AeroVironment, Inc. (NASDAQ:AVAV) Q1 2024 Earnings Call Transcript

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And it requires effort in our part, and for them to increase capacity, they’ve got to scale up their production and their manufacturing in their operations. And we’re working with many of them that are strategic to us to make sure that we don’t have any bottlenecks. And I’m very pleased with the progress that our team is making, and we’ve made it a concerted effort and focus for ourselves as a priority as a Company and a leadership team to focus on that for the last three to four years. And I think that is starting to pay dividend for us as we see the kind of growth that we’ve been able to achieve and deliver to, for our shareholders.

Pete Skibitski : Okay. I appreciate it. And last one from me, on the Tomahawk deal, my question is why buy this company. It’s fairly young, right? Only five years old. Why buy them instead of maybe team with them on an ongoing basis or some other business arrangement? It’s — this whole area of ground control systems, it’s, I guess you would have to have a comfort level that their IP is so high that it would — other competitors would have a hard time overcoming that. Can you share your thoughts on why you pulled the trigger on this deal?

Wahid Nawabi: Sure. So as you said, that’s a very good question, Pete. One, we’ve known them for many, many years. And we’ve known them since their founding days, and in fact. So, I personally known that one of the founders, through the industry, of course, for a long time. The reason why we did this is because it allows us to accelerate and achieve our growth objectives faster for ourselves as well as for our customers. As an independent company, while they continue to work with us, we won’t be getting the level of priority and preferential treatment as we would like because at the end of the day, it’s all about the mission of more customers, the war fighters. And most of our customers have already chosen to go down the path of selecting their system, Tomahawk systems as the open architecture to connect multiple unmanned and manned devices.

So think about a battlefield where there are tanks, armored vehicles, ground robots, UAVs, etcetera, USVs, and you need to make sure that you provide a common operating picture for the operator, for the warfighter. And so, what Tomahawk does it brings all those things and it connects them and integrates them and also introduces a lot of predictive AI feature set. So in order for us to deliver those capabilities to our customers faster and also integrate deeper in terms of our product roadmaps, technology investments, we felt that the acquisition was the better way to go. And lastly, I would say we’re also growing in terms of our talent. Tomahawk Robotics is primarily based out of Florida and it’s an area that we’d like to get access to more talent.

So their site in Florida allows us to expand our workforce outside of California and areas where they’re closer to our customers. So there are several reasons, their talent base, their IT, their product, their progress with customers, as well as ability to support our growth in the years to come. So, I really feel strongly that this is a very good decision for our Company or shareholders. It’s also a great outcome for our customers. So far the feedback has been very positive and it positions us to basically marry the best, the most ubiquitous unmanned systems provider, which is AeroVironment, with the most advanced common controller technology enabled by AI from Tomahawk to be an integrated system solution for our customers.

Pete Skibitski : Okay. Appreciate all the color. Thank you.

Wahid Nawabi: You’re welcome.

Operator: Thank you. And with no further questions in the queue, I’d like to turn the call back over to Jonah Teeter-Balin for any closing remarks.

Jonah Teeter-Balin: Great. Thank you once again for joining today’s conference call and for your interest in AeroVironment. As a reminder, an archived version of this call, all SEC filings and relevant news can be found under the Investors section of our website. We wish you a good evening and look forward to speaking with you again following next quarter’s results.

Operator: This concludes today’s conference call. Thank you for participating. You may now disconnect. Everyone, have a great day.

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