​\n\n​\n\n—\n\n​\n\nContributions in equity method investments\n\n​\n\n​\n\n(4,543)\n\n​\n\n​\n\n(5,674)\n\n​\n\n​\n\n(3,074)\n\n​\n\nPurchase of available-for-sale investments\n\n​\n\n​\n\n(369,867)\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\nRedemption of available-for-sale investments\n\n​\n\n​\n\n94,500\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\nPurchase of equity and debt investments\n\n​\n\n​\n\n(8,000)\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\nProceeds from sale of equity securities\n\n​\n\n​\n\n19,214\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\nExercise of warrants\n\n​\n\n​\n\n(6,250)\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\nAcquisition of intangibles\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n(1,500)\n\n​\n\nBusiness acquisitions, net of cash acquired\n\n​\n\n​\n\n(871,507)\n\n​\n\n​\n\n—\n\n​\n\n​\n\n(24,157)\n\n​\n\nNet cash used in investing activities\n\n​\n\n​\n\n(1,232,671)\n\n​\n\n​\n\n(28,490)\n\n​\n\n​\n\n(51,714)\n\n​\n\n**Financing activities**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nProceeds from revolving credit facility\n\n​\n\n​\n\n233,939\n\n​\n\n​\n\n40,000\n\n​\n\n​\n\n—\n\n​\n\nPrincipal payments of term loan\n\n​\n\n​\n\n(700,000)\n\n​\n\n​\n\n(28,000)\n\n​\n\n​\n\n(107,000)\n\n​\n\nPrincipal payments of revolver\n\n​\n\n​\n\n(265,000)\n\n​\n\n​\n\n(10,000)\n\n​\n\n​\n\n—\n\n​\n\nProceeds from long-term debt\n\n​\n\n​\n\n693,202\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\nProceeds from shares issued, net of underwriter costs\n\n​\n\n​\n\n968,515\n\n​\n\n​\n\n—\n\n​\n\n​\n\n88,437\n\n​\n\nPayment of contingent consideration\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n(2,132)\n\n​\n\nProceeds from convertible debt, net of underwriter costs\n\n​\n\n​\n\n726,944\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\nPayment of debt issuance costs\n\n​\n\n​\n\n(2,445)\n\n​\n\n​\n\n(1,151)\n\n​\n\n​\n\n(37)\n\n​\n\nPayment of equity issuance costs\n\n​\n\n​\n\n(1,388)\n\n​\n\n​\n\n(2,896)\n\n​\n\n​\n\n—\n\n​\n\nHoldback and retention payments for business acquisition\n\n​\n\n​\n\n—\n\n​\n\n​\n\n(390)\n\n​\n\n​\n\n(500)\n\n​\n\nTax withholding payment related to net settlement of equity awards\n\n​\n\n​\n\n(10,928)\n\n​\n\n​\n\n(4,147)\n\n​\n\n​\n\n(1,596)\n\n​\n\nEmployee stock purchase plan contributions\n\n​\n\n​\n\n4,355\n\n​\n\n​\n\n1,910\n\n​\n\n​\n\n—\n\n​\n\nExercise of stock options\n\n​\n\n​\n\n—\n\n​\n\n​\n\n1,841\n\n​\n\n​\n\n—\n\n​\n\nOther\n\n​\n\n​\n\n(16)\n\n​\n\n​\n\n(23)\n\n​\n\n​\n\n(24)\n\n​\n\nNet cash provided by (used in) financing activities\n\n​\n\n​\n\n1,647,178\n\n​\n\n​\n\n(2,856)\n\n​\n\n​\n\n(22,852)\n\n​\n\nEffects of currency translation on cash and cash equivalents\n\n​\n\n​\n\n360\n\n​\n\n​\n\n225\n\n​\n\n​\n\n(284)\n\n​\n\nNet increase (decrease) in cash and cash equivalents\n\n​\n\n \n\n336,463\n\n​\n\n \n\n(32,439)\n\n​\n\n \n\n(59,558)\n\n​\n\nCash and cash equivalents at beginning of period\n\n​\n\n​\n\n40,862\n\n​\n\n​\n\n73,301\n\n​\n\n​\n\n132,859\n\n​\n\nCash and cash equivalents at end of period\n\n​\n\n$\n\n377,325\n\n​\n\n$\n\n40,862\n\n​\n\n$\n\n73,301\n\n​\n\n**Supplemental disclosures of cash flow information**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nCash paid, net during the period for:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nIncome taxes\n\n​\n\n$\n\n3,606\n\n​\n\n$\n\n24,631\n\n​\n\n$\n\n20,438\n\n​\n\nInterest\n\n​\n\n$\n\n12,847\n\n​\n\n$\n\n1,757\n\n​\n\n$\n\n6,823\n\n​\n\n**Non-cash activities**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nIssuance of common stock for business acquisition\n\n​\n\n​\n\n2,782,553\n\n​\n\n​\n\n—\n\n​\n\n​\n\n109,820\n\n​\n\nUnrealized loss on available-for-sale investments\n\n​\n\n​\n\n(215)\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\nChange in foreign currency translation adjustments\n\n​\n\n$\n\n1,094\n\n​\n\n$\n\n(922)\n\n​\n\n$\n\n(1,140)\n\n​\n\nAcquisitions of property and equipment included in accounts payable\n\n​\n\n$\n\n3,610\n\n​\n\n$\n\n2,204\n\n​\n\n$\n\n986\n\n​\n\n​\n\nSee accompanying notes to consolidated financial statements.\n\n​\n\n84\n\n[Table of Contents](#Toc)\n\n**AEROVIRONMENT, INC.**\n\n​\n\n**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n​\n\n**1.           Organization and Significant Accounting Policies**\n\n​\n\n**Organization**\n\n​\n\nAeroVironment, Inc., a Delaware corporation and its fully owned subsidiaries (collectively referred to herein as the “Company”), is engaged in the design, development, production, delivery and support of autonomous systems, precision strike systems, Counter-Uncrewed Aircraft Systems (“C-UAS”) technologies, space-based platforms, directed energy systems, and cyber and electronic warfare capabilities. The Company provides these products and services primarily to organizations within or supplying the U.S. Department of Defense (“DoD”), other federal agencies and to international allied governments.\n\n​\n\nEffective May 1, 2025, the Company reorganized its segments. In connection with the Company’s acquisition of BlueHalo Financing Topco, LLC (“BlueHalo”), the reorganization was implemented to drive additional operational improvements, foster synergies and provide leaders with greater autonomy over their product lines. The Company’s reportable segments are as follows:\n\n​\n\n*Autonomous Systems (“AxS”)*— The AxS segment focuses on the design, development, production, delivery, and support of intelligent, multi-domain robotic systems, including UAS, uncrewed underwater vehicles and ground robot systems. The segment includes the Company’s former Uncrewed Systems (“UxS”), Loitering Munitions Systems (“LMS”), and MacCready Works (“MW”) segments as well as Integrated Air and Missile Defense (“IAMD”), Electronic Warfare Systems (“EW”) and Uncrewed Maritime (“UUV”) products and services from the BlueHalo acquisition. It primarily serves organizations within or supplying the DoD, other federal agencies, and international allied governments. This segment encompasses the Company’s core autonomous platforms, such as drones and robotic systems, tailored for mission-critical applications across air, land and sea domains.\n\n​\n\n*Space, Cyber, and Directed Energy (“SCDE”)*— The SCDE segment focuses on advanced technologies in the space domain providing space-based and ground-based platforms, cyber capabilities, and directed energy systems. This segment positions the Company in high-growth areas of next-generation defense technology, addressing emerging threats and mission requirements in space, cyber warfare, and directed energy applications (e.g., high-energy lasers). It also primarily serves organizations within or supplying the U.S. DoD, other federal agencies, and international allied governments.\n\n​\n\n**Significant Accounting Policies**\n\n​\n\n**Principles of Consolidation**\n\n​\n\nThe accompanying consolidated financial statements include the accounts of AeroVironment, Inc. and its wholly-owned subsidiaries. Consolidated results include that of the Company and subsidiaries. The assets, liabilities and operating results of acquired companies have been included in the Company’s consolidated financial statements. Refer to Note 19—Business Acquisitions for further details. The Company eliminates intercompany balances and transactions in consolidation.\n\n​\n\n**Investments in Companies Accounted for Using the Equity or Cost Method**\n\n​\n\nInvestments in other non-consolidated entities are accounted for using the equity method or cost basis depending upon the level of ownership and/or the Company’s ability to exercise significant influence over the operating and financial policies of the investee. When the equity method is used, investments are recorded at original cost and adjusted periodically to recognize the Company’s proportionate share of the investees’ net income or losses after the date of investment. When net losses from an investment accounted for under the equity method exceed its carrying amount, the investment balance is reduced to zero and additional losses are not provided for as the Company is not obligated to provide additional capital. The Company resumes accounting for the investment under the equity method if the entity\n\n85\n\n[Table of Contents](#Toc)\n\nsubsequently reports net income and the Company’s share of that net income exceeds the share of net losses not recognized during the period the equity method was suspended.\n\n​\n\nWhen an investment accounted for using the equity method issues its own shares, the subsequent reduction in the Company’s proportionate interest in the investee is reflected in equity as an adjustment to paid-in-capital. The Company evaluates its investments in companies accounted for by the equity or cost method for impairment when there is evidence or indicators that a decrease in value may be other than temporary. Refer to Note 8—Investments in Companies Accounted for Using the Equity Method for further details. For investments accounted for using the cost basis, refer to Note 2—Investments for further details.\n\n​\n\n**Segments**\n\n​\n\nOperating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources and in assessing performance. The Company’s CODM, who is the Chief Executive Officer, makes operating decisions, assesses performance and makes resource allocation decisions, including the focus of research and development (“R&D”) and other significant expenses, leading to decisions related to resource allocations in relation to profit and loss.\n\n​\n\n**Use of Estimates**\n\n​\n\nThe preparation of consolidated financial statements in conformity with generally accepted accounting principles (“GAAP”) in the United States requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Significant estimates made by management include, but are not limited to, valuation of inventory, acquired intangibles, goodwill, deferred tax assets and liabilities, useful lives of property, plant and equipment, medical and dental liabilities, warranty liabilities, long-term incentive plan liabilities and estimates of anticipated contract costs and transaction price utilized in the revenue recognition process. Actual results could differ from those estimates.\n\n​\n\n**Reclassifications**\n\n​\n\nCertain prior year amounts have been reclassified to conform to the current year presentation. Specifically, the Company’s disaggregated revenue disclosure has been recast to conform to the new disaggregation by operating groups and presentation of capitalized software to be sold in the statement of cash flows has been recast to conform to current year presentation.\n\n​\n\n**Cash Equivalents**\n\n​\n\nThe Company considers all highly liquid investments with an original maturity of three months or less at the time of purchase to be cash equivalents. The Company’s cash equivalents are comprised of money market funds, certificates of deposit of major financial institutions and U.S. Treasury bills.\n\n​\n\n**Investments**\n\n​\n\nThe Company’s investments are accounted for as available-for-sale and are reported at fair value. Unrealized gains and losses for debt securities are excluded from earnings and reported as a separate component of stockholders’ equity, net of deferred income taxes for available-for-sale investments. Investments in equity securities and warrants are measured at fair value with net unrealized gains and losses from changes in the fair value recognized in other (expense) income, net. Gains and losses realized on the disposition of investment securities are determined on the specific identification basis and credited or charged to income. Management determines the appropriate classification of securities at the time of purchase and reevaluates such designation as of each balance sheet date.\n\n​\n\n86\n\n[Table of Contents](#Toc)\n\n**Fair Values of Financial Instruments Approximating Cost**\n\n​\n\nFair values of cash and cash equivalents, accounts receivable, unbilled receivables, retentions and accounts payable approximate cost due to the short period of time to maturity.\n\n​\n\n**Concentration of Credit Risk**\n\n​\n\nFinancial instruments that potentially subject the Company to concentration of credit risk consist primarily of cash, cash equivalents, municipal bonds, U.S. government securities, U.S. government-guaranteed agency securities, U.S. government sponsored agency debt securities, highly rated corporate bonds, and accounts receivable. The Company currently invests in equity securities and limited partnership funds. The Company’s revenue and accounts receivable are with a limited number of corporations and governmental entities. In the aggregate, 85%, 75% and 76% of the Company’s revenue came from agencies of the U.S. government for the years ended April 30, 2026, 2025 and 2024, respectively. These agencies accounted for 76% and 75% of the accounts receivable balances at April 30, 2026 and 2025, respectively. One such agency, the U.S. Army, accounted for 25%, 20% and 11% of the Company’s consolidated revenue for the years ended April 30, 2026, 2025 and 2024, respectively. The Company performs ongoing credit evaluations of its commercial customers and maintains an allowance for potential losses.\n\n​\n\n**Accounts Receivable, Unbilled Receivables and Retentions**\n\n​\n\nAccounts receivable represents primarily U.S. government and allied foreign governments, and to a lesser extent commercial receivables, net of allowances for doubtful accounts. Unbilled receivables represent costs in excess of billings on incomplete contracts and, where applicable, accrued profit related to government long-term contracts on which revenue has been recognized, but for which the customer has not yet been billed. Unbilled receivables are considered contract assets.\n\n​\n\nRetentions represent amounts withheld by customers until contract completion. At April 30, 2026 and 2025, the retention balances were $3,416,000 and $746,000, respectively. The Company determines the allowance for credit losses based on historical customer experience, age of receivable and other currently available evidence. When a specific account is deemed uncollectible, the account is written off against the allowance. The allowance for credit losses reflects the Company’s best estimate of expected credit losses over the life of the receivable; such losses have historically been within management’s expectations. An account is deemed past due based on contractual terms rather than on how recently payments have been received.\n\n​\n\n**Inventories**\n\n​\n\nInventories are stated at the lower of cost (using the weighted average costing method and the first in first out or FIFO method) or net realizable value. Inventory write-offs and write-down provisions are provided to cover risks arising from slow-moving items or technological obsolescence and for market prices lower than cost. The Company periodically evaluates the quantities on hand relative to current and historical selling prices and historical and projected sales volume. Based on this evaluation, provisions are made to write inventory down to its net realizable value.\n\n​\n\n87\n\n[Table of Contents](#Toc)\n\n**Long-Lived Assets**\n\n​\n\nProperty, plant and equipment are carried at cost. Depreciation of property and equipment, including amortization of leasehold improvements, are provided using the straight-line method over the following estimated useful lives:\n\n​\n\n​\n\n​\n\n​\n\n​\n\nMachinery and equipment\n\n  ​ ​ ​\n\n2 – 10 years\n\n \n\nComputer equipment and software\n\n \n\n3 – 5 years\n\n​\n\nBuildings\n\n​\n\n40 years\n\n​\n\nIn-service ISR assets\n\n​\n\n3 – 10 years\n\n​\n\nFurniture and fixtures\n\n \n\n3 – 10 years\n\n​\n\nLeasehold improvements\n\n \n\nLesser of useful life or term of lease\n\n​\n\n​\n\nMaintenance, repairs and minor renewals are charged directly to expense as incurred. Additions and betterments to property and equipment are capitalized at cost. When the Company disposes of assets, the applicable costs and accumulated depreciation and amortization thereon are removed from the accounts and any resulting gain or loss is included in other income (expense), net in the period incurred with the exception of in-service intelligence, surveillance and reconnaissance (“ISR”) assets which is included in cost of sales in the period incurred.\n\n​\n\nThe Company reviews the recoverability of its long-lived assets whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. The estimated future cash flows are based upon, among other things, assumptions about expected future operating performance, and may differ from actual cash flows. If the sum of the projected undiscounted cash flows (excluding interest) is less than the carrying value of the assets, the assets will be written down to the estimated fair value in the period in which the determination is made.\n\n​\n\n**Cloud Computing Arrangements**\n\n​\n\nImplementation costs incurred in a cloud computing arrangement that is a service contract are capitalized and recorded on the consolidated balance sheets in prepaid expenses and other current assets and other assets. The amounts capitalized are amortized on a straight-line basis over the estimated useful life of the service arrangement, which generally range from three to seven years. As of April 30, 2026 and 2025, capitalized costs related to cloud computing arrangements was $46,170,000 and $33,656,000, respectively, net of accumulated amortization of $10,349,000 and $4,887,000, respectively. Amortization expense related to cloud computing arrangements for the fiscal years ended April 30, 2026, 2025 and 2024 was $5,536,000, $2,541,000 and $1,440,000.\n\n​\n\n**Costs of Software to Be Sold**\n\n​\n\nCosts incurred for internally developed and produced or purchased software to be sold, leased or marketed once the software has established technological feasibility are capitalized and recorded on the consolidated balance sheets in other assets. The amounts capitalized are amortized according to the greater of a straight-line basis over the estimated useful life of the service arrangement, which generally range from two to five years, or the ratio that current gross revenues for a product bear to the total of current and anticipated future gross revenues for that product. As of April 30, 2026 and 2025, capitalized costs of software to be sold, leased or marketed was $27,410,000 and $3,269,000 respectively, net of accumulated amortization of $6,718,000 and $460,000, respectively.\n\n​\n\n**Intangibles Assets — Acquired in Business Combinations**\n\n​\n\nThe Company performs valuations of assets acquired and liabilities assumed on each acquisition accounted for as a business combination and allocates the purchase price of the acquired business to the respective net tangible and intangible assets. Acquired intangible assets include technology, backlog, licenses, customer relationships, in-process research and development, trademarks and tradenames, and non-compete agreements. The Company determines the appropriate useful life by performing an analysis of expected cash flows based on historical experience of the acquired businesses. Intangible assets are amortized over their estimated useful lives using the straight-line method which\n\n88\n\n[Table of Contents](#Toc)\n\napproximates the pattern in which the economic benefits are consumed. The estimated useful life for the Company’s intangible assets are as follows:\n\n​\n\n​\n\n​\n\n​\n\n​\n\nTechnology\n\n  ​ ​ ​\n\n3 – 12 years\n\n \n\nBacklog\n\n​\n\n1 – 3 years\n\n​\n\nLicenses\n\n \n\n3 years\n\n​\n\nCustomer relationships\n\n \n\n3 – 9 years\n\n​\n\nIn-process research and development\n\n​\n\n3 years\n\n​\n\nTrademarks and tradenames\n\n \n\n5 years\n\n​\n\nNon-compete agreements\n\n​\n\nContractual term\n\n​\n\n​\n\nThe Company monitors conditions related to these assets to determine whether events and circumstances warrant a revision to the remaining amortization period. The Company tests its intangible assets with finite lives for potential impairment whenever management concludes events or changes in circumstances indicate that the carrying amount may not be recoverable. The original estimate of an asset’s useful life and the impact of an event or circumstance on either an asset’s useful life or carrying value involve significant judgment. As part of the Company’s annual goodwill impairment and identifiable asset test during the fiscal quarter ended April 30, 2025, a decrease in forecasted results of the Uncrewed Ground Vehicles (“UGV”) reporting unit resulted in accelerated intangible amortization expenses of $4,258,000, which was recorded during the three months ended April 30, 2025. Refer to Note 6—Goodwill for further details.\n\n​\n\n**Goodwill**\n\n​\n\nGoodwill represents the excess of the cost of an acquired entity over the fair value of the acquired net assets. The Company tests goodwill for impairment annually during the fourth quarter of the fiscal year or when events or circumstances change in a manner that indicates goodwill might be impaired. Events or circumstances that could trigger an impairment review include, but are not limited to, a significant adverse change in legal factors or in the business or political climate, an adverse action or assessment by a regulator, unanticipated competition, a loss of key personnel, significant changes in the manner of our use of the acquired assets or the strategy for the Company’s overall business, significant negative industry or economic trends or significant underperformance relative to projected future results of operations.\n\n​\n\nThe Company’s evaluation of goodwill for impairment involves the comparison of the fair value of each reporting unit to its carrying value. For the impairment test, the Company first assesses qualitative factors, macroeconomic conditions, industry and market considerations, triggering events, cost factors, and overall financial performance, to determine whether it is necessary to perform a quantitative goodwill impairment test. Alternatively, the Company may bypass the qualitative assessment for some or all of its reporting units and apply the quantitative impairment test. If determined to be necessary, the quantitative impairment test shall be used to identify goodwill impairment and measure the amount of a goodwill impairment loss to be recognized (if any). For the quantitative impairment test we estimate the fair value by weighting the results from the income approach and the market approach. These valuation approaches consider a number of factors that include, but are not limited to, prospective financial information, growth rates, terminal value, discount rates, and comparable multiples from publicly traded companies in the Company’s industry and require the Company to make certain assumptions and estimates regarding industry economic factors and future profitability of its business.\n\n​\n\n89\n\n[Table of Contents](#Toc)\n\nIn January 2026, a stop-work order was received on the Company’s Other Transaction Agreement (“OTA”) for the delivery of BADGER phased array antenna systems to support Space Force’s SCAR program. Additionally, in March 2026, the customer terminated the agreement for convenience. The Company concluded that the stop-work order represented a trigger event that indicated the carrying value of the Space reporting unit exceeded its fair value. As a result, the Company updated the estimates of the long-term cash flows of the Space reporting unit to reflect the reduced revenue associated with the stop-work order and termination for convenience as well as an increase in expected research and development and capital investments to achieve product commercialization, which is expected to result in expanded opportunities and improve long term product margins. The changes in estimates resulted in the recognition of a goodwill impairment charge of approximately $240,708,000 in the Space reporting unit. Due to the trigger event, the Company also performed a recoverability test on the long-lived assets, inclusive of the intangibles, of the Space reporting unit for impairment in accordance with ASC 360. The undiscounted cash flows exceeded the carrying value and no impairment was recorded. As of April 30, 2026, our Space reporting unit has a goodwill balance of approximately $291,000,000.\n\nDuring the Company’s annual impairment test during the fiscal quarter ended April 30, 2025, the Company determined the carrying value of the UGV reporting unit exceeded its fair value due to a decrease in forecasted results of the UGV reporting unit resulting from reduced probability and delays of obtaining certain opportunities as well as an increase in forecast expenditures to support operational decisions identified during the fiscal quarter ended April 30, 2025. These changes in estimates resulted in a full impairment and the recognition of a goodwill impairment charge of $18,359,000 in the UGV reporting unit.\n\n​\n\nDuring the most recent annual impairment test during the fourth quarter of fiscal year 2026, the estimated fair value of all reporting units with goodwill from acquisitions in previous years substantially exceeded their carrying value. The reporting units from the BlueHalo acquisition and the acquisition of Empirical Systems Aerospace, Inc. (“ESAero”) were recently recorded at estimated fair value during the fiscal year ended April 30, 2026 and, other than the Space unit, no triggering event for goodwill impairment was since identified.\n\n​\n\nThe estimates and assumptions used to determine the fair value of our reporting units are highly subjective in nature. Actual results can be materially different from the estimates and assumptions. If actual market conditions are less favorable than those projected by the industry or by us, or if events occur or circumstances change that would reduce the estimated fair value of our indefinite-lived intangible assets below the carrying amounts, the Company could recognize future impairment charges, the amount of which could be material.\n\n​\n\n**Product Warranty**\n\n​\n\nThe Company accrues an estimate of its exposure to warranty claims based upon both current and historical product sales data and warranty costs incurred. Product warranty reserves are recorded in other current liabilities. The majority of warranties provided do not provide for services beyond standard assurances. However, certain warranties are considered to be separate performance obligations.\n\n​\n\n**Accrued Sales Commissions**\n\n​\n\nAs of April 30, 2026 and 2025, the Company accrued sales commissions in other current liabilities of $14,974,000 and $6,535,000, respectively.\n\n​\n\n**Self-Insurance Liability**\n\n​\n\nThe Company is self-insured for employee medical claims, subject to individual and aggregate stop loss policies. The Company estimates a liability for claims filed and incurred but not reported based upon recent claims experience and an analysis of the average period of time between the occurrence of a claim and the time it is reported to and paid by the Company. As of April 30, 2026 and 2025, the Company estimated and recorded a self-insurance liability in wages and related accruals of approximately $4,343,000 and $1,559,000, respectively.\n\n​\n\n90\n\n[Table of Contents](#Toc)\n\n**Employee Savings Plan**\n\n​\n\nThe Company has an employee 401(k) savings plan covering all eligible employees. The Company expensed approximately $29,137,000, $9,679,000 and $8,554,000 in contributions to the plan for the years ended April 30, 2026, 2025 and 2024, respectively.\n\n​\n\n**Interest Expense, net**\n\n​\n\nInterest expense, net includes interest expense and interest income. Interest expense for the fiscal year ended April 30, 2026 was $24,197,000. Interest expense includes interest charges from the Credit Facilities as well as the amortization of debt issuance costs for the issuance of the Convertible Notes and the Fourth Amendment to the Credit Agreement, which upon effectiveness of the Amended Credit Agreement, the Company drew $225,000,000 from the amended Revolving Facility and the full $700,000,000 of the Term Loan Facility.\n\n​\n\nInterest income for the fiscal year ended April 30, 2026 was $18,581,000. Interest income includes interest income earned on available-for-sale debt securities.\n\n​\n\n**Income Taxes**\n\n​\n\nDeferred income tax assets and liabilities are computed annually for differences between the financial statement and income tax bases of assets and liabilities that will result in taxable or deductible amounts in the future. The provision for income taxes reflects the taxes to be paid for the period and the change during the period in the deferred income tax assets and liabilities. The Company records a valuation allowance to reduce the deferred tax assets to the amount of future tax benefit that is more likely than not to be realized. For uncertain tax positions, the Company determines whether it is “more likely than not” that a tax position will be sustained upon examination by the appropriate taxing authorities before any part of the benefit can be recorded in the financial statements. For those tax positions where it is “not more likely than not” that a tax benefit will be sustained, no tax benefit is recognized. Where applicable, associated interest and penalties are also recorded. The Company records a deferred tax asset for acquisition-related costs incurred for an acquisition that closes in a subsequent reporting period. The Company reevaluates the deferred tax asset in the period the acquisition closes and reverses the deferred tax asset to tax expense for deductible expenses.\n\n​\n\n**Customer Advances**\n\n​\n\nThe Company receives advances, performance-based payments and progress payments from customers that may exceed costs incurred on certain contracts, including contracts with agencies of the U.S. government resulting in contract liabilities. These advances are classified as customer advances and will be offset against billings.\n\n​\n\n**Revenue Recognition**\n\n​\n\nThe Company’s revenue is generated pursuant to written contractual arrangements to design, develop, manufacture and/or modify complex products, and to provide related engineering, technical and other services according to the specifications of the customers. These contracts may be firm fixed price (“FFP”), cost-plus-fixed fee, cost-plus-award fee, and cost-plus-incentive fee (“Cost Plus”), or time and materials (“T&M”). The Company considers all such contracts to be within the scope of ASC Topic 606, *Revenue from Contracts with Customers* (“ASC 606”).\n\n​\n\n**Performance Obligations**\n\n​\n\nA performance obligation is a promise in a contract to transfer distinct goods or services to a customer, and it is the unit of account in ASC 606. A contract’s transaction price is allocated to each distinct performance obligation and revenue is recognized when each performance obligation under the terms of a contract is satisfied. Revenue is measured at the amount of consideration the Company expects to receive in exchange for transferring goods or providing services. For contracts with multiple performance obligations, the Company allocates the contract’s transaction price to each performance obligation using its observable standalone selling price for products and services. When the standalone selling price is not directly observable, the Company uses its best estimate of the standalone selling price of each distinct\n\n91\n\n[Table of Contents](#Toc)\n\ngood or service in the contract using the cost plus reasonable margin approach. This approach estimates the Company’s expected costs of satisfying the performance obligation and then adds an appropriate margin for that distinct good or service.\n\n​\n\nContract modifications are routine in the performance of the Company’s contracts. In most instances, contract modifications are for additional goods and/or services that are distinct and, therefore, accounted for as new contracts.\n\n​\n\nPerformance obligations are satisfied over time if the customer receives the benefits as the Company performs, if the customer controls the asset as it is being developed or produced, or if the product being produced for the customer has no alternative use and the Company has a contractual right to payment for the Company’s costs incurred to date plus a reasonable margin. The contractual right to payment is generally supported by termination for convenience clauses that allow the customer to unilaterally terminate the contract for convenience, pay the Company for costs incurred plus a reasonable profit, and take control of any work in process. Product revenue for certain Precision Strike products including LMS, Space, Directed Energy and Cyber and Mission Solutions product deliveries and customization of UGV transport vehicles is recognized over time as costs are incurred. Contract services revenue is recognized over time and composed of revenue recognized on contracts for the provision of services, including repairs and maintenance, training, engineering design, development and prototyping activities, technical support services, ISR services, and customer-funded R&D contracts. Contract services revenue is recognized over time as services are rendered. Typically, revenue is recognized over time using an input measure (e.g., costs incurred to date relative to total estimated costs at completion) to measure progress. Certain contract services revenue is recognized over time as services are rendered. The Company elected the right to invoice practical expedient in which if an entity has a right to consideration from a customer in an amount that corresponds directly with the value to the customer of the entity’s performance completed to date, the entity may recognize revenue in the amount to which the entity has a right to invoice. Certain training services are recognized over time using an output method based on days of training completed. LMS product revenue is currently recognized over time as the product is considered to not have alternative use as the U.S. government is the only current customer including FMS sales. Once LMS products receive a DCS contract, which is expected during fiscal year 2027, the products are considered to have alternative use and revenue will be recognized at a point in time.\n\n​\n\nFor performance obligations satisfied over time, revenue is generally recognized using costs incurred to date relative to total estimated costs at completion to measure progress. Incurred costs represent work performed, which correspond with, and thereby best depict, transfer of control to the customer. Contract costs include labor, materials, subcontractors’ costs, other direct costs, and indirect costs applicable on government and commercial contracts.\n\n​\n\nFor performance obligations which are not satisfied over time per the aforementioned criteria above, revenue is recognized at the point in time in which each performance obligation is fully satisfied. The Company’s product sales revenue is primarily composed of revenue recognized on contracts for the delivery of UAS, UGV, UUV, IAMD, and EW systems and spare parts, respectively. Revenue is recognized at the point in time when control transfers to the customer, which generally occurs when title and risk of loss have passed to the customer.\n\n​\n\nOn April 30, 2026, the Company had approximately $1,176,192,000 of remaining performance obligations under contracts with its customers, which the Company also refers to as backlog. The Company currently expects to recognize approximately 85% of the remaining performance obligations as revenue in fiscal 2027, an additional 15% in fiscal 2028 and thereafter.\n\n​\n\nThe Company collects sales, value add, and other taxes concurrent with revenue producing activities, which are excluded from revenue when they are both imposed on a specific transaction and collected from a customer.\n\n​\n\n**Contract Estimates**\n\n​\n\nAccounting for contracts and programs involves the use of various techniques to estimate total contract revenue and costs. For long-term contracts, the Company estimates the total expected costs to complete the contract and recognizes revenue based on the percentage of costs incurred at period end.\n\n​\n\n92\n\n[Table of Contents](#Toc)\n\nContract estimates are based on various assumptions to project the outcome of future events that may span several years. These assumptions include labor productivity and availability, the complexity of the work to be performed, the cost and availability of materials, the performance of subcontractors, and the availability and timing of funding from the customer.\n\n​\n\nThe nature of the Company’s contracts gives rise to several types of variable consideration, including undefinitized contract actions and unpriced change orders, which are within the scope of ASC 606 with final contract values to be negotiated, penalty fees and incentive awards generally for late delivery and early delivery, respectively. The Company generally estimates such variable consideration as the most likely amount. In addition, the Company includes the estimated variable consideration to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the related uncertainty is resolved. These estimates are based on historical award experience, anticipated performance and the Company’s best judgment at the time. Based on experience in estimating these amounts, they are included in the transaction price of the Company’s contracts and the associated remaining performance obligations.\n\n​\n\nAs a significant change in one or more of these estimates could affect the profitability of the Company’s contracts, the Company regularly reviews and updates its contract-related estimates. Changes in cumulative revenue estimates, due to changes in the estimated transaction price or cost estimates including definitization of contracts, are recorded using a cumulative catch-up adjustment in the period identified. In the period undefinitized contract actions or unpriced change orders become definitized, a cumulative catch-up adjustment is recorded to reflect the final consideration, which could have a material positive or negative impact.\n\n​\n\nIf at any time the estimate of contract profitability indicates an anticipated loss on the contract and the contract falls under the scope of onerous contract guidance, contracts for which specifications are provided by the customer for the construction of facilities or the production of goods or the provision of related services, the Company recognizes the total loss in the quarter it is identified, and it is recorded in other current liabilities. The balance of forward loss reserves as of April 30, 2026 and April 30, 2025 was $6,103,000 and $104,000, respectively. The Company records forward loss reserves when the total estimated costs to complete the contracts are in excess of the total remaining consideration of the contracts. As of April 30, 2026, one IAMD contract had a forward loss reserve of $3,889,000 due to increase estimated costs to complete the project. No other individual contract in the forward loss reserve was material to the Company’s consolidated financial statements for the fiscal years ended April 30, 2026, 2025 or 2024.\n\n​\n\nThe impact of adjustments in contract estimates on the Company’s operating earnings can be reflected in either operating costs and expenses or revenue. The aggregate impact of adjustments in contract estimates on revenue related to performance obligations satisfied or partially satisfied in previous periods was a decrease to revenue of $(2,557,000) for the year ended April 30, 2026 and an increase to revenue of $6,002,000, and $5,408,000 for the years ended April 30, 2025, and 2024, respectively. For the year ended April 30, 2026, the Company had two individual contracts with material adjustments. One Cyber and Mission Solutions contract had an adjustment due to revised estimates of the total expected costs to complete contracts, which decreased revenue by approximately $(3,091,000). One Space and Directed Energy contract had a favorable adjustment due to lower expected costs and an increase in profitability which increased revenue by approximately $6,659,000. During the year ended April 30, 2025, the Company definitized four LMS undefinitized contract actions, which resulted in a cumulative catch-up revenue adjustment of $9,870,000 increase to revenue, and eight LMS unpriced change orders, which resulted in a cumulative catch-up revenue adjustment of $2,177,000 increase to revenue. The Company also had one LMS contract with a material adjustment due to revised estimates of the total expected costs to complete contracts, which decreased revenue by approximately $2,874,000. During the year ended April 30, 2024, the Company had two LMS contracts with a material adjustment due to revised estimates of the total expected costs to complete contracts, which increased revenue by approximately $2,672,000.\n\n​\n\n93\n\n[Table of Contents](#Toc)\n\n**Revenue by Category**\n\n​\n\nThe following tables present the Company’s revenue disaggregated by operating group, contract type, customer category and geographic location (in thousands):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year Ended April 30,**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Revenue by operating group**\n\n​\n\n**2026**\n\n**  ​ ​ ​**\n\n**2025**\n\n​\n\n**2024**\n\nUncrewed Aircraft Systems\n\n​\n\n$\n\n363,878\n\n​\n\n$\n\n352,019\n\n​\n\n$\n\n407,671\n\nPrecision Strike and Defense Systems\n\n​\n\n​\n\n848,342\n\n​\n\n​\n\n359,433\n\n​\n\n​\n\n192,587\n\nOther\n\n​\n\n​\n\n145,857\n\n​\n\n​\n\n109,175\n\n​\n\n​\n\n116,462\n\nSpace and Directed Energy\n\n​\n\n​\n\n273,404\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\nCyber and Mission Solutions\n\n​\n\n​\n\n345,364\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\nTotal revenue\n\n​\n\n$\n\n1,976,845\n\n​\n\n$\n\n820,627\n\n​\n\n$\n\n716,720\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year Ended April 30,**\n\n​\n\n​\n\n**April 30,**\n\n​\n\n**April 30,**\n\n​\n\n**April 30,**\n\n**Revenue by contract type**\n\n​\n\n**2026**\n\n**  ​ ​ ​**\n\n**2025**\n\n​\n\n**2024**\n\nFFP\n\n​\n\n$\n\n1,384,333\n\n​\n\n$\n\n746,190\n\n​\n\n$\n\n634,266\n\nCost Plus\n\n​\n\n​\n\n454,113\n\n​\n\n​\n\n67,986\n\n​\n\n​\n\n77,458\n\nT&M\n\n​\n\n \n\n138,399\n\n​\n\n \n\n6,451\n\n​\n\n \n\n4,996\n\nTotal revenue\n\n​\n\n$\n\n1,976,845\n\n​\n\n$\n\n820,627\n\n​\n\n$\n\n716,720\n\n​\n\nEach of these contract types presents advantages and disadvantages. Typically, the Company assumes more risk with FFP contracts. However, these types of contracts generally offer additional profits when the Company completes the work for less than originally estimated. CPFF contracts generally subject the Company to lower risk. Accordingly, the associated base fees are usually lower than fees on FFP contracts. Under T&M contracts, the Company’s profit may vary if actual labor hour rates vary significantly from the negotiated rates.\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year Ended April 30,**\n\n​\n\n​\n\n**April 30,**\n\n​\n\n**April 30,**\n\n​\n\n**April 30,**\n\n**Revenue by customer category**\n\n​\n\n**2026**\n\n**  ​ ​ ​**\n\n**2025**\n\n​\n\n**2024**\n\nU.S. government\n\n​\n\n$\n\n1,688,719\n\n​\n\n$\n\n613,053\n\n​\n\n$\n\n544,885\n\nNon-U.S. government\n\n​\n\n​\n\n288,126\n\n​\n\n​\n\n207,574\n\n​\n\n​\n\n171,835\n\nTotal revenue\n\n​\n\n$\n\n1,976,845\n\n​\n\n$\n\n820,627\n\n​\n\n$\n\n716,720\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year Ended April 30,**\n\n​\n\n​\n\n**April 30,**\n\n​\n\n**April 30,**\n\n​\n\n**April 30,**\n\n**Revenue by geographic location**\n\n​\n\n**2026**\n\n**  ​ ​ ​**\n\n**2025**\n\n​\n\n**2024**\n\nDomestic\n\n​\n\n$\n\n1,420,437\n\n​\n\n$\n\n390,744\n\n​\n\n$\n\n271,727\n\nInternational\n\n​\n\n​\n\n556,408\n\n​\n\n​\n\n429,883\n\n​\n\n​\n\n444,993\n\nTotal revenue\n\n​\n\n$\n\n1,976,845\n\n​\n\n$\n\n820,627\n\n​\n\n$\n\n716,720\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year Ended April 30,**\n\n​\n\n​\n\n**April 30,**\n\n​\n\n**April 30,**\n\n​\n\n**April 30,**\n\n**Revenue percentage by recognition method**\n\n​\n\n**2026**\n\n**  ​ ​ ​**\n\n**2025**\n\n​\n\n**2024**\n\nOver time\n\n​\n\n​\n\n70%\n\n​\n\n​\n\n57%\n\n​\n\n​\n\n43%\n\nPoint in time\n\n​\n\n​\n\n30%\n\n​\n\n​\n\n43%\n\n​\n\n​\n\n57%\n\nTotal revenue\n\n​\n\n​\n\n100%\n\n​\n\n​\n\n100%\n\n​\n\n​\n\n100%\n\n​\n\n**Contract Balances**\n\n​\n\nThe timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables, and customer advances and deposits on the consolidated balance sheets. In the Company’s services\n\n94\n\n[Table of Contents](#Toc)\n\ncontracts, amounts are billed as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals, which is generally monthly, or upon the achievement of contractual milestones. Generally, billing occurs subsequent to revenue recognition, resulting in contract assets recorded in unbilled receivables and retentions on the consolidated balance sheets. However, the Company sometimes receives advances or deposits from its customers before revenue is recognized, resulting in contract liabilities recorded in customer advances on the consolidated balance sheets. Contract liabilities are not a significant financing component as they are generally utilized to pay for contract costs within a one-year period or are used to ensure the customer meets contractual requirements. These assets and liabilities are reported on the consolidated balance sheets on a contract-by-contract basis at the end of each reporting period. For the Company’s product revenue, the Company generally receives cash payments subsequent to satisfying the performance obligation via delivery of the product, resulting in billed accounts receivable. Changes in the contract asset and liability balances during the years ended April 30, 2026 or 2025 were not materially impacted by any other factors. For the Company’s contracts, there are no significant gaps between the receipt of payment and the transfer of the associated goods and services to the customer for material amounts of consideration.\n\n​\n\nRevenue recognized for the years ended April 30, 2026, 2025, and 2024 that was included in contract liability balances at the beginning of each year were $12,331,000, $9,980,000 and $13,757,000, respectively.\n\n​\n\n**Cost to Fulfill a Contract with a Customer**\n\n​\n\nThe Company recognizes assets for the costs to fulfill a contract with a customer if the costs are specifically identifiable, generate or enhance resources used to satisfy future performance obligations, and are expected to be recovered in accordance with ASC 340-40 *Other Assets and Deferred Costs: Contracts with Customers*. The assets related to costs to fulfill contracts with customers are capitalized and amortized over the period the related performance obligations are satisfied. As of April 30, 2026 and 2025, the Company’s costs to fulfill were $0 and $1,948,000, respectively.\n\n​\n\n**Stock-Based Compensation**\n\n​\n\nStock-based compensation is measured at the grant date based on the fair value of the award and is recognized as expense over the requisite service period, which is generally the vesting period of the respective award. No compensation cost is ultimately recognized for awards for which employees do not render the requisite service and are forfeited.\n\n​\n\n**Long-Term Incentive Awards**\n\n​\n\nFor long-term incentive awards outstanding as of April 30, 2026, the awards include time-based awards which vest equally over three years and performance-based awards which vest based on the achievement of a target payout established at the beginning of each performance period. The actual payout at the end of the performance period is calculated based upon the Company’s achievement of such targets. Payouts are made in shares of restricted stock which become immediately vested upon issuance.\n\n​\n\nAt each reporting period, the Company reassesses the probability of achieving the performance targets. The estimation of whether the performance targets will be achieved requires judgment, and, to the extent actual results or updated estimates differ from the Company’s current estimates, the cumulative effect on current and prior periods of those changes will be recorded in the period estimates are revised.\n\n​\n\n**Research and Development**\n\n​\n\nInternally funded R&D costs sponsored by the Company relate to both U.S. government products and services and those for commercial and foreign customers. Internally funded R&D costs for the Company are recoverable and allocable under government contracts in accordance with U.S. government procurement regulations.\n\n​\n\nCustomer-funded R&D costs are incurred pursuant to contracts (revenue arrangements) to perform research and development activities according to customer specifications. These costs are direct contract costs and are expensed to cost of sales when the corresponding revenue is recognized, which is generally as the research and development services\n\n95\n\n[Table of Contents](#Toc)\n\nare performed. Revenue from customer-funded R&D was $240,889,000, $78,491,000 and $82,104,000 for the years ended April 30, 2026, 2025 and 2024, respectively. The related cost of sales for customer-funded R&D totaled $209,656,000, $58,028,000 and $62,181,000 for the years ended April 30, 2026, 2025 and 2024, respectively.\n\n​\n\n**Lease Accounting**\n\n​\n\nThe Company leases certain buildings, land and equipment. At contract inception the Company determines whether the contract is, or contains, a lease and whether the lease should be classified as an operating or a financing lease. Operating leases are recorded in operating lease right-of-use assets, current operating lease liabilities and non-current operating lease liabilities.\n\n​\n\nThe Company recognizes operating lease right-of-use assets and operating lease liabilities based on the present value of the future minimum lease payments over the lease term at commencement date. The Company uses its incremental borrowing rate based on the information available at commencement date to determine the present value of future payments and the appropriate lease classification. The Company defines the initial lease term to include renewal options determined to be reasonably certain. The Company’s leases have remaining lease terms of less than one year to six years, some of which may include options to extend the lease for up to ten years, and some of which may include options to terminate the lease after one to twelve months. If the Company determines the option to extend or terminate is reasonably certain, it is included in the determination of lease assets and liabilities. For operating leases, the Company recognizes lease expense for these leases on a straight-line basis over the lease term.\n\n​\n\nMany of the Company’s real estate lease agreements contain incentives for tenant improvements, rent holidays, or rent escalation clauses. For tenant improvement incentives, if the incentive is determined to be a leasehold improvement owned by the lessee, the Company generally records the incentive as a reduction to fixed lease payments thereby reducing rent expense. For rent holidays and rent escalation clauses during the lease term, the Company records rental expense on a straight-line basis over the term of the lease. For these lease incentives, the Company uses the date of initial possession as the commencement date, which is generally when the Company is given the right of access to the space and begins to make improvements in preparation for intended use.\n\n​\n\nThe Company does not have any material restrictions or covenants in its lease agreements, sale-leaseback transactions, land easements or residual value guarantees.\n\n​\n\nIn determining the inputs to the incremental borrowing rate calculation, the Company makes judgments about the value of the leased asset, its credit rating and the lease term including the probability of its exercising options to extend or terminate the underlying lease or purchase the underlying asset. Additionally, the Company makes judgments around contractual asset substitution rights in determining whether a contract contains a lease.\n\n​\n\n**Advertising Costs**\n\n​\n\nAdvertising costs are expensed as incurred. Advertising expenses included in SG&A expenses were $1,445,000, $416,000 and $457,000 for the years ended April 30, 2026, 2025 and 2024, respectively.\n\n​\n\n**Foreign Currency Transactions**\n\n​\n\nForeign currency transaction gains and losses are charged or credited to earnings as incurred. For the fiscal years ended April 30, 2026, 2025 and 2024, foreign currency transaction losses that are included in other income (expense), net in the accompanying consolidated statements of (loss) income were $102,000, $491,000, and $22,000, respectively.\n\n​\n\n**(Loss) Earnings Per Share**\n\n​\n\nBasic (loss) earnings per share are computed using the weighted-average number of common shares outstanding and excludes any anti-dilutive effects of options, restricted stock and restricted stock units. The dilutive effect of potential common shares outstanding is included in diluted (loss) earnings per share.\n\n​\n\n96\n\n[Table of Contents](#Toc)\n\nThe reconciliation of diluted to basic shares is as follows:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year Ended April 30,**\n\n** **\n\n​\n\n**  ​ ​ ​**\n\n**2026**\n\n**  ​ ​ ​**\n\n**2025**\n\n**  ​ ​ ​**\n\n**2024**\n\n** **\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nNet (loss) income attributable to AeroVironment, Inc.\n\n​\n\n$\n\n(265,122,000)\n\n​\n\n$\n\n43,619,000\n\n​\n\n$\n\n59,666,000\n\n​\n\nDenominator for basic earnings per share:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nWeighted average common shares\n\n​\n\n \n\n49,087,346\n\n​\n\n \n\n28,018,656\n\n​\n\n \n\n27,203,417\n\n​\n\nDilutive effect of employee stock options, restricted stock and restricted stock units\n\n​\n\n \n\n—\n\n​\n\n \n\n154,832\n\n​\n\n \n\n124,576\n\n​\n\nDenominator for diluted earnings per share\n\n​\n\n​\n\n49,087,346\n\n​\n\n​\n\n28,173,488\n\n​\n\n​\n\n27,327,993\n\n​\n\n​\n\nDuring the years ended April 30, 2026, 2025 and 2024, certain options, shares of restricted stock and restricted stock units were not included in the computation of diluted earnings per share because their inclusion would have been anti-dilutive. Due to the net loss for the fiscal year ended April 30, 2026, no shares reserved for issuance upon exercise of stock options or shares of unvested restricted stock were included in the computation of diluted loss per share as their inclusion would have been anti-dilutive. The number of options, restricted stock and restricted stock units which met this anti-dilutive criterion was approximately 344,578; 393 and 1,000 for the years ended April 30, 2026, 2025 and 2024, respectively.\n\n​\n\n**Recently Adopted Accounting Standards**\n\n​\n\nIn December 2023, the FASB issued ASU 2023-09, *Income Taxes (Topic 740): Improvements to Income Tax Disclosures* (“ASU 2023-09”). ASU 2023-09 requires updates to the rate reconciliation, income taxes paid and other disclosures. Effective April 30, 2026, the Company adopted the ASU 2023-09. The Company is evaluating the potential impact of this adoption on its consolidated financial statements. The Company’s adoption of ASU 2023-07 did not have a material impact on the Company’s consolidated financial statements but did result in additional disclosures in the notes to the Company’s consolidated financial statements.\n\n​\n\n**Recently Issued Accounting Standards**\n\n​\n\nIn November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income— Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”). ASU 2024-03 requires disclosure, in the notes to financial statements, of specified information about certain costs and expenses included in each expense caption on the face of the income statement at interim and annual reporting periods. The new standard is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, and should be applied either prospectively to financial statements issued for reporting periods after the effective date of this ASU or retrospectively to any or all prior periods presented in the financial statements. The Company does not expect the adoption of ASU 2024-03 to have a material impact on its consolidated financial statements; however, the ASU will result in additional disclosures in the notes to our consolidated financial statements.\n\n​\n\nIn September 2025, the FASB issued ASU 2025-06, Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”), which better aligns the accounting guidance to how software is developed by eliminating project stages from capitalization criteria. The new standard is effective for annual reporting periods beginning after December 15, 2027 and interim periods within those annual reporting periods. The standard allows for prospective, modified, or retrospective transition. Early adoption is permitted. The Company is currently evaluating the impact of adopting this new pronouncement.\n\n​\n\n97\n\n[Table of Contents](#Toc)\n\nIn December 2025, the FASB issued ASU 2025-11, Interim Reporting (“ASU 2025-11”), which is intended to improve the navigability of required interim disclosures and clarify when that guidance is applicable, and also to provide additional guidance on what disclosures should be provided in interim reporting periods. The new standard is effective for annual reporting periods beginning after December 15, 2027 and interim periods within those annual reporting periods. The standard allows for prospective or retrospective transition. Early adoption is permitted. The Company does not expect the adoption of ASU 2024-03 to have a material impact on its consolidated financial statements.\n\n​\n\n**2.           Investments**\n\n​\n\nInvestments consist of the following:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**April 30,**\n\n​\n\n** **\n\n**2026**\n\n**  ​ ​ ​**\n\n**2025**\n\nShort-term investments:\n\n​\n\n**(In thousands)**\n\nAvailable-for-sale securities:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nU.S. government securities\n\n​\n\n​\n\n137,759\n\n​\n\n​\n\n—\n\nCorporate securities\n\n​\n\n​\n\n117,213\n\n​\n\n​\n\n—\n\nTotal short-term investments\n\n​\n\n$\n\n254,972\n\n​\n\n$\n\n—\n\nLong-term investments:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nAvailable-for-sale securities:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nU.S. government securities\n\n​\n\n​\n\n14,106\n\n​\n\n​\n\n—\n\nCorporate securities\n\n​\n\n​\n\n6,953\n\n​\n\n​\n\n—\n\nInvestments at cost\n\n​\n\n​\n\n8,000\n\n​\n\n​\n\n—\n\nEquity securities and warrants\n\n​\n\n​\n\n—\n\n​\n\n​\n\n1,204\n\nTotal long-term available-for-sale securities investments\n\n​\n\n$\n\n29,059\n\n​\n\n$\n\n1,204\n\nEquity method investments\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nInvestments in limited partnership funds\n\n​\n\n \n\n52,069\n\n​\n\n \n\n30,423\n\nTotal equity method investments\n\n​\n\n \n\n52,069\n\n​\n\n \n\n30,423\n\nTotal long-term investments\n\n​\n\n$\n\n81,128\n\n​\n\n$\n\n31,627\n\n​\n\n**Available-For-Sale Securities**\n\n​\n\nAs of April 30, 2026, the balance of available-for-sale securities consisted of U.S. government securities and high-grade corporate bonds. Interest earned from these investments is recorded in interest expense, net. Realized gains on sales of these investments on the basis of specific identification are recorded in interest expense, net. As of April 30, 2025, the company held no available-for-sale securities.\n\n​\n\nThe following table is a summary of the activity related to the available-for-sale investments recorded in short-term and long-term investments as of April 30, 2026 (in thousands):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**  ​ ​ ​**\n\n**April 30, 2026**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Gross**\n\n​\n\n**Gross**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Amortized**\n\n​\n\n**Unrealized**\n\n​\n\n**Unrealized**\n\n​\n\n**Fair**\n\n​\n\n​\n\n**Cost**\n\n**  ​ ​ ​**\n\n**Gains**\n\n​\n\n**Losses**\n\n​\n\n**Value**\n\nCorporate securities\n\n​\n\n$\n\n124,306\n\n​\n\n​\n\n1\n\n​\n\n​\n\n(142)\n\n​\n\n$\n\n124,165\n\nU.S. government securities\n\n​\n\n​\n\n151,940\n\n​\n\n$\n\n1\n\n​\n\n$\n\n(75)\n\n​\n\n​\n\n151,866\n\nTotal available-for-sale securities\n\n​\n\n$\n\n276,246\n\n​\n\n$\n\n2\n\n​\n\n$\n\n(217)\n\n​\n\n$\n\n276,031\n\n​\n\n**Equity Securities**\n\n​\n\nOn September 12, 2022, the Company invested $5,000,000 and acquired 500,000 shares and 500,000 privately placed, redeemable warrants of Amprius Technologies, Inc. On April 16, 2026, the Company sold 500,000 shares for $9,350,000, net of commission and fee, and on April 22, 2026, the Company exercised its right to redeem the warrants for 500,000 shares at an exercise of $12.50 for $6,250,000 and sold the received 500,000 shares on April 29, 2026 for $9,824,000.\n\n98\n\n[Table of Contents](#Toc)\n\n​\n\nEquity securities and warrants are measured at fair value with net unrealized gains (losses) from changes in the fair value recognized in other income (expense), net.\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year Ended April 30,**\n\n​\n\n​\n\n**2026**\n\n**  ​ ​ ​**\n\n**2025**\n\n​\n\n**2024**\n\nNet gain (loss) recognized during the period on equity securities\n\n​\n\n$\n\n11,720\n\n​\n\n$\n\n177\n\n​\n\n$\n\n(3,945)\n\nLess: Net gain recognized during the period on equity securities sold during the period\n\n​\n\n​\n\n11,720\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\nUnrealized gain (loss) recognized during the period on equity securities still held at the reporting date\n\n​\n\n$\n\n—\n\n​\n\n$\n\n177\n\n​\n\n$\n\n(3,945)\n\n​\n\n**Investments Measured at Cost**\n\n**​**On December 22, 2025, the Company invested $3,000,000 in a privately-held technology company through Simple Agreement for Future Equity (“SAFE”) arrangement. The SAFE provides the Company with the right to receive equity in the issuing company upon the occurrence of certain future events, including a qualifying equity financing or a liquidity event. The Company measures the investment at cost, less any impairment and are recorded in long-term investments and included in Equity securities and warrants line in the investments table above.\n\n​\n\nOn April 13, 2026, the Company invested $5,000,000 in a privately-held technology company through a convertible promissory note. The note bears interest at 4.03% annually, matures in 3 years, automatically converts into preferred equity upon a qualified financing event subject to a conversion discount, optional conversion into preferred equity upon a non-qualified financing event subject to a conversion discount, or optional conversion into preferred equity absent subsequent financing without a conversion discount.\n\n​\n\n​\n\n**3.           Fair Value Measurements**\n\n​\n\nFair value is the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value hierarchy contains three levels as follows:\n\n​\n\n●Level 1—Inputs to the valuation based upon quoted prices (unadjusted) for identical assets or liabilities in active markets that are accessible as of the measurement date.\n\n​\n\n●Level 2—Inputs to the valuation include quoted prices in either markets that are not active, or in active markets for similar assets or liabilities, inputs other than quoted prices that are observable, and inputs that are derived principally from or corroborated by observable market data.\n\n​\n\n●Level 3—Inputs to the valuation that are unobservable inputs for the asset or liability.\n\n​\n\nThe Company’s financial assets measured at fair value on a recurring basis at April 30, 2026, were as follows (in thousands):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Fair Value Measurement Using**\n\n​\n\n​\n\n**  ​ ​ ​**\n\n​\n\n​\n\n**  ​ ​ ​**\n\n**Significant**\n\n**  ​ ​ ​**\n\n​\n\n​\n\n**  ​ ​ ​**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Quoted prices in**\n\n​\n\n**other**\n\n​\n\n**Significant**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**active markets for**\n\n​\n\n**observable**\n\n​\n\n**unobservable**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**identical assets**\n\n​\n\n**inputs**\n\n​\n\n**inputs**\n\n​\n\n​\n\n​\n\n​\n\n**Description**\n\n​\n\n**(Level 1)**\n\n​\n\n**(Level 2)**\n\n​\n\n**(Level 3)**\n\n​\n\n**Total**\n\n​\n\nAvailable-for-sale securities\n\n​\n\n$\n\n—\n\n​\n\n$\n\n276,031\n\n​\n\n$\n\n—\n\n​\n\n$\n\n276,031\n\n​\n\nTotal\n\n​\n\n$\n\n—\n\n​\n\n$\n\n276,031\n\n​\n\n$\n\n—\n\n​\n\n$\n\n276,031\n\n​\n\n99\n\n[Table of Contents](#Toc)\n\n​\n\n​\n\nThe Company had no financial liabilities measured at fair value on a recurring basis at April 30, 2026.\n\n​\n\nThe Company’s financial assets measured at fair value on a recurring basis at April 30, 2025, were as follows (in thousands):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Fair Value Measurement Using**\n\n​\n\n**  ​ ​ ​**\n\n​\n\n​\n\n**  ​ ​ ​**\n\n**Significant**\n\n**  ​ ​ ​**\n\n​\n\n​\n\n**  ​ ​ ​**\n\n​\n\n​\n\n​\n\n​\n\n**Quoted prices in**\n\n​\n\n**other**\n\n​\n\n**Significant**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**active markets for**\n\n​\n\n**observable**\n\n​\n\n**unobservable**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**identical assets**\n\n​\n\n**inputs**\n\n​\n\n**inputs**\n\n​\n\n​\n\n​\n\n**Description**\n\n​\n\n**(Level 1)**\n\n​\n\n**(Level 2)**\n\n​\n\n**(Level 3)**\n\n​\n\n**Total**\n\nEquity securities\n\n​\n\n$\n\n1,080\n\n​\n\n$\n\n—\n\n​\n\n$\n\n—\n\n​\n\n$\n\n1,080\n\nWarrants\n\n​\n\n​\n\n—\n\n​\n\n​\n\n124\n\n​\n\n​\n\n—\n\n​\n\n​\n\n124\n\nTotal\n\n​\n\n$\n\n1,080\n\n​\n\n$\n\n124\n\n​\n\n$\n\n—\n\n​\n\n$\n\n1,204\n\n​\n\nThe Company had no financial liabilities measured at fair value on a recurring basis at April 30, 2025.\n\n​\n\n**4.           Inventories, net**\n\n​\n\nInventories consist of the following (in thousands):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**April 30,**\n\n​\n\n​\n\n** **\n\n**2026**\n\n**  ​ ​ ​**\n\n**2025**\n\n** **\n\n​\n\n​\n\n**(In thousands)**\n\n** **\n\nRaw materials\n\n​\n\n$\n\n156,200\n\n​\n\n$\n\n52,567\n\n​\n\nWork in process\n\n​\n\n \n\n73,289\n\n​\n\n \n\n73,434\n\n​\n\nFinished goods\n\n​\n\n \n\n119,957\n\n​\n\n \n\n46,761\n\n​\n\nInventories, gross\n\n​\n\n \n\n349,446\n\n​\n\n \n\n172,762\n\n​\n\nReserve for inventory excess and obsolescence\n\n​\n\n \n\n(36,590)\n\n​\n\n \n\n(28,672)\n\n​\n\nInventories, net\n\n​\n\n$\n\n312,856\n\n​\n\n$\n\n144,090\n\n​\n\n​\n\nFor the fiscal years ended April 30, 2026, 2025 and 2024, the Company recorded inventory reserve charges of $8,460,000, $2,882,000 and $13,937,000, respectively.\n\n​\n\n**5.           Intangibles, net**\n\n​\n\nThe components of intangibles are as follows (in thousands):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**April 30,**\n\n​\n\n**April 30,**\n\n​\n\n​\n\n**  ​ ​ ​**\n\n**2026**\n\n**  ​ ​ ​**\n\n**2025**\n\n​\n\nTechnology\n\n​\n\n$\n\n585,970\n\n​\n\n$\n\n101,645\n\n​\n\nLicenses\n\n​\n\n​\n\n1,008\n\n​\n\n​\n\n1,008\n\n​\n\nCustomer relationships\n\n​\n\n​\n\n618,730\n\n​\n\n​\n\n77,588\n\n​\n\nBacklog\n\n​\n\n​\n\n58,131\n\n​\n\n​\n\n2,963\n\n​\n\nIn-process research and development\n\n​\n\n​\n\n550\n\n​\n\n​\n\n550\n\n​\n\nNon-compete agreements\n\n​\n\n​\n\n3,320\n\n​\n\n​\n\n320\n\n​\n\nTrademarks and tradenames\n\n​\n\n​\n\n3,668\n\n​\n\n​\n\n1,668\n\n​\n\nOther\n\n​\n\n​\n\n146\n\n​\n\n​\n\n146\n\n​\n\nIntangibles, gross\n\n​\n\n​\n\n1,271,523\n\n​\n\n​\n\n185,888\n\n​\n\nLess accumulated amortization\n\n​\n\n \n\n(341,697)\n\n​\n\n \n\n(137,177)\n\n​\n\nIntangibles, net\n\n​\n\n$\n\n929,826\n\n​\n\n$\n\n48,711\n\n​\n\n​\n\nThe weighted average amortization period at April 30, 2026 and 2025 was 6 years. Amortization expense for the years ended April 30, 2026, 2025 and 2024 was $203,984,000, $23,391,000 and $17,954,000, respectively.\n\n​\n\n100\n\n[Table of Contents](#Toc)\n\nIn January 2026, a stop-work order was received on the Company’s OTA for the delivery of BADGER phased array antenna systems to support Space Force’s Satellite Communication Augmentation Resource (“SCAR”) program. Additionally, in March 2026, the customer terminated the agreement for convenience. The Company concluded that the stop-work order represented a trigger event that indicated the carrying value of the Space reporting unit exceeded its fair value. Due to the trigger event, the Company performed a recoverability test on the long-lived assets of the Space reporting unit, inclusive of the intangibles, for impairment in accordance with ASC 360. The undiscounted cash flows exceeded the carrying value and no impairment was recorded for long-lived assets.\n\n​\n\nAs part of the Company’s annual goodwill impairment and identifiable assets test during the fiscal quarter ended April 30, 2025, a decrease in forecasted results of the UGV reporting unit resulted in accelerated intangible amortization expenses of $4,258,000, or loss per diluted share of $0.12, which was during the three months ended April 30, 2025. Refer to Note 6—Goodwill for further details.\n\n​\n\nCustomer relationships, backlog, technology, non-compete agreements, and tradename intangibles were recognized in conjunction with the Company’s acquisition of ESAero on March 16, 2026. Technology, backlog and customer relationships intangibles were recognized in conjunction with the Company’s acquisition of Blue Halo on May 1, 2025. Refer to Note 19—Business Acquisitions for further details.\n\n​\n\nEstimated amortization expense for the next five years is as follows (in thousands):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**  ​ ​ ​**\n\n**Year ending**\n\n** **\n\n​\n\n​\n\n**April 30,**\n\n** **\n\n2027\n\n​\n\n$\n\n173,032\n\n​\n\n2028\n\n​\n\n \n\n165,242\n\n​\n\n2029\n\n​\n\n \n\n160,271\n\n​\n\n2030\n\n​\n\n \n\n137,236\n\n​\n\n2031\n\n​\n\n \n\n78,624\n\n​\n\n​\n\n​\n\n$\n\n714,405\n\n​\n\n​\n\n​\n\n​\n\n**6.           Goodwill**\n\n​\n\nThe following table presents the changes in the Company’s goodwill balance (in thousands):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**AxS**\n\n​\n\n**SCDE**\n\n​\n\n**Total**\n\nGoodwill\n\n​\n\n$\n\n431,157\n\n​\n\n$\n\n—\n\n​\n\n$\n\n431,157\n\nAccumulated impairment losses\n\n​\n\n​\n\n(174,376)\n\n​\n\n​\n\n—\n\n​\n\n​\n\n(174,376)\n\nBalance at April 30, 2025\n\n​\n\n​\n\n256,781\n\n​\n\n​\n\n—\n\n​\n\n​\n\n256,781\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nAdditions to goodwill\n\n​\n\n​\n\n1,027,665\n\n​\n\n​\n\n1,449,940\n\n​\n\n​\n\n2,477,605\n\nImpairment to goodwill\n\n​\n\n​\n\n—\n\n​\n\n​\n\n(240,708)\n\n​\n\n​\n\n(240,708)\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nGoodwill\n\n​\n\n​\n\n1,458,822\n\n​\n\n​\n\n1,449,940\n\n​\n\n​\n\n2,908,762\n\nAccumulated impairment losses\n\n​\n\n​\n\n(174,376)\n\n​\n\n​\n\n(240,708)\n\n​\n\n​\n\n(415,084)\n\nBalance at April 30, 2026\n\n​\n\n$\n\n1,284,446\n\n​\n\n$\n\n1,209,232\n\n​\n\n$\n\n2,493,678\n\n​\n\n101\n\n[Table of Contents](#Toc)\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**AxS**\n\n​\n\n**SCDE**\n\n​\n\n**Total**\n\nGoodwill\n\n​\n\n$\n\n431,669\n\n​\n\n$\n\n—\n\n​\n\n$\n\n431,669\n\nAccumulated impairment losses\n\n​\n\n​\n\n(156,017)\n\n​\n\n​\n\n—\n\n​\n\n​\n\n(156,017)\n\nBalance at April 30, 2024\n\n​\n\n​\n\n275,652\n\n​\n\n​\n\n—\n\n​\n\n​\n\n275,652\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nChange to goodwill\n\n​\n\n​\n\n(512)\n\n​\n\n​\n\n—\n\n​\n\n​\n\n(512)\n\nImpairment of goodwill\n\n​\n\n​\n\n(18,359)\n\n​\n\n​\n\n—\n\n​\n\n​\n\n(18,359)\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nGoodwill\n\n​\n\n​\n\n431,157\n\n​\n\n​\n\n—\n\n​\n\n​\n\n431,157\n\nAccumulated impairment losses\n\n​\n\n​\n\n(174,376)\n\n​\n\n​\n\n—\n\n​\n\n​\n\n(174,376)\n\nBalance at April 30, 2025\n\n​\n\n$\n\n256,781\n\n​\n\n$\n\n—\n\n​\n\n$\n\n256,781\n\n​\n\nThe AxS segment includes goodwill from the acquisitions of ESAero, Pulse Aerospace, LLC, Arcturus UAV, Inc., Telerob Gesellschaft für Fernhantierungstechnik mbH (“Telerob”), which has since been fully impaired, Planck Aerosystems, Inc., Tomahawk Robotics, Inc. (“Tomahawk”), certain reporting units from BlueHalo and includes goodwill from the purchase of certain assets of Intelligent Systems Group business segment of Progeny Systems Corporation. The SCDE segment includes goodwill from certain reporting units from BlueHalo.\n\n​\n\nDuring the fiscal year ended April 30, 2026, the additions relate to the BlueHalo and ESAero acquisitions. Refer to Note 19—Business Acquisitions for further details.\n\n​\n\nThe impairment during the fiscal year ended April 30, 2026 relates to the impairment of the Space reporting unit. In January 2026, a stop-work order was received on the Company’s Other Transaction Agreement for the delivery of BADGER phased array antenna systems to support Space Force’s SCAR program. Additionally, in March 2026, the customer terminated the agreement for convenience. The Company concluded that the stop-work order represented a trigger event that indicated the carrying value of the Space reporting unit exceeded its fair value. As a result, the Company updated the estimates of the long-term cash flows of the Space reporting unit to reflect the reduced revenue associated with the stop-work order and termination for convenience as well as an increase in expected research and development and capital investments to achieve product commercialization, which is expected to result in expanded opportunities and improve long term product margins. The changes in estimates resulted in the recognition of a goodwill impairment charge of approximately $240,708,000 in the Space reporting unit.\n\n​\n\nDuring the fiscal year ended April 30, 2025, the change to goodwill in AxS is attributable to the translation of the goodwill related to the Telerob Acquisition, which was recorded in Euros and translated to dollars at each reporting date and was fully impaired during the fiscal year ended April 30, 2025. The impairment relates to the impairment of the UGV reporting unit. During the Company’s annual impairment test during the fiscal quarter ended April 30, 2025, the Company determined the carrying value of the UGV reporting unit exceeded its fair value due to a decrease in forecasted results of the UGV reporting unit resulting from reduced probability and delays of obtaining certain opportunities as well as an increase in forecast expenditures to support operational decisions identified during the fiscal quarter ended April 30, 2025. The changes in estimates resulted in the recognition of a goodwill impairment charge of $18,359,000 in the UGV reporting unit.\n\n​\n\nDuring the most recent annual impairment test during the fourth quarter of fiscal year 2026, the estimated fair value of all reporting units with goodwill from acquisitions in previous years substantially exceeded their carrying value. The reporting units from the BlueHalo and ESAero acquisitions were recently recorded at estimated fair value during the fiscal year ended April 30, 2026 and, other than the Space unit, no triggering event for goodwill impairment was since identified.\n\n​\n\n102\n\n[Table of Contents](#Toc)\n\n**7.           Property and Equipment, net**\n\n​\n\nProperty and equipment, net consist of the following:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**April 30,**\n\n​\n\n​\n\n**  ​ ​ ​**\n\n**2026**\n\n**  ​ ​ ​**\n\n**2025**\n\n​\n\n​\n\n​\n\n**(In thousands)**\n\n​\n\nIn-service ISR assets\n\n​\n\n​\n\n3,987\n\n​\n\n​\n\n1,486\n\n​\n\nLand, building, and leasehold improvements\n\n​\n\n​\n\n85,143\n\n​\n\n​\n\n31,472\n\n​\n\nMachinery and equipment\n\n​\n\n \n\n185,263\n\n​\n\n \n\n131,236\n\n​\n\nFurniture and fixtures\n\n​\n\n \n\n12,028\n\n​\n\n \n\n7,324\n\n​\n\nComputer equipment and software\n\n​\n\n \n\n61,930\n\n​\n\n \n\n50,617\n\n​\n\nConstruction in process\n\n​\n\n \n\n24,622\n\n​\n\n \n\n8,304\n\n​\n\nProperty and equipment, gross\n\n​\n\n \n\n372,973\n\n​\n\n \n\n230,439\n\n​\n\nLess accumulated depreciation and amortization\n\n​\n\n \n\n(206,254)\n\n​\n\n \n\n(179,735)\n\n​\n\nProperty and equipment, net\n\n​\n\n$\n\n166,719\n\n​\n\n$\n\n50,704\n\n​\n\n​\n\nDepreciation expense for the years ended April 30, 2026, 2025 and 2024 was $35,830,000, $17,063,000 and $17,098,000, respectively.\n\n​\n\n**8.****Investments in Companies Accounted for Using the Equity Method**\n\n​\n\n**Investment in Limited Partnership Fund**\n\n​\n\nIn July 2019, the Company made its initial capital contribution to a limited partnership fund focusing on highly relevant technologies and start-up companies serving defense and industrial markets. Under the terms of the limited partnership agreement, the Company contributed a total of $10,000,000 during the fiscal years ended April 30, 2021 and 2022, and there were no further contribution commitments to this fund as of April 30, 2022. During the fiscal year ended April 30, 2026 the Company received a distribution of $528,000. In March 2022, the Company entered into a similar second limited partnership fund and committed to contributions totaling $20,000,000 over an expected five year period. During the fiscal years ended April 30, 2026, 2025 and 2024, the Company made total contributions of $4,543,000, $5,674,000 and $3,074,000, respectively. Under the terms of the limited partnership agreement, the Company has committed to make additional capital contributions of $931,000 to the fund expected to be paid over the next two fiscal years. In May 2026, the Company entered into a third similar limited partnership and committed to contributions totaling $20,000,000 over an expected five year period. The Company accounts for investments in limited partnerships as equity method investments as the Company is deemed to have influence when it holds more than a minor interest. For the fiscal years ended April 30, 2026, 2025 and 2024, the Company recorded its ownership percentage of the net gain (loss) of the limited partnership, or $17,441,000, $4,816,000, and $(1,782,000) respectively, in equity method investment income (loss), net of deferred taxes $0, respectively, in the consolidated statements of income (loss). At April 30, 2026 and 2025, the carrying value of the investment in the limited partnership of $51,880,000 and $30,423,000, respectively, was recorded in available-for-sale long-term investments.\n\n​\n\n​\n\n​\n\n**9.           Warranty Reserves**\n\n​\n\nWarranty reserve activity is summarized as follows:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**April 30,**\n\n​\n\n​\n\n​\n\n**2026**\n\n**  ​ ​ ​**\n\n**2025**\n\n** **\n\n​\n\n​\n\n**(In thousands)**\n\n \n\nBeginning balance\n\n​\n\n$\n\n4,189\n\n​\n\n$\n\n5,538\n\n​\n\nBalance acquired from acquisition\n\n​\n\n​\n\n2,274\n\n​\n\n​\n\n—\n\n​\n\nWarranty expense\n\n​\n\n \n\n9,006\n\n​\n\n \n\n1,151\n\n​\n\nChange in estimate\n\n​\n\n​\n\n(1,655)\n\n​\n\n​\n\n—\n\n​\n\nWarranty costs settled\n\n​\n\n \n\n(5,080)\n\n​\n\n \n\n(2,500)\n\n​\n\nEnding balance\n\n​\n\n$\n\n8,734\n\n​\n\n$\n\n4,189\n\n​\n\n​\n\n​\n\n​\n\n103\n\n[Table of Contents](#Toc)\n\n**10.****Debt**\n\n​\n\nIn connection with the consummation of the Arcturus Acquisition on February 19, 2021, the Company, as borrower, and Arcturus, as guarantor, entered into a Credit Agreement with certain lenders, letter of credit issuers, Bank of America, N.A., as the administrative agent and the swingline lender, and BofA Securities, Inc., JPMorgan Chase Bank, N.A., and U.S. Bank National Association, as joint lead arrangers and joint bookrunners (the “Credit Agreement”).\n\nThe Credit Agreement and its associated Security and Pledge Agreement set forth the terms and conditions for (i) a five-year $100,000,000 revolving credit facility, which included a $10,000,000 sublimit for the issuance of standby and commercial letters of credit (the “Revolving Facility”), and (ii) a five-year amortized $200,000,000 term A loan drawn in full upon execution (the “Term Loan Facility”, and together with the Revolving Facility, the “Credit Facilities”).\n\n​\n\nOn February 4, 2022, the Company entered into a First Amendment to Credit Agreement and Waiver relating to its existing Credit Agreement. On June 6, 2023, the Company entered into a Second Amendment to Credit Agreement relating to its existing credit Agreement which increased the sublimit from $10,000,000 to $25,000,000. On October 4, 2024, the Company entered into a Third Amendment to Credit Agreement with the existing lenders, BofA NA, the administrative agent and the swingline lender, JPM, and U.S. Bank, and Citibank (the “New Lender”) (the “Third Amendment to Credit Agreement”). The Third Amendment to Credit Agreement provided for an aggregate $200,000,000 revolving credit facility, including a $25,000,000 sublimit for the issuance of standby and commercial letters of credit, and a $10,000,000 sublimit for swingline loans, secured by all assets of the Company and the Guarantors, and extends the maturity date for obligations pursuant to the Credit Agreement to October 4, 2029. Upon effectiveness of the Third Amendment to Credit Agreement, the Company drew $15,000,000 from the amended Revolving Facility and repaid in full all outstanding amounts owed pursuant to the $700,000,000 Term Loan Facility. The Third Amendment to Credit Agreement reflects the removal of the Term Loan Facility. The unamortized debt issuance costs allocated to the Term Loan Facility of $590,000 were expensed upon repayment of the Term Loan Facility and recorded in interest expense.\n\n​\n\nOn May 1, 2025, in connection with the consummation of the BlueHalo Acquisition, the Company entered into a Fourth Amendment to Credit Agreement with the lenders, BofA NA, the administrative agent and the swingline lender, JPM, and U.S. Bank, and Citibank (the “Fourth Amendment to Credit Agreement” and the existing Credit Agreement as amended thereby, the “Amended Credit Agreement”). The Amended Credit Agreement now provides for an aggregate $700,000,000 term loan and an aggregate $350,000,000 revolving credit facility, including a $25,000,000 sublimit for the issuance of standby and commercial letters of credit, and a $10,000,000 sublimit for swingline loans, secured by all assets of the Company and the Guarantors. Upon effectiveness of the Amended Credit Agreement, the Company drew $225,000,000 from the amended Revolving Facility and the full $700,000,000 of the Term Loan Facility. In June 2025, the Company drew an additional $10,000,000 under the Revolving Facility.\n\n​\n\nIn July 2025, the Company used approximately $965,303,000 of the net proceeds from the Convertible Notes Offering and Common Stock Offering to repay indebtedness under the Term Loan Facility and outstanding borrowings under the Revolving Credit Facility. Refer to Note 11—Convertible Notes and Note 16—Share Issuances, respectively, for further details. The unamortized debt issuance costs allocated to the Term Loan Facility of $6,668,000 were expensed upon repayment of the Term Loan Facility and recorded as interest expense in the consolidated statements of operations. The Revolver Facility remains open and available to the Company.\n\n​\n\nThe Company’s ability to borrow under the Revolving Facility is reduced by outstanding letters of credit, which as of April 30, 2026 and 2025 was $13,152,000 and $9,376,000, respectively. As of April 30, 2026 and 2025, approximately $336,848,000 and $160,624,000 was available under the Revolving Facility, respectively. The $700,000,000 term loan has been repaid in full and closed; although new term loans can be renegotiated and issued under the Credit Facility. Borrowings under the Revolving Facility may be used for working capital and other general corporate purposes, including acquisitions that meet certain parameters. As of April 30, 2026, the Company was in compliance with all amended covenants.\n\n​\n\n104\n\n[Table of Contents](#Toc)\n\nLong-term debt and the current period interest rates were as follows:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**April 30,**\n\n​\n\n**April 30,**\n\n​\n\n​\n\n**2026**\n\n**  ​ ​ ​**\n\n**2025**\n\n​\n\n​\n\n**(In thousands)**\n\n​\n\n**(In thousands)**\n\nRevolving credit facility\n\n​\n\n$\n\n—\n\n​\n\n$\n\n30,000\n\nConvertible notes\n\n​\n\n​\n\n747,500\n\n​\n\n​\n\n—\n\nTotal long-term debt\n\n​\n\n​\n\n747,500\n\n​\n\n​\n\n30,000\n\nLess unamortized debt issuance costs–convertible notes\n\n​\n\n​\n\n18,533\n\n​\n\n​\n\n—\n\nTotal long-term debt, net of unamortized debt issuance costs–convertible notes\n\n​\n\n$\n\n728,967\n\n​\n\n$\n\n30,000\n\nUnamortized debt issuance costs–revolving credit facility\n\n​\n\n$\n\n1,745\n\n​\n\n$\n\n1,281\n\nCurrent period interest rate\n\n​\n\n​\n\n—\n\n​\n\n​\n\n5.9%\n\n​\n\nFuture contractual long-term debt principal payments at April 30, 2026 were as follows:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Fiscal Year**\n\n​\n\n**(In thousands)**\n\n2027\n\n​\n\n$\n\n—\n\n2028\n\n​\n\n​\n\n—\n\n2029\n\n​\n\n​\n\n—\n\n2030\n\n​\n\n​\n\n—\n\n2031\n\n​\n\n​\n\n747,500\n\n​\n\n​\n\n$\n\n747,500\n\n​\n\n​\n\n**11.****Convertible Notes**\n\n​\n\nIn July 2025, the Company entered into an underwriting agreement (the “Note Underwriting Agreement”) with certain underwriters (the “Note Underwriters”) agreeing, subject to customary conditions, to issue and sell $650,000,000 aggregate principal amount of the Notes to the Note Underwriters as well as an option, exercisable within 30 days after entering the Note Underwriting Agreement, to purchase up to an additional $97,500,000 aggregate principal amount of Notes solely to cover over-allotments. The Note Underwriters exercised such option to purchase an additional $97,500,000 aggregate principal amount of Notes. The issuance of $747,500,000 aggregate principal amount of Notes was completed in July 2025. The estimated fair value (Level 2) of the zero-coupon convertible note maturing on July 15, 2030 was $760,656,000 as of April 30, 2026.\n\n​\n\nThe Notes are the Company’s senior, unsecured obligations and are (i) equal in right of payment with the Company’s existing and future senior, unsecured indebtedness; (ii) senior in right of payment to the Company’s existing and future indebtedness that is expressly subordinated to the Notes; (iii) effectively subordinated to the Company’s existing and future secured indebtedness, to the extent of the value of the collateral securing that indebtedness, including any borrowings under the Company's revolving credit facility; and (iv) structurally subordinated to all existing and future indebtedness and other liabilities, including trade payables, and (to the extent the Company is not a holder thereof) preferred equity, if any, of the Company’s subsidiaries.\n\n​\n\nThe Notes do not bear regular interest, and the principal amount of the Notes will not accrete. Special interest will accrue on the Notes upon the occurrence of certain events relating to the Company's failure to file certain SEC reports as provided in the Indenture. The Notes will mature on July 15, 2030, unless earlier repurchased, redeemed or converted. Before April 15, 2030, noteholders have the right to convert their Notes only upon the occurrence of certain events. From and after April 15, 2030, noteholders may convert their Notes at any time at their election until the close of business on the second scheduled trading day immediately before the maturity date. The Company will have the right to elect to settle conversions either entirely in cash or in a combination of cash and shares of its common stock. Upon conversion of any Note, the consideration due upon conversion, which will be determined over an “Observation Period” (as defined in the Indenture) consisting of 60 consecutive trading days, will be paid in cash up to at least the principal amount of the Notes being converted and the Company will pay or deliver, as the case may be, cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the Company’s\n\n105\n\n[Table of Contents](#Toc)\n\nelection, in respect of the remainder, if any, of the Company’s conversion obligation in excess of the principal amount of the Notes being converted. The initial conversion rate is 3.1017 shares of the Company's common stock per $1,000 principal amount of Notes, which represents an initial conversion price of approximately $322.40 per share of the Company's common stock. The conversion rate and conversion price will be subject to customary adjustments upon the occurrence of certain events. In addition, if certain corporate events that constitute a “Make-Whole Fundamental Change” (as defined in the Indenture) occur, then the conversion rate will, in certain circumstances, be increased for a specified period of time.\n\n​\n\nThe Notes will be redeemable, in whole or in part (subject to certain limitations described below), at the Company’s option at any time, and from time to time, on or after July 21, 2028 and on or before the 61st scheduled trading day immediately before the maturity date, at a cash redemption price equal to the principal amount of the Notes to be redeemed, plus accrued and unpaid special interest, if any, to, but excluding, the redemption date, but only if the last reported sale price per share of the Company’s common stock exceeds 130% of the conversion price on (i) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date the Company sends the related redemption notice; and (ii) the trading day immediately before the date the Company sends such notice. However, the Company may not redeem less than all of the outstanding Notes unless at least $100.0 million aggregate principal amount of Notes are outstanding and not called for redemption as of the time the Company sends the related redemption notice. In addition, calling any Note for redemption will constitute a Make-Whole Fundamental Change with respect to that Note, in which case the conversion rate applicable to the conversion of that Note will be increased in certain circumstances if it is converted after it is called for redemption.\n\n​\n\nIf certain events that constitute a “Fundamental Change” (as defined in the Indenture) occur, then, subject to a limited exception for certain cash mergers as provided in the Indenture, noteholders may require the Company to repurchase their Notes at a cash repurchase price equal to the principal amount of the Notes to be repurchased, plus accrued and unpaid special interest, if any, to, but excluding, the fundamental change repurchase date. The definition in the Indenture of Fundamental Change includes certain business combination transactions involving the Company and certain de-listing events with respect to the Company’s common stock.\n\n​\n\nThe Notes have customary provisions relating to the occurrence of “Events of Default” (as defined in the Indenture), which include the following: (i) certain payment defaults on the Notes (which, in the case of a default in the payment of special interest on the Notes, will be subject to a 30-day cure period); (ii) the Company’s failure to send certain notices under the Indenture within specified periods of time; (iii) the Company's failure to convert a Note in accordance with the Indenture within a specified period of time; (iv) the Company’s failure to comply with certain covenants in the Indenture relating to the Company’s ability to consolidate with or merge with or into, or sell, lease or otherwise transfer, in one transaction or a series of transactions, all or substantially all of the assets of the Company and its subsidiaries, taken as a whole, to another person; (v) a default by the Company in its other obligations or agreements under the Indenture or the Notes if such default is not cured or waived within 60 days after notice is given in accordance with the Indenture; (vi) certain defaults by the Company or any of its significant subsidiaries with respect to indebtedness for borrowed money of at least $55,000,000; and (vii) certain events of bankruptcy, insolvency and reorganization involving the Company or any of its significant subsidiaries.\n\n​\n\nIf an Event of Default involving bankruptcy, insolvency or reorganization events with respect to the Company (and not solely with respect to a significant subsidiary of the Company) occurs, then the principal amount of, and all accrued and unpaid interest, if any, on all of the Notes then outstanding will immediately become due and payable without any further action or notice by any person. If any other Event of Default occurs and is continuing, then, the Trustee, by notice to the Company, or noteholders of at least 25% of the aggregate principal amount of Notes then outstanding, by notice to the Company and the Trustee, may declare the principal amount of, and all accrued and unpaid interest, if any, on, all of the Notes then outstanding to become due and payable immediately. However, notwithstanding the foregoing, the Company may elect, at its option, that the sole remedy for an Event of Default relating to certain failures by the Company to comply with certain reporting covenants in the Indenture consists exclusively of the right of the noteholders to receive special interest on the Notes for up to 365 days, at a rate per annum equal to 0.25% of the principal amount of the Notes for the first 180 days on which special interest accrues and, thereafter, at a rate per annum equal to 0.50% of the principal amount thereof.\n\n​\n\n106\n\n[Table of Contents](#Toc)\n\n**12.          Leases**\n\n​\n\nThe components of lease costs recorded in cost of sales and SG&A expense were as follows (in thousands):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year Ended**\n\n​\n\n**Year Ended**\n\n​\n\n​\n\n**April 30,**\n\n​\n\n**April 30,**\n\n​\n\n**  ​ ​ ​**\n\n**2026**\n\n​\n\n**2025**\n\nOperating lease cost\n\n​\n\n$\n\n25,426\n\n​\n\n$\n\n10,163\n\nShort term lease cost\n\n​\n\n​\n\n1,442\n\n​\n\n​\n\n822\n\nVariable lease cost\n\n​\n\n​\n\n3,880\n\n​\n\n​\n\n1,627\n\nSublease income\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\nTotal lease costs, net\n\n​\n\n$\n\n30,748\n\n​\n\n$\n\n12,612\n\n​\n\nSupplemental lease information was as follows:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year Ended**\n\n​\n\n**Year Ended**\n\n​\n\n​\n\n**April 30,**\n\n​\n\n**April 30,**\n\n​\n\n**  ​ ​ ​**\n\n**2026**\n\n​\n\n**2025**\n\n​\n\n​\n\n**(In thousands)**\n\n​\n\n**(In thousands)**\n\nCash paid for amounts included in the measurement of operating lease liabilities\n\n​\n\n$\n\n23,708\n\n​\n\n$\n\n10,229\n\nRight-of-use assets obtained in exchange for new lease liabilities\n\n​\n\n$\n\n6,699\n\n​\n\n$\n\n10,099\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nWeighted average remaining lease term\n\n​\n\n​\n\n71 months\n\n​\n\n​\n\n48 months\n\nWeighted average discount rate\n\n​\n\n​\n\n6.7%\n\n​\n\n​\n\n5.4%\n\n​\n\nMaturities of operating lease liabilities as of April 30, 2026 were as follows (in thousands):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Fiscal Year**\n\n​\n\n​\n\n​\n\n2027\n\n​\n\n$\n\n23,263\n\n2028\n\n​\n\n \n\n25,143\n\n2029\n\n​\n\n \n\n22,449\n\n2030\n\n​\n\n \n\n17,597\n\n2031\n\n​\n\n \n\n11,803\n\nThereafter\n\n​\n\n​\n\n34,089\n\nTotal lease payments\n\n​\n\n$\n\n134,344\n\nLess: imputed interest\n\n​\n\n​\n\n(28,522)\n\nTotal present value of operating lease liabilities\n\n​\n\n$\n\n105,822\n\n​\n\n​\n\n**13.          Stock-Based Compensation**\n\n​\n\nFor the years ended April 30, 2026, 2025 and 2024, the Company recorded stock-based compensation expense of approximately $38,334,000, $21,461,000 and $17,069,000, respectively.\n\n​\n\nOn September 24, 2021, the stockholders of the Company approved the 2021 Equity Incentive Plan (“2021 Plan”) effective September 24, 2021, for officers, directors, key employees and consultants. Under the 2021 Plan, incentive stock options, nonqualified stock options, restricted stock awards, stock appreciation right awards, performance share awards, performance stock unit awards, dividend equivalents awards, stock payment awards, deferred stock awards, restricted stock unit awards, other stock-based awards, performance bonus awards or performance-based awards may be granted at the discretion of the compensation committee, which consists of outside directors. The sum of any cash compensation, or other compensation, and the value of awards granted to a non-employee director as compensation for services as a non-employee director during any fiscal year may not exceed $500,000, which amount is increased to $700,000 in the fiscal year of a non-employee director’s initial year of service as a non-employee director. The exercise price for any incentive stock option shall not be less than 100% of the fair market value on the date of grant. Vesting of awards is established at the time of grant.\n\n​\n\n107\n\n[Table of Contents](#Toc)\n\nThe prior plan, the 2006 Equity Incentive Plan (“2006 Plan”), was approved by the stockholders of the Company on January 14, 2007 and effective January 21, 2007 for officers, directors, key employees and consultants. On September 29, 2011, the stockholders of the Company approved an amendment and restatement of the 2006 Plan (“Restated 2006 Plan”). The Restated 2006 Plan expired in July 2021.\n\n​\n\nOn September 19, 2023, the stockholders of the Company approved the Company’s 2023 Employee Stock Purchase Plan (the “2023 ESPP”). The 2023 ESPP allows for eligible employees to purchase common stock through payroll deductions of up to $25,000 worth of common stock (determined at the fair market value of the shares at the time such rights are granted) for each calendar year in which the purchase rights are outstanding at any time. Shares of common stock are purchased under the 2023 ESPP at a discount to the market price of the shares of no less than 85% of the fair market value of the Company’s common stock on each purchase date. Subject to adjustments for changes in the Company’s capitalization and certain corporate transactions, the total number of shares available for issuance under the 2023 ESPP is 1,000,000 shares of common stock. For the fiscal years ended April 30, 2026 and 2025, 27,737 and 14,598 shares have been issued under the 2023 ESPP, respectively.\n\n​\n\nThe fair value of the grants under the 2023 ESPP was estimated at the grant date using an option pricing model. Assumptions included in the option pricing model included the expected term of grants, the expected volatility, the risk-free interest rate, and the expected dividend yield. The expected term of stock options represents the weighted average period the Company expects the grants to remain outstanding, based on the offering period of the grant. The expected volatility is based on historical volatility for the Company’s stock. The risk-free interest rate is based on the implied yield on a U.S. Treasury zero coupon bond with a remaining term that approximates the expected term of the option. The expected dividend yield of zero reflects that the Company has not paid any cash dividends since inception and does not anticipate paying cash dividends in the foreseeable future.\n\n​\n\nThe fair value of stock options granted previously was estimated at the grant date using the Black-Scholes option pricing model. Assumptions included in the Black-Scholes option pricing model included the expected term of stock options, the expected volatility, the risk-free interest rate, and the expected dividend yield. The expected term of stock options represents the weighted average period the Company expects the stock options to remain outstanding, based on the Company’s historical exercise and post-vesting cancellation experience and the remaining contractual life of its outstanding options. The expected volatility is based on historical volatility for the Company’s stock. The risk-free interest rate is based on the implied yield on a U.S. Treasury zero-coupon bond with a remaining term that approximates the expected term of the option. The expected dividend yield of zero reflects that the Company has not paid any cash dividends since inception and does not anticipate paying cash dividends in the foreseeable future.\n\n​\n\nAs of April 30, 2025, no stock options were outstanding. Information related to the stock option plans at 2025 and 2024, and for the years then ended is as follows:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Restated 2006 Plan**\n\n​\n\n**  ​ ​ ​**\n\n​\n\n**  ​ ​ ​**\n\n**Weighted**\n\n​\n\n​\n\n​\n\n​\n\n**Average**\n\n​\n\n​\n\n​\n\n​\n\n**Exercise**\n\n​\n\n​\n\n**Shares**\n\n​\n\n**Price**\n\nOutstanding at April 30, 2023\n\n \n\n66,164\n\n​\n\n \n\n27.82\n\nOptions granted\n\n \n\n—\n\n​\n\n \n\n—\n\nOptions exercised\n\n \n\n—\n\n​\n\n \n\n—\n\nOptions canceled\n\n \n\n—\n\n​\n\n \n\n—\n\nOutstanding at April 30, 2024\n\n \n\n66,164\n\n​\n\n \n\n27.82\n\nOptions granted\n\n \n\n—\n\n​\n\n \n\n—\n\nOptions exercised\n\n \n\n(66,164)\n\n​\n\n \n\n27.82\n\nOptions canceled\n\n \n\n—\n\n​\n\n \n\n—\n\nOutstanding at April 30, 2025\n\n \n\n—\n\n​\n\n \n\n—\n\n​\n\nNo options were granted during the fiscal years ended April 30, 2026, 2025 and 2024. The total intrinsic value of all options exercised during the years ended April 30, 2025 and 2024 was approximately $7,312,000, and $0, respectively. Proceeds from all option exercises under all stock option plans for the years ended April 30, 2025 and 2024\n\n108\n\n[Table of Contents](#Toc)\n\nwere approximately $1,841,000 and $0, respectively. The intrinsic value of all options outstanding and exercisable at both April 30, 2026 and 2025 was $0.\n\n​\n\nAs of April 30, 2026, there was approximately $22,910,000 of total unrecognized compensation cost related to non-vested share-based compensation awards granted under the equity plans. That cost is expected to be recognized over an approximately two-year period or a weighted average period of approximately 2.0 years. The total fair value of shares vesting during the years ended April 30, 2026, 2025 and 2024 was $9,544,000, $8,543,000 and $6,170,000, respectively. The tax benefit realized from stock-based compensation was $11,080,000, $6,984,000 and $0 for the fiscal years ended April 30, 2026, 2025, and 2024, respectively.\n\n​\n\nInformation related to the Company’s restricted stock awards at April 30, 2026 and for the year then ended is as follows:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**2021 Plan**\n\n​\n\n**  ​ ​ ​**\n\n​\n\n**  ​ ​ ​**\n\n**Weighted**\n\n​\n\n​\n\n​\n\n​\n\n**Average**\n\n​\n\n​\n\n​\n\n​\n\n**Grant Date**\n\n​\n\n​\n\n**Shares**\n\n​\n\n**Fair Value**\n\nUnvested stock at April 30, 2025\n\n \n\n162,140\n\n​\n\n$\n\n127.71\n\nStock granted\n\n \n\n123,315\n\n​\n\n \n\n229.31\n\nStock vested\n\n \n\n(78,908)\n\n​\n\n \n\n118.65\n\nStock canceled\n\n \n\n(18,010)\n\n​\n\n \n\n186.40\n\nUnvested stock at April 30, 2026\n\n \n\n188,537\n\n​\n\n$\n\n192.48\n\n​\n\nInformation related to the Company’s restricted stock units at April 30, 2026 and for the year then ended is as follows:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**2021 Plan**\n\n​\n\n**  ​ ​ ​**\n\n​\n\n**  ​ ​ ​**\n\n**Weighted**\n\n​\n\n​\n\n​\n\n​\n\n**Average**\n\n​\n\n​\n\n​\n\n​\n\n**Grant Date**\n\n​\n\n​\n\n**Shares**\n\n​\n\n**Fair Value**\n\nUnvested stock at April 30, 2025\n\n \n\n3,178\n\n​\n\n$\n\n125.00\n\nStock granted\n\n \n\n485\n\n​\n\n​\n\n278.07\n\nStock vested\n\n \n\n(1,559)\n\n​\n\n \n\n116.29\n\nStock canceled\n\n \n\n(113)\n\n​\n\n \n\n175.67\n\nUnvested stock at April 30, 2026\n\n \n\n1,991\n\n​\n\n$\n\n166.24\n\n​\n\n​\n\n**14.          Long-Term Incentive Awards**\n\n​\n\nThe Company grants awards as a long-term incentive plan (“LTIP”) under its 2021 Plan to key employees. These awards consist of: (i) time-based restricted stock awards and time-based restricted stock units, which vest in three equal tranches, and (ii) performance-based restricted stock units (“PRSUs”), which vest based on the Company’s achievement of revenue and non-GAAP adjusted earnings before interest, taxes, depreciation and amortization (“adjusted EBITDA”) targets for a three-year period. At the award date, target achievement levels, threshold achievement levels and maximum achievement levels for each of the financial performance metrics were established for which the PRSUs would vest at 100%, 50% and 250% for each such metric, respectively. The actual payout for the PRSUs at the end of the performance period will be calculated based upon the Company’s achievement of the established revenue and non-GAAP adjusted EBITDA targets for the performance period. Settlement of the PRSUs will be made in fully-vested shares of the Company’s common stock.\n\n​\n\nDuring the three months ended August 2, 2025, the Company granted LTIP awards (the “Fiscal 2026 LTIP”). The time-based restricted stock awards and time-based restricted stock units vest in equal tranches in July 2026, July 2027 and July 2028. The PRSUs vest based on the Company’s achievement of the financial performance metrics targets for the three-year period ending April 30, 2028. During the fiscal year ended April 30, 2026 the Company recorded\n\n109\n\n[Table of Contents](#Toc)\n\n$7,067,000 of compensation expense related to the Fiscal 2026 LTIP, respectively. At April 30, 2026, the maximum compensation expense that may be recorded for the performance-based portion of the Fiscal 2026 LTIP is $30,311,000.\n\n​\n\nDuring the three months ended July 27, 2024, the Company granted LTIP awards (the “Fiscal 2025 LTIP”). The time-based restricted stock awards and time-based restricted stock units vest in equal tranches in July 2025, July 2026 and July 2027. The PRSUs vest based on the Company’s achievement of the financial performance metrics targets for the three-year period ending April 30, 2027. During the fiscal year ended April 30, 2026 and 2025, the Company recorded $7,956,000 and $3,134,000 of compensation expense related to the Fiscal 2025 LTIP, respectively. At April 30, 2026, the maximum compensation expense that may be recorded for the performance-based portion of the Fiscal 2025 LTIP is $17,138,000.\n\n​\n\nDuring the three months ended July 29, 2023, the Company granted LTIP awards (the “Fiscal 2024 LTIP”). The time-based restricted stock awards and time-based restricted stock units vest in equal tranches in July 2024, July 2025 and July 2026. The PRSUs vest based on the Company’s achievement of the financial performance metrics targets for the three-year period ended April 30, 2026. During the fiscal years ended April 30, 2026, 2025, and 2024, the Company recorded $6,362,000, $4,177,000 and $3,916,000 of compensation expense related to the Fiscal 2024 LTIP, respectively.\n\n​\n\nDuring the three months ended July 30, 2022, the Company granted LTIP awards (the “Fiscal 2023 LTIP”). The time-based restricted stock awards and time-based restricted stock units vested in equal tranches in July 2023, July 2024 and July 2025. The PRSUs vested based on the Company’s achievement of the financial performance metrics targets for the three-year period ended April 30, 2025. During the three months ended August 2, 2025, the Company issued a total of 61,605 fully-vested shares of the Company’s common stock to settle the PRSUs in the Fiscal 2023 LTIP. During the fiscal years ended April 30, 2025 and 2024, the company recorded $3,139,000 and $3,349,000 related to the fiscal year 2023 LTIP PRSUs.\n\n​\n\nAt each reporting period, the Company reassesses the probability of achieving the performance targets. The estimation of whether the performance targets will be achieved requires judgment, and, to the extent actual results or updated estimates differ from the Company’s current estimates, the cumulative effect on current and prior periods of those changes will be recorded in the period estimates are revised.\n\n​\n\n**15.          Income Taxes**\n\n​\n\nThe components of income/(loss) before income taxes are as follows (in thousands):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n  ​ ​ ​\n\n**Year Ended April 30,**\n\n \n\n​\n\n​\n\n**2026**\n\n​\n\n**2025**\n\n​\n\n**2024**\n\n** **\n\nDomestic\n\n​\n\n$\n\n(298,407)\n\n​\n\n$\n\n68,814\n\n​\n\n$\n\n68,968\n\n​\n\nForeign\n\n​\n\n​\n\n(7,215)\n\n​\n\n \n\n(29,150)\n\n​\n\n \n\n(5,737)\n\n​\n\n(Loss) income before income taxes\n\n​\n\n​\n\n(305,622)\n\n​\n\n​\n\n39,664\n\n​\n\n​\n\n63,231\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nEquity method investment income (loss)\n\n​\n\n​\n\n17,441\n\n​\n\n​\n\n4,837\n\n​\n\n​\n\n(1,674)\n\n​\n\nTotal (loss) income before income taxes\n\n​\n\n$\n\n(288,181)\n\n​\n\n$\n\n44,501\n\n​\n\n$\n\n61,557\n\n​\n\n​\n\nThe Company expects any foreign earnings to be reinvested in such foreign jurisdictions and, therefore, no deferred tax liabilities for U.S. income taxes on undistributed earnings are recorded. The foreign subsidiaries do not have any undistributed earnings.\n\n​\n\n110\n\n[Table of Contents](#Toc)\n\nA reconciliation of income tax expense/(benefit) computed using the U.S. federal statutory rates to actual income tax expense is as follows (dollars in thousands):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year Ended April 30,**\n\n​\n\n​\n\n**2026**\n\n​\n\n**2025**\n\n​\n\n**2024**\n\n​\n\n​\n\n​\n\n**Dollars**\n\n​\n\n**Percentages**\n\n​\n\n​\n\n​\n\n**Dollars**\n\n​\n\n**Percentages**\n\n​\n\n​\n\n​\n\n**Dollars**\n\n​\n\n**Percentages**\n\n​\n\nU.S. federal statutory income tax rate\n\n​\n\n$\n\n(64,181)\n\n​\n\n21.0\n\n%\n\n​\n\n$\n\n8,329\n\n​\n\n21.0\n\n%\n\n​\n\n$\n\n12,927\n\n​\n\n21.0\n\n%\n\nState income taxes, net of federal benefit\n\n​\n\n​\n\n(4,558)\n\n​\n\n1.5\n\n​\n\n​\n\n​\n\n(987)\n\n​\n\n(2.5)\n\n​\n\n​\n\n​\n\n569\n\n​\n\n0.9\n\n​\n\nEffect of cross-border tax laws:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nForeign-derived intangible income\n\n​\n\n​\n\n—\n\n​\n\n—\n\n​\n\n​\n\n​\n\n(7,830)\n\n​\n\n(19.7)\n\n​\n\n​\n\n​\n\n(9,831)\n\n​\n\n(16.0)\n\n​\n\nTax Credits:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nResearch and development credits\n\n​\n\n​\n\n(8,290)\n\n​\n\n2.7\n\n​\n\n​\n\n​\n\n(5,263)\n\n​\n\n(13.3)\n\n​\n\n​\n\n​\n\n(4,831)\n\n​\n\n(7.8)\n\n​\n\nChanges in valuation allowance\n\n​\n\n​\n\n(2,665)\n\n​\n\n0.9\n\n​\n\n​\n\n​\n\n84\n\n​\n\n0.2\n\n​\n\n​\n\n​\n\n931\n\n​\n\n1.6\n\n​\n\nNontaxable or nondeductible items:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nLimit on executive compensation\n\n​\n\n​\n\n5,958\n\n​\n\n(1.9)\n\n​\n\n​\n\n​\n\n2,646\n\n​\n\n6.7\n\n​\n\n​\n\n​\n\n1,687\n\n​\n\n2.7\n\n​\n\nExcess benefit relating to stock-based compensation\n\n​\n\n​\n\n(5,040)\n\n​\n\n1.6\n\n​\n\n​\n\n​\n\n(2,997)\n\n​\n\n(7.6)\n\n​\n\n​\n\n​\n\n(389)\n\n​\n\n(0.6)\n\n​\n\nGoodwill impairment\n\n​\n\n​\n\n44,438\n\n​\n\n(14.5)\n\n​\n\n​\n\n​\n\n—\n\n​\n\n—\n\n​\n\n​\n\n​\n\n—\n\n​\n\n—\n\n​\n\nAcquisition related costs\n\n​\n\n​\n\n3,426\n\n​\n\n(1.1)\n\n​\n\n​\n\n​\n\n—\n\n​\n\n—\n\n​\n\n​\n\n​\n\n—\n\n​\n\n—\n\n​\n\nOther Perms\n\n​\n\n​\n\n4,185\n\n​\n\n(1.5)\n\n​\n\n​\n\n​\n\n1,515\n\n​\n\n3.8\n\n​\n\n​\n\n​\n\n536\n\n​\n\n0.8\n\n​\n\nChanges in unrecognized tax benefit\n\n​\n\n​\n\n2,321\n\n​\n\n(0.8)\n\n​\n\n​\n\n​\n\n459\n\n​\n\n1.2\n\n​\n\n​\n\n​\n\n(370)\n\n​\n\n(0.6)\n\n​\n\nForeign Tax Effects:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nStatutory tax rate different from US\n\n​\n\n​\n\n(719)\n\n​\n\n0.2\n\n​\n\n​\n\n​\n\n(2,603)\n\n​\n\n(6.6)\n\n​\n\n​\n\n​\n\n(293)\n\n​\n\n(0.5)\n\n​\n\nGoodwill impairment\n\n​\n\n​\n\n—\n\n​\n\n—\n\n​\n\n​\n\n​\n\n5,477\n\n​\n\n13.8\n\n​\n\n​\n\n​\n\n—\n\n​\n\n—\n\n​\n\nChange in valuation allowance\n\n​\n\n​\n\n1,653\n\n​\n\n(0.5)\n\n​\n\n​\n\n​\n\n2,213\n\n​\n\n5.6\n\n​\n\n​\n\n​\n\n—\n\n​\n\n—\n\n​\n\nOther Adjustments\n\n​\n\n​\n\n413\n\n​\n\n(0.1)\n\n​\n\n​\n\n​\n\n(161)\n\n​\n\n(0.4)\n\n​\n\n​\n\n​\n\n955\n\n​\n\n1.5\n\n​\n\nEffective income tax rate\n\n​\n\n$\n\n(23,059)\n\n​\n\n7.5\n\n%\n\n​\n\n$\n\n882\n\n​\n\n2.2\n\n%  \n\n​\n\n$\n\n1,891\n\n​\n\n3.0\n\n%\n\n​\n\nThe components of the (benefit from) provision for income taxes are as follows (in thousands):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year Ended April 30,**\n\n** **\n\n​\n\n**  ​ ​ ​**\n\n**2026**\n\n**  ​ ​ ​**\n\n**2025**\n\n**  ​ ​ ​**\n\n**2024**\n\n** **\n\nCurrent:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nFederal\n\n​\n\n$\n\n(349)\n\n​\n\n$\n\n21,901\n\n​\n\n$\n\n20,990\n\n​\n\nState\n\n​\n\n \n\n3,896\n\n​\n\n \n\n(320)\n\n​\n\n \n\n1,511\n\n​\n\nForeign\n\n​\n\n​\n\n523\n\n​\n\n​\n\n—\n\n​\n\n​\n\n(76)\n\n​\n\n​\n\n​\n\n \n\n4,070\n\n​\n\n \n\n21,581\n\n​\n\n \n\n22,425\n\n​\n\nDeferred:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nFederal\n\n​\n\n \n\n(19,494)\n\n​\n\n \n\n(19,301)\n\n​\n\n \n\n(18,844)\n\n​\n\nState\n\n​\n\n \n\n(7,635)\n\n​\n\n \n\n(734)\n\n​\n\n \n\n(625)\n\n​\n\nForeign\n\n​\n\n​\n\n—\n\n​\n\n​\n\n(664)\n\n​\n\n​\n\n(1,065)\n\n​\n\n​\n\n​\n\n \n\n(27,129)\n\n​\n\n \n\n(20,699)\n\n​\n\n \n\n(20,534)\n\n​\n\nTotal income tax expense (benefit)\n\n​\n\n$\n\n(23,059)\n\n​\n\n$\n\n882\n\n​\n\n$\n\n1,891\n\n​\n\n​\n\n111\n\n[Table of Contents](#Toc)\n\nSignificant components of the Company’s deferred income tax assets and liabilities are as follows (in thousands):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**April 30,**\n\n** **\n\n​\n\n**  ​ ​ ​**\n\n**2026**\n\n**  ​ ​ ​**\n\n**2025**\n\n** **\n\nDeferred income tax assets:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nAccrued expenses\n\n​\n\n$\n\n6,435\n\n​\n\n$\n\n2,367\n\n​\n\nStock based compensation\n\n​\n\n​\n\n5,467\n\n​\n\n​\n\n3,728\n\n​\n\nAllowances, reserves, and other\n\n​\n\n \n\n564\n\n​\n\n \n\n—\n\n​\n\nUnrealized loss on securities\n\n​\n\n \n\n1,704\n\n​\n\n \n\n3,787\n\n​\n\nNet operating loss and credit carry-forwards\n\n​\n\n \n\n75,001\n\n​\n\n \n\n21,620\n\n​\n\n163(J) disallowed interest expense carry-forward\n\n​\n\n​\n\n28,083\n\n​\n\n​\n\n—\n\n​\n\nAcquisition related costs\n\n​\n\n​\n\n6,263\n\n​\n\n​\n\n4,299\n\n​\n\nCapitalized research and development costs\n\n​\n\n​\n\n59,288\n\n​\n\n​\n\n57,266\n\n​\n\nReserve for inventory excess and obsolescence\n\n​\n\n \n\n8,257\n\n​\n\n \n\n6,306\n\n​\n\nLease liability\n\n​\n\n​\n\n30,436\n\n​\n\n​\n\n8,226\n\n​\n\nTotal deferred income tax assets\n\n​\n\n \n\n221,498\n\n​\n\n \n\n107,599\n\n​\n\nDeferred income tax liabilities:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nFixed asset basis\n\n​\n\n \n\n(22,416)\n\n​\n\n \n\n(3,160)\n\n​\n\nAllowances, reserves, and other\n\n​\n\n​\n\n(5,517)\n\n​\n\n​\n\n(1,895)\n\n​\n\nOutside basis difference\n\n​\n\n​\n\n(38)\n\n​\n\n​\n\n(38)\n\n​\n\nRight-of-use asset\n\n​\n\n​\n\n(28,749)\n\n​\n\n​\n\n(7,645)\n\n​\n\nIntangibles basis\n\n​\n\n​\n\n(185,053)\n\n​\n\n​\n\n(6,631)\n\n​\n\nTotal deferred income tax liabilities\n\n​\n\n \n\n(241,773)\n\n​\n\n \n\n(19,369)\n\n​\n\nValuation allowance\n\n​\n\n \n\n(30,219)\n\n​\n\n \n\n(26,770)\n\n​\n\nNet deferred tax assets\n\n​\n\n$\n\n(50,494)\n\n​\n\n$\n\n61,460\n\n​\n\n​\n\nThe One Big Beautiful Bill Act was enacted in the U.S. on July 4, 2025. OBBBA introduced significant changes to the U.S. federal corporate tax system, including reinstating the immediate deductibility of domestic research and experimental (“R&E”) expenditures for tax years beginning after December 31, 2024. While foreign R&E expenditures continue to be capitalized and amortized over the applicable recovery period. Accordingly, the provisions impacting the Company have been reflected in the financial statements for the year ended April 30, 2026.\n\n​\n\nAt April 30, 2026 and 2025 the Company recorded a valuation allowance of $30,219,000 and $26,770,000, respectively, against state net operating losses and state R&D credits as the Company is currently generating more tax credits than it will utilize in future years. The valuation allowance increased by $3,449,000 and $2,935,000 for April 30, 2026 and April 30, 2025, respectively, primarily due to state net operating losses and foreign deferred tax assets.\n\n​\n\nAt April 30, 2026, the Company had federal R&D Credit carryforwards of 11,811,000, which carryforward to fiscal year 2046. At April 30, 2026, the Company had California R&D credit carryforwards of $21,425,000. These credits carryforward indefinitely.\n\n​\n\nAt April 30, 2026, the Company had federal, state and foreign net operating loss carryforwards of approximately $180,315,000, $170,408,000 and $11,118,000, respectively. The federal net operating losses carry forward indefinitely. The state net operating losses will begin expiring in fiscal year 2036, and foreign net operating losses carry forward indefinitely. Utilization of federal and state net operating loss carryforwards may be subject to substantial annual limitation due to the ownership changes as provided by Section 382 of the Internal Revenue Code and similar state provisions.\n\n​\n\nAt April 30, 2026 and 2025, the Company had approximately $16,196,000 and $13,429,000, respectively, of unrecognized tax benefits. Of the 2026 balance, $8,852,000 would impact the Company’s tax expense and $7,414,000 would result in an increase in California R&D credit valuation allowance. The Company estimates that $1,268,000 of its unrecognized tax benefits will decrease in the next twelve months due to statute of limitation expiration.\n\n​\n\n112\n\n[Table of Contents](#Toc)\n\nThe following table summarizes the activity related to the Company’s gross unrecognized tax benefits for the years ended April 30, 2026 and 2025 (in thousands):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**April 30,**\n\n** **\n\n​\n\n**  ​ ​ ​**\n\n**2026**\n\n**  ​ ​ ​**\n\n**2025**\n\n** **\n\nBalance as of May 1\n\n​\n\n$\n\n13,429\n\n​\n\n$\n\n13,601\n\n​\n\nIncreases related to prior year tax positions\n\n​\n\n \n\n62\n\n​\n\n \n\n30\n\n​\n\nDecreases related to prior year tax positions\n\n​\n\n \n\n(141)\n\n​\n\n \n\n(18)\n\n​\n\nIncreases related to current year tax positions\n\n​\n\n \n\n3,588\n\n​\n\n \n\n1,582\n\n​\n\nDecreases related to lapsing of statute of limitations\n\n​\n\n \n\n(742)\n\n​\n\n \n\n(1,766)\n\n​\n\nBalance as of April 30\n\n​\n\n$\n\n16,196\n\n​\n\n$\n\n13,429\n\n​\n\n​\n\nThe Company records interest and penalties on uncertain tax positions to income tax expense. As of April 30, 2026 and 2025, the Company had accrued approximately $1,609,000 and $454,000, respectively, of interest and penalties related to uncertain tax positions. The 2021 to 2024 tax years remain open to examination by the IRS for federal income taxes. The tax years 2019 to 2024 remain open for major state taxing jurisdictions.\n\n​\n\nThe following table summarized income taxes paid for the year ended April 30, 2026, 2025 and 2024 (in thousands):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year Ended April 30,**\n\n​\n\n**Year Ended April 30,**\n\n​\n\n**Year Ended April 30,**\n\n** **\n\n​\n\n​\n\n**2026**\n\n**  ​ ​ ​**\n\n**2025**\n\n**  ​ ​ ​**\n\n**2024**\n\n** **\n\nFederal\n\n​\n\n$\n\n2,250\n\n​\n\n$\n\n24,175\n\n​\n\n$\n\n17,387\n\n​\n\nState:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nAlabama\n\n​\n\n \n\n(272)\n\n​\n\n \n\n​\n\n​\n\n \n\n​\n\n​\n\nCalifornia\n\n​\n\n​\n\n514\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nFlorida\n\n​\n\n \n\n351\n\n​\n\n \n\n​\n\n​\n\n \n\n​\n\n​\n\nMaryland\n\n​\n\n​\n\n204\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nOther\n\n​\n\n \n\n174\n\n​\n\n \n\n682\n\n​\n\n \n\n2,533\n\n​\n\nForeign:\n\n​\n\n \n\n​\n\n​\n\n \n\n​\n\n​\n\n \n\n​\n\n​\n\nGermany\n\n​\n\n​\n\n385\n\n​\n\n​\n\n(226)\n\n​\n\n​\n\n518\n\n​\n\nTotal income taxes paid\n\n​\n\n$\n\n3,606\n\n​\n\n$\n\n24,631\n\n​\n\n$\n\n20,438\n\n​\n\n​\n\n​\n\n​\n\n113\n\n[Table of Contents](#Toc)\n\n**16.****Share Issuances**\n\n​\n\nIn July 2025, the Company entered into an underwriting agreement (the “Common Stock Underwriting Agreement”) with certain underwriters (the “Common Stock Underwriters”) agreeing, subject to customary conditions, to issue and sell 3,528,226 shares of the Company’s common stock to the Common Stock Underwriters. In addition, pursuant to the Common Stock Underwriting Agreement, the Company granted the Common Stock Underwriters an option, exercisable within 30 days after entering the Common Stock Underwriting Agreement, to purchase up to an additional 529,234 shares of the Company’s common stock (the “Over-allotment Option”). The issuance of 3,528,226 shares of common stock was completed in July 2025. Subsequently, the Company closed the issuance and sale of 529,234 shares of its common stock pursuant to the underwriters’ full exercise of the Over-allotment Option in July 2025 for a total issuance of 4,057,460 shares, generating gross proceeds to the Company of $1,006,250,000, proceeds of $968,515,000, net of underwriting discount and proceeds of $966,846,000 net of underwriting discount and other equity issuance costs.\n\n​\n\n**17.          Accumulated Other Comprehensive Loss**\n\n​\n\nThe components of accumulated other comprehensive loss are as follows (in thousands):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Foreign**\n\n​\n\n**Total Accumulated**\n\n​\n\n​\n\n​\n\n**Available-for-**\n\n​\n\n**Currency Translation**\n\n​\n\n**Other**\n\n​\n\n​\n\n**  ​ ​ ​**\n\n**Sale Securities**\n\n​\n\n**Adjustments**\n\n​\n\n**Comprehensive Loss**\n\n​\n\nTotal accumulated other comprehensive loss balance as of April 30, 2025\n\n​\n\n$\n\n—\n\n​\n\n$\n\n(6,514)\n\n​\n\n$\n\n(6,514)\n\n​\n\nUnrealized loss, net of $0 of taxes\n\n​\n\n​\n\n(215)\n\n​\n\n​\n\n—\n\n​\n\n​\n\n(215)\n\n​\n\nChanges in foreign currency translation adjustments\n\n​\n\n​\n\n—\n\n​\n\n​\n\n1,094\n\n​\n\n​\n\n1,094\n\n​\n\nTotal accumulated other comprehensive loss balance as of April 30, 2026\n\n​\n\n$\n\n(215)\n\n​\n\n$\n\n(5,420)\n\n​\n\n$\n\n(5,635)\n\n​\n\n​\n\n​\n\n**18.          Commitments and Contingencies**\n\n​\n\n**Commitments**\n\n​\n\nThe Company’s operations are primarily conducted in leased facilities. Refer to Note 12—Leases for additional information.\n\n​\n\n**Contingencies**\n\n​\n\nThe Company is subject to legal proceedings and claims which arise out of the ordinary course of its business. Although adverse decisions or settlements may occur, the Company, in consultation with legal counsel, believes that the final disposition of such matters will not have a material adverse effect on the consolidated financial position, results of operations or cash flows of the Company.\n\n​\n\nThe Company’s ability to borrow under the Revolving Facility is reduced by outstanding letters of credit. Refer to Note 10—Debt for additional information.\n\n​\n\n**Contract Cost Audits**\n\n​\n\nPayments to the Company on government Cost Plus contracts are based on provisional, or estimated indirect rates, which are subject to an annual audit by the Defense Contract Audit Agency (“DCAA”). The cost audits result in the negotiation and determination of the final indirect cost rates that the Company may use for the period(s) audited. The final rates, if different from the provisional rates, may create an additional receivable or liability for the Company.\n\n​\n\nFor example, during the course of its audits, the DCAA may question the Company’s incurred costs, and if the DCAA believes the Company has accounted for such costs in a manner inconsistent with the requirements under Federal Acquisition Regulations, the DCAA auditor may recommend to the Company’s administrative contracting officer to disallow such costs. Historically, the Company has not experienced material disallowed costs as a result of government\n\n114\n\n[Table of Contents](#Toc)\n\naudits. However, the Company can provide no assurance that the DCAA or other government audits will not result in material disallowances for incurred costs in the future.\n\n​\n\nThe Company’s revenue recognition policy calls for revenue recognized on all Cost Plus government contracts to be recorded at actual rates unless collectability is not reasonably assured. At April 30, 2026 and 2025, the Company had no reserve for open incurred cost claim audits.\n\n​\n\n**19.         Business Acquisitions**\n\n​\n\n**ESAero Acquisition**\n\n​\n\nOn March 16, 2026, the Company closed its acquisition of ESAero, a leading producer of UAS and advanced air mobility platforms. Pursuant to the merger agreement, the Company acquired 100% of ESAero equity for an aggregate purchase price of $177,909,000 consisting of 671,078 shares of the Company’s common stock with a fair value of $142,188,000 and $26,922,000 cash-on-hand, net of $2,386,000 cash acquired, plus an $8,800,000 holdback for certain customary adjustments, such as net working capital, and certain seller indemnification obligations. The fair value of the shares issued was based on the closing price on March 16, 2026 of $211.88. ESAero is incorporated into AeroVironment’s AxS segment. The Company believes the acquisition will enhance the Company’s ability to transition from innovative design to advanced manufacturing. The Company accounted for the acquisition under the acquisition method of accounting for business combinations.\n\n​\n\nThe following table summarizes the preliminary allocation of the fair value of the acquisition consideration transferred to assets acquired and liabilities assumed as of the acquisition date. The allocation of the purchase price is preliminary and subject to change as the Company continues to evaluate the fair values of certain assets and liabilities acquired. Open items in the purchase price allocation include the valuation of assets acquired and liabilities assumed including, but not limited to customer relationships, backlog developed technology, non-compete agreements, and tradename intangibles; leases; details surrounding tax matters; and assumptions underlying certain existing or potential reserves, such as those for inventory and legal matters (in thousands):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**March 16,**\n\n​\n\n​\n\n​\n\n**2026**\n\n​\n\nFair value of assets acquired:\n\n​\n\n​\n\n​\n\n​\n\nAccounts receivable\n\n​\n\n$\n\n7,545\n\n​\n\nUnbilled receivables and retentions\n\n​\n\n​\n\n25,004\n\n​\n\nInventories, net\n\n​\n\n​\n\n44\n\n​\n\nPrepaid expenses and other current assets\n\n​\n\n​\n\n2,715\n\n​\n\nProperty and equipment\n\n​\n\n​\n\n1,606\n\n​\n\nOperating lease right-of-use assets\n\n​\n\n​\n\n10,923\n\n​\n\nIntangibles\n\n​\n\n​\n\n55,300\n\n​\n\nGoodwill\n\n​\n\n​\n\n110,177\n\n​\n\nTotal identifiable assets\n\n​\n\n$\n\n213,314\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nFair value of liabilities assumed:\n\n​\n\n​\n\n​\n\n​\n\nAccounts payable\n\n​\n\n$\n\n5,776\n\n​\n\nWages and related accruals\n\n​\n\n​\n\n2,435\n\n​\n\nCustomer advances\n\n​\n\n​\n\n702\n\n​\n\nCurrent operating lease liabilities\n\n​\n\n​\n\n1,964\n\n​\n\nOther current liabilities\n\n​\n\n​\n\n816\n\n​\n\nNon-current operating lease liabilities\n\n​\n\n​\n\n8,960\n\n​\n\nIncome taxes payable (non-current)\n\n​\n\n​\n\n2,874\n\n​\n\nDeferred income taxes\n\n​\n\n​\n\n11,878\n\n​\n\nTotal liabilities assumed\n\n​\n\n​\n\n35,405\n\n​\n\nTotal identifiable net assets\n\n​\n\n$\n\n177,909\n\n​\n\n115\n\n[Table of Contents](#Toc)\n\n​\n\nDetermining the fair value of the intangible assets acquired requires significant judgment, including the amount and timing of expected future cash flows, long-term growth rates and discount rates. The fair value of the intangible assets was determined using a discounted cash flow analysis, which were based on the Company’s preliminary estimates of future sales, earnings and cash flows after considering such factors as general market conditions, anticipated customer demand, changes in working capital, long term business plans and recent operating performance. Use of different estimates and judgments could yield materially different results.\n\n​\n\nThe goodwill is attributable to the synergies the Company expects to achieve through leveraging the acquired technology to its existing customers, the workforce of ESAero and expected future customers in the AxS market. For income tax purposes the acquisition is treated as a stock acquisition, as such the goodwill associated with this purchase is not deductible.\n\n​\n\n**ESAero Supplemental Pro Forma Information (unaudited)**\n\n​\n\nESAero revenue and income from operations for the period ended April 30, 2026 since acquisition on March 16, 2026 was $20,038,000 and $5,951,000, inclusive of $1,116,000 of intangible amortization, respectively. The following unaudited pro forma summary presents condensed consolidated information of the Company as if the business acquisition had occurred on May 1, 2024 (in thousands):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year Ended**\n\n​\n\n​\n\n**April 30,**\n\n​\n\n**April 30,**\n\n​\n\n​\n\n**2026**\n\n​\n\n**2025**\n\nRevenue\n\n​\n\n$\n\n2,056,180\n\n​\n\n$\n\n863,041\n\nNet (loss) income\n\n​\n\n$\n\n(257,092)\n\n​\n\n$\n\n33,836\n\n​\n\nThese pro forma amounts have been calculated by applying the Company’s accounting policies, assuming transaction costs had been incurred during the year ended April 30, 2025, reflecting the additional amortization that would have been charged and including the results of ESAero prior to acquisition.\n\n​\n\nThe Company incurred approximately $2,504,000 of acquisition-related expenses for the fiscal year ended April 30, 2026. These expenses are included in SG&A on the Company’s consolidated statements of income (loss).\n\n​\n\nThe unaudited pro forma supplemental information is based on estimates and assumptions, which the Company believes are reasonable and are not necessarily indicative of the results that have been realized had the acquisition been consolidated in the tables above as of May 1, 2024, nor are they indicative of results of operations that may occur in the future.\n\n​\n\n**BlueHalo Acquisition**\n\n​\n\nOn November 13, 2024, the Company formed Archangel Merger Sub LLC, a Delaware limited liability company and a direct wholly owned subsidiary of the Company (“Merger Sub”), for the purpose of the announced acquisition of BlueHalo. On May 1, 2025, the Company closed its acquisition of BlueHalo for merger consideration, net of cash acquired, of $3,484,945,000. Through the acquisition, BlueHalo is incorporated into the Company’s AxS and SCDE segments. The Company believes that the acquisition will help to advance the combined company as a global defense technology leader across air, land, sea, space, and cyber. The Company accounted for the acquisition under the acquisition method of accounting for business combinations.\n\n​\n\n​\n\n​\n\n​\n\n(in thousands)\n\n​\n\nAmount\n\nEquity consideration transferred\n\n$\n\n2,640,365\n\nSettlement of BlueHalo’s transaction expenses\n\n​\n\n25,214\n\nSettlement of BlueHalo’s debt\n\n​\n\n863,207\n\nMerger consideration\n\n$\n\n3,528,786\n\nLess cash acquired\n\n​\n\n(43,841)\n\nFair value of consideration transferred\n\n$\n\n3,484,945\n\n116\n\n[Table of Contents](#Toc)\n\n​\n\nThe fair value of the Company’s common stock issued is based on 17,425,849 shares issued as consideration, per the terms of the Merger Agreement, and the closing share price of $151.52 on April 30, 2025.\n\n​\n\nThe following table summarizes the final allocation of the fair value of the merger consideration transferred to assets acquired and liabilities assumed as of the acquisition date (in thousands):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**May 1,**\n\n​\n\n​\n\n**2025**\n\nFair value of assets acquired:\n\n​\n\n​\n\n​\n\nAccounts receivable, net of allowance for credit losses of $420 at May 1, 2025\n\n  ​ ​ ​\n\n$\n\n79,665\n\nUnbilled receivables and retentions\n\n​\n\n​\n\n96,414\n\nInventories, net\n\n​\n\n​\n\n87,794\n\nIncome taxes receivable\n\n​\n\n​\n\n3,941\n\nPrepaid expenses and other current assets\n\n​\n\n​\n\n13,628\n\nLong-term investments\n\n​\n\n​\n\n151\n\nProperty and equipment\n\n​\n\n​\n\n87,841\n\nOperating lease right-of-use assets\n\n​\n\n​\n\n70,879\n\nIntangibles\n\n​\n\n​\n\n1,029,800\n\nGoodwill\n\n​\n\n​\n\n2,367,428\n\nOther assets\n\n​\n\n​\n\n1,086\n\nTotal identifiable assets\n\n​\n\n$\n\n3,838,627\n\n​\n\n​\n\n​\n\n​\n\nFair value of liabilities assumed:\n\n​\n\n​\n\n​\n\nAccounts payable\n\n​\n\n​\n\n56,930\n\nWages and related accruals\n\n​\n\n​\n\n43,031\n\nCustomer advances\n\n​\n\n​\n\n42,700\n\nCurrent operating lease liabilities\n\n​\n\n​\n\n6,707\n\nOther current liabilities\n\n​\n\n​\n\n11,971\n\nNon-current operating lease liabilities\n\n​\n\n​\n\n64,720\n\nLiability for uncertain tax positions\n\n​\n\n​\n\n436\n\nDeferred income taxes\n\n​\n\n​\n\n127,187\n\nTotal liabilities assumed\n\n​\n\n​\n\n353,682\n\nTotal identifiable net assets\n\n​\n\n$\n\n3,484,945\n\n​\n\nDetermining the fair value of the intangible assets acquired requires significant judgment, including the amount and timing of expected future cash flows, long-term growth rates and discount rates. The fair value assigned to intangible assets has been estimated based on third-party preliminary valuation studies utilizing income-based methodologies and corroborated with benchmarks of similar transactions in the industry. Use of different estimates and judgments could yield materially different results. All intangible assets acquired in the BlueHalo acquisition are subject to amortization.\n\n​\n\nThe goodwill is attributable to the differences between the estimated fair value of the consideration transferred and the estimated fair value of the assets acquired, and liabilities assumed. For income tax purposes the goodwill and intangibles are not deductible for tax purposes.\n\n​\n\n117\n\n[Table of Contents](#Toc)\n\nThe following table summarizes the valuation of the fair value of intangible assets acquired (in thousands):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nFair Value\n\nEstimated Useful Life\n\n​\n\n​\n\n​\n\nYears\n\nFair value of intangible assets acquired:\n\n​\n\n​\n\n​\n\nBacklog\n\n$\n\n49,900\n\n1-2\n\nCustomer relationships\n\n​\n\n499,500\n\n4-9\n\nDeveloped technology\n\n​\n\n480,400\n\n4-10\n\nIntangible assets acquired\n\n$\n\n1,029,800\n\n​\n\n​\n\n**BlueHalo Supplemental Pro Forma Information (unaudited)**\n\n​\n\nBlueHalo revenue and loss from operations for the fiscal year ended April 30, 2026 since its acquisition on May 1, 2025 was $919,144,000 and $(365,518,000), inclusive of $208,482,000 of intangible amortization and $240,708,000 of goodwill impairment, respectively. The following unaudited pro forma summary presents condensed consolidated information of the Company as if the business acquisition had occurred on May 1, 2024. The pro forma amounts include the historical operating results of the Company and BlueHalo prior to the acquisition. The pro forma results are not necessarily indicative of the Company's results of operations that would have been obtained had the acquisition of BlueHalo been completed for the period presented, or which may be realized in the future (in thousands):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year Ended**\n\n​\n\n​\n\n**April 30,**\n\n​\n\n**April 30,**\n\n​\n\n​\n\n**2026**\n\n​\n\n**2025**\n\nRevenue\n\n​\n\n$\n\n1,976,845\n\n​\n\n$\n\n1,663,312\n\nNet loss\n\n​\n\n$\n\n(190,923)\n\n​\n\n$\n\n(171,740)\n\n​\n\nThe Company recognized a nonrecurring pro forma adjustment to pro forma earnings to amortize an increase in the fair value of inventory acquired during the year ended April 30, 2025. In addition, for the year ended April 30, 2026, the amortization expense associated with the Company's one-year intangible backlog has been eliminated within the pro forma adjustments.\n\n​\n\nThese pro forma amounts have been calculated by applying the Company’s accounting policies, assuming transaction costs had been incurred during the year ended April 30, 2025, reflecting the additional amortization and depreciation that would have been charged, incremental interest expense associated with the initial financing for the acquisition under the term loan and revolver, and including the results of BlueHalo prior to acquisition.\n\n​\n\nThe Company incurred approximately $64,194,000 of BlueHalo acquisition-related expenses including integration costs. The Company recognized a nonrecurring pro forma adjustment to the year ended April 30, 2026 to remove the impact of the transaction costs from the historical balance, while recognizing the $44,903,000 of transaction expenses within the year ended April 30, 2025 to reflect the costs as if the acquisition was completed during the year ended April 30, 2025.\n\n​\n\nThe unaudited pro forma combined financial information presented above does not give effect to the July 2025 common stock issuance and Notes issuance, as such proceeds were not used to fund the BlueHalo acquisition. As the Company’s repayment of indebtedness using the proceeds of the common stock issuance and Convertible Notes issuance was not directly attributable to the acquisition, the related reduction in interest expense is not reflected in this unaudited pro forma combined financial information.\n\n​\n\n**Tomahawk Acquisition**\n\n​\n\nOn September 15, 2023, the Company closed its acquisition of Tomahawk, a leader in AI-enabled robotic control systems. Pursuant to the merger agreement, the Company acquired 100% of Tomahawk equity for an aggregate purchase price of $134,467,000 consisting of 985,999 shares of restricted common stock of the Company valued at $109,820,000 and $27,205,000 cash-on-hand, net of $3,048,000 cash acquired, plus a $490,000 holdback. During the\n\n118\n\n[Table of Contents](#Toc)\n\nthree months ended January 27, 2024, the holdback was decreased $100,000 as part of the working capital adjustment, and the total purchase price and goodwill, therefore, decreased by $100,000 as well. The remaining $390,000 holdback was paid during the three months ended October 26, 2024. The fair value of the shares issued was the closing price on September 15, 2023, the close of the Tomahawk purchase agreement. Tomahawk is incorporated into AeroVironment’s UxS segment. The acquisition will enable deeper integration of both companies’ technology, leading to enhanced interoperability and interconnectivity of uncrewed systems through a singular platform with similar control features. The Company accounted for the acquisition under the acquisition method of accounting for business combinations.\n\n​\n\nThe following table summarizes the final allocation of the purchase price over the estimated fair value of the assets and liabilities assumed in the acquisition of Tomahawk (in thousands):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**September 15,**\n\n​\n\n​\n\n**2023**\n\nFair value of assets acquired:\n\n​\n\n​\n\n​\n\nAccounts receivable\n\n  ​ ​ ​\n\n$\n\n2,314\n\nUnbilled receivable\n\n​\n\n​\n\n993\n\nInventories, net\n\n​\n\n​\n\n2,882\n\nPrepaid and other current assets\n\n​\n\n​\n\n148\n\nProperty and equipment, net\n\n​\n\n​\n\n1,789\n\nOperating lease assets\n\n​\n\n​\n\n1,337\n\nOther assets\n\n​\n\n​\n\n71\n\nTechnology\n\n​\n\n​\n\n39,000\n\nCustomer relationship\n\n​\n\n​\n\n4,800\n\nTrademarks\n\n​\n\n​\n\n1,600\n\nDeferred tax asset\n\n​\n\n​\n\n2,865\n\nGoodwill\n\n​\n\n​\n\n95,414\n\nTotal identifiable net assets\n\n​\n\n$\n\n153,213\n\n​\n\n​\n\n​\n\n​\n\nFair value of liabilities assumed:\n\n​\n\n​\n\n​\n\nAccounts payable\n\n​\n\n​\n\n3,788\n\nWages and related accruals\n\n​\n\n​\n\n620\n\nCustomer advances\n\n​\n\n​\n\n1,648\n\nCurrent operating lease liabilities\n\n​\n\n​\n\n482\n\nOther current liabilities\n\n​\n\n​\n\n411\n\nNon-current operating lease liabilities\n\n​\n\n​\n\n855\n\nOther non-current liabilities\n\n​\n\n​\n\n7\n\nDeferred income taxes\n\n​\n\n​\n\n11,035\n\nTotal liabilities assumed\n\n​\n\n​\n\n18,846\n\nTotal identifiable net assets\n\n​\n\n$\n\n134,367\n\n​\n\n​\n\n​\n\n​\n\nFair value of consideration transferred:\n\n​\n\n​\n\n​\n\nEquity consideration\n\n​\n\n$\n\n109,820\n\nCash consideration, net of cash acquired\n\n​\n\n​\n\n24,157\n\nHoldback\n\n​\n\n​\n\n390\n\nTotal consideration\n\n​\n\n$\n\n134,367\n\n​\n\nDetermining the fair value of the intangible assets acquired requires significant judgment, including the amount and timing of expected future cash flows, long-term growth rates and discount rates. The fair value of the intangible assets was determined using a discounted cash flow analysis, which were based on the Company’s preliminary estimates of future sales, earnings and cash flows after considering such factors as general market conditions, anticipated customer demand, changes in working capital, long term business plans and recent operating performance. Use of different estimates and judgments could yield materially different results.\n\n​\n\n119\n\n[Table of Contents](#Toc)\n\nThe goodwill is attributable to the synergies the Company expects to achieve through leveraging the acquired technology to its existing customers, the workforce of Tomahawk and expected future customers in the UxS market. For income tax purposes the acquisition is treated as a stock acquisition, as such the goodwill associated with this purchase is not deductible.\n\n​\n\n**Tomahawk Supplemental Pro Forma Information (unaudited)**\n\n​\n\nTomahawk revenue since acquisition on September 15, 2023 was $15,883,000 as of April 30, 2024. Other than the aforementioned revenue and intangible asset amortization expense of $5,730,000 for the year ended April 30, 2024 since the acquisition on September 15, 2023, the Tomahawk financial results were not significant. The following unaudited pro forma summary presents condensed consolidated information of the Company as if the business acquisition had occurred on May 1, 2022 (in thousands):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year Ended**\n\n​\n\n​\n\n​\n\n**April 30,**\n\n​\n\n​\n\n​\n\n**2024**\n\nRevenue\n\n​\n\n$\n\n727,241\n\nNet income\n\n​\n\n$\n\n57,273\n\n​\n\nThe Company did not have any material, nonrecurring pro forma adjustments directly attributable to the business acquisition included in the reported pro forma revenue and earnings.\n\n​\n\nThese pro forma amounts have been calculated by applying the Company’s accounting policies, assuming transaction costs had been incurred during the three months ended July 30, 2022, reflecting the additional amortization that would have been charged and including the results of Tomahawk prior to acquisition.\n\n​\n\nThe Company incurred approximately $1,873,000 of acquisition-related expenses for the fiscal year ended April 30, 2024. These expenses are included in SG&A on the Company’s consolidated statements of income (loss).\n\n​\n\nThe unaudited pro forma supplemental information is based on estimates and assumptions, which the Company believes are reasonable and are not necessarily indicative of the results that have been realized had the acquisition been consolidated in the tables above as of May 1, 2022, nor are they indicative of results of operations that may occur in the future.\n\n​\n\n**20.****Pension**\n\n​\n\nAs part of the acquisition of Telerob on May 3, 2021, the Company acquired a small foreign-based defined benefit pension plan. The Rheinmetall-Zusatzversorgung (“RZV”) service plan covers three former employees based on individual contracts issued to the employees. No other employees are eligible to participate. The Company has reinsurance policies taken out for participating former employees, which were pledged to the employees. The measurement date for the Company’s pension plan was April 30, 2026.\n\n​\n\nThe table below includes the projected benefit obligation and fair value of plan assets. The net fair value of plan assets is recorded in other assets on the consolidated balance sheets.\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**April 30,**\n\n​\n\n​\n\n**2026**\n\n​\n\n​\n\n**(In thousands)**\n\nProjected benefit obligation\n\n​\n\n$\n\n(3,249)\n\nFair value of plan assets\n\n​\n\n \n\n3,862\n\nFunded status of the plan\n\n​\n\n$\n\n613\n\n​\n\n120\n\n[Table of Contents](#Toc)\n\nChange in projected benefit obligation (in thousands):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**2026**\n\n​\n\n**2025**\n\nPension benefit obligation balance as of April 30, 2025 and 2024, respectively\n\n​\n\n$\n\n(3,335)\n\n​\n\n$\n\n(3,246)\n\nInterest cost\n\n​\n\n \n\n(123)\n\n​\n\n \n\n(112)\n\nActuarial loss\n\n​\n\n​\n\n98\n\n​\n\n​\n\n16\n\nBenefits paid\n\n​\n\n​\n\n211\n\n​\n\n​\n\n190\n\nForeign currency exchange rate changes\n\n​\n\n​\n\n(100)\n\n​\n\n​\n\n(183)\n\nPension benefit obligation balance as of April 30, 2026 and 2025, respectively\n\n​\n\n$\n\n(3,249)\n\n​\n\n$\n\n(3,335)\n\n​\n\nChange in plan assets (in thousands):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**2026**\n\n​\n\n**2025**\n\nFair value of plan assets as of April 30, 2025 and 2024, respectively\n\n​\n\n$\n\n3,817\n\n​\n\n$\n\n3,636\n\nExpected return on plan assets\n\n​\n\n​\n\n142\n\n​\n\n​\n\n162\n\nBenefits paid\n\n​\n\n​\n\n(211)\n\n​\n\n​\n\n(190)\n\nForeign currency exchange rate changes\n\n​\n\n​\n\n114\n\n​\n\n​\n\n209\n\nFair value of plan assets as of April 30, 2026 and 2025, respectively\n\n​\n\n$\n\n3,862\n\n​\n\n$\n\n3,817\n\n​\n\nThe accumulated benefit obligation is approximately equal to the projected benefit obligation. The plan assets consist of reinsurance policies for each of the three pension commitments. The reinsurance policies are fixed-income investments considered a level 2 fair value hierarchy based on observable inputs of the policy. The Company does not expect to make any contributions to the Plan in the fiscal year ending April 30, 2026. The projected benefit obligation and projected fair value of plan assets include the assumptions in the table below.\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year Ended**\n\n​\n\n​\n\n**Year Ended**\n\n​\n\n​\n\n​\n\n**April 30,**\n\n​\n\n​\n\n**April 30,**\n\n​\n\n​\n\n​\n\n**2026**\n\n​\n\n​\n\n**2025**\n\nDiscount rate\n\n​\n\n​\n\n3.7%\n\n​\n\n​\n\n3.6%\n\nIn-payment benefits\n\n​\n\n \n\n2.5%\n\n​\n\n \n\n2.5%\n\nExpected return on plan assets\n\n​\n\n​\n\n2.9%\n\n​\n\n​\n\n2.9%\n\n​\n\nExpected benefits payments as of April 30, 2026 (in thousands):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n2026\n\n​\n\n$\n\n211\n\n2027\n\n​\n\n​\n\n218\n\n2028\n\n​\n\n \n\n220\n\n2029\n\n​\n\n \n\n222\n\n2030\n\n​\n\n​\n\n224\n\n2031-2035\n\n​\n\n \n\n1,124\n\nTotal expected benefit payments\n\n​\n\n$\n\n2,219\n\n​\n\nNet periodic benefit cost is recorded in interest (expense) income, net (in thousands).\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year Ended April 30,**\n\n​\n\n​\n\n**2026**\n\n​\n\n**2025**\n\n​\n\n**2024**\n\n​\n\n​\n\n**(In thousands)**\n\n​\n\n**(In thousands)**\n\n​\n\n**(In thousands)**\n\nActual return on plan assets\n\n​\n\n$\n\n142\n\n​\n\n$\n\n162\n\n​\n\n$\n\n52\n\nInterest cost\n\n​\n\n \n\n(123)\n\n​\n\n \n\n(112)\n\n​\n\n \n\n(119)\n\nActuarial gain (loss)\n\n​\n\n​\n\n98\n\n​\n\n​\n\n16\n\n​\n\n​\n\n(206)\n\nNet periodic benefit cost\n\n​\n\n$\n\n117\n\n​\n\n$\n\n66\n\n​\n\n$\n\n(273)\n\n121\n\n[Table of Contents](#Toc)\n\n​\n\n​\n\n**21.          Segments**\n\n​\n\nThe Company identifies two reportable segments, AxS and SCDE.\n\n​\n\nThe accounting policies of the segments are the same as those described in Note 1—Organization and Significant Accounting Policies. The operating segments sales to each other are eliminated. Effective May 1, 2025, segment adjusted EBITDA is the measure of profitability used by the CODM for purposes of making decisions about allocating resources to the segments and assessing performance. Segment adjusted EBITDA is defined as segment income (loss) from operations before depreciation and amortization and adjusted for the impact of certain other non-cash items, including goodwill impairment, amortization of implementation of cloud computing arrangements, stock-based compensation, other purchase accounting adjustments, and cash items including acquisition related expenses and certain one-time non-operating expense or income such as legal expense.\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year Ended April 30, 2026**\n\n​\n\n**  ​ ​ ​**\n\n**AxS**\n\n**  ​ ​ ​**\n\n**SCDE**\n\n**  ​ ​ ​**\n\n**Total**\n\nRevenue:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nProduct sales\n\n​\n\n$\n\n1,142,762\n\n​\n\n$\n\n272,587\n\n​\n\n$\n\n1,415,349\n\nContract services\n\n​\n\n​\n\n215,315\n\n​\n\n​\n\n346,181\n\n​\n\n​\n\n561,496\n\n​\n\n​\n\n​\n\n1,358,077\n\n​\n\n​\n\n618,768\n\n​\n\n​\n\n1,976,845\n\nLess:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nCost of sales less intangible amortization and other purchase accounting adjustments\n\n​\n\n​\n\n837,367\n\n​\n\n​\n\n546,127\n\n​\n\n​\n\n1,383,494\n\nIntangible amortization included in cost of sales\n\n​\n\n​\n\n48,901\n\n​\n\n​\n\n43,808\n\n​\n\n​\n\n92,709\n\nSG&A less intangible amortization\n\n​\n\n​\n\n208,673\n\n​\n\n​\n\n104,147\n\n​\n\n​\n\n312,820\n\nIntangible amortization included in SG&A\n\n​\n\n​\n\n41,688\n\n​\n\n​\n\n88,743\n\n​\n\n​\n\n130,431\n\nResearch and development\n\n​\n\n​\n\n113,063\n\n​\n\n​\n\n14,615\n\n​\n\n​\n\n127,678\n\nImpairment of goodwill\n\n​\n\n​\n\n—\n\n​\n\n​\n\n240,708\n\n​\n\n​\n\n240,708\n\nOther expense (income)\n\n​\n\n​\n\n(7,547)\n\n​\n\n​\n\n(3,439)\n\n​\n\n​\n\n(10,986)\n\nAdd:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nDepreciation\n\n​\n\n​\n\n28,848\n\n​\n\n​\n\n13,049\n\n​\n\n​\n\n41,897\n\nAmortization\n\n​\n\n​\n\n90,589\n\n​\n\n​\n\n132,551\n\n​\n\n​\n\n223,140\n\nImpairment of goodwill\n\n​\n\n​\n\n—\n\n​\n\n​\n\n240,708\n\n​\n\n​\n\n240,708\n\nAcquisition-related expenses\n\n​\n\n​\n\n29,782\n\n​\n\n​\n\n18,388\n\n​\n\n​\n\n48,170\n\nAmortization of cloud computing arrangement implementation\n\n​\n\n​\n\n5,522\n\n​\n\n​\n\n14\n\n​\n\n​\n\n5,536\n\nEquity securities investments activity, net\n\n​\n\n​\n\n(9,941)\n\n​\n\n​\n\n(1,779)\n\n​\n\n​\n\n(11,720)\n\nStock-based compensation\n\n​\n\n​\n\n27,920\n\n​\n\n​\n\n10,414\n\n​\n\n​\n\n38,334\n\nSegment adjusted EBITDA\n\n​\n\n$\n\n288,652\n\n​\n\n$\n\n(2,596)\n\n​\n\n$\n\n286,056\n\n​\n\n122\n\n[Table of Contents](#Toc)\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year Ended April 30, 2025**\n\n​\n\n**  ​ ​ ​**\n\n**AxS**\n\n**  ​ ​ ​**\n\n**SCDE**\n\n**  ​ ​ ​**\n\n**Total**\n\nRevenue:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nProduct sales\n\n​\n\n$\n\n692,722\n\n​\n\n$\n\n—\n\n​\n\n$\n\n692,722\n\nContract services\n\n​\n\n​\n\n127,905\n\n​\n\n​\n\n—\n\n​\n\n​\n\n127,905\n\n​\n\n​\n\n​\n\n820,627\n\n​\n\n​\n\n—\n\n​\n\n​\n\n820,627\n\nLess:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nCost of sales less intangible amortization and other purchase accounting adjustments\n\n​\n\n​\n\n482,586\n\n​\n\n​\n\n—\n\n​\n\n​\n\n482,586\n\nIntangible amortization included in cost of sales\n\n​\n\n​\n\n19,405\n\n​\n\n​\n\n—\n\n​\n\n​\n\n19,405\n\nSG&A less intangible amortization\n\n​\n\n​\n\n154,752\n\n​\n\n​\n\n—\n\n​\n\n​\n\n154,752\n\nIntangible amortization included in SG&A\n\n​\n\n​\n\n4,001\n\n​\n\n​\n\n—\n\n​\n\n​\n\n4,001\n\nResearch and development\n\n​\n\n​\n\n100,729\n\n​\n\n​\n\n—\n\n​\n\n​\n\n100,729\n\nImpairment of goodwill\n\n​\n\n​\n\n18,359\n\n​\n\n​\n\n—\n\n​\n\n​\n\n18,359\n\nOther expense (income)\n\n​\n\n​\n\n(1,057)\n\n​\n\n​\n\n—\n\n​\n\n​\n\n(1,057)\n\nAdd:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nDepreciation\n\n​\n\n​\n\n17,592\n\n​\n\n​\n\n—\n\n​\n\n​\n\n17,592\n\nAmortization\n\n​\n\n​\n\n23,406\n\n​\n\n​\n\n—\n\n​\n\n​\n\n23,406\n\nImpairment of goodwill\n\n​\n\n​\n\n18,359\n\n​\n\n​\n\n—\n\n​\n\n​\n\n18,359\n\nAcquisition-related expenses\n\n​\n\n​\n\n19,290\n\n​\n\n​\n\n—\n\n​\n\n​\n\n19,290\n\nAmortization of cloud computing arrangement implementation\n\n​\n\n​\n\n2,541\n\n​\n\n​\n\n—\n\n​\n\n​\n\n2,541\n\nEquity securities investments activity, net\n\n​\n\n​\n\n(177)\n\n​\n\n​\n\n—\n\n​\n\n​\n\n(177)\n\nLegal expense\n\n​\n\n​\n\n2,100\n\n​\n\n​\n\n—\n\n​\n\n​\n\n2,100\n\nStock-based compensation\n\n​\n\n​\n\n21,461\n\n​\n\n​\n\n—\n\n​\n\n​\n\n21,461\n\nSegment adjusted EBITDA\n\n​\n\n$\n\n146,424\n\n​\n\n$\n\n—\n\n​\n\n$\n\n146,424\n\n​\n\n123\n\n[Table of Contents](#Toc)\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year Ended April 30, 2024**\n\n​\n\n**  ​ ​ ​**\n\n**AxS**\n\n**  ​ ​ ​**\n\n**SCDE**\n\n**  ​ ​ ​**\n\n**Total**\n\nRevenue:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nProduct sales\n\n​\n\n$\n\n585,771\n\n​\n\n$\n\n—\n\n​\n\n$\n\n585,771\n\nContract services\n\n​\n\n​\n\n130,949\n\n​\n\n​\n\n—\n\n​\n\n​\n\n130,949\n\n​\n\n​\n\n​\n\n716,720\n\n​\n\n​\n\n—\n\n​\n\n​\n\n716,720\n\nLess:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nCost of sales less intangible amortization and other purchase accounting adjustments\n\n​\n\n​\n\n419,241\n\n​\n\n​\n\n—\n\n​\n\n​\n\n419,241\n\nIntangible amortization included in cost of sales\n\n​\n\n​\n\n13,548\n\n​\n\n​\n\n—\n\n​\n\n​\n\n13,548\n\nSG&A less intangible amortization\n\n​\n\n​\n\n109,410\n\n​\n\n​\n\n—\n\n​\n\n​\n\n109,410\n\nIntangible amortization included in SG&A\n\n​\n\n​\n\n5,010\n\n​\n\n​\n\n—\n\n​\n\n​\n\n5,010\n\nResearch and development\n\n​\n\n​\n\n97,687\n\n​\n\n​\n\n—\n\n​\n\n​\n\n97,687\n\nOther expense (income)\n\n​\n\n​\n\n4,373\n\n​\n\n​\n\n—\n\n​\n\n​\n\n4,373\n\nAdd:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nDepreciation\n\n​\n\n​\n\n17,191\n\n​\n\n​\n\n—\n\n​\n\n​\n\n17,191\n\nAmortization\n\n​\n\n​\n\n18,558\n\n​\n\n​\n\n—\n\n​\n\n​\n\n18,558\n\nAcquisition-related expenses\n\n​\n\n​\n\n2,095\n\n​\n\n​\n\n—\n\n​\n\n​\n\n2,095\n\nAmortization of cloud computing arrangement implementation\n\n​\n\n​\n\n1,444\n\n​\n\n​\n\n—\n\n​\n\n​\n\n1,444\n\nEquity securities investments activity, net\n\n​\n\n​\n\n3,945\n\n​\n\n​\n\n—\n\n​\n\n​\n\n3,945\n\nStock-based compensation\n\n​\n\n​\n\n17,069\n\n​\n\n​\n\n—\n\n​\n\n​\n\n17,069\n\nSegment adjusted EBITDA\n\n​\n\n$\n\n127,753\n\n​\n\n$\n\n—\n\n​\n\n$\n\n127,753\n\n​\n\nThe following table (in thousands) provides a reconciliation from segment adjusted EBITDA to income before income taxes:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year Ended**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**April 30,**\n\n**  ​ ​ ​**\n\n**April 30,**\n\n​\n\n**April 30,**\n\n​\n\n​\n\n**2026**\n\n​\n\n**2025**\n\n​\n\n**2024**\n\nSegment adjusted EBITDA\n\n​\n\n$\n\n286,056\n\n​\n\n$\n\n146,424\n\n​\n\n$\n\n127,753\n\nDepreciation and amortization\n\n​\n\n​\n\n(265,037)\n\n​\n\n​\n\n(40,998)\n\n​\n\n​\n\n(35,749)\n\nImpairment of goodwill\n\n​\n\n​\n\n(240,708)\n\n​\n\n​\n\n(18,359)\n\n​\n\n​\n\n—\n\nAcquisition-related expenses\n\n​\n\n​\n\n(48,170)\n\n​\n\n​\n\n(19,290)\n\n​\n\n​\n\n(2,095)\n\nAmortization of cloud computing arrangement implementation\n\n​\n\n​\n\n(5,536)\n\n​\n\n​\n\n(2,541)\n\n​\n\n​\n\n(1,444)\n\nLegal expense\n\n​\n\n​\n\n—\n\n​\n\n​\n\n(2,100)\n\n​\n\n​\n\n—\n\nStock-based compensation\n\n​\n\n​\n\n(38,334)\n\n​\n\n​\n\n(21,461)\n\n​\n\n​\n\n(17,069)\n\nEquity securities investments activity, net\n\n​\n\n​\n\n11,720\n\n​\n\n​\n\n177\n\n​\n\n​\n\n(3,945)\n\nInterest expense, net\n\n​\n\n​\n\n(5,613)\n\n​\n\n​\n\n(2,188)\n\n​\n\n​\n\n(4,220)\n\n(Loss) income before income taxes\n\n​\n\n$\n\n(305,622)\n\n​\n\n$\n\n39,664\n\n​\n\n$\n\n63,231\n\n​\n\nSegment assets are summarized in the table below. Corporate assets primarily consist of cash and cash equivalents, prepaid expenses and other current assets, long-term investments, property and equipment, net, operating lease right-of-use assets, deferred income taxes and other assets managed centrally on behalf of the business segments.\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**  ​ ​ ​**\n\n**AxS**\n\n**  ​ ​ ​**\n\n**SCDE**\n\n**  ​ ​ ​**\n\n**Corporate**\n\n​\n\n**Total**\n\nAs of April 30, 2026\n\n​\n\n$\n\n2,604,511\n\n​\n\n$\n\n2,032,663\n\n​\n\n$\n\n1,079,568\n\n​\n\n$\n\n5,716,742\n\nAs of April 30, 2025\n\n​\n\n$\n\n872,530\n\n​\n\n$\n\n—\n\n​\n\n$\n\n248,037\n\n​\n\n$\n\n1,120,567\n\n124\n\n[Table of Contents](#Toc)\n\n​\n\nCapital expenditures are summarized in the table below (in thousands):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**  ​ ​ ​**\n\n**AxS**\n\n**  ​ ​ ​**\n\n**SCDE**\n\n**  ​ ​ ​**\n\n**Corporate**\n\n​\n\n**Total**\n\nYear Ended April 30, 2026\n\n​\n\n$\n\n50,780\n\n​\n\n$\n\n29,380\n\n​\n\n$\n\n6,058\n\n​\n\n$\n\n86,218\n\nYear Ended April 30, 2025\n\n​\n\n$\n\n21,212\n\n​\n\n$\n\n—\n\n​\n\n$\n\n1,604\n\n​\n\n$\n\n22,816\n\nYear Ended April 30, 2024\n\n​\n\n$\n\n19,229\n\n​\n\n$\n\n—\n\n​\n\n$\n\n3,754\n\n​\n\n$\n\n22,983\n\n​\n\n​\n\n​\n\n**22.          ****Geographic Information**\n\n​\n\nSales to non-U.S. customers, including U.S. government foreign military sales in which an end user is a foreign government, accounted for 28%, 52% and 62% of revenue for each of the fiscal years ended April 30, 2026, 2025 and 2024, respectively. For the fiscal years ended April 30, 2025 and 2024, Ukraine represented $149,600,000, or 18%, and $274,136,000, or 38%, respectively, of the Company’s consolidated revenues. The Company’s internationally deployed fixed assets for UGV was $5,062,000 and $5,033,000 as of April 30, 2026 and 2025, respectively. The Company’s internationally deployed in-service assets for MUAS was $5,472,000 and $1,486,000 as of April 30, 2026 and 2025, respectively.\n\n​\n\n​\n\n​\n\n​\n\n​\n\n125\n\n[Table of Contents](#Toc)\n\n**SUPPLEMENTARY DATA**\n\n​\n\n**SCHEDULE II—****VALUATION AND QUALIFYING ACCOUNTS**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Additions**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n** **\n\n​\n\n**  ​ ​ ​**\n\n**Balance at**\n\n**  ​ ​ ​**\n\n**Balance**\n\n​\n\n**Charged to**\n\n**  ​ ​ ​**\n\n**Charged to**\n\n**  ​ ​ ​**\n\n​\n\n​\n\n**  ​ ​ ​**\n\n**Balance at**\n\n** **\n\n​\n\n​\n\n**Beginning**\n\n​\n\n**Acquired from**\n\n​\n\n**Costs and**\n\n​\n\n**Other**\n\n​\n\n​\n\n​\n\n​\n\n**End of**\n\n** **\n\n**Description**\n\n​\n\n**of Period**\n\n​\n\n**Acquisition**\n\n​\n\n**Expenses**\n\n​\n\n**Accounts**\n\n​\n\n**Deductions**\n\n​\n\n**Period**\n\n** **\n\n​\n\n​\n\n**(In thousands)**\n\n \n\nAllowance for credit losses for the year ended April 30:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n2024\n\n​\n\n$\n\n156\n\n​\n\n$\n\n—\n\n​\n\n$\n\n89\n\n​\n\n$\n\n—\n\n​\n\n$\n\n(86)\n\n​\n\n$\n\n159\n\n​\n\n2025\n\n​\n\n$\n\n159\n\n​\n\n$\n\n—\n\n​\n\n$\n\n111\n\n​\n\n$\n\n—\n\n​\n\n$\n\n(67)\n\n​\n\n$\n\n203\n\n​\n\n2026\n\n​\n\n$\n\n203\n\n​\n\n$\n\n387\n\n​\n\n$\n\n1,426\n\n​\n\n$\n\n—\n\n​\n\n$\n\n(55)\n\n​\n\n$\n\n1,961\n\n​\n\nWarranty reserve for the year ended April 30:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n2024\n\n​\n\n$\n\n3,642\n\n​\n\n$\n\n40\n\n​\n\n$\n\n4,364\n\n​\n\n$\n\n—\n\n​\n\n$\n\n(2,508)\n\n​\n\n$\n\n5,538\n\n​\n\n2025\n\n​\n\n$\n\n5,538\n\n​\n\n$\n\n—\n\n​\n\n$\n\n1,151\n\n​\n\n$\n\n—\n\n​\n\n$\n\n(2,500)\n\n​\n\n$\n\n4,189\n\n​\n\n2026\n\n​\n\n$\n\n4,189\n\n​\n\n$\n\n2,274\n\n​\n\n$\n\n9,006\n\n​\n\n$\n\n—\n\n​\n\n$\n\n(6,735)\n\n​\n\n$\n\n8,734\n\n​\n\nReserve for inventory excess and obsolescence for the year ended April 30:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n2024\n\n​\n\n$\n\n15,205\n\n​\n\n$\n\n—\n\n​\n\n$\n\n13,937\n\n​\n\n$\n\n—\n\n​\n\n$\n\n(3,242)\n\n​\n\n$\n\n25,900\n\n​\n\n2025\n\n​\n\n$\n\n25,900\n\n​\n\n$\n\n—\n\n​\n\n$\n\n2,882\n\n​\n\n$\n\n—\n\n​\n\n$\n\n(110)\n\n​\n\n$\n\n28,672\n\n​\n\n2026\n\n​\n\n$\n\n28,672\n\n​\n\n$\n\n4,942\n\n​\n\n$\n\n8,460\n\n​\n\n$\n\n—\n\n​\n\n$\n\n(5,484)\n\n​\n\n$\n\n36,590\n\n​\n\nReserve for self-insured medical claims for the year ended April 30:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n2024\n\n​\n\n$\n\n1,383\n\n​\n\n$\n\n—\n\n​\n\n$\n\n16,365\n\n​\n\n$\n\n—\n\n​\n\n$\n\n(16,504)\n\n​\n\n$\n\n1,244\n\n​\n\n2025\n\n​\n\n$\n\n1,244\n\n​\n\n$\n\n—\n\n​\n\n$\n\n17,436\n\n​\n\n$\n\n—\n\n​\n\n$\n\n(17,121)\n\n​\n\n$\n\n1,559\n\n​\n\n2026\n\n​\n\n$\n\n1,559\n\n​\n\n$\n\n—\n\n​\n\n$\n\n26,945\n\n​\n\n$\n\n—\n\n​\n\n$\n\n(24,113)\n\n​\n\n$\n\n4,391\n\n​\n\n​\n\n​\n\n126\n\n[Table of Contents](#Toc)\n\n**Item ****9. Changes in and Disagreements****with Accountants on Accounting and Financial Disclosure.**\n\n​\n\nNot applicable.\n\n​\n\n**Item ****9A. Controls and Procedure****s.**\n\n​\n\n**Evaluation of Disclosure Controls and Procedures**\n\n​\n\nWe maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can only provide reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost benefit relationship of possible controls and procedures. As required by Rules 13a-15(e) and 15d-15(e) under the Exchange Act, we have carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on this assessment, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of April 30, 2026, due to the material weaknesses in internal control over financial reporting described below.\n\n​\n\nNotwithstanding the material weaknesses described below, management has concluded that the financial statements included in this Annual Report present fairly, in all material respects, our financial position, results of operations and cash flows in conformity with U.S. GAAP.\n\n​\n\n**Management’s Report on Internal Control Over Financial Reporting**\n\n​\n\nOur management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act.\n\n​\n\nBecause of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.\n\n​\n\nUnder the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of our internal control over financial reporting as of April 30, 2026, based on the criteria established in *Internal Control—Integrated Framework (2013)*, issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on this assessment, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of April 30, 2026, due to the material weaknesses in internal control over financial reporting described below.\n\n​\n\nOur assessment of the effectiveness of the Company’s internal control over financial reporting as of April 30, 2026 excludes the acquisition of BlueHalo which was acquired on May 1, 2025 and ESAero which was acquired on March 16, 2026, and whose combined financial statements constitute approximately 46% of total assets and 48% of total revenue of the consolidated financial statement amounts of the Company as of and for the year ended April 30, 2026.\n\n​\n\nA material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis.\n\n​\n\nDespite the exclusion of BlueHalo from our assessment of the effectiveness of the Company’s internal control over financial reporting as of April 30, 2026, we identified a material weakness in controls over the financial close and reporting process as a result of the BlueHalo acquisition. BlueHalo did not design and maintain effective information\n\n127\n\n[Table of Contents](#Toc)\n\ntechnology (“IT”) general controls for certain information systems that are relevant to information used the preparation of BlueHalo’s financial reporting that is included in the consolidated financial statements of Aerovironment. Specifically, BlueHalo did not design and maintain user access controls to ensure appropriate segregation of duties and to adequately restrict user and privileged access to appropriate personnel. As a result, the automated controls and IT dependent manual business process controls that rely upon BlueHalo’s financial reporting information from the affected applications were deemed not effective.\n\n​\n\nIn addition, we determined that the error resulting in the restatement of our unaudited condensed consolidated financial statements for the quarter ended January 31, 2026 in the Amendment No. 1 on Form 10-Q/A, filed with the SEC on June 22, 2026, originated from a material weakness. The material weakness relates to the design of controls over the preparation and review of our goodwill impairment analysis. Specifically, we did not have a properly designed control requiring preparation and review of a reconciliation of goodwill by reporting unit.\n\n​\n\nThe effectiveness of our internal control over financial reporting as of April 30, 2026 has been audited by Deloitte & Touche LLP, our independent registered public accounting firm, as stated in their report which is included herein.\n\n​\n\n**Remediation Plan**\n\n​\n\nAs of the date of this report, management’s remediation efforts are ongoing, and management has committed to a remediation plan to address the material weaknesses noted above. The remediation plan includes, but is not limited to, the following activities which have been performed or are in process:\n\n​\n\n●With respect to the material weakness related to information technology general controls over BlueHalo’s financial reporting, we have designed and are implementing enhancements to user access and program change management controls, including restricting administrator-level access, performing periodic user access reviews, and formalizing change management and data modification processes through documented and approved workflows.\n\n●With respect to the material weakness related to design of controls over the preparation and review of our goodwill impairment analysis, •Implemented a control over the preparation and review of a quarterly reconciliation of goodwill by reporting unit\n\n​\n\nRemedial controls must operate for a sufficient period of time for a definitive conclusion, through testing, that the deficiencies have been remediated and, as such, management can give no assurance that the measures it has undertaken have remediated the material weaknesses that it has identified or that additional material weakness will not arise in the future. Management will continue to monitor the effectiveness of these and other processes, procedures, and controls and will make any further changes that management determines to be appropriate.\n\n​\n\n**Changes in Internal Control over Financial Reporting**\n\n​\n\nExcept for the identification of the material weaknesses described above, there were no changes in our internal control over financial reporting as defined in Rules 13a-15(f) or 15d-15(f) that occurred during the quarter ended April 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.\n\n​\n\n**Item ****9B. Other Informatio****n.**\n\n​\n\nNone of our directors or officers informed us of the adoption or termination of a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as those terms are defined in Regulation S-K, Item 408 during the three-month period ended April 30, 2026.\n\n​"}