AeroVironment, Inc. (NASDAQ:AVAV) Q3 2023 Earnings Call Transcript

Brian Ruttenbur: Great. And then just last question, since you mentioned the double-digit growth in fiscal 2024, can you talk a little bit about what you expect to see going to the bottom line in terms of the growth? Obviously much — well, I’m making the statement obviously, but greater growth on earnings and EBITDA. Can you give us any kind of parameters around that?

Wahid Nawabi: So, Brian, we obviously have a very large fourth quarter in front of us right now. We’re executing against that. We will be updating you with all of our financial guidance for next fiscal year on our next call. Overall, what I could say is that we expect another year of improvements in pretty much almost all of our metrics, I think our top line will grow. I think our gross margin will sustain or even grow slightly more as we gain scale, our mixed between hardware versus hardware and product sales versus services will improve and all of that would also mean that we’ll get some scale and leverage, which means the bottom line will improve significantly as well. So, I think that we have executed extremely well this year against very, very difficult challenges and tough sort of headwinds and position the company for multiple years of growth and prosperity.

I think that it’s going to be a shift in way people realize and look at small UAS and Tactical Missile Systems and loitering munitions in general. Pretty much the future conflicts is going to be about unmanned systems on the air, on the ground, and with all, with lethal precision capabilities such as switchblade. I think we’re getting ourselves positioned for that. We work really hard for that. We’re going to have a great year, and I think we’re going to continue to have even a better year of 2024 and beyond.

Brian Ruttenbur: Great. Thank you.

Wahid Nawabi: You’re welcome, Brian.

Operator: Thank you. Our next question comes from the line of Pete Skibitski with Alembic Global. Your line is open. Please go ahead.

Pete Skibitski: Hey, good afternoon guys.

Wahid Nawabi: Good afternoon.

Pete Skibitski: Guys, one thing that’s difficult to track is, this Ukraine funding as it grows, I think, more than $100 billion, it’s just kind of the total amount that you’re expecting. So, I’m sure you’ve kind track it with a fine tooth comb, but could you give us any kind of an estimate in terms of the Ukraine funding initiatives that have been announced so far, how much of that is as yet to make it into your backlog, even just as a rough order of magnitude?

Wahid Nawabi: Sure. So, Pete, it is a very fluid situation, number one, because the war is an ongoing thing. And on a regular basis, the U.S. DoD keeps giving our systems to Ukraine and the efficacy of those systems are phenomenally good and the demand for it continues to increase. While that’s happening, U.S. DoD also is starting to realize we have to have more of these systems for their own backlog and for their own stockpiles of weapon systems and unmanned systems. And in addition to that, there are other international allies. We look at this on the neighborhood and even outside the neighborhoods of Ukraine that are requesting and demanding the same systems — similar capabilities. So, so far, I would say, we’re probably getting maybe half to a third of what’s been announced into our bookings and our backlog.