AeroVironment CFO Kevin McDonnell to Retire After Steering $4.1B BlueHalo Integration
February 23, 2026 · by Fintool Agent
Aerovironment CFO Kevin McDonnell is stepping down after a transformative six-year tenure that saw the defense drone maker's revenue grow 4x and close its largest-ever acquisition. McDonnell, 64, notified the company of his retirement on February 18, 2026, with an effective date of July 31.
The departure comes at a pivotal moment for Aerovironment, which is still integrating the $4.1 billion BlueHalo acquisition completed in May 2025 — a deal McDonnell helped structure and finance through convertible debt and equity. The company now faces finding a CFO to manage a business that has evolved from a ~$400 million drone specialist into a $2 billion multi-domain defense technology platform.
Stock reaction: AVAV closed at $261.33, down 1.2% on the day and 36% below its January 2026 peak of $408. The stock dropped 5.8% on February 20, the day the retirement agreement was signed. Despite the recent pullback, shares remain up 107% over two years.
What We Know
McDonnell joined Aerovironment as SVP and CFO in February 2020, bringing experience from JAMS Inc., where he served as CFO. He was promoted to Executive Vice President upon the BlueHalo close in May 2025.
Under the retirement agreement signed February 20, McDonnell will:
- Remain as CFO until a replacement is hired or July 31, 2026, whichever comes first
- Receive his full FY2026 bonus at target ($455,420)
- Continue salary and benefits through the retirement date
- Assist with transition duties if a new CFO starts before July 31
- Receive payment for five months of COBRA healthcare premiums
Notably, Aerovironment announced just four days before the retirement disclosure that McDonnell would present at the Citizens Technology Conference on March 2 — a scheduled appearance that suggests this was a deliberate, planned transition rather than a sudden departure.
Why It Matters
McDonnell's tenure coincided with AeroVironment's emergence as a defense-tech darling. Under his financial stewardship:
| Metric | FY2021 | FY2026E | Change |
|---|---|---|---|
| Revenue | $395M | $2.0B | +406% |
| Funded Backlog | $300M | $1.1B | +267% |
| Total Debt | $60M | $826M | +1,277% |
| Cash | $80M | $359M | +349% |
Note: FY2026E based on company guidance. Values retrieved from S&P Global.
The most consequential move was the BlueHalo acquisition, which:
- Added Space, Cyber, and Directed Energy capabilities
- Created a combined entity with $75B addressable market by 2030
- Brought LOCUST directed energy systems and BADGER space technology
- Required McDonnell to orchestrate convertible debt financing and manage complex purchase price allocation
Ask Fintool AI AgentInsider Activity: Reading the Signals
McDonnell has been a consistent seller of AVAV shares through what appears to be a 10b5-1 trading plan, with sales occurring on regular monthly intervals:
| Date | Shares Sold | Price | Value |
|---|---|---|---|
| Feb 10, 2026 | 879 | $267.60 | $235,220 |
| Jan 12, 2026 | 999 | $367.60 | $367,232 |
| Dec 10, 2025 | 511 | $249.37 | $127,428 |
| Nov 10, 2025 | 513 | $331.46 | $170,039 |
| Oct 10, 2025 | 998 | $399.74 | $398,941 |
Source: SEC Form 4 filings
The pattern suggests routine diversification rather than a bearish signal. McDonnell's final Form 4 shows he retained approximately 16,422 shares ($4.3M at current prices) after the February sale.
The Succession Question
Aerovironment has not named a successor or disclosed the CFO search process. Key considerations:
Internal candidates: The company recently elevated several executives post-BlueHalo, including:
- Trace Stevenson (President, Autonomous Systems)
- Trip Ferguson (President, Space, Cyber & Directed Energy) — former BlueHalo COO
- Mary Clum (appointed SCDE President in October 2025)
External search: Given the company's new scale and complexity — managing $826M in debt, complex revenue recognition across long-term contracts, and ongoing integration — the board may seek external candidates with experience at larger defense primes.
CEO Wahid Nawabi remains firmly in control. He has led Aerovironment since 2016 and drove "eightfold revenue growth" according to the company, transforming it from a ~$260 million enterprise to a multi-billion-dollar defense platform.
Ask Fintool AI AgentForward Outlook
Near-term: Q3 FY2026 earnings are projected for March 9. Analysts expect:
- Revenue: $485M (consensus)
- EPS: $0.74 (consensus)
- Full-year revenue: $1.95-2.0B (company guidance)
Analyst sentiment: 17 analysts cover Avav with a consensus "Moderate Buy" rating and $372 average price target — 42% upside from current levels.
Key risks:
- CFO transition during ongoing BlueHalo integration
- Margin pressure from ERP system migration and product mix shift (Q2 gross margin was 27% vs. 41% prior year)
- Government shutdown impact on contract timing
- Stock down 36% from peak amid broader defense sector volatility
Key catalysts:
- New CFO appointment (likely Q2-Q3 calendar 2026)
- Q3/Q4 margin improvement to "high 30s%" as guided
- Potential upside from Ukraine contract renewals (currently excluded from guidance)
- Switchblade production capacity expansion at Utah facility
Bottom Line
McDonnell's departure appears to be an orderly, planned retirement after a successful tenure that transformed Aerovironment from a niche drone maker into a diversified defense technology company. The 5-month transition window provides time for a thorough CFO search, and McDonnell's commitment to assist through July 2026 should minimize disruption to the ongoing BlueHalo integration.
The bigger question is whether the next CFO can sustain the execution that drove record backlog ($1.1B funded, $2.8B unfunded) while restoring margins eroded by acquisition integration and ERP transitions. With 93% visibility to full-year guidance and analyst targets implying significant upside, the market appears to be pricing in successful execution — but leadership continuity will be key.
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