AeroVironment, Inc. (NASDAQ:AVAV) Q2 2023 Earnings Call Transcript

Kevin McDonnell: Right. It was $4.5 million in case you missed it in our comments of accelerated depreciation in the quarter. And even with that, we still believe we’re going to hit our gross margin targets for the year.

Wahid Nawabi: Yeah.

Pete Skibitski: Okay. That’s great. Appreciate the color, guys. Thank you.

Wahid Nawabi: You’re welcome.

Operator: One moment please. Our next question comes from the line of Brian Ruttenbur of Imperial Capital. Your line is open.

Brian Ruttenbur: Yeah. Thank you very much. Just a couple of follow-ups real quick. In terms of operating expenses, can you give us a little bit of guidance for third quarter and fourth quarter, how they look versus second quarter in terms of R&D and SG&A, maybe give us directionally flat, up, down from the second quarter levels?

Kevin McDonnell: We don’t normally give that level of guidance, but as Wahid indicated, I think we’re at 11% to 12% R&D for the year.

Wahid Nawabi: And generally, we usually try to level load our — in R&D throughout the year because of capacity of headcount and resources. So you don’t usually see a major increase or decrease on a quarterly basis in our R&D spend, Brian, in general.

Brian Ruttenbur: Great. You talked about 11% to 12% R&D. SG&A as a percentage, it should drop from second quarter levels to…

Kevin McDonnell: Yes.

Brian Ruttenbur: Okay. Great. Thank you very much.

Kevin McDonnell: I mean it’s the same situation. Your SG&A expenses aren’t going to bump way up with revenue in the next couple of quarters. We’re going to get a lot of leverage with that increase in revenue. They will continue to increase primarily because there are some commissions and things like that, and we are expanding our sales force activities.

Wahid Nawabi: And the BNP (ph) business proposal activity has been high and will continue to be high, but those are very positive signs, Brian, because it means that there’s a demand for our solutions, and we’re competing for projects and our win rate generally is quite high.

Brian Ruttenbur: Right. Thank you.

Wahid Nawabi: You’re welcome.

Operator: Thank you. I’m showing no further questions at this time. And let’s turn the call back over to Jonah Teeter-Balin for any closing remarks.

Jonah Teeter-Balin: Thank you once again for joining today’s conference call and for your interest in AeroVironment. An archived version of this call, all SEC filings and relevant news can be found on our website at avinc.com. We wish you a good evening and look forward to speaking with you again following next quarter’s results.

Operator: This concludes today’s conference call. Thank you for participating. You may now disconnect.