Good afternoon. I am Louie Di Palma. I cover aerospace and defense on William Blair's Equity Research Team. This is day one of the 45th annual William Blair Growth Stock Conference. We're pleased to be hosting a 30-minute presentation/fireside chat with the management team of AV. AV is the branding of the new combined company between AeroVironment and BlueHalo. You can see the halo around AV. Joining us today are Chairman, President, and CEO Wahid Nawabi, CFO Kevin McDonnell, and Head of Investor Relations, sitting in the front row, Denise Pacioni. Following the presentation, there will be a breakout right here that will not be webcast. I am required to inform the audience that a complete list of disclosures and potential conflicts of interest are available on our website at williamblair.com. I think Kevin is going to go through some slides.
Before that, if we focus our attention to the first slide here, you can see a picture of what I believe is the Switchblade 300 being launched. This is very timely and applicable because over the weekend, there was a major sneak attack by Ukraine of Russian forces that was front-page news. It was a major drone attack that was compared to Pearl Harbor. Hopefully, there is not a major world war conflict after. Part of the significance of this drone attack was that it featured drones in a box, in that these drones were basically placed in a cargo pallet. The drones and the cargo pallet were remotely opened and launched.
One of the many investor questions related to this drone attack, which could be presented for the man himself, Wahid here, is, does AeroVironment have this same drone-in-a-box capability, which with its Switchblade, as the Switchblade has been considered the poster child for the U.S. Army and our Department of Defense's drone program? We have Wahid here. We will transition to Kevin, and then we will go back to Wahid.
Okay. Thank you. Great to be with you all. Thank you for joining our session. The short answer is yes. Both Switchblade 300 and Switchblade 600 do come in a multi-pack launching system. Switchblade 300, you might have seen it in some trade shows or events. It's a fully weatherized box about this big for the smaller Switchblade 300 that you can put up to six Switchblade 300s inside that box. It closes. It has a remote control activation mechanism. It was specifically designed for this type of an application where you do not have an operator right next to the Switchblade. You wanted this to be sitting somewhere outside and eventually being called to action. Switchblade 600, we have a solution that has actually been demonstrated. It's in the testing phase and prototyping phase with our customers.
You have six Switchblade 600s as well that you can put on a variety of different platforms. You can put it on a vehicle, a cargo, a rail, a container, even a ship. We have done that even on small boats, very small fast attack boats. The idea is very similar, that you can remotely launch these things at multiple units at a time to attack either single or multiple targets at a time.
Excellent.
Thank you.
Thank you.
I don't know which one's live. Okay, thank you, Louis. I'm Kevin McDonnell. I'm the CFO. I'll just take you through a few slides. Thank you, everybody, for coming. Big crowd here. I know it's the end of the day, but I think everybody wants to go to the reception. First, I'll start with the safe harbor. We're not giving any numbers out today. We're really talking about the combined AV/BlueHalo story. That's what's fresh in everybody's minds. As Louis is saying, one of the main takeaways, if you don't listen the rest of the time, we're in the middle of a seismic shift in warfare. We're moving to drones and counter-drone technologies. AV has been in this business a long time. We're at the forefront of those technologies for the U.S. military and our allies.
That is just one of the most important points you can take away from today. Today, AV represents what we believe is the premier provider of defense technology solutions. We have been the trusted supplier of the U.S. military and our allies for over 30 years. We are in the best position to address the emerging global priorities of unmanned systems, one-way attack, counter-UAS, directed energy, and space. Today, with the combined portfolio of BlueHalo, we address all these areas. I will show you a little bit later specifically how. We have consistently shown double-digit profitable growth over the last decade or so. With the BlueHalo acquisition, which we just talked about, that did close on May 1, fortifying our leadership position in all these markets.
Probably one of the more important facts on the page is the fact we've deployed over 42,000 platforms between the AV Group 1 through 3 systems, our Switchblade systems, and our counter-UAS systems. Our systems are battle-tested. We've made these things in volumes for decades and invested billions of dollars. The combined company's revenue is about $2 billion. Our market cap today is a little over $8 billion. The combined new company is going to be in two different segments. One segment will be autonomous systems, which has our precision strike, one-way attack capability. Our Group 1 through 3 UAS, or unmanned aerial systems, mostly for reconnaissance, but other things too. Our counter-UAS systems, our ground and maritime robotics systems, and a group we call McCrady Works, which McCrady was one of the founders of the company, as another group, which really is our innovation unit.
They're working on advanced solutions. They were the group that actually developed the Red Dragon, which we recently introduced, which we'll talk about a little bit more later. The other group is the Space Technology Group. That's ground communications and space hardware, a directed energy group, which is both for space communications and for counter-UAS solutions, a cyber group doing advanced cyber cape operations for the U.S. military, very high-end stuff. They also have an advanced solutions group, which is working with some of our key larger customers on, again, very advanced high-tech solutions, stuff that really isn't in the air like AV has been. McCrady Works is focused on, but a lot of other solutions for key customers. The combined company combines two great portfolios, two growing businesses well positioned.
On the AV side, we've traditionally had the very strong Switchblade franchise and our Group 1 through 3 UAS business. BlueHalo brings the space business and the directed energy capabilities to us. This just creates a very diversified portfolio, just so happens to be very well matched with the U.S. DOD priorities today, which have been more specifically enumerated over the last few months than when we actually did this deal back in November. This creates a very lucrative transaction in terms of EBITDA and non-GAAP EPS, so improved profitability over the coming years. We do believe this is a company that's well positioned for double-digit growth and beyond the next several years. In terms of the investment highlights, there's many. The portfolio products, which I'll go through more in a second, are well aligned to the DOD priorities.
If you look at it in these particular categories of Group 1 through 3 UAS, loitering munitions, one-way attack, counter-UAS, and space, we've invested over $3 billion over multiple decades in these products. This is not an overnight startup situation. This is a battle-tested company with the solutions that have been around for decades. We continue to innovate. I'll talk to you more about that like that. We're talking about multi-generational products. We just, for example, introduced Titan IV, so the fourth-generation counter-UAS, RF detect and identify and defeat system. Again, global provider, over 100 countries among the two companies. AV has had a long, had a strong franchise globally in UAS solutions. I would call the 800-pound gorilla in those sections. We have the proven ability to scale and produce.
We're very well aligned not only with the general priorities, but some of the bigger bet priorities of the U.S. DOD. Again, we have a very diversified portfolio. What we're doing here is not we're building a multi-billion dollar defense technology company that at the end of the day will have multiple solutions serving multiple customers with no single product or program representing more than 10% of revenue, say. Again, we're not going to be even these large aerospace companies have programs that might be 20%, 30% of their revenue. Our programs are going to be of the billion, the $2 billion, $3 billion size over five years and generating $300 million and $400 million a year. That's kind of the profile of what we're looking at. Everybody has to have a huge addressable market. We got that, $50 billion.
If you break it down, it's even more interesting. The three markets on the left, the Group 1 through 3 UAS, the defensive systems, which is really where your counter-UAS is, and your one-way attack or precision strike or loitering munition categories, that's $15 billion. We are the absolute leader in every one of those markets. The undisputed global leader in UAS for Group 1- 3. They're on the battlefield, counter-UAS with BlueHalo or our Titan IV system, and then on precision strike loitering munitions. We invented that category over a decade ago. We've been evolving those products over time. We have the Switchblade 300, 600, and now the Red Dragon.
On the right, in the space technology area, that's a combination of things like our ground station, our Badger ground station that's going to be replaced in the entire U.S. DOD infrastructure on the ground, enabling the ground station to communicate with multiple satellites at a time. Also, more importantly, laser communications. The number of laser communication terminals is growing at a CAGR of 45% and expected in and of itself to be a $40 billion market in five years. Now they use laser communications at all levels, from the GEO to the LEO satellites. We're focused in on the GEO side, which obviously that market is the entire market. We're focused on a very fast-growing part of the GEO market, which again will be an important part of something like a Golden Dome solution.
Several weeks ago now, the U.S. DOD, when DOGE was popular and there was a big memo sent around and said, we want you to cut back. We want you to cut back 8% of your budget, I think is what the number was. They said, but we do not want you to touch these 17 categories. By default, that is their 17 priorities. When you looked at those priorities, and these are a listing of six of them, we are six of the 17 priorities, most of the product categories. I mean, some of the priorities were additive manufacturing, scale investment, and things like that. When you look at the product and service categories, we are six of the 17 protected areas that the U.S. DOD is investing in. We are leaders, as I said, in things like precision fires and loitering munitions.
We're leaders in autonomous UAS systems. We're leaders in counter-UAS systems. We're leaders in space technology primarily as a supplier to some of the larger prime contractors. We're leaders in advanced cybersecurity solutions. We have a variety of advanced munitions. When you look at the revenue diversity, on the left is the AV kind of FY2025-ish or 2025-ish numbers. We're pretty much dominated by the Group 1 through 3 UAS and our precision strike capabilities. Two extremely strong global franchises, lots of growth there, again, fully aligned with the U.S. DOD priorities. When we combine with BlueHalo and the post-acquisition company, much more diversified, but also very strong franchises added in counter-UAS and space technologies and cyber. These are not names on a chart. These are substantial businesses that they bring to the table and really diversify our revenue streams going forward.
As I said earlier, creating a very diversified company. Current list of active programs of record we're going after, it's over 30. We would say we're the number one or two candidate for those programs over the next several years. These programs, as you know, they evolve. They don't just happen overnight. They're in various stages. We're in a great position as we look out three years to capture a lot of that business, the U.S. DOD. Innovation is key to our success. As I said before, our founder, Paul McCrady, was probably not a familiar name to everybody in this room, but probably one of the greatest inventors of our time. They came to him and said, hey, can you invent a smog detection system for Southern California? He said, sure, I'll invent that. He said, hey, can you invent a car charging system?
He said, sure, I'll invent that. Sure. Can you invent an electric bike? Sure, I'll invent that. They came to him with all the problems that the world had. He basically rose to the challenge with engineers. We have in our DNA this kind of innovation engine. It so happens he stumbled on, can you make a drone to fly over a hill so we can see the enemy? He said, sure, I can do that. That is what started AV down the defense path. We immediately in the early wars, early Middle East wars, were the ones providing the early drones to them, flying over a hill with somebody looking at things. Things are a lot different today. We have been along for the ride throughout that innovation.
As I said, during these last decades, even just the last decade alone, invested about $3 billion in this product portfolio in terms of CRAD and IRAD and sustaining engineering. We have substantial innovations in all these product categories. I'll talk to that a little bit more later. We also focus on open architectures. We're not trying to close out the competition. We're trying to have open architectures following the U.S. Department of Defense's MOSA standards. Our P550 introduced recently this last year is one of the best examples of how MOSA is probably supposed to work. We believe in having those standards so we can have adaptability as we move forward. This is a really pretty picture of all of our stuff. I won't go through the whole thing.
It shows you that we're going from space to ground to sea with our product portfolios. We're on the edge. We're dominant on the edge. When you need something that's in the battlefield, in the fight, there's no one that has the complete portfolio that we have on the edge when it comes to drones and counter-drones technology, even battlefield communications. We have a strong presence there. We talk about the platforms. We talk about drones and lethal drones and things like that.
We also have a strong software legacy of different solutions from our Kinesis software, which provides command and control, multi-platform command and control to our battlefield operations software called Vigilant Halo, to our vision systems called Spotter Edge, which allows object identification on multiple platforms supplied to many different prime contractors, our Avicor technology, which provides autonomy to, again, a lot of aerial platforms. We have a very substantial investment in software. This is my favorite slide. On one slide, you can see the three primary product categories of precision strike, which is your lethal drones, your Group 1 through 3 UAS drones, and our counter-UAS capabilities. On the left, the precision strike, we start with our Switchblade products, the 600 and 300, which they're the category leaders today. I mean, example, that's easy to say, but we'll really give you an example.
The Ukraine war was not just about getting rid of a lot of our old technology on the battlefield, but also trying all the new stuff. After a year in Ukraine, the U.S. DOD did not have an Army program for precision, for loitering munitions or lethal drones. They came back and said, we're going to have a program. We're going to have a program of record. We're going to pick AeroVironment Switchblade 600 as the first tranche of our new loitering munition program or precision strike program called LASO. We have a Replicator program, which is our showcase of technologies. We're going to start with the Switchblade 600. Kind of validation that on the battlefield, in real-world conditions, the Switchblade is performing very well and really proving its mettle.
On the bottom is our Red Dragon, which recently is Red Dragon, which is a fully autonomous one-way attack drone. By autonomous, I mean you point it in a direction, and it can autonomously find the targets. The final decision to take the target out or not is still in the operator's hands and with a confidence level. In the middle is our Group 1 through 3 UAS. We've been the 800-pound gorilla in Group 1, 2 for two decades. This year, we introduced the P550, a revolutionary Group 2 platform, multi-domain, allows the operators in the field to switch out from reconnaissance to lethal effects in a matter of minutes. For example, it's almost a compliant. The Puma, which is legendary around the world, used heavily in Ukraine still today as their primary air force.
The Jump 20X, the first fully autonomous Group 3 aircraft to be able to land and take off on a moving ship in relatively high sea state, the first, and really getting a lot of traction with the U.S. Navy, the Marine Corps, and obviously our land forces, and most recently won programs of record in Italy and Denmark. On the far right is the counter-UAS solutions. Again, in the middle, the Titan solution, the most fielded counter-UAS RF defeat system in the world is the Titan system. Our Locus system is a laser weapon system, the only fully deployed directed-energy counter-UAS solution. Using lasers to take out drones in the world that is mobile and be able to move on the battlefield. There are some larger ones that are fixed site. This is the only mobile one that is fully deployed.
Freedom Eagle, our entrant into the counter-UAS missile business. The last three, and I'll go quickly because my time's running out, is our space technology business. There on the upper left is the Badger system, which allows a satellite or the ground station to communicate with multiple satellites at a time. Today, it's a one-to-one ratio between the ground station and the satellite. This enables them to have multiple satellites communicate. Again, something that would be critical in a Golden Dome scenario is to have more advanced ground stations. The laser comms, the ability to communicate through lasers, which are more secure with satellites in the GEO area, is another key business that should grow substantially. We have tons of space-qualified hardware, which we, again, sell mostly to prime contractors. We have the ground and maritime robotic solutions.
The Defender system is on a program of record, about almost $100 million. On the far right, Emerging Technologies is really the McCrady works I talked about. If you look at all those products, and as I said earlier, we're fully aligned with and in great position to capture pieces of the Golden Dome program. One-way attack, again, one of the top, I think, five or so priorities of the list was an autonomous one-way attack. The counter-UAS priorities, we all are seeing how important that is, not only in the battlefield, but at the border, critical infrastructure over time. This will be an exponentially growing field. Border security, again, both from a reconnaissance standpoint and from a counter-UAS standpoint. Space technologies, again, everybody knows that space is an important domain for a future fight.
One little kind of tidbit of examples talking about the Switchblade in Ukraine is that we supply, using about $36 million of Switchblade 600s, the Ukrainians were able to destroy over $2.5 billion of Russian equipment. It is because of the Switchblade 600's ability to evade the countermeasures of the Russians successfully. It can lock on visually to a target well beyond the countermeasures of the Russians. Those countermeasures of jamming and comms denied are not effective. It is just going to lock on visually to the target and take it out. The Switchblade is probably second to none in its ability to track a moving target. To wrap it up here, we have a very aligned to our customer priorities. That is the U.S. DOD and our allies. We are right-sized to be the disruptor.
We're going after the right types of programs that make a significant impact to our customers. We're providing leading-edge technologies. We're not something we developed 10 years ago, and we're still selling it. We're on the edge. We are developing category killers as we speak in those areas that we are investing in. We have a proven track record. Nobody can deny that, delivering to the US DOD for 30 years. The recent acquisition even positioned us better for all the DOD priorities, including now counter-UAS and space and cyber. We pride ourselves on having profitable growth, a strong EBITDA percentage. The combination BlueHalo shouldn't change that. Again, even as a $2 billion company, we are very confident of double-digit growth and beyond as we look out the next few years.
If you layer on top of that all that's happening with the Army transformation, the DOD priorities, what's happening around the globe with increasing budgets in NATO, we are very well positioned to have significant growth and double this company in the next few years. That's it for the formal presentation. You made me nervous standing the whole time there. You were ready to take the mic away from me, I think.
Oh, you on the slides.
Okay, so question time.
Yeah, another timely drone-related development that took place last week for Wahid and also Kevin was that Motorola announced that it has reached an agreement to acquire Silvus Technologies for $5 billion. I think this is a company that you guys know very well. Silvus, for those of you in the audience who do not know, specializes in this type of radio frequency networks that allow drones to evade jamming. My question for you, Wahid and Kevin, is do you have your own in-house Silvus-type capabilities? Kevin, you were just discussing how the Switchblade was particularly effective in Ukraine because it was able to avoid being jammed. There were reports over the past two years of how Russia was shooting down like 90% of the drones that came from Ukraine's side.
Your drones seem to be particularly successful at evading these electronic warfare attacks. What are your in-house capabilities that allow you to avoid your drones being jammed?
Sure. Yeah, you got it. You got it. I did my work. Believe it or not, actually, that is a really good example you shared because people do not know that in the small Group 1, 2, 3 UAS, our drone business, AeroVironment's RF radios is by far the most prolific, highly deployed system out there. Those 42,000-plus systems that Kevin talked about, almost 95% or so plus of them have our radios in it. Because when we started developing our drones a decade-plus ago, two decades ago, there was no such company as Silvus or Persistent Systems or others. U.S. DOD wanted us to develop a specific waveform for the communication and controls of drones.
Digital Data Link, right?
Digital Data Link. It's called a DDL, Digital Data Link. It's actually a waveform. Think of it as a 5G or LTE waveform standard for RF communication between a ground station and a drone. The U.S. DOD made it a standard. We gave the license or the technology to them as well. The vast majority of the drones that are out there, which is ours, has that. If you look at based on that, and probably if we make it a separate product by itself, we do not break it down because it's a subsystem that goes into every one of our products, it will be one of the most profitable and a large revenue base for the company, probably more profitable than other things.
The Silvus example is a really good one because it is the first time now, Silvus radios are used for more than just the drones now, but the predominant use of theirs is actually walkie-talkies between ground soldiers and operators in Ukraine. If that business, if we split that up, it should be at least worth that much, if not more, because it is a lot more prevalent and it is capable. We continue to invest in it. At the same time, we have actually stayed, as Kevin said, as an open architecture and platform. We have integrated Silvus radios into our drones when the customer says we should use this versus the other one, including on our Switchblades, including in our other platforms that we have used. We continue to stay open to that.
We're actually good teammates and players together in the market, even though indirectly we somehow compete in this area as well. The answer is yes, we do. We have a lot of expertise in this area. To just fast forward a little bit more, the Badger system that you see, which is really a next-generation phased-array system, is all about RF communication. It's about RF at much, much, much, much longer distances. It's the ability to actually control and communicate to the thousands of the U.S. defense industry, the DOD's and intelligence satellites that we have. That infrastructure is supposedly the second oldest infrastructure in the United States as a whole. I think the nuclear triad is the only one that actually is older. This program was competed. AeroVironment, or AV, now BlueHalo at the time, essentially is wanted.
It should be over $1 billion, $2 billion over the next five years. We want to go as fast as we can. The customer would like us to go faster because that is desperately needed to be upgraded. We are doing.