Quarterly results from drone maker AeroVironment were a relief for investors. There is still growth for defense contractors selling drones and drone-related tech.

AeroVironment announced fiscal first quarter 2027 earnings of 59 cents a share from sales of $480.5 million. Wall Street was looking for earnings of 22 cents a share on sales of $452 million. A year ago, the company reported earnings of 32 cents a share on sales of $455 million.

Backlog ended the quarter at $1.5 billion, up from $1.2 billion at the end of April.

Results look solid. Management also maintained the outlook for the full fiscal year. In June, they forecast fiscal year 2027 sales of about $2.2 billion and earnings before interest, taxes, depreciation, and amortization (Ebitda) of about $315 million. Wall Street currently projects $2.2 billion in sales and Ebitda of $322 million.

AeroVironment shares jumped 3.1% in after hours trading to $145.920. They fell 5.4% in regular trading ahead of earnings, while the S&P 500 dropped 0.5%.

Investors might have been a little nervous heading into results—for good reason. Coming into the week, AeroVironment stock has been weak, down about 40% since the start of the year and down more than 40% since the start of the Iran War.

Many defense stocks have fallen since fighting began, with investors worried that a split Congress after the midterm elections would lead to spending gridlock. AeroVironment has run into some company-specific headwinds, too.

In March, the government canceled a billion-dollar contract to deliver AeroVironment BADGER phased-array antenna systems to support a Space Force program. The Space Force realized that commercially available solutions could save costs.

The contract and investor sentiment have punished the stock’s valuation. Earlier in 2026, AeroVironment stock traded at 90 times earnings expected over the coming 12 months. Investors were much more optimistic about booming demand for unmanned weapons systems. Now, shares trade at about 39 times earnings, which are expected to grow almost 39% a year on average for the coming few years.

The company’s results support the notion that growth is coming. Guidance implies roughly 10% sales growth in fiscal year 2027. Wall Street projects more growth after that.

Investors might want to brace for some trading volatility on Thursday. The stock has a recent history of big post-earnings moves. AeroVironment shares jumped about 19% after it reported fiscal fourth quarter numbers in June. It dropped 6% after reporting fiscal third quarter numbers in March.