AEVEX Q2 Earnings Call Highlights

Key Points

• AEVEX reported strong second-quarter results, with revenue doubling year over year to $201.8 million and net income improving to $6.7 million from a prior-year loss. The company raised 2026 guidance to $700 million–$720 million in revenue and $105 million–$111.5 million in adjusted EBITDA.
• AEVEX agreed to acquire BlackSea Technologies for up to $650 million, adding unmanned surface and subsea vessels to its aerial-systems portfolio. The deal includes $250 million in cash, approximately $350 million in stock and a $50 million earn-out, with closing expected in September 2026.
• Demand and growth prospects remain robust: the opportunity pipeline expanded to approximately $10.5 billion, tactical-systems revenue surged 142% to $174.2 million, and production capacity is being expanded to support continued orders.

AEVEX NYSE: AVEX reported second-quarter revenue of $201.8 million, up approximately 100% from the prior-year period, and raised its full-year outlook as demand for unmanned systems remained strong. The company also announced a definitive agreement to acquire BlackSea Technologies, a developer of unmanned surface and subsea vessels, in a transaction valued at up to $650 million.

Executive Chairman Brian Raduenz said the company delivered its second consecutive “beat and raise,” citing sustained demand, production scaling and execution across its autonomous systems operations. He added that the Department of War recently identified AEVEX as one of a select group of defense technology primes accelerating development and production of systems for real-world missions.

BlackSea acquisition expands maritime portfolio

The proposed BlackSea acquisition would add unmanned surface vessel and undersea capabilities to AEVEX’s existing unmanned aerial systems portfolio. BlackSea serves customers including the U.S. Navy, U.S. Special Operations Command and the intelligence community, according to management.

The consideration includes approximately $250 million in cash at closing, about $350 million in AEVEX common stock priced at $27.50 per share, and a $50 million earn-out contingent on BlackSea achieving certain performance targets through fiscal 2027. The stock component would result in the issuance of approximately 12.7 million shares to the sellers.

Chief Financial Officer Todd Booth said BlackSea is expected to generate roughly $150 million in fiscal 2026 revenue, with adjusted EBITDA margins approximately in line with AEVEX’s. The transaction is expected to be accretive to earnings per share in the near term before non-cash purchase accounting amortization, Booth said.

The companies expect the deal to close in September 2026, subject to the expiration of the Hart-Scott-Rodino waiting period and customary closing conditions. Following the close, BlackSea will operate as AEVEX’s third business unit, with BlackSea CEO Bob Pugkney expected to continue leading the business.

CEO Roger Wells said BlackSea has delivered more than 350 unmanned surface vessels since inception and has accumulated more than 25,000 operational hours, including nearly 500 hours supporting Operation Epic Fury. He said BlackSea had more than $110 million in funded backlog and over $250 million in unfunded backlog tied to its GARC and Chaser small unmanned surface vessels, as well as contested-logistics platforms including the Sea-Based Petroleum Distribution System.

BlackSea operates across five U.S. locations, including a waterfront manufacturing and development footprint in Baltimore. Wells said its production facility can produce approximately 40 small unmanned surface vessels per month.

Revenue growth led by tactical systems

AEVEX’s tactical systems segment generated $174.2 million in second-quarter revenue, a 142% increase from a year earlier. The company attributed the growth largely to execution on its Deep Strike unmanned aerial systems program. Segment adjusted EBITDA margin was 17% of sales.

Global solutions revenue declined 5% year over year to $27.6 million, primarily because an aircraft sale recorded in the second quarter of 2025 did not recur. The segment’s adjusted EBITDA margin expanded by roughly 700 basis points to 14.2% in the quarter because of sales mix, according to Booth.

Companywide net income was $6.7 million, compared with a net loss of $11.8 million in the second quarter of 2025. Higher revenue, improved margins and lower interest expense contributed to the improvement, partly offset by transaction costs, income taxes and changes in the fair value of derivative liabilities.

AEVEX reported a trailing 12-month book-to-bill ratio of 1.08 and said unit volumes increased 114% year over year. The company is expanding and consolidating its Tampa production facilities, an investment Wells said is expected to more than double capacity over the next year.

Pipeline grows as customers seek shorter-cycle orders

Management said AEVEX’s opportunity pipeline grew to approximately $10.5 billion from $8.1 billion at the end of 2025. The increase reflected greater clarity around government budgets and priorities, product-development activity and expanded production capacity.

Wells said the company continues to see roughly $2 billion of potential contract value across launched effects, one-way attack systems, long-range precision strike and support for operations in the U.S. Central Command area of responsibility. He identified the company’s Group 3 Disruptor and Raker product lines as areas seeing significant interest.

The company said its customers increasingly favor shorter-cycle production orders, contributing to more “book-and-ship” revenue. Backlog coverage represented 71% of the midpoint of AEVEX’s updated 2026 revenue outlook, down from 82% in the first quarter as revenue guidance increased and shorter-cycle activity continued.

During the question-and-answer session, Booth said the Deep Strike program remained a major contributor in 2026, though its contribution is expected to decline through the second half of the year, with a smaller amount extending into 2027. Wells said AEVEX expects to transition toward other programs across its launched effects, long-range precision strike, one-way attack and combatant-command support portfolio areas.

2026 outlook raised

AEVEX raised its fiscal 2026 revenue outlook to a range of $700 million to $720 million and adjusted EBITDA guidance to $105 million to $111.5 million. The updated outlook does not include the impact of the proposed BlackSea acquisition.

At the midpoint of its revenue outlook, management said approximately 95% of expected 2026 revenue was in backlog, with the remainder expected through renewals of long-standing global solutions contracts. The company expects full-year book-to-bill to be near 1.0 after accounting for the higher revenue outlook.

For the first six months of 2026, AEVEX generated $8.6 million of operating cash flow, compared with $27.9 million of cash used in operating activities during the comparable 2025 period. The company ended the quarter with $215.2 million in cash and $99.1 million in long-term debt. It also had access to an undrawn $75 million delayed-draw term loan and a $200 million revolving credit facility.

About AEVEX (NYSE:AVEX)

AEVEX Corp. is a holding company which designs, manufactures and provides autonomous systems and navigation technologies. The company's operating segment includes tactical systems and global solutions. AEVEX Corp. is based in Solana Beach, California.

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