WASHINGTON, July 2, 2026 — The U.S. Department of Defense has awarded AeroVironment Inc. a $500 million firm-fixed-price contract to supply the U.S. Army with commercial counter-unmanned aerial systems (C-UAS), strengthening the military's ability to detect, track, and defeat hostile drones.
The contract, announced on July 1, was awarded by the U.S. Army Contracting Command at the Detroit Arsenal, Michigan, under contract number W912CH-26-D-A073. The agreement is scheduled to run through June 29, 2029, with work locations and funding allocations to be determined through individual task orders.
The procurement covers both counter-unmanned aerial systems (C-UAS) and counter-small unmanned aerial systems (C-sUAS) to address a wide range of aerial threats, including larger unmanned aircraft as well as commercially available quadcopters and fixed-wing drones that have become increasingly common in modern conflicts.
Neither the U.S. Army nor AeroVironment has disclosed which specific systems will be ordered or where they will be deployed. The Department of Defense said procurement details will be finalized through future task orders.
The firm-fixed-price structure means AeroVironment assumes responsibility for any cost overruns during contract execution, providing the government with predetermined pricing throughout the agreement.
Although AeroVironment is headquartered in Arlington, Virginia, the Department of Defense contract announcement lists the company under its Simi Valley, California, operating address.
Expanding Counter-Drone Capabilities
Known for its Switchblade loitering munition systems, AeroVironment has expanded its counter-drone portfolio in recent years.
Its offerings include the Titan family of radio frequency jamming systems, which disrupt the control and navigation signals used by hostile drones, providing a non-kinetic method of defeating unmanned aircraft without relying on conventional interceptors.
The company's capabilities grew significantly after completing its $4.1 billion acquisition of BlueHalo in May 2025, adding directed-energy weapons, advanced electronic warfare technologies, and additional counter-drone capabilities.
In April 2026, AeroVironment introduced Halo_Shield, a modular counter-UAS platform designed to detect, track, and defeat threats ranging from drone swarms to subsonic cruise missiles. The company has also advanced prototype high-energy laser weapon systems and expanded production of its Freedom Eagle kinetic interceptor missiles.
Growing Demand for Counter-Drone Systems
The contract reflects the U.S. Army's continued investment in counter-drone technologies as unmanned aircraft become more widely used for reconnaissance, surveillance, targeting, and attack missions. Commercially available drones have become increasingly common on modern battlefields, driving demand for systems capable of detecting and neutralizing these threats.
Financial Outlook
Following the announcement, AeroVironment shares (NASDAQ: AVAV) rose more than 3% in after-hours trading.
The company expects fiscal year 2027 revenue between $2.125 billion and $2.225 billion, supported by growing demand for unmanned and counter-unmanned systems.
The award follows an $874 million Foreign Military Sales contract secured in December 2025 to provide unmanned aircraft and counter-drone systems to allied and partner nations. Combined with the new $500 million U.S. Army award, AeroVironment has secured more than $1.3 billion in drone and counter-drone-related contract capacity over the past seven months, reinforcing its position as a key supplier of unmanned and counter-unmanned technologies for U.S. and allied forces.
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