MRCY

Mercury Systems, Inc.

Next est. report 2026-11-03 · AMC

Fiscal Spend '25: US Defense Modernization & Shipbuilding Modern Warfare '26: Defense Electronics & Components Modern Warfare '26: Tier 1 Suppliers Modern Warfare '26: Warfare in Iran Space Supply Chain '26: Space-Grade Chips & Electronics

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Overview

Mercury Systems, Inc. provides advanced components, modules, and integrated subsystems for aerospace and defense. The company delivers mission-critical processi

Mercury Systems, Inc. provides advanced components, modules, and integrated subsystems for aerospace and defense. The company delivers mission-critical processing at the edge, including common processing architecture, enabling electronic warfare, radar, and AI across the battle space. Approximately 86% of its FY26 revenue is domestic, serving defense contractors and global allies with sophisticated solutions for around 300 programs.

Search Keywords Brand Product

Common Processing Architecture
CPA solutions
secure chiplets
AI-enabled edge computing
ruggedized servers
digital radio frequency memory
DRFM units
radar environment simulation
signals intelligence payloads
electro-optical/infrared technologies
EO/IR
onboard UAV processor systems
BuiltSECURE Servers
Mission Computing Product Line
Mixed Signal Processing Products
FPGA Processor Boards
Rugged Rack Servers
Small Form Factor Systems
OpenVPX Embedded Processing
Airborne and Mission Computers
SiP and MCM
aerospace defense electronics
mission-critical processing
electronic warfare
EW
radar systems
missile defense
space programs
C4I systems
AI in defense
defense supply chain optimization
backlog conversion
defense technology
warfighter at the edge

Search Keywords Event Phrases

Mercury Systems earnings
MRCY Q4 results
Palantir partnership Mercury Systems

Search Keywords Policy Regulatory

defense budgets
National Defense Authorization Act
NDAA
Golden Dome initiative
LTAMDS program
defense spending priorities

What They Do (Plain English & Analogies): Mercury Systems is like the specialized "brain" and "nervous system" provider for advanced military equipment. They create super-tough, super-fast computers, communication devices, and electronic components that help things like fighter jets, missiles, radar systems, and satellites see, think, and act in real-time, even in extreme conditions. They focus on making sure critical information is processed securely and quickly right where it's needed, often at the "edge" of a battlefield or in space. They're also working on integrating artificial intelligence (AI) directly into these defense systems to enable smarter, more autonomous operations, providing "mission dominance for the warfighter at the edge".
Very Brief History: Established in 1981 as Mercury Computer Systems, Inc., the company went public on the Nasdaq in 1998. It officially rebranded to Mercury Systems, Inc. in November 2012, reflecting its broader focus on advanced components, modules, and integrated subsystems for the aerospace and defense industries.
"Street Stereotype": Mercury Systems is generally perceived as a specialized, pure-play defense electronics supplier, known for its high-performance, secure, and ruggedized processing solutions for mission-critical applications in aerospace, defense, and space. The company is currently seen by investors and analysts as executing a turnaround, transitioning from a heavy research and development (R&D) focus to higher-volume production, with an emphasis on improving margins and free cash flow.
Subsidiaries On Linked In*: Mercury Mission Systems, LLC — A legal subsidiary, though Mercury Systems internally consolidated its divisions into a unified structure in January 2024. This entity is still mentioned as a division providing specific technologies.
Pentek Systems, Inc. — A legal subsidiary acquired by Mercury Systems.
Customer Sectors & Example Clients: Mercury Systems primarily serves the aerospace and defense industries, including large defense prime contractors, U.S. government agencies and laboratories, and allied international governments. They support approximately 300 programs for over 25 prime customers. Specific top defense prime contractors that are clients include Raytheon Company (RTX), The Boeing Company, Lockheed Martin Corp, L3 Technologies Inc., and Northrop Grumman Systems Corporation. They also serve direct government agencies such as the Air Force, Army, Navy, and Special Operations Command.
New Customers / Segments They'Re Targeting: Mercury Systems is targeting new program opportunities, particularly within their Common Processing Architecture (CPA) area, by developing smaller form factors that can fit on different platforms, potentially opening up new markets and additional total addressable market (TAM). They aim to penetrate new markets where security requirements are necessary, leveraging their unique CPA technology and security apparatus. The company is also seeing increased customer interest in securing memory to support future production requirements across a number of advanced defense platforms.
Supply Chain And Sourcing Geographies: Mercury Systems operates a high-reliability, low-volume, high-complexity electronics supply chain, sourcing long-lead semiconductors and specialty components. The company prioritizes local and domestic suppliers whenever possible. Their manufacturing and engineering sites are predominantly in the United States, including locations in Massachusetts (Andover, Chelmsford), New Hampshire (Hudson), Arizona (Phoenix, Mesa), California (Cypress, Fremont, Oxnard, San Jose, Torrance), Alabama (Huntsville), Florida (Gainesville, Gulf Breeze), Indiana (Lafayette, West Lafayette), Maryland (Lexington Park), and New Jersey (Princeton, Upper Saddle River, West Caldwell). They also have an EMEA Headquarters in Switzerland. The company recently announced a strategic agreement with Palantir to leverage AI software to enhance material planning and factory operations, aiming to improve backlog conversion and deliver critical technologies faster. They are also making targeted investments in inventory, automation, and factory optimization to drive organic growth. A temporary slowdown in international deliveries was noted due to outsourcing manufacturing to a contract manufacturer, which they expect to resolve over the next couple of quarters.
Sales Geographies And Expansion Plans: Mercury Systems primarily sells its products in the United States, which represented 85.8% of its FY26 revenue. The company also has a global presence, with solutions deployed in 35 countries across Europe and the Asia Pacific regions, serving allied international markets. While international sales were down around 15% in FY26 due to a temporary slowdown in deliveries from an outsourced manufacturing partner, the company expects these issues to be worked out over the next couple of quarters, noting strong international demand and backlog. Management is optimistic about potential tailwinds from increased global defense budgets, which could lead to increased demand and bookings from existing and potentially new allied international customers.
How Key Themes May Help/Hurt: The buildout of the 'Modern Warfare '26: Warfare in Iran' theme, alongside related defense themes, is largely beneficial for Mercury Systems. Escalating geopolitical tensions and increased global defense budgets are driving a surge in demand for advanced military capabilities, directly benefiting Mercury Systems' offerings in electronic warfare, radar, missile defense, space, and common processing architecture. The rapid technological redefinition of warfare, emphasizing AI and secure processing at the edge, aligns perfectly with Mercury's focus on providing compute infrastructure for AI distributed across the battle space and secure chiplets. Increased federal funding for defense modernization, including missile defense and space, translates to higher demand for Mercury's components and subsystems. Strong bookings in space programs and the company's focus on secure CPA technology position them well for space-grade electronics. However, persistent global supply chain constraints, despite Mercury's optimization efforts, could still pose challenges to production and delivery timelines. Potential legislative delays in budget allocation or shifts in defense priorities, though mitigated by Mercury's record backlog, could impact contract timing. The temporary slowdown in international deliveries due to outsourcing manufacturing also highlights execution risks.

3 Main Long-Term Bull Details

Record Bookings and Backlog with Enhanced Visibility: Mercury Systems achieved record Q4 FY26 bookings of $660 million (up 93.1% year-over-year) and record full-year bookings of $1.5 billion (up 49.8% year-over-year), resulting in a record total backlog of over $1.9 billion and a record next 12-month backlog of $1 billion. This provides enhanced multi-year visibility and a strong foundation for sustained organic revenue growth, with the company increasing its targeted organic revenue growth to low double digits.
Strategic Positioning in Critical Defense Priorities and AI Integration: The company's strategic positioning is closely aligned with critical global defense priorities, including common processing architecture (CPA), effectors, airborne applications, space, and missile defense. Mercury Systems is uniquely positioned with its secure CPA solutions, which saw record bookings, and is actively leveraging AI software through a partnership with Palantir to enhance operations and deliver critical technologies to the warfighter faster. This focus on AI-enabled edge computing and secure processing addresses a rapidly expanding market.
Demonstrated Operational Excellence and Margin Expansion: Mercury Systems has shown solid execution, leading to FY26 organic revenue growth of 7.9% and adjusted EBITDA growth of 25.7%, with full-year adjusted EBITDA margin increasing by 217 basis points year-over-year to 15.3%. The company is focused on converting lower-margin backlog, securing new bookings with target margins, and driving efficiencies through automation and site consolidation, aiming for adjusted EBITDA margins in the low to mid-20s and improved free cash flow conversion.

3 Main Long-Term Bear Details

Free Cash Flow Conversion Challenges and Investment Needs: While the company is making progress on free cash flow drivers, the FY27 outlook anticipates free cash flow conversion beneath its 50% target, approaching 35%, with a larger outflow expected in Q1 due to targeted investments in inventory, automation, and factory optimization to support growth. This indicates that significant capital expenditure and working capital demands are still required to scale new programs, potentially delaying the full realization of free cash flow targets.
Gradual Margin Expansion and Execution Risk: Despite progress, the company expects a gradual increase in adjusted EBITDA margin throughout FY27, with Q1 expected to be in line with Q1 FY26, rather than a sharp seasonal step-up. Achieving the targeted low to mid-20% adjusted EBITDA margins will require sustained execution on backlog conversion, operational efficiencies, and organic growth, suggesting a longer, more gradual path to full margin realization.
Dependence on Defense Budgets and Program Execution: Mercury Systems' business is ultimately tied to the funding and execution of prime defense contractor programs and global defense budgets. While current demand signals are strong, potential legislative delays in budget allocation, political volatility, shifts in defense priorities, or unforeseen program cancellations could impact demand and the timing of contract awards, despite the company's record backlog. Additionally, a temporary slowdown in international deliveries due to outsourcing manufacturing highlights execution risks in scaling new operational models.

Competitors And Differentiation: Mercury Systems differentiates itself in the market, particularly with its common processing architecture (CPA), where it claims to be the only provider capable of meeting certain security standards, thus creating a "nice moat around this business". This unique security apparatus allows them to penetrate new markets, especially in smaller form factors, and get on additional platforms where security requirements are paramount. While specific competitors are not named in the transcript, external sources indicate competitors include major defense contractors like Raytheon Technologies, Lockheed Martin, Northrop Grumman, BAE Systems, and specialized niche players such as Curtiss-Wright, Leonardo DRS, and Comtech Telecommunications Corp..
Recent Performance & What The Market'S Focused On: Mercury Systems delivered strong Q4 FY26 results, ahead of expectations, with record bookings of $660 million, record backlog of over $1.9 billion, record revenue of $290 million, and the highest adjusted EBITDA margin of the year at 16.7%. Full-year FY26 saw 7.9% organic revenue growth and 25.7% adjusted EBITDA growth, with total revenue of $983.6 million. The company reduced net debt by 19.5% year-over-year to $227 million. The market is focused on Mercury Systems' ability to sustain its organic growth trajectory, convert its record backlog efficiently, and continue expanding its adjusted EBITDA margins towards the low to mid-20s target. Investors are also closely watching the free cash flow conversion, especially given the anticipated lower conversion in FY27 due to strategic investments. The potential upside from market tailwinds, such as increased defense budgets and the materialization of multi-year customer commitments, particularly in areas like Common Processing Architecture (CPA), effectors, airborne applications, space, and missile defense, and the impact of the Palantir partnership, are also key areas of market interest. The company's outlook for FY27 includes revenue growth approaching double digits (total revenue approaching $1.1 billion) and adjusted EBITDA approaching $200 million.

Revenue Segments And Estimated Mix: {"segments":[{"segment_name":"Domestic Revenue","estimated_mix":"85.8%","source_or_comment":"FY26 transcript","yoy_or_trend_comment":"Grew 13% organically year over year in FY26."补偿: 3},{"segment_name":"International Revenue","estimated_mix":"14.2%","source_or_comment":"Inferred from FY26 domestic revenue","yoy_or_trend_comment":"Down around 15% year over year in FY26, temporary slowdown expected to unwind."补偿: 3},{"segment_name":"Common Processing Architecture (CPA)","estimated_mix":"Significant segment","source_or_comment":"Q4 FY26 transcript","yoy_or_trend_comment":"Record CPA bookings in Q4 FY26 and for the full year."补偿: 3},{"segment_name":"Effectors","estimated_mix":"Significant segment","source_or_comment":"Q4 FY26 transcript (bookings driver)","yoy_or_trend_comment":"Strong production awards in Q4 FY26."补偿: 3},{"segment_name":"Airborne Applications","estimated_mix":"Significant segment","source_or_comment":"Q4 FY26 transcript (bookings driver)","yoy_or_trend_comment":"Strong production awards in Q4 FY26."补偿: 3},{"segment_name":"Space","estimated_mix":"Significant segment","source_or_comment":"Q4 FY26 transcript (bookings driver)","yoy_or_trend_comment":"Strong production awards in Q4 FY26."补偿: 3},{"segment_name":"Missile Defense","estimated_mix":"Significant segment","source_or_comment":"Q4 FY26 transcript (bookings driver)","yoy_or_trend_comment":"Strong production awards in Q4 FY26."补偿: 3},{"segment_name":"Munitions","estimated_mix":"Significant segment","source_or_comment":"Q4 FY26 transcript (potential tailwind)","yoy_or_trend_comment":"Potential for higher demand."补偿: 3}]}
Product Brands: Common Processing Architecture
RFS1140
BuiltSECURE™ Servers
Mission Computing Product Line
Mixed Signal Processing Products
FPGA Processor Boards
Rugged Rack Servers
Small Form Factor Systems
OpenVPX Embedded Processing
Airborne and Mission Computers
SiP and MCM

Bull / Bear Details

Mercury Systems, a critical defense electronics supplier, is demonstrating robust operational momentum, evidenced by record Q4 FY26 bookings, backlog, and reven

Thesis

Mercury Systems, a critical defense electronics supplier, is demonstrating robust operational momentum, evidenced by record Q4 FY26 bookings, backlog, and revenue, alongside significant adjusted EBITDA margin expansion. The company has increased its organic growth outlook to low double digits, driven by successful program transitions and strong demand in common processing architecture. Enhanced multiyear visibility and potential tailwinds from global defense budgets and AI integration further bolster its outlook, despite near-term free cash flow investments. (Updated: 2026-08-20)

Bull case

Mercury Systems achieved record Q4 FY26 bookings of $660 million (up 93.1% YoY) and a 2.3 book-to-bill, resulting in a record backlog of over $1.9 billion. This strong demand, particularly in Common Processing Architecture (CPA), provides enhanced multiyear visibility into FY27 and FY28, underpinning an increased outlook for low double-digit organic revenue growth.
The company demonstrated significant adjusted EBITDA margin expansion, with full-year FY26 adjusted EBITDA growth of 25.7% and a 217 basis point margin increase to 15.3%. Management expects margins to generally increase through FY27, reaching the low to mid-20s target by year-end, driven by converting higher-margin backlog and operational efficiencies, including a strategic AI partnership with Palantir.
Mercury Systems is strategically positioned with its Common Processing Architecture (CPA), which saw its largest-ever bookings quarter and is expanding into smaller form factors and AI-enabled edge computing. The company anticipates significant upside from un-factored market tailwinds, including increased global defense budgets, multiyear customer commitments in munitions, missile defense, and space.

Bear case

Despite strong overall performance, Mercury Systems anticipates FY27 free cash flow conversion to be beneath its 50% target, approaching 35%, with Q1 FY27 expected to be a larger outflow due to targeted investments in inventory to support growth. While net debt is down, continuous focus on cash conversion efficiency and working capital management remains critical.
While margins are expanding, the Q4 FY26 adjusted EBITDA margin of 16.7% was lower than the prior year's 18.8%. Management indicated a gradual increase in margins throughout FY27, rather than a sharp step-up, suggesting a sustained execution effort is required to consistently achieve the targeted low to mid-20% adjusted EBITDA margins.
International sales were down approximately 15% year-over-year in FY26, attributed to a temporary slowdown in deliveries due to outsourcing manufacturing to a contract manufacturer. Although expected to resolve, this highlights potential execution risks in supply chain transitions and geographic market volatility, despite strong domestic growth.

Bull / Bear Case

Bear Case: Despite strong bookings, Mercury Systems anticipates FY27 free cash flow (FCF) conversion to be beneath its 50% target, approaching 35%, with a larger outflow expected in Q1 FY27 due to targeted investments in inventory, automation, and factory optimization. This indicates ongoing capital demands and potential delays in fully realizing FCF targets. The Q4 FY26 adjusted EBITDA margin of 16.7% was lower than the prior year's 18.8%, and management expects only a gradual increase throughout FY27, suggesting sustained execution effort is required to consistently achieve targeted margins. Furthermore, international sales were down approximately 15% year-over-year in FY26 due to a temporary slowdown from outsourcing manufacturing, highlighting potential execution risks in supply chain transitions and geographic market volatility.
Bull Case: Mercury Systems demonstrates robust operational momentum, highlighted by record Q4 FY26 bookings of $660 million, a 2.3 book-to-bill ratio, and a record backlog exceeding $1.9 billion. This provides strong multiyear visibility into FY27 and FY28, underpinning an increased outlook for low double-digit organic revenue growth. The company is strategically positioned in critical defense priorities, particularly with its Common Processing Architecture (CPA), which saw its largest-ever bookings quarter and is expanding into smaller form factors and AI-enabled edge computing. Management expects significant adjusted EBITDA margin expansion, with full-year FY26 adjusted EBITDA growth of 25.7% and a 217 basis point margin increase to 15.3%, aiming for low to mid-20s by FY27 year-end through higher-margin backlog conversion and operational efficiencies, including a strategic AI partnership with Palantir.
More Compelling & Why: Bear. MRCY's current Price-to-Sales (P/S) ratio of approximately 6.9x is significantly above its historical median of 4.06x and an estimated fair P/S of 2x, suggesting the stock is overvalued. The anticipated Q1 FY27 free cash flow outflow and projected FY27 FCF conversion of only 35% (below the 50% target) indicate that the market is pricing in substantial future success that still carries execution risk and significant investment needs. My view would flip if MRCY consistently demonstrates FCF conversion above 45% and achieves sustained adjusted EBITDA margins in the low 20s, coupled with a more reasonable valuation closer to its historical P/S median.

Key Factors5 rows

Key Factor	Why It Matters	What To Watch	What It Signals	Where/How To Track	Free Alt Data	Paid Alt Data
Free Cash Flow (FCF) Generation & Net Working Capital Reduction	Improved free cash flow and reduced net working capital are crucial for demonstrating sustainable cash conversion, balance sheet flexibility, and the company's ability to fund organic growth and debt reduction, which are key aspects of the value creation opportunity.	Quarterly Free Cash Flow (FCF) amount and net working capital balance. Specifically, watch for FCF to improve significantly after the anticipated Q1 FY27 outflow and for continued year-over-year reduction in net working capital below $431 million (Q4 FY26).	FCF returning to positive territory and showing sequential improvement after Q1 FY27, coupled with continued year-over-year reduction in net working capital, is a bullish signal.	Company earnings releases and conference calls (next expected in Q1 FY27, around November 2026), SEC filings (10-Q), investor relations section of mrcy.com.		FactSet: Free cash flow and working capital trends; CreditSights: Debt and liquidity analysis.
Adjusted EBITDA Margin Expansion	Consistent expansion of adjusted EBITDA margin demonstrates the company's operational efficiency improvements, successful conversion of higher-margin backlog, and progress towards its long-term profitability targets, validating the turnaround thesis.	Quarterly adjusted EBITDA margin percentage, gross margin percentage, and operating expenses as a percentage of sales. Specifically, watch for sequential increases in adjusted EBITDA margin throughout FY27, moving towards the high teens and eventually the low to mid-20s target.	Adjusted EBITDA margin consistently increasing quarter-over-quarter in FY27, particularly exceeding Q4 FY26's 16.7% and progressing towards the high teens, is a bullish signal.	Company earnings releases and conference calls (next expected in Q1 FY27, around November 2026), SEC filings (10-Q), investor relations section of mrcy.com.		Refinitiv Eikon: Consensus adjusted EBITDA margin forecasts; S&P Capital IQ: Historical and projected margin analysis.
Materialization of Unincorporated Tailwinds (Golden Dome, LTAMDS, Palantir Partnership)	These represent significant potential upside not yet factored into the company's outlook, offering substantial opportunities for accelerated organic growth, increased bookings, and enhanced profitability, further strengthening the investment thesis.	Announcements of new multiyear customer commitments, significant follow-on orders, or firm bookings explicitly tied to 'Golden Dome', LTAMDS, munitions, space, or missile defense programs. Updates on the financial impact (revenue, margin) of the Palantir partnership.	Announcement of firm bookings or revenue contributions from these previously un-factored tailwinds or quantifiable positive financial impacts from the Palantir partnership is a bullish signal.	Company press releases, earnings conference calls, investor presentations, defense industry publications (e.g., Defense News, C4ISRNET), US Department of Defense contract announcements, investor relations section of mrcy.com.	USASpending.gov: Government contract awards for 'Golden Dome,' 'LTAMDS,' or 'missile defense' to Mercury Systems or its prime contractors; Defense News: Articles on defense budget allocations for these programs.	GovWin IQ: Contract intelligence for Golden Dome, LTAMDS, and related programs; AlphaSense: Keyword searches in defense industry reports for 'Mercury Systems Palantir impact'.
Bookings and Book-to-Bill Ratio	Strong bookings and a high book-to-bill ratio are leading indicators of future revenue and backlog conversion, reflecting robust customer demand and enhanced visibility, which are critical for the company's organic growth strategy.	Future quarterly bookings value, book-to-bill ratio, and sequential/year-over-year growth in next 12-month backlog. Specifically, watch for bookings to consistently exceed prior quarter records and a book-to-bill ratio above 1.0.	Bookings consistently exceeding $660 million (Q4 FY26 record) and a book-to-bill ratio consistently above 1.0 (especially above 2.0) is a bullish signal, indicating sustained strong demand and future revenue growth.	Company earnings releases and conference calls (next expected in Q1 FY27, around November 2026), SEC filings (10-Q), investor relations section of mrcy.com.	USASpending.gov: Government contract awards for 'Mercury Systems' or 'MRCY' exceeding $X million.	Bloomberg Terminal: Analyst consensus estimates for bookings; GovWin IQ: Government contract awards and pipeline analysis for defense electronics.
Common Processing Architecture (CPA) Program Wins/Expansion	Continued success in securing new CPA program awards and expanding into new form factors validates Mercury's technological differentiation, opens new total addressable markets, and drives organic growth in a critical defense electronics segment.	Announcements of new CPA-leveraged program awards, details on expansion into smaller form factors or secure chiplets, and any specific revenue contributions or pipeline updates related to CPA.	New significant CPA contract awards or successful deployment of smaller form factor CPA on new platforms is a bullish signal.	Company press releases, earnings conference calls, investor presentations, industry news (e.g., Defense News, C4ISRNET), investor relations section of mrcy.com.	Defense News, C4ISRNET: Articles on new defense programs, AI integration, or secure processing; Google Trends: 'Mercury Systems CPA' or 'secure chiplets defense'.	GovWin IQ: Contract awards and pipeline for secure processing and AI in defense; Thinknum: Job postings mentioning 'CPA' or 'secure processing' at Mercury Systems.

Key Reported Metrics, Reratings Triggers & Results3 rows

Strong bookings are a leading indicator of future revenue and backlog conversion, reflecting robust customer demand and the potential for upside from defense bu

Upcoming print · 2026-11-03

Key reported metrics
Metric	Last period	Why it matters
Bookings Growth	$660 million (93.1% y/y growth)	Strong bookings are a leading indicator of future revenue and backlog conversion, reflecting robust customer demand and the potential for upside from defense budget tailwinds. Continued strong bookings will reinforce future visibility and growth prospects.
Adjusted EBITDA Margin	$49 million (-3.92% y/y growth)	This metric is crucial for assessing the company's operational efficiency and profitability improvements, indicating progress towards its long-term target margins. Management expects a gradual increase throughout FY27, making the next quarter's performance key.
Organic Revenue Growth	$290 million (6.1% y/y growth)	This metric directly reflects Mercury Systems' ability to convert its record backlog into sales and demonstrates the success of its transition from development to higher-rate production programs, validating the company's increased FY27 outlook and growth strategy.

Last reported · 2026-08-18

Key reported metrics			Rerating thresholds			Earnings results
Metric	Last period	Why it matters	What's needed for rerating	Rerating context	Earnings date	Actual reported	Hit target?	Notes
Bookings Growth	73.7%	Strong bookings and a high book-to-bill ratio are leading indicators of future revenue and backlog conversion, reflecting robust customer demand and the potential for upside from defense budget tailwinds.	For Mercury Systems (MRCY) to rerate higher, its Q4 FY26 bookings need to be the strongest of the year, exceeding the Q3 FY26 record of $348.3 million. Additionally, the book-to-bill ratio should be greater than 1.48, and the year-over-year bookings growth rate for Q4 FY26 should be at least comparable to the prior period's 73.7%, or ideally show further acceleration.	Sustained high bookings growth and a strong book-to-bill ratio validate Mercury Systems' investment thesis of robust customer demand and successful transition to higher-rate production. This signals strong future revenue visibility, operational efficiency, and potential for continued margin expansion, which are key factors investors are watching for to drive a positive rerating.	2026-08-18	$660 million (93.1% y/y growth)	Yes	Mercury Systems reported record bookings of $660 million for Q4 FY26, which was nearly double the previous record and significantly exceeded the Q3 FY26 record of $348.3 million. The year-over-year growth of 93.1% also surpassed the prior period's 73.7%, and the book-to-bill ratio was 2.3, well above the 1.48 trigger. This strong performance was highlighted as a key positive in the earnings call, reflecting robust demand across the portfolio.
Adjusted EBITDA (YoY Growth Rate)	46%	This metric is crucial for assessing the company's operational efficiency and profitability improvements, indicating progress towards its long-term target margins and signaling effective cost management and operating leverage.	For Mercury Systems' stock to rerate higher, the Adjusted EBITDA (YoY Growth Rate) for Q4 FY26 needs to be above 46%. This would demonstrate sustained, exceptional profitability expansion, defying potential expectations of a slowdown following the acceleration of approximately $15 million of Adjusted EBITDA from Q4 to Q3 FY26, and would surpass the already strong 46% growth reported in Q3 FY26.	Achieving an Adjusted EBITDA (YoY Growth Rate) above 46% would validate Mercury Systems' operational efficiency and successful conversion of higher-margin backlog. It would signal sustainable, accelerated profitability expansion, reinforcing the bullish investment thesis and driving a positive re-rating of the stock's valuation.	2026-08-18	$49 million (-3.92% y/y growth)	No	Adjusted EBITDA for Q4 FY26 was $49 million, a decrease from $51 million in the same quarter last year, resulting in a year-over-year decline of 3.92%. This missed the rerating trigger of above 46% year-over-year growth. While full-year adjusted EBITDA grew by 25.7% to $150 million, the quarterly performance did not show the accelerated expansion required for a rerating.
Organic Revenue Growth	11.5%	This metric directly reflects the company's ability to convert its record backlog into sales and demonstrates the success of its transition from development to higher-rate production programs, validating its growth strategy.	For Mercury Systems (MRCY) to rerate higher, the company's Organic Revenue Growth for Q4 FY26 needs to be at least 12% year-over-year. This would demonstrate continued strong execution and a successful transition of development programs to higher-rate production, exceeding the robust 11.5% organic growth reported in Q3 FY26 and significantly outperforming current analyst expectations of a 3% revenue decline for the quarter.	Achieving organic revenue growth of at least 12% would validate Mercury Systems' ability to convert its record backlog into sales and successfully transition development programs to production. This sustained and accelerated growth would reinforce the bullish investment thesis, signaling strong operational momentum and progress towards long-term targets, which could lead to a higher valuation multiple, especially given the current bearish analyst revenue estimates.	2026-08-18	$290 million (6.1% y/y growth)	No	Mercury Systems reported Q4 FY26 revenue of nearly $290 million, representing 6.1% organic growth year-over-year. This fell short of the rerating trigger of at least 12% organic revenue growth. Despite being a record quarter for revenue, the growth rate did not accelerate beyond the prior quarter's 11.5% as required for a rerating.

Key Questions

Will Mercury Systems successfully execute its plan to increase adjusted EBITDA margins throughout FY27, moving from the high teens towards its low to mid-20% ta

Will Mercury Systems successfully execute its plan to increase adjusted EBITDA margins throughout FY27, moving from the high teens towards its low to mid-20% target by year-end, validating operational efficiencies and the conversion of higher-margin backlog?

Question 2: Beyond the increased FY27/FY28 organic revenue outlook, will Mercury Systems convert the significant potential tailwinds (e.g., Golden Dome, LTAMDS, Palantir partnership, multi-year commitments) into firm bookings and accelerated revenue growth, providing upside to current guidance and further validating its long-term growth strategy?
Question 3: Can Mercury Systems manage the anticipated Q1 FY27 free cash outflow and subsequently improve free cash flow conversion throughout the year, approaching its 35% FY27 target and demonstrating a clear path back to the 50% target in FY28, despite planned investments in inventory?

Earnings Transcript Summary2 rows

2026-08-18 · 2026Q4 Earnings Call

3 Things Management Is Most Focused On	Call Takeaway & Tone	Prior Quarter'S Y/Y Growth By Segment	3 Things Analysts Most Pressed On (And Mgmt Responses)	Revenue Segments
3 Things Management Is Most Focused On1. Performance Excellence and Backlog Conversion: Management is focused on sound execution on development programs, delivering for customers, scaling efficiently on numerous programs transitioning to higher volume production, and improving backlog conversion. This is evidenced by record quarterly revenue and the highest overtime revenue in 15 quarters, driven by better alignment of the supply chain. 2. Driving Organic Growth: Management is prioritizing organic growth through increased volume on existing production programs, the transition of development programs to production, and capitalizing on potential market tailwinds. This focus resulted in record bookings of $660 million (up 93.1% year-over-year) and a record backlog of over $1.9 billion, leading to an increased outlook for organic growth. 3. Margin Expansion and Free Cash Flow: Management is committed to progressing toward targeted EBITDA margins in the low to mid-20s and improving free cash flow. This involves backlog margin expansion, ongoing initiatives to simplify, automate, and optimize operations, and driving organic growth to increase positive operating leverage, as well as reducing net debt and improving net working capital.	Call Takeaway & ToneThe overall takeaway from Mercury Systems' Q4 FY26 earnings call was highly positive and confident. The company delivered results ahead of expectations, achieving record bookings, backlog, and revenue, along with the highest EBITDA margin of the year and robust free cash flow. Management expressed strong optimism about enhanced visibility into FY27 and FY28, driven by solid execution and strong demand signals, leading to an increased outlook for organic growth. The tone was upbeat, emphasizing the strong foundation, the benefits of increased backlog for planning and optimization, and the significant potential for future upside from market tailwinds and operational improvements not yet factored into the guidance.	Prior Quarter'S Y/Y Growth By SegmentFor Q3 FY26, overall organic revenue was up 11.5% year-over-year. Domestic revenue generated 17% year-over-year growth. Specific year-over-year growth percentages for international revenue or overtime revenue were not detailed in the Q3 FY26 earnings reports found.	3 Things Analysts Most Pressed On (And Mgmt Responses)1. FY27 Margin Progression: Analysts questioned the expected gradual increase in margins throughout FY27, with a stronger second half. Management responded that this is a continuation of burning down lower-margin backlog and bringing in new bookings aligned with their target margin profile, expecting to operate in line with their target by the end of FY27. 2. Conservatism of FY27/FY28 Outlook and Unrecognized Tailwinds: Analysts pressed on whether the increased FY27 revenue outlook reflected recent large agreements or broader market tailwinds, and why potential upsides weren't fully incorporated. Management clarified that the outlook is largely based on existing backlog and does not yet include significant potential tailwinds from increased production quantities, new multi-year customer commitments (e.g., Golden Dome, LTAMDS), or benefits from initiatives like the Palantir partnership and other automation efforts. 3. International Sales Decline and Supply Chain Health: Analysts inquired about the year-over-year decline in international sales and the health of the supply chain. Management attributed the international decline to a temporary slowdown in deliveries due to outsourcing manufacturing to a contract manufacturer, which they expect to resolve in a couple of quarters. Regarding the supply chain, they noted strong progress in aligning it with deliveries, leading to record overtime revenue, and highlighted targeted investments in inventory and automation to further support growth.	Revenue SegmentsFor Q4 FY26, total organic revenue was up 6.1% year-over-year. For the full year FY26, total organic revenue grew 7.9% year-over-year. Domestic revenue, representing 85.8% of FY26 revenue, grew 13% organically year-over-year. International sales were down around 15% year-over-year. Overtime revenue was up 23.6% year-over-year.

2026-05-05 · 2026Q3 Earnings Call

3 Things Management Is Most Focused On	Call Takeaway & Tone	Prior Quarter'S Y/Y Growth By Segment	3 Things Analysts Most Pressed On (And Mgmt Responses)	Revenue Segments
3 Things Management Is Most Focused On1. Performance Excellence: Management is focused on sound execution of development programs, accelerating deliveries for customers, and ramping up production for programs transitioning to higher volumes. This focus enabled the acceleration of approximately $25 million of revenue, $15 million of adjusted EBITDA, and $25 million of cash from Q4 to Q3. 2. Expanding Margins: A key focus is progressing towards targeted adjusted EBITDA margins in the low to mid-20% range. This is driven by converting lower-margin backlog and securing new bookings with target margin profiles, simplifying and optimizing operations, and increasing positive operating leverage through organic growth. 3. Driving Organic Growth: Management aims to achieve organic growth through increased volume on existing production programs, the transition of development programs to production, potential upside from customer-driven acceleration and increased quantities, and winning new development programs. Record bookings of $348.3 million and a record backlog approaching $1.6 billion support this priority.	Call Takeaway & ToneThe overall takeaway from Mercury Systems' Q3 FY26 earnings call was highly positive. The company exceeded expectations with robust organic revenue growth of 11.5% year-over-year and significant adjusted EBITDA margin expansion of 360 basis points. Management highlighted record bookings and backlog, driven by the successful transition of development programs to production and strong customer demand across a diversified portfolio. The tone was confident and optimistic, with management raising their FY26 outlook for revenue growth (approaching mid-single digits) and adjusted EBITDA margin (mid-teens). They expressed enthusiasm for continued progress towards long-term financial targets and the potential for additional market tailwinds from increased global defense budgets and domestic priorities like Golden Dome.	Prior Quarter'S Y/Y Growth By SegmentFor Q2 FY26, Mercury Systems reported overall revenue of $233 million, which was a 4.4% increase compared to the prior year. Specific year-over-year growth percentages for individual segments (like domestic, space, radar, etc.) were not detailed in the Q2 FY26 earnings reports found.	3 Things Analysts Most Pressed On (And Mgmt Responses)1. Implied Q4 Margins and FY27 Outlook: Ken Herbert questioned the more modest implied margin expansion for Q4 FY26 compared to typical seasonal step-ups and the outlook for FY27 margins. Management (Dave Farnsworth) responded that the business linearity has flattened, with a stronger Q3, leading to a more gradual margin increase in Q4 rather than a sharp step-up from a lower base. Bill Ballhaus added that this reflects a smooth progression from development to production, resulting in consistent top-line growth and accelerating bottom-line performance, supported by 17% domestic growth and a 10% sequential increase in 12-month backlog. 2. Specific Programs Driving Strong Bookings: Ken Herbert asked for details on particular programs within missiles, C4I, and space that contributed significantly to the strong bookings. Management (Bill Ballhaus) emphasized the diversification of their portfolio, stating no single program accounts for more than 10% of revenue. He attributed the strong bookings to broad demand across space, C4I, and missile defense, reflecting the transition from development to follow-on production orders. Dave Farnsworth reiterated that all areas are seeing solid activity, aligning with market trends and increased production on existing programs. 3. Q4 Revenue Guide and Unbilled Receivables: Pete Skibitski inquired about the implied year-over-year decline in Q4 revenue despite the positive tone and raised guidance, and the modest decrease in unbilled receivables. Management (Bill Ballhaus) clarified that adjusting for a $30 million acceleration from Q1 FY26 into Q4 of the prior year, the year-over-year growth comparison for Q4 aligns with the steady progression seen in Q1-Q3. Regarding unbilled receivables, Dave Farnsworth explained that while they are focused on reducing older balances, the ramp-up in new production activities introduces new unbilled balances, creating a timing dynamic. He highlighted that net working capital is down year-over-year despite revenue growth, indicating improved efficiency.	Revenue SegmentsOverall organic revenue was up 11.5% year-over-year. Domestic revenue, representing approximately 88% of Q3 revenue, generated 17% year-over-year growth. Management also noted that space, radar, and other sensors and effectors were up significantly, though specific percentages for these sub-segments were not provided.

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2026-08-18

About Expanding Eligible Market	About Competition	About The Broader Industry	Where Things Are Headed	Updates On Theme	Broader Themes Emerging	Bullish-Leaning Quotes (Short)	Bearish-Leaning Quotes (Short)	Hiring
About Expanding Eligible MarketMercury Systems anticipates near-term organic growth from increased volume on existing production programs and the transition of development programs to production, with potential upside from customer demand and new development program wins. The company had its largest quarter ever for Common Processing Architecture (CPA) bookings, reflecting differentiation and growth prospects. They are seeing favorable impacts from the defense budgetary environment leading to multiyear customer commitments and potential higher demand across space, munitions, missile defense, and CPA. A strategic agreement with Palantir to leverage AI software is expected to enhance material planning and factory operations, potentially increasing revenue. New program opportunities in CPA are emerging, and customer interest in smaller CPA form factors could open up a new total addressable market (TAM) for different platforms.	About CompetitionMercury Systems believes its Common Processing Architecture (CPA) technology, particularly with its included security apparatus, positions them as the only provider capable of meeting certain security requirements, which gives them optimism for penetrating new markets and platforms.	About The Broader IndustryThe broader industry is characterized by increased global defense budgets and domestic priorities, driving demand for defense solutions. Geopolitical conflicts are necessitating urgent investment in advanced electronic solutions, including Counter-UAS, electronic warfare, directed energy systems, and space-based assets. The company noted a favorable market backdrop with an anticipated 9.9% addressable market compound annual growth rate.	Where Things Are HeadedMercury Systems is increasing its outlook for organic growth, targeting low double-digit organic revenue growth, adjusted EBITDA margins in the low to mid-20s, and free cash flow conversion of 50%. For FY 2027, they expect revenue growth approaching double digits, totaling nearly $1.1 billion, with adjusted EBITDA in the high teens, approaching $200 million. Adjusted EBITDA margin is expected to generally increase through FY27, reaching the target profile by year-end. For FY 2028, top-line organic growth is projected in the low double digits, with adjusted EBITDA margin at the low end of their target and free cash flow returning towards the 50% target. This outlook does not yet incorporate potential additional market tailwinds or benefits from the Palantir partnership and other automation efforts, which could represent upside.	Updates On ThemeWarfare	Broader Themes EmergingAI distributed across the battle space.	Bullish-Leaning Quotes (Short)We delivered Q4 results that were ahead of our expectations with record bookings record backlog, record revenue, the highest EBITDA margin of the year, and robust free cash flow. We enter FY 2027 with enhanced visibility and are increasing our outlook for organic growth. Record bookings of $660 million up 93.1% year over year and nearly double our previous record bookings quarter. Our record total backlog approaching $2 billion is also providing enhanced visibility as we enter FY 2027 and into FY 2028. Increasing targeted organic revenue growth to low double digits while maintaining targeted adjusted EBITDA margin in the low to mid-20s and targeted free cash flow conversion of 50%.	Bearish-Leaning Quotes (Short)Gross margin for the fourth quarter was 30.6% as compared to 31.0% for the same quarter last year. Adjusted EBITDA for the fourth quarter was approximately $49 million as compared to $51 million in the same quarter last year. Adjusted EBITDA as a percentage of revenue was 16.7%. As compared to 18.8% for the same quarter last year. FY 27 free cash flow conversion beneath our 50% target, approaching 35%. Our international sales were down around 15%.	HiringOperating expenses as a percentage of revenue decreased by 150 basis points as compared to the prior year, which reflects the efficiency improvements in headcount reductions we previously discussed to align our team composition with our increased production mix, driving improved operating leverage.

2026-05-05

About Expanding Eligible Market	About Competition	About The Broader Industry	Where Things Are Headed	Updates On Theme	Broader Themes Emerging	Bullish-Leaning Quotes (Short)	Bearish-Leaning Quotes (Short)	Hiring
About Expanding Eligible MarketMercury Systems anticipates near-term organic growth driven by increased volume on existing production programs and the transition of development programs to production. The company expects potential upside from customer-driven acceleration and increased quantities across its broad portfolio of production programs. New development programs are also expected to contribute to future production volume. Mercury Systems sees potential for higher demand across its portfolio due to increased global defense budgets and domestic priorities like Golden Dome. The company has ongoing interactions and funded programs with IBAS, seeking opportunities to increase capacity, efficiency, and innovation. Management believes its capabilities align well with broad administrative priorities, including Golden Dome, missile defense, and armament, providing exposure to a wide set of market tailwinds. Potential tailwinds from increased global defense budgets and domestic priorities like Golden Dome are viewed as additive to the company's target profile and could manifest by the end of calendar 2026, or potentially as early as the current fourth quarter. The company is also exploring driving its common processing architecture into smaller form factors and secure chiplets, which is expected to open up a larger total addressable market (TAM). Ultimately, Mercury Systems aims to provide the compute infrastructure for AI distributed across the battle space by taking mission-critical processing to the edge, increasing performance, and driving smaller form factors.	About CompetitionMercury Systems highlights its differentiation in the market, particularly with its common processing architecture, where it claims to be the only one capable of meeting certain security standards, thus creating a 'nice moat around this business'.	About The Broader IndustryThe broader industry is characterized by increased global defense budgets and domestic priorities such as Golden Dome. Geopolitical conflicts are driving demand for defense solutions. The rapid technological redefinition of warfare, particularly with the proliferation of cheap drones, necessitates urgent investment in advanced electronic solutions, including Counter-UAS (C-UAS), electronic warfare, directed energy systems, and space-based assets. Escalating geopolitical tensions and multipolar military competition are compelling nations to prioritize preparedness and modernize defense capabilities.	Where Things Are HeadedMercury Systems is optimistic about its performance, strategic positioning, and the market backdrop, expecting to achieve its target profile of above-market top-line growth, adjusted EBITDA margins in the low to mid-20% range, and free cash flow conversion of 50%. The company has raised its FY26 expectations, now anticipating annual revenue growth approaching mid-single digits (up from low single digits) and full-year adjusted EBITDA margin in the mid-teens (up from approaching mid-teens). Free cash flow is expected to be positive for Q4. Management believes FY26 performance will be a significant step toward its target profile and is gaining optimism about potential tailwinds from increased global defense budgets and domestic priorities like Golden Dome, which could lead to upside bookings. The company expects a gradual trend in margin expansion rather than a significant jump in Q4, reflecting a smoother progression of the business. Gross margin performance is anticipated to improve over time as the average margin in the backlog increases with the conversion of lower-margin backlog and the addition of new bookings aligned with target margins. Continuous execution on its four priority areas is expected to drive revenue growth, profitability, further margin expansion, and cash conversion, demonstrating long-term value creation. The company envisions its common processing architecture evolving to provide compute infrastructure for AI distributed across the battle space by delivering mission-critical processing at the edge with increased performance and smaller form factors.	Updates On ThemeWarfare	Broader Themes EmergingAI distributed across the battle space.	Bullish-Leaning Quotes (Short)We delivered Q3 results that were ahead of our expectations with significant year-over-year growth in backlog, revenue and adjusted EBITDA. record bookings of $348.3 million and a 1.48 book-to-bill, resulting in a record backlog approaching $1.6 billion. Revenue of $235.8 million, up 11.5% organically year-over-year. I'm very optimistic about our team's performance, strategic positioning, the market backdrop and our expectation to deliver results in line with our target profile. Our Q4 bookings have the potential to be the strongest of the year based on a pipeline of opportunities that is more robust than our Q3 pipeline. We now expect annual revenue growth for FY '26 approaching mid-single digits, up from low single digits. I'm gaining optimism regarding the potential for tailwinds associated with increased global defense budgets and domestic priorities like Golden Dome to materialize and upside bookings to our plan over time.	Bearish-Leaning Quotes (Short)Free cash outflow of $1.8 million, meaningfully outperforming our expectations. Free cash flow for the third quarter was an outflow of approximately $2 million as compared to an inflow of $24 million in the prior year. We still have work to do to reach our targeted profile. So we don't expect to see that great a jump up in the fourth quarter, more of a gradual kind of trend, but we feel good about the total year.	HiringOperating expenses decreased approximately $11 million or 14.3% year-over-year, driven primarily by lower restructuring and other charges, selling, general and administrative expenses, and research and development costs. These decreases reflect efficiency improvements and headcount reductions previously discussed to align the team composition with an increased production mix, driving improved operating leverage.

2026-05-05

About Expanding Eligible Market	About Competition	About The Broader Industry	Where Things Are Headed	Updates On Theme	Broader Themes Emerging	Bullish-Leaning Quotes (Short)	Bearish-Leaning Quotes (Short)	Hiring
About Expanding Eligible MarketMercury Systems anticipates near-term organic growth from increased volume on existing production programs and the transition of development programs to production. The company expects potential upside from customer-driven acceleration and increased quantities across its broad portfolio, alongside new development programs contributing to future production volume. There is potential for higher demand across its portfolio due to increased global defense budgets and domestic priorities like Golden Dome. Mercury Systems has ongoing interactions and funded programs with IBAS, seeking opportunities to increase capacity, efficiency, and innovation. Management believes its capabilities align well with broad administrative priorities, including Golden Dome, missile defense, and armament, providing exposure to a wide set of market tailwinds. Potential tailwinds from increased global defense budgets and domestic priorities like Golden Dome are viewed as additive to the company's target profile and could manifest by the end of calendar 2026, or potentially as early as the current fourth quarter. The company is also exploring driving its common processing architecture into smaller form factors and secure chiplets, which is expected to open up a larger total addressable market (TAM). Ultimately, Mercury Systems aims to provide the compute infrastructure for AI distributed across the battle space by taking mission-critical processing to the edge, increasing performance, and driving smaller form factors.	About CompetitionMercury Systems highlights its differentiation in the market, particularly with its common processing architecture, where it claims to be the only one capable of meeting certain security standards, thus creating a 'nice moat around this business'.	About The Broader IndustryThe broader industry is characterized by increased global defense budgets and domestic priorities such as Golden Dome. Geopolitical conflicts are driving demand for defense solutions. The rapid technological redefinition of warfare, particularly with the proliferation of cheap drones, necessitates urgent investment in advanced electronic solutions, including Counter-UAS (C-UAS), electronic warfare, directed energy systems, and space-based assets. Escalating geopolitical tensions and multipolar military competition are compelling nations to prioritize preparedness and modernize defense capabilities.	Where Things Are HeadedMercury Systems is optimistic about its performance, strategic positioning, and the market backdrop, expecting to achieve its target profile of above-market top-line growth, adjusted EBITDA margins in the low to mid-20% range, and free cash flow conversion of 50%. The company has raised its FY26 expectations, now anticipating annual revenue growth approaching mid-single digits (up from low single digits) and full-year adjusted EBITDA margin in the mid-teens (up from approaching mid-teens). Free cash flow is expected to be positive for Q4. Management believes FY26 performance will be a significant step toward its target profile and is gaining optimism about potential tailwinds from increased global defense budgets and domestic priorities like Golden Dome, which could lead to upside bookings. The company expects a gradual trend in margin expansion rather than a significant jump in Q4, reflecting a smoother progression of the business. Gross margin performance is anticipated to improve over time as the average margin in the backlog increases with the conversion of lower-margin backlog and the addition of new bookings aligned with target margins. Continuous execution on its four priority areas is expected to drive revenue growth, profitability, further margin expansion, and cash conversion, demonstrating long-term value creation. The company envisions its common processing architecture evolving to provide compute infrastructure for AI distributed across the battle space by delivering mission-critical processing at the edge with increased performance and smaller form factors.	Updates On ThemeWarfare	Broader Themes EmergingAI distributed across the battle space.	Bullish-Leaning Quotes (Short)We delivered Q3 results that were ahead of our expectations with significant year-over-year growth in backlog, revenue and adjusted EBITDA. record bookings of $348.3 million and a 1.48 book-to-bill, resulting in a record backlog approaching $1.6 billion. Revenue of $235.8 million, up 11.5% organically year-over-year. I'm very optimistic about our team's performance, strategic positioning, the market backdrop and our expectation to deliver results in line with our target profile. Our Q4 bookings have the potential to be the strongest of the year based on a pipeline of opportunities that is more robust than our Q3 pipeline.	Bearish-Leaning Quotes (Short)Free cash outflow of $1.8 million, meaningfully outperforming our expectations. Free cash flow for the third quarter was an outflow of approximately $2 million as compared to an inflow of $24 million in the prior year. We still have work to do to reach our targeted profile. So we don't expect to see that great a jump up in the fourth quarter, more of a gradual kind of trend, but we feel good about the total year.	HiringOperating expenses decreased primarily due to 'headcount reductions we previously discussed to align our team composition with our increased production mix, driving improved operating leverage'.

NotesTable

Date	Comment	Comment Type	Comment Sentiment	Link	Price Reaction
2026-08-18	Mercury Systems reported record Q4 FY26 bookings, backlog, and revenue, increasing its FY27 organic growth outlook to low double digits. Despite this positive messaging, the stock fell 10.68% (t+2 days), significantly underperforming the SPY. The market likely reacted negatively to the Q4 adjusted EBITDA margin decline, anticipated lower FY27 free cash flow conversion (35%), and a larger Q1 cash outflow for inventory investments, overshadowing the strong demand and long-term optimism.	Earnings Transcript	Negative		-10.68% (vs SPY: -10.12%)

Upcoming Events2 rows

Catalyst ID	Estimated Timing	Estimated Date Start	Estimated Date End	Catalyst	Why It Matters	Ticker Or Theme Specific	Transcript Date	Source Type
MRCY_0488e3c3	After Q1 FY27 ends (September 30, 2026)	2026-10-01	2026-11-15	Release of Mercury Systems' financial results for the first quarter of fiscal year 2027.	These results will provide the first update on the company's progress towards its increased organic growth expectations and adjusted EBITDA margin targets for FY27.	Ticker	2026-08-18	earnings_transcript
MRCY_161e0da6	by the time we get to the end of the fiscal year (FY27)	2027-04-01	2027-06-30	Mercury Systems expects to be operating in line with its target adjusted EBITDA margin profile (low to mid-20s) by the end of fiscal year 2027.	This milestone would validate the company's strategy for margin expansion, driven by converting lower-margin backlog and securing new bookings at target margins.	Ticker	2026-08-18	earnings_transcript

Prior Earnings Metrics HistoryTable

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