UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ________________________________________________________________ ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 29, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to COMMISSION FILE NUMBER: 001-41194 ________________________________________________________________ ME ...

Overview of Q3 FY2024 Performance [Management Commentary](index=1&type=section&id=Management%20Commentary) The company is progressing on four priorities: shifting to production, expanding backlog, optimizing costs, and reducing working capital - The company is focused on four key priorities: shifting development to production, growing backlog, streamlining operations, and reducing working capital[2](index=2&type=chunk) - **Working capital decreased by 8.0% year-over-year**, reversing a multi-year growth trend[2](index=2&type=chunk) - The company expects to enter FY25 with a clearer path to predictable organic growth, expanding margins, and strong cash flow[3](index=3&type=chunk) [Key Financial Highlights](index=1&type=section&id=Key%20Financial%20Highlights) The company reported a book-to-bill ratio of 1.06 and a record backlog of $1.3 billion despite a GAAP net loss **Q3 FY2024 Key Metrics** | Metric | Value | Note | | :--- | :--- | :--- | | Bookings | $219.9 million | - | | Book-to-bill Ratio | 1.06 | - | | Revenue | $208.3 million | - | | GAAP Net Loss | ($44.6) million | - | | Adjusted EBITDA | ($2.4) million | - | | Record Backlog | $1.3 billion | Up 17% YoY | Detailed Financial Results [Third Quarter Fiscal 2024 Results](index=2&type=section&id=Third%20Quarter%20Fiscal%202024%20Results) Q3 FY2024 saw a significant downturn with decreased revenue, a swing to a GAAP net loss, and negative adjusted EBITDA **Q3 FY2024 vs Q3 FY2023 Financial Performance** | Metric | Q3 FY2024 | Q3 FY2023 | | :--- | :--- | :--- | | Revenues | $208.3 million | $263.5 million | | GAAP Net (Loss) Income | ($44.6) million | $5.2 million | | GAAP (Loss) EPS | ($0.77) | $0.09 | | Adjusted (Loss) EPS | ($0.26) | $0.40 | | Adjusted EBITDA | ($2.4) million | $43.5 million | **Q3 FY2024 vs Q3 FY2023 Cash Flow** | Metric | Q3 FY2024 | Q3 FY2023 | | :--- | :--- | :--- | | Cash flows used in operating activities | ($17.8) million | ($3.2) million | | Free cash flow | ($25.7) million | ($12.7) million | [Backlog](index=2&type=section&id=Backlog) The company's total backlog reached a record $1.29 billion, with $761.2 million expected to convert to revenue within 12 months - Total backlog increased by $190.5 million year-over-year to a **record $1.29 billion**[9](index=9&type=chunk) - **$761.2 million** of the total backlog is expected to be converted to revenue in the next 12 months[9](index=9&type=chunk) Business Outlook [Fiscal Year 2024 Guidance](index=3&type=section&id=Fiscal%20Year%202024%20Guidance) The company maintains its full-year revenue guidance and expects bookings to exceed $1 billion with positive free cash flow **Full Fiscal Year 2024 Outlook** | Metric | Guidance Range / Expectation | | :--- | :--- | | Revenue | $800.0 million to $850.0 million | | Bookings | Exceed $1 billion | | Free Cash Flow | Positive | Financial Statements [Consolidated Balance Sheets](index=8&type=section&id=Consolidated%20Balance%20Sheets) Total assets remained stable while total liabilities increased, leading to a decrease in shareholders' equity **Balance Sheet Summary (in thousands)** | Account | March 29, 2024 | June 30, 2023 | | :--- | :--- | :--- | | **Total Assets** | **$2,378,178** | **$2,391,367** | | Cash and cash equivalents | $142,645 | $71,563 | | Goodwill | $938,093 | $938,093 | | **Total Liabilities** | **$905,385** | **$824,682** | | Long-term debt | $616,500 | $511,500 | | **Total Shareholders' Equity** | **$1,472,793** | **$1,566,685** | [Consolidated Statements of Operations](index=9&type=section&id=Consolidated%20Statements%20of%20Operations) The company's Q3 operating results show a significant decline in revenue and a shift from operating income to a loss **Q3 Statement of Operations Summary (in thousands, except per share data)** | Account | Q3 FY2024 | Q3 FY2023 | | :--- | :--- | :--- | | Net revenues | $208,258 | $263,479 | | Gross margin | $40,642 | $90,289 | | (Loss) income from operations | ($45,656) | $1,954 | | Net (loss) income | ($44,574) | $5,156 | | Diluted net (loss) earnings per share | ($0.77) | $0.09 | [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities increased year-over-year, contributing to a decrease in total cash and cash equivalents **Q3 Statement of Cash Flows Summary (in thousands)** | Account | Q3 FY2024 | Q3 FY2023 | | :--- | :--- | :--- | | Net cash used in operating activities | ($17,805) | ($3,217) | | Net cash used in investing activities | ($7,938) | ($9,398) | | Net cash provided by financing activities | $0 | $0 | | Net decrease in cash | ($26,001) | ($12,503) | | Cash and cash equivalents at end of period | $142,645 | $64,441 | Non-GAAP Financial Measures [Reconciliation of GAAP to Adjusted EBITDA](index=11&type=section&id=Reconciliation%20of%20GAAP%20to%20Adjusted%20EBITDA) Adjusted EBITDA turned negative at ($2.4) million, a sharp decline from the prior year's positive result **Adjusted EBITDA Reconciliation Summary (in thousands)** | Metric | Q3 FY2024 | Q3 FY2023 | | :--- | :--- | :--- | | Net (loss) income (GAAP) | ($44,574) | $5,156 | | Adjustments (Net) | $42,177 | $38,305 | | **Adjusted EBITDA (Non-GAAP)** | **($2,397)** | **$43,461** | [Reconciliation of GAAP to Free Cash Flow](index=14&type=section&id=Reconciliation%20of%20GAAP%20to%20Free%20Cash%20Flow) Free cash flow remained negative and worsened compared to the same period last year **Free Cash Flow Reconciliation (in thousands)** | Metric | Q3 FY2024 | Q3 FY2023 | | :--- | :--- | :--- | | Net cash used in operating activities | ($17,805) | ($3,217) | | Purchases of property and equipment | ($7,938) | ($9,446) | | **Free cash flow** | **($25,743)** | **($12,663)** | [Reconciliation of GAAP to Adjusted Income and EPS](index=15&type=section&id=Reconciliation%20of%20GAAP%20to%20Adjusted%20Income%20and%20EPS) The company reported a non-GAAP adjusted loss per share, reversing the adjusted income from the prior-year quarter **Adjusted (Loss) Income and EPS Reconciliation** | Metric | Q3 FY2024 | Q3 FY2023 | | :--- | :--- | :--- | | Net (loss) income (GAAP) | ($44.6) M | $5.2 M | | Adjusted (loss) income (Non-GAAP) | ($15.1) M | $22.6 M | | Diluted (loss) EPS (GAAP) | ($0.77) | $0.09 | | Adjusted (loss) EPS (Non-GAAP) | ($0.26) | $0.40 | [Reconciliation of GAAP to Organic Revenue](index=17&type=section&id=Reconciliation%20of%20GAAP%20to%20Organic%20Revenue) All reported net revenues for the quarter were classified as organic, with no contribution from recent acquisitions - For Q3 FY2024, total net revenues of **$208.3 million were entirely organic**, with no contribution from acquired revenue[60](index=60&type=chunk) Other Information [Conference Call Information](index=3&type=section&id=Conference%20Call%20Information) A conference call was scheduled to discuss the quarterly results and provide a business outlook - A conference call to discuss financial results was scheduled for 5:00 p.m. ET on May 7, 2024[13](index=13&type=chunk) [Forward-Looking Safe Harbor Statement](index=6&type=section&id=Forward-Looking%20Safe%20Harbor%20Statement) The report contains forward-looking statements that are subject to various risks and uncertainties - The report includes a safe harbor statement cautioning that forward-looking statements are subject to risks and uncertainties that could cause actual results to differ[20](index=20&type=chunk)

Mercury Systems (MRCY) is expected to deliver a year-over-year decline in earnings on lower revenues when it reports results for the quarter ended March 2024. This widely-known consensus outlook gives a good sense of the company's earnings picture, but how the actual results compare to these estimates is a powerful factor that could impact its near-term stock price.The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on May 7. On ...

Financial Data and Key Metrics Changes - The company reported bookings of $325 million for the quarter, with a book-to-bill ratio of 1.65, resulting in a backlog of $1.3 billion, which is up over $160 million or 14% year-over-year [13][27] - Revenues for the quarter were $197 million, down $32 million or 14% compared to the prior year, primarily due to a shift in focus towards challenge programs and a higher mix of development programs [13][14] - Gross margin for the second quarter decreased to 16% from 35.3% in the prior year, largely due to cost growth impacts and higher manufacturing adjustments [14][15] - GAAP net loss was $45.6 million, compared to a loss of $10.9 million in the prior year, driven by approximately $48 million of costs incurred in the quarter [15][17] - Free cash flow for the quarter was $37.5 million, an increase from $22.2 million in the prior year, attributed to strong collections and favorable billing terms [16][29] Business Line Data and Key Metrics Changes - The company made progress in retiring risks associated with challenge programs, completing or exiting four additional programs, totaling eight out of approximately 20 challenge programs [5][30] - The challenge program cost growth was primarily driven by one specific program, which included development, low-rate production, and a long production run [54][61] - The company is transitioning from a high mix of development programs to production programs, which is expected to improve margins and predictability in the future [30][38] Market Data and Key Metrics Changes - The company anticipates strong demand and bookings momentum to continue through the year, with full-year bookings expected to exceed $1 billion [32][37] - The company has a record backlog, indicating robust customer health and demand for its products [57][59] Company Strategy and Development Direction - The company is focused on four priority areas: enhancing execution for predictable performance, driving organic growth, addressing cost structure to expand margins, and improving free cash flow [38] - A reorganization was announced to streamline operations and eliminate redundancy, consolidating multiple business units under a single operating structure [24][28] - The company aims to complete the majority of challenge programs by the end of the fiscal year, which is critical for transitioning to higher-margin production programs [30][37] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that fiscal '24 is a transitional year, with expectations for revenue and earnings to be below prior year levels due to higher-than-expected cost growth [30][37] - The company is withdrawing its full-year GAAP and non-GAAP net earnings guidance, focusing instead on revenue guidance due to ongoing volatility [49][50] - Management remains optimistic about the long-term growth potential, targeting low to mid-20% adjusted EBITDA margins as the business stabilizes [61][62] Other Important Information - The company reported a significant improvement in net working capital, decreasing by approximately $70 million in the quarter [29][36] - Cash and cash equivalents at the end of the quarter were $169 million, with net debt of $448 million, reflecting free cash flow generation [29][48] Q&A Session Summary Question: What is the status of the challenge program that caused the $14 million cost growth? - Management indicated that the program will remain active for a while, but they have gained a clearer understanding of the production costs and execution requirements moving forward [54][61] Question: Are any of the businesses impaired due to the cost growth? - Management stated that impairment assessments are conducted at a gross level, and they do not see significant impairment risks at this time [56] Question: What does the decrease in sales to key customers indicate? - Management noted that fluctuations in sales percentages to key customers are normal and reflect a diversified backlog, emphasizing the strength of their current backlog and bookings [57][58]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ________________________________________________________________ ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 29, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to COMMISSION FILE NUMBER: 001-41194 ________________________________________________________________ ...

Financial Performance Q1 FY24 - Bookings decreased by 28% from $266.9 million in Q1 FY23 to $191.5 million in Q1 FY24[4] - Revenue declined by 20% from $227.6 million in Q1 FY23 to $181.0 million in Q1 FY24[4] - Organic revenue also declined by 20% from $227.6 million in Q1 FY23 to $181.0 million in Q1 FY24[4] - Gross margin decreased by 640 basis points from 34.3% in Q1 FY23 to 27.9% in Q1 FY24[4] - Adjusted EBITDA decreased by 94% from $31.2 million (13.7% of revenue) in Q1 FY23 to $2.0 million (1.1% of revenue) in Q1 FY24[4] - Free cash flow was negative $47.1 million in Q1 FY24, compared to negative $73.4 million in Q1 FY23[4] - GAAP net loss increased from $14.3 million in Q1 FY23 to $36.7 million in Q1 FY24[4] Working Capital and Cash Flow - The company is focused on transitioning to a more cash-efficient approach to reduce working capital[3] - Efforts are underway to improve the long-term working capital posture[2] FY24 Outlook - Revenue is projected to be between $950.0 million and $1,000.0 million, representing a decrease of 2% to an increase of 3% compared to FY23 revenue of $973.9 million[34] - Adjusted EPS is expected to be between $1.19 and $1.54, compared to $1.00 in FY23[34] - Adjusted EBITDA is projected to be between $160.0 million and $185.0 million, representing 16.8% to 18.5% of revenue, compared to $132.3 million (13.6% of revenue) in FY23[34]

Financial Performance - Total revenues decreased by $46.6 million, or 20.5%, to $181.0 million for the first quarter ended September 29, 2023, compared to $227.6 million for the same period in 2022[123] - The net loss for the first quarter ended September 29, 2023, was $36.7 million, compared to a net loss of $14.3 million for the same period in 2022[119] - Loss from operations was $40.2 million for the first quarter ended September 29, 2023, compared to a loss of $7.2 million in the prior year[122] - Adjusted EBITDA for the first quarter ended September 29, 2023, was $1,957 thousand, a significant decrease from $31,161 thousand in the prior year[160] - Free cash flow for the first quarter ended September 29, 2023, was $(47,083) thousand, compared to $(73,367) thousand in the prior year[168] - Organic revenue for the first quarter ended September 29, 2023, was $180,991 thousand, reflecting a decrease of $46,588 thousand or 20% year-over-year[169] Expenses - Gross margin was 27.9% for the first quarter ended September 29, 2023, a decrease of 640 basis points from 34.3% in the prior year[126] - Research and development expenses increased by $4.1 million, or 14.8%, to $31.9 million for the first quarter ended September 29, 2023, due to an increase in headcount[128] - Selling, general and administrative expenses decreased by $3.1 million, or 8.1%, to $35.8 million for the first quarter ended September 29, 2023, primarily due to cost-saving measures[127] - Amortization of intangible assets decreased by $2.0 million to $12.5 million for the first quarter ended September 29, 2023, due to the full amortization of backlog intangible from the Avalex acquisition[129] - Interest expense increased to $7.9 million in the first quarter ended September 29, 2023, compared to $4.5 million in the prior year, driven by higher interest rates and increased borrowings of $576.5 million[133] - Other net expenses decreased to $1.8 million in the first quarter ended September 29, 2023, from $3.6 million in the same quarter last year[134] - Restructuring and other charges amounted to $9,546 thousand in the first quarter of 2023, compared to $1,508 thousand in the same period of 2022[163] Revenue Sources - The company recognized approximately $38.7 million in revenue over time, representing 58% of total revenues for the first quarter ended September 29, 2023, down from 63% in the prior year[123] - The decrease in total revenue was primarily driven by declines in radar, C4I, and electronic warfare applications, totaling $44.5 million[125] Employment and Cost-Saving Measures - The company employed 2,539 employees as of September 29, 2023, focusing on engineering and research activities[118] - The company initiated cost-saving measures resulting in the elimination of approximately 150 positions, incurring $9.5 million in severance costs during the first quarter ended September 29, 2023[130] Cash Flow and Obligations - Cash used in operating activities was $39.1 million for the first quarter ended September 29, 2023, an improvement from $66.0 million in the prior year[147] - The company invested $8.0 million in the first quarter ended September 29, 2023, an increase from $7.3 million in the same period last year[148] - The company had $65.0 million of borrowings on its Revolver in the first quarter ended September 29, 2023, compared to $60.0 million in the prior year[149] - Total cash and cash equivalents increased by $17.8 million to $89.4 million as of September 29, 2023[145] - The company has a total of $128.7 million in purchase obligations as of September 29, 2023, primarily for inventory components and services[150] Taxation - The company recorded an income tax benefit of $13.0 million on a loss before income taxes of $49.7 million for the first quarter ended September 29, 2023[135] - The impact to income taxes for the first quarter ended September 29, 2023, was $(10,758) thousand, compared to $(5,191) thousand in the prior year[163] Shareholder Impact - Diluted loss per share for the first quarter ended September 29, 2023, was $(0.64), compared to $(0.26) for the same period in 2022[163] - The company expects to continue incurring expenses similar to those reflected in adjusted income and adjusted EPS, indicating ongoing operational costs[161]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED June 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO . COMMISSION FILE NUMBER 0-23599 MERCURY SYSTEMS, INC. (Exact name of registrant as specified in its charter) Massachusetts 04-2741391 (State or other jurisdiction of incorpor ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ________________________________________________________________ ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to COMMISSION FILE NUMBER: 0-23599 ________________________________________________________________ MERC ...

2 © Mercury Systems, Inc. Does not contain Technical Data. / /Mercury Proprietary/ No Tech Data/ / | --- | --- | |-----------------------------------------------------------------------------------------------------|-------| | | | | Focus on operational excellence, execution continues | | | Leadership driving continuous improvement in key operations, execution areas | | | Progress on late-stage development programs, new product introductions to continue in Q4, FY24 | | | Efforts continue to further enhance ...