Overview
AeroVironment Inc (NASDAQ:AVAV) reported that its previously issued unaudited financial statements for the three and nine months ended January 31, 2026 require revision after the company discovered an error in the goodwill impairment analysis for its Space reporting unit. The company filed an amended Form 10-Q/A on June 17, 2026, and shares fell 4.5% in premarket trading on Monday following the disclosure.
Nature of the error
The calculation mistake stemmed from the carrying value used in the goodwill impairment analysis for the Space reporting unit not including a portion of goodwill that arose from acquired deferred tax assets and liabilities. This omission produced an incremental goodwill impairment charge of $89.4 million, which the company attributed to the previously disclosed stop-work order and termination of its BADGER phased array antenna systems agreement with the U.S. Government for the SCAR program.
Financial effects
Because of the error, loss from operations was understated by $89.4 million for both the three- and nine-month periods ended January 31, 2026. Net loss for those same periods was understated by $87.3 million. The understatement also affected basic and diluted net loss per share, which were understated by $1.75 for the three-month period and by $1.79 for the nine-month period ended January 31, 2026.
The company emphasized that the error was non-cash in nature and did not change previously reported current assets, current liabilities, revenues, or cash used in operating activities. AeroVironment also noted that its non-GAAP measures - specifically Adjusted EBITDA and non-GAAP diluted earnings per share for the affected period - remain unchanged by the restatement.
Controls and governance
In connection with the restatement, AeroVironment's management identified a material weakness in the company's internal control over financial reporting related to the preparation and review of the goodwill impairment analysis. Management concluded that disclosure controls and procedures as of January 31, 2026 were ineffective.
Additionally, the company reported that two members of its board of directors, David Wodlinger and Henry Albers, resigned on June 17, 2026. The company said both directors indicated their resignations were not a result of any disagreement with management.
Implications
The restatement adjusts prior operating and net loss metrics and highlights a control weakness in goodwill impairment preparation. The adjustment is tied to a previously disclosed government contract termination and is non-cash, leaving liquidity and revenue measures unchanged for the affected periods.