This afternoon, we also filed a slide presentation with our earnings release and posted the presentation to the Investor section of our website under Events and Presentations. I'll begin by summarizing our quarterly performance, followed by Kevin, who will review our financial results in greater detail, and then discuss guidance for Fiscal Year 2026. government shutdown, we delivered excellent financial results and achieved several strategic milestones that we believe position AV for strong, sustained growth well into the future. The total ceiling value of new contract awards during Q2 reached $3.5 billion, a historic record achievement by AV.
We also made significant progress on multiple programs of record that we believe will solidify our leadership in all of the domains in which we participate: air, land, sea, space, and cyber. With strong top-line growth expected on the horizon, we are executing on our expansion plans to further scale our manufacturing capacity and meet accelerating demand across several of our products and programs. Our proven execution capabilities, combined with the robust pipeline of orders and operational readiness, reinforce our confidence in achieving our industry-leading long-term growth objectives. Second, we also achieved another record Q2 revenue of nearly $473 million.
Third, we launched several new innovative products aligned to our customers' highest priorities and continue to execute on expanding our manufacturing capacity to meet accelerated demand. And fourth, we're raising the lower end of our Fiscal Year 2026 revenue guidance and now expect revenues between $1.95 billion and $2 billion. AV Halo, our open architecture software platform, is designed to unify command and control, intelligence analysis, synthetic training, and autonomous targeting across all domains, creating advanced communication among critical assets during conflict. Moreover, we expect that AV Halo's ability to enable competing products to operate on a common command and control software system will play an increasingly crucial role in U.S.
| Metric | Period | Current guidance |
|---|---|---|
| FY2026 revenue | — | $1.95B-$2.0B (raised low end; ~15% growth at midpoint over pro forma FY2025) |
| FY2026 adjusted EBITDA | — | $300M-$320M (maintained; 15%-16% of revenue) |
| FY2026 adjusted EPS | — | $3.40-$3.55 (lowered on higher full-year tax rate from BlueHalo PPA update) |
| Visibility to revenue midpoint | — | 93% |
| Second-half revenue split | — | ~45% Q3 / 55% Q4; ~70% of second-half EBITDA in Q4 |
| Adjusted gross margin (full year) | — | low 30s%, improving to high 30s% by Q4 |
| Metric | YoY | Note |
|---|---|---|
| Total revenue | +151% as reported (+9% pro forma; legacy AV organic +21%) | Record Q2 revenue despite government shutdown-related delays in FMS shipments and SCDE revenue. |
| Autonomous Systems (AxS) revenue | +15.7% vs FY2025 pro forma | Precision strike and counter-UAS up ~38% (Switchblade 600, Titan); uncrewed systems up 8% (over 50% ex-Ukraine, driven by JUMP 20). |
| Space, Cyber & Directed Energy (SCDE) revenue | similar to prior-year pro forma | Space and directed energy up over 20% (LOCUST a key driver), offset by cyber mission systems decline from discontinued programs and the shutdown. |
| Adjusted gross margin | down from 41% | Higher service mix, early-stage product maturation, Oracle Fusion ERP go-live inefficiencies/one-time costs, and unfavorable mix plus lost SCDE revenue from the government shutdown. |
| Adjusted EBITDA | up from $25.9M | Incremental BlueHalo results, partly offset by one-time costs and shutdown impacts. |
| Adjusted EPS (diluted) | down from $0.47 | Higher service/product mix pressure, one-time ERP costs and shutdown effects. |
| Adjusted SG&A | up from $33.2M (17.6%) | Combination with BlueHalo; leverage improving as a percent of revenue. |
| R&D expense | up from $28.7M (15.2%) | Business-model shift; higher absolute R&D on larger combined company. |
| Cash and investments | — | New balance sheet post-BlueHalo and Q1 financing. |
| Total contract award ceiling | — | Multiple large awards across both segments. |
| Bookings | — | Key program wins. |
| Funded backlog | — | End of Q2. |
| Unfunded backlog | — | End of Q2 (per the backlog summary). |
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Government shutdown | — | Elongated U.S. government shutdown delayed orders/FMS shipments and lost SCDE revenue, shifting projected revenue into later quarters. | — |
| BlueHalo integration | Progressing ahead of plan (Q1) | Exceeding expectations; positioning AV as a premier next-generation defense-tech company. | — |
| Software / interoperability | — | Expanded AV Halo (Cortex, Mentor) and announced OpenJAUS collaboration to extend interoperability across robots, drones, missiles and ground vehicles. | — |
| ERP / systems | — | Went live on Oracle Fusion ERP in the cloud; caused near-term inefficiencies and one-time costs but positions the company for multi-billion-dollar scale. | — |