AeroVironment Inc. (NASDAQ:AVAV) shares climbed 2.7% in premarket trading on Monday after the defense technology company announced it had been awarded a $117.3 million contract by the U.S. Army for its P550 unmanned aerial system.
The agreement, issued under a Basic Ordering Agreement through the Army’s Unmanned Aircraft Systems Marketplace initiative, covers the delivery of 82 P550 electric vertical take-off and landing (eVTOL) drones. The procurement supports the Army’s Battalion Reconnaissance programme and marks the first full-rate production order for the P550 platform.
P550 selected for next-generation reconnaissance programme
The contract was awarded through a competitive Call for Solutions under the Army’s Long Range Reconnaissance programme, which is focused on equipping military forces with adaptable capabilities for future combat operations.
The P550 is an autonomous Group 2 eVTOL unmanned aircraft designed to perform a wide range of missions. It can carry multi-sensor payloads weighing up to 15 pounds and offers up to five hours of battery-powered endurance.
The platform is also designed for operational flexibility, allowing crews to replace payloads and batteries in less than five minutes without the need for tools. Its modular open systems architecture enables integration with third-party payloads, datalinks and mission planning software.
Drone platform supports multi-domain military operations
The P550 is intended for intelligence, surveillance and reconnaissance missions, while also supporting precision strike, electronic warfare and communications relay operations across air, land and maritime environments.
“The P550 gives maneuver forces the ability to rapidly reconfigure, extend their reach, and deliver effects across domains, all while operating in contested environments where speed and autonomy are decisive,” said Wahid Nawabi, Chairman, President and Chief Executive Officer at AeroVironment.
The latest contract further strengthens AeroVironment’s position in the growing market for advanced autonomous defense systems as military demand for next-generation drone technology continues to increase.
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