Shares of AeroVironment (AVAV) surged 5.07% in after-hours trading on Tuesday following the company's release of its fiscal first-quarter 2026 results, which showcased strong revenue growth and an improved earnings outlook for the full year.

The unmanned aircraft systems maker reported record quarterly revenue of $454.7 million, up 140% year-over-year, significantly beating analyst expectations of $439.5 million. This substantial increase was primarily driven by the successful acquisition of BlueHalo, which contributed $235.2 million to the quarter's revenue. AeroVironment's legacy business also performed well, with revenue up 16% compared to the same period last year.

Despite the impressive top-line growth, AeroVironment's adjusted earnings per share came in at $0.32, slightly below the consensus estimate of $0.37. However, investors appeared to focus more on the company's improved full-year guidance. AeroVironment raised its fiscal 2026 adjusted EPS outlook to a range of $3.60 to $3.70, up from its previous forecast of $2.80 to $3.00. The company also reaffirmed its revenue guidance of $1.9 billion to $2.0 billion for the fiscal year.

The market's positive reaction seems to be driven by AeroVironment's strong revenue performance, record backlog of $1.1 billion, and the company's increased earnings guidance. These factors suggest that AeroVironment is successfully integrating its BlueHalo acquisition and capitalizing on growing demand for its unmanned systems and defense technologies.