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- Restatement (new) — Q3 FY2026 financial statements require restatement due to goodwill impairment calculation error.
- Material Weakness (new) — Material weakness identified in internal controls over preparation and review of goodwill impairment analyses.
- Goodwill Impairment (new) — Additional $89.4M goodwill impairment recorded for Space reporting unit due to calculation methodology error.
AeroVironment restates Q3 FY2026 for $89.4M goodwill impairment error, discloses control weakness
Filed June 22, 2026 · Period ending June 16, 2026 · ~1 min read
Key Changes
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high
Company restates Q3 FY2026 financials to record additional $89.4M goodwill impairment on Space unit, increasing net loss by $87.3M ($1.75/share) due to calculation error that omitted deferred tax-related goodwill from carrying value analysis.
Item 4.02 — Non-Reliance on Previously Issued Financial Statements verify on EDGAR → -
high
Management identifies material weakness in internal controls over goodwill impairment analysis preparation and review; disclosure controls as of Jan 31, 2026 deemed ineffective and prior evaluation should not be relied upon.
Item 4.02 — Non-Reliance on Previously Issued Financial Statements verify on EDGAR → -
medium
Additional impairment stems from same SCAR program termination previously disclosed; no new triggering events or changes to Space unit's long-term cash flow estimates. Non-GAAP metrics (Adjusted EBITDA, non-GAAP EPS) unchanged.
Item 4.02 — Non-Reliance on Previously Issued Financial Statements verify on EDGAR → -
low
Two directors (David Wodlinger, Henry Albers) resigned effective June 17, 2026, with no disagreement cited. Arlington Capital Partners retains contractual right to designate two successors under Nov 2024 shareholder agreement; Board now has eight members.
Item 5.02 — Departure of Directors or Certain Officers; Election of Directors; Compensation verify on EDGAR →
Summary
AeroVironment disclosed a significant accounting error requiring restatement of its Q3 FY2026 financial statements. The company failed to properly calculate the carrying value in its goodwill impairment analysis for the Space reporting unit, omitting goodwill allocated from acquired deferred tax assets and liabilities.
This technical error resulted in an additional $89.4 million impairment charge, increasing the net loss by $87.3 million and reducing earnings per share by $1.75 for the quarter.
The error is particularly concerning because management identified a material weakness in internal controls over the preparation and review of goodwill impairment analyses, concluding that disclosure controls as of January 31, 2026 were ineffective. The additional impairment relates to the previously disclosed SCAR program termination and does not reflect new business deterioration—the company emphasizes that long-term cash flow estimates for the Space unit remain unchanged and no new triggering events have occurred. The restatement is a non-cash adjustment with no impact on revenues, operating cash flows, or non-GAAP metrics. However, the material weakness raises questions about the reliability of the company's financial reporting processes for complex accounting estimates. Separately, two directors resigned in a routine board change, with Arlington Capital Partners retaining the right to designate successors under its shareholder agreement.
Section-by-Section Diff
Event · Item 5.02 — Departure of Directors or Certain Officers; Election of Directors; Compensation
Item 5.02 — Departure of Directors or Certain Officers; Election of Directors; Compensation filed; see Key Changes for terms.
Added in current filing · verify on EDGAR →
On May 1, 2025, Mr. Wodlinger and Mr. Albers were appointed to the Board after being named designees of Arlington Capital Partners V, L.P. and Arlington Capital Partners VI, L.P. (collectively, the “Shareholder”), in accordance with the terms of the Shareholder’s Agreement, dated November 18, 2024 (the “Shareholder’s Agreement”), by and among the Company and the Shareholder. ... Following the resignations of Messrs. Wodlinger and Albers, the Shareholder retains the right to designate two successor directors to fill the vacancies created by the resignations. As of the date of this report, the Shareholder has not designated any successor directors. Following these resignations, the Board consists of eight directors.
The resigning directors were originally appointed as designees of Arlington Capital Partners under a November 2024 shareholder agreement. Arlington retains the contractual right to designate two successor directors to fill these vacancies, though no successors have been named yet. The Board now has eight members pending these appointments.
Show 1 minor / wording change
Added in current filing · verify on EDGAR →
On June 16, 2026, the Company received separate notices from each of Director David Wodlinger and Director Henry Albers informing the Company of their resignation from the Company’s Board effective June 17, 2026. Both Mr. Wodlinger and Mr. Albers noted in their separate letters that their decision to resign from the Board is not the result of any disagreement with management on any matter relating to the Company's operations, policies, or practices.
Two directors, David Wodlinger and Henry Albers, resigned from the Board effective June 17, 2026. Both explicitly stated their resignations were not due to any disagreement with management on company operations, policies, or practices. This is a routine board change with no indication of conflict or concern.
Event · Item 4.02 — Non-Reliance on Previously Issued Financial Statements
Item 4.02 — Non-Reliance on Previously Issued Financial Statements filed; see Key Changes for terms.
Added in current filing · verify on EDGAR →
During the preparation of the Company’s consolidated financial statements as of and for the year ended April 30, 2026, the Company identified an error in the calculation of the carrying value used in the goodwill impairment analysis of the Space reporting unit for the Affected Period. Specifically, the Space reporting unit carrying value utilized in the goodwill impairment analysis did not include an allocation of goodwill resulting from acquired deferred tax assets and liabilities.
AeroVironment discovered an error in its goodwill impairment calculation for the Space reporting unit during Q3 FY2026. The carrying value used in the impairment analysis failed to include goodwill allocated from acquired deferred tax assets and liabilities. This technical accounting error resulted in an understatement of the impairment charge that should have been recorded.
Added in current filing · verify on EDGAR →
Loss from operations was understated by $89,402,000 for the three and nine months ended January 31, 2026;
● Net loss was understated by $87,272,000 for the three and nine months ended January 31, 2026;
● Basic and diluted net loss per share was understated by $1.75 for the three months ended January 31, 2026 and by $1.79 for the nine months ended January 31, 2026; and
● Total assets were overstated by $89,402,000, total liabilities were overstated by $2,130,000, and total stockholders' equity was overstated by $87,272,000 as of January 31, 2026.
The restatement increases the goodwill impairment charge by $89.4 million, which increases the net loss by $87.3 million (after tax effects) and reduces diluted loss per share by $1.75 for Q3 and $1.79 for the nine-month period. Total stockholders' equity is reduced by $87.3 million. This is a non-cash adjustment with no impact on revenues, current assets, current liabilities, or operating cash flows.
Added in current filing · verify on EDGAR →
Management determined that the error and the related restatements were the result of a newly identified material weakness in the Company’s internal control over financial reporting related to the preparation and review of the goodwill impairment analysis, and concluded that the disclosure controls and procedures as of January 31, 2026 were ineffective. Therefore, the Company’s previous evaluation of its disclosure controls and procedures as of January 31, 2026 should no longer be relied upon.
Management identified a material weakness in internal controls specifically related to the preparation and review of goodwill impairment analyses. As a result, the company concluded that its disclosure controls and procedures as of January 31, 2026 were ineffective, and investors should not rely on the prior evaluation. This raises concerns about the reliability of the company's financial reporting processes for complex accounting estimates.
Added in current filing · verify on EDGAR →
The incremental goodwill impairment charge recorded relates to the previously disclosed stop-work order and subsequent termination for convenience of the Company’s agreement with the U.S. Government for the delivery of BADGER phased array antenna systems to support the Satellite Communication Augmentation Resource (“SCAR”) program, which was identified as the triggering event for the initial impairment analysis. The incremental goodwill impairment charge does not relate to updated estimates of the long-term cash flows of the Space reporting unit used in the goodwill impairment analysis. No subsequent triggering event has been identified.
The additional impairment charge stems from the same triggering event previously disclosed: the U.S. Government's termination of the SCAR program contract. The incremental charge is purely a correction of the calculation methodology, not a reflection of worsening business conditions or new negative developments in the Space reporting unit. The company emphasizes that long-term cash flow estimates remain unchanged and no new triggering events have occurred.
Added in current filing · verify on EDGAR →
In addition, the error did not impact previously reported non-generally accepted accounting principles (“GAAP”) measures Adjusted EBITDA and non-GAAP diluted earnings per share for the Affected Period.
The restatement does not change the company's non-GAAP metrics (Adjusted EBITDA and non-GAAP diluted EPS) because goodwill impairment charges are excluded from these measures. Investors who focus on adjusted earnings will see no change in the company's reported operational performance for the quarter.
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Figures/quotes linked to EDGAR · Narrative written by AI · Jul 7, 2026 · How we verify