Corp. said its existing contract with the US Navy for drone speedboats known as GARCs has been modified, increasing its total value to about $350 million and extending its term through June 2027.

Aevex has been enhancing the boats it’s already delivered “with new mission packages” as part of the existing contract, the company said in a statement. The defense technology company made the announcement in response to a Bloomberg report on the US Navy planning no new orders for the boats, formally known as global autonomous reconnaissance crafts.

The Navy’s decision was made due to ongoing performance issues related to limitations to the hardware and the emergence of more suitable alternatives, including cheaper one-way attack drones, a person briefed on the matter said, asking not to be identified discussing private matters. Aevex’s shares sank by a record 33% on the news on Wednesday, wiping out nearly $600 million in market value. They rose 13% on Thursday.

“The business successfully completed its contractual obligation having delivered 325 GARC units to the Navy in 2025,” Aevex said in its statement. “No additional GARC vessels were planned for procurement as the Navy deploys its existing GARCs across multiple different commands and missions.”

RBC Capital Markets analyst Kenneth Herbert described the share decline as a buying opportunity, “but we expect investor skepticism on GARC and concern on 2027 Ukraine backfilling to weigh on the stock.”A Navy spokesperson said it has spent $136.8 million to date on 24 prototypes and 301 GARCs and had gained practical experience from their deployment for training, exercises and operations, adding that this knowledge is helping the Navy accelerate robotic and autonomous systems capabilities. GARCs continue to operate in missions today, the Navy spokesperson said, without addressing the decision not to make additional orders of the boat.

Aevex said the Navy is funding GARC enhancements, including upgrades and mission-specific capabilities. The company said in its statement that it’s separately “progressing” next-generation unmanned surface vessels, including ones known as Chaser and Comet. A person briefed on the matter previously told Bloomberg that Aevex Maritime Systems is planning to upgrade existing GARC platforms to improve resiliency.

Aevex bought GARC manufacturer BlackSea Technologies in September for as much as $650 million. The company’s chief executive officer, Roger Wells, said in the firm’s statement that the “Navy’s continued investment in the GARC fleet, combined with our transition to next-generation platforms, reinforces the strategy behind this acquisition.”Aevex said the Navy’s GARCs are being tasked with new missions including mine countermeasures, a term generally used to describe operations involving the detection and neutralization of explosives. The units are currently conducting such “MCM missions” in the Strait of Hormuz, the company said.

When asked whether GARCs were currently helping US Central Command to clear mines in the Strait of Hormuz, Centcom spokesperson US Navy Captain Tim Hawkins referred Bloomberg to statements made by Centcom Commander Admiral Brad Cooper in August. In them, Cooper said the US had cleared international shipping lanes of mines in the strait using Navy divers, SEALs and air operations. He made no mention of naval vessels.

The GARC platform has evolved since it was earlier envisioned as a remote-control operated ocean-surveying vessel.

Aevex officials said in interviews that the GARC faced some challenges during experimentation, but they said those didn’t necessarily reflect problems with the vessel itself so much as process, testing and integration issues.

The Navy funded roughly 75 engineering change proposals as GARC was being developed to improve performance and reliability, Paul Seiffert, director of Aevex’s unmanned surface vessel programs, said in an interview Wednesday. “Each one of those were either for performance or reliability, making a product better,” he said.

“When you put a lot of hours on something, you have to figure out what’s the mean failure time — what’s the, you know, high-risk parts or components,” Bob Pudney, senior vice president of maritime systems, said in an interview. “I think that’s with any system, and so because we put 25,000 hours on our product, we’ve found what those are.”The GARC’s performance in testing over time has been viewed as a failure, and the Navy has moved on, a defense official familiar with the platform previously told Bloomberg, asking not to be identified speaking unofficially on the matter. The official noted problems with the hardware, software and sensors.

The defense official said the failure doesn’t signal the end of US efforts to foster drone warfare at sea, nor does it mean the end of the Pentagon’s relationship with Aevex, pointing to the company’s ability to leverage its experience with GARC and add investment capital to support the development of new platforms for the Navy.

BlackSea was among three winners this month of a Navy prize challenge for its demonstrations in finding and destroying mines using autonomous technology, separate from the GARC. On Friday, GARC was still listed as one of the surface warfare programs under the Navy’s new effort on robotic and autonomous systems that was established to speed adoption.