Arlington, Virginia, March 22, 2026, 11:05 (EDT)
AeroVironment has landed close to $135 million in new contracts from the U.S. Army, securing a $117.3 million deal for P550 long-range reconnaissance drones, plus another $17.6 million tied to Red Dragon systems and related equipment. News of the awards broke over the weekend after contract specifics surfaced late last week.
Timing’s notable here. Fewer than two weeks back, AeroVironment slashed its fiscal 2026 revenue target to $1.85 billion-$1.95 billion, down from $1.95 billion-$2.0 billion, and recognized a $151.3 million goodwill impairment—an accounting hit tied to the Space Force’s SCAR satellite communications project halt. Still, the company reported a record $1.1 billion in funded backlog, meaning confirmed orders with government funding attached. CEO Wahid Nawabi insists demand for its “unique solutions remains robust.” Avinc
The main award here is a firm-fixed-price deal, locking in the price up front, to buy and supply P550 Long Range Reconnaissance systems. According to a U.S. government contract notice, actual work sites and funding will be sorted out per order, with all deliveries due by July 23, 2026.
The smaller contract includes Red Dragon one-way attack drones, battery chargers, ground control stations, launchers, spare kits, training materials, and field-service support. Only one bid was submitted, and the Army expects the work to wrap up by April 8.
P550 is key to AeroVironment’s ambitions in the Army’s long-range reconnaissance effort. Back in December, Jason Hendrix—he’s the company’s VP for small uncrewed aerial systems—described the aircraft as designed to bring battalions not just ISR (intelligence, surveillance and reconnaissance), but also strike options, all packed into what he called “a single, adaptable platform.” AeroVironment, Inc.
On March 10, Nawabi told analysts that the previous $13 million P550 contract “opened the door for additional orders,” adding that AeroVironment was pushing production higher. He also pointed to Red Dragon as a likely growth engine, with the company ramping up output. AeroVironment, Inc.
This new P550 order drops right in the thick of an ongoing contest. Last August, the Army named both AeroVironment’s P550 and Edge Autonomy’s Stalker Block 35X as picks for speedy fielding of their first batch of long-range reconnaissance drones. The move is meant to maintain competitive pressure as the initiative scales up.
AeroVironment hasn’t let up on expanding its portfolio. On March 16, the company announced it was buying Empirical Systems Aerospace for roughly $200 million—the second major move in under a year, following its $4.1 billion BlueHalo acquisition. Calling ESAero’s tech “vital” for the rapidly evolving defense-tech sector, Nawabi underscored the importance of the new deal. AeroVironment, Inc.
The new Army contract doesn’t erase concerns about execution. Back on March 10, execs flagged that some postponed orders would likely land toward the end of the fourth quarter and into early fiscal 2027, highlighting how government spending can easily shift across reporting periods. Shares last traded at $197.72, off 6.45% from the prior close, Reuters market data showed.
