Core Viewpoint - Mercury Systems, Inc. reported strong financial results for the fourth quarter and fiscal year 2025, with significant year-over-year growth in key metrics such as backlog, revenue, net income, adjusted EBITDA, and free cash flow [1][2]. Financial Performance - Fourth quarter fiscal 2025 revenues reached $273.1 million, a 9.9% increase from $248.6 million in the same quarter of fiscal 2024 [3]. - Full year fiscal 2025 revenues totaled $912.0 million, up 9.2% from $835.3 million in fiscal 2024 [7]. - The company achieved record quarterly bookings of $341.5 million, resulting in a book-to-bill ratio of 1.25 and a record backlog of $1.40 billion, which is a 6% increase year-over-year [2][11][12]. Profitability Metrics - GAAP net income for the fourth quarter of fiscal 2025 was $16.4 million, translating to diluted earnings per share of $0.27, compared to a net loss of $10.8 million and a loss per share of $0.19 in the fourth quarter of fiscal 2024 [4][22]. - Adjusted earnings per share for the fourth quarter were $0.47, up from $0.23 in the same period last year [4][46]. - Adjusted EBITDA for the fourth quarter was $51.3 million, with an adjusted EBITDA margin of 18.8%, compared to $31.2 million in the fourth quarter of fiscal 2024 [5][22]. Cash Flow and Backlog - Free cash flow for the fourth quarter was $34.0 million, contributing to a record full year free cash flow of $119.0 million, compared to $26.1 million in fiscal 2024 [6][9]. - Cash flows from operating activities in the fourth quarter were $38.1 million, down from $71.8 million in the same quarter of fiscal 2024 [6][9]. Year-End Summary - For fiscal year 2025, the company reported a GAAP net loss of $37.9 million, or $0.65 per share, a significant improvement from a net loss of $137.6 million, or $2.38 per share, in fiscal 2024 [8][49]. - Adjusted EBITDA for the full year was $119.4 million, a substantial increase from $9.4 million in fiscal 2024 [8][37].

Company Overview - Mercury Systems (MRCY) is expected to report a year-over-year decline in earnings due to lower revenues for the quarter ended June 2025, with a consensus EPS estimate of $0.21, reflecting an 8.7% decrease from the previous year [1][3] - Revenues are anticipated to be $241.71 million, down 2.8% from the same quarter last year [3] Earnings Expectations - The upcoming earnings report is scheduled for August 11, and the stock may rise if the actual results exceed expectations, while a miss could lead to a decline [2] - The consensus EPS estimate has remained unchanged over the last 30 days, indicating stability in analyst expectations [4] Earnings Surprise Prediction - The Most Accurate Estimate for Mercury Systems is higher than the Zacks Consensus Estimate, resulting in an Earnings ESP of +8.05%, suggesting a more optimistic outlook from analysts [11] - However, the company currently holds a Zacks Rank of 5, which complicates the prediction of an earnings beat [11] Historical Performance - In the last reported quarter, Mercury Systems met the expected EPS of $0.06, resulting in no surprise [12] - Over the past four quarters, the company has beaten consensus EPS estimates three times [13] Industry Comparison - Curtiss-Wright (CW), a peer in the Aerospace - Defense Equipment industry, is expected to report an EPS of $3.13 for the same quarter, indicating a year-over-year increase of 17.2% [17] - Revenues for Curtiss-Wright are projected to be $850.49 million, up 8.4% from the previous year, with a positive Earnings ESP of +0.67% and a Zacks Rank of 2, suggesting a likely earnings beat [18][19]

Core Insights - Mercury Systems Inc. will release its fourth quarter and full year fiscal year 2025 financial results on August 11, 2025, after market close [1] - A conference call and webcast will be held at 5:00 p.m. ET on the same day to discuss the financial results and business outlook [2] - The company specializes in mission-critical processing technologies for aerospace and defense, with products deployed in over 300 programs across 35 countries [4] Financial Results Announcement - The financial results for the fourth quarter and full year fiscal year 2025 will be disclosed after market close on August 11, 2025 [1] - The conference call will provide insights into quarterly financial results, business highlights, and future outlook [2] Conference Call Details - Participants can register for the conference call and webcast online, with a recommendation to register at least 15 minutes before the start [3] - A replay of the webcast will be available two hours after the call and archived for six months [3] Company Overview - Mercury Systems is headquartered in Andover, Massachusetts, and operates over 20 locations globally [4] - The company focuses on making advanced technologies accessible for challenging aerospace and defense missions [4] - Its Mercury Processing Platform enables customers to utilize innovative capabilities for mission computing, sensor processing, command and control, and communications [4]

Core Insights - Mercury Systems, Inc. has signed two agreements with a European defense prime contractor to enhance production of processing subsystems and components for radar and electronic warfare missions [1] - The agreements include a five-year contract for higher-volume production of sensor processing subsystems and an expanded production agreement for Monolithic Microwave Integrated Circuit (MMIC) products [2][3] Group 1: Agreements and Production Enhancements - The five-year agreement allows for faster production of sensor processing subsystems using Mercury's HDS6605 6U OpenVPX multiprocessing boards for various radar systems [2] - The expanded production agreement focuses on delivering MMIC products that support electronic warfare sensors, enhancing the performance of these sensors [3] Group 2: Commitment to Defense Sector - Mercury Systems is committed to strengthening its relationship with European defense systems providers, investing to reduce development and production timelines for its processing products [4] - The company emphasizes its role in making advanced technologies more accessible for aerospace and defense missions, with products deployed in over 300 programs across 35 countries [4]

Core Insights - Mercury Systems, Inc. announced two new production awards in June totaling $36.9 million for ground-based radar programs, utilizing its Common Processing Architecture and cybersecurity software from the recently acquired Star Lab [1][2] Company Overview - Mercury Systems is a technology company focused on delivering mission-critical processing power to the edge, enhancing accessibility for aerospace and defense missions [2] - The Mercury Processing Platform enables customers to leverage innovative capabilities from silicon to system scale, facilitating timely data-driven decisions [2] - The company's products and solutions are deployed in over 300 programs across 35 countries, covering applications in mission computing, sensor processing, command and control, and communications [2] Market Demand - There is strong demand for secure, high-performance processing solutions at the edge, as indicated by follow-on programs with two U.S. defense primes [2]

Core Viewpoint - Mercury Systems, Inc. has been awarded an $8.5 million contract by the U.S. Department of Defense to develop a next-generation RF signal conditioning multi-chip package, enhancing the performance and cost-effectiveness of X-band AESA radars [1][2]. Group 1: Contract and Funding - The contract is part of the DoD's Industrial Base Analysis and Sustainment (IBAS) Program, which aims to improve the defense industrial base's readiness and competitiveness through investments in domestic technologies [1]. - The two-year contract involves collaboration with Systems Innovation Engineering to develop a solution that reduces the size, weight, and power requirements of radar systems by over 80% compared to existing hardware [2]. Group 2: Technological Advancements - The new signal conditioning module will leverage Mercury's expertise in microwave and mixed signal technologies, making it more producible and affordable while enabling high-volume missions [2]. - The initiative is expected to enhance RF sensor performance and readiness, supporting faster and more reliable threat detection for military applications [3]. Group 3: Company Overview - Mercury Systems is a technology company focused on mission-critical processing for aerospace and defense, with products deployed in over 300 programs across 35 countries [4]. - The company is headquartered in Andover, Massachusetts, and operates more than 20 locations worldwide, providing solutions in mission computing, sensor processing, command and control, and communications [4].

Company Overview - Mercury Systems (MRCY) shares have increased by approximately 7.6% over the past month, outperforming the S&P 500 [1] - The most recent earnings report is crucial for understanding the key drivers behind this performance [1] Earnings Estimates - Estimates for Mercury Systems have trended upward in the past month, with a consensus estimate shift of 8.33% [2] - The stock currently holds a Zacks Rank of 3 (Hold), indicating expectations for an in-line return in the upcoming months [4] VGM Scores - Mercury Systems has a Growth Score of B, but a low Momentum Score of D, and a Value Score of D, placing it in the bottom 40% for the value investment strategy [3] - The overall aggregate VGM Score for the stock is D, which is significant for investors not focused on a single strategy [3] Industry Performance - Mercury Systems is part of the Zacks Aerospace - Defense Equipment industry, where another player, Woodward (WWD), has seen a 20.8% increase in shares over the past month [5] - Woodward reported revenues of $883.63 million for the last quarter, reflecting a year-over-year increase of 5.8% [5] - Woodward's expected earnings for the current quarter are $1.60 per share, showing a year-over-year decline of 1.8% [6]

Core Viewpoint - Mercury Systems, Inc. has introduced the ROCK3, the first safety-certifiable, SOSA-aligned aviation mission computer, aimed at enhancing aircraft capabilities for government and commercial organizations, particularly in the context of next-generation applications like 5G and AI [1][2]. Product Features - The ROCK3 is a DAL-certifiable, 3U OpenVPX mission computer featuring Intel Core i7 safety-certifiable processors, delivering up to 20 times the performance compared to PowerPC-based aircraft computers [2]. - It is designed for advanced, safety-critical applications in military and urban mobility aircraft, including mission management, sensor fusion, processing, and surveillance [2]. - The open architecture of ROCK3 allows customers to avoid vendor lock-in, facilitating greater application interoperability and faster, more cost-effective deployment of new capabilities [2][4]. Development Background - The development of ROCK3 incorporates insights from Mercury's involvement in the U.S. Army's Aviation Mission Common Server (AMCS) program, which aimed to create a unified mission computing architecture for the Army's rotorcraft fleet [3]. Strategic Importance - The introduction of ROCK3 is expected to enhance safety and survivability for current and next-generation aircraft by utilizing advanced sensors and data fusion applications, providing pilots with timely and accurate information for decision-making [4]. - Mercury Systems emphasizes that ROCK3 represents a new approach for aviation organizations to implement more affordable, scalable, interoperable, and sustainable avionics solutions through open architectures [4]. Industry Engagement - Mercury will showcase various next-generation mission computing applications at the Army Aviation Mission Solutions Summit 2025, held from May 14-16 in Nashville, Tennessee, in collaboration with industry partners [5].

Core Insights - Mercury Systems (MRCY) reported third-quarter fiscal 2025 results with earnings in line with estimates and revenues exceeding expectations [1] - Non-GAAP earnings were 6 cents per share, a significant improvement from a loss of 26 cents in the same quarter last year [1] - Non-GAAP revenues increased by 1.5% year over year to $211.4 million, surpassing the consensus estimate by 4.07% [1] Financial Performance - Total bookings for the quarter were $200.4 million, resulting in a book-to-bill ratio of 0.95 [3] - Total backlog as of March 28, 2025, was $1.34 billion, up by $51 million from the previous year [3] - Gross profit rose to $57.1 million, reflecting a 40.5% year-over-year increase, with gross margin expanding from 19.5% to 27% [4] - Research and development (R&D) expenses decreased by 25.9% year over year to $16 million, representing 7.56% of revenues [5] - Selling, general and administrative (SG&A) expenses fell by 0.3% year over year to $43 million, accounting for 20.4% of revenues [5] - Total operating expenses decreased by 13.7% to $74.5 million, with operating expenses as a percentage of revenues down 620 basis points to 35.3% [6] - Adjusted EBITDA was $24.7 million, a turnaround from a negative EBITDA of $2.397 million in the prior year [6] Cash Flow and Balance Sheet - Cash and cash equivalents stood at $269.8 million as of March 28, 2025, up from $242.6 million at the end of December 2024 [7] - Long-term debt was reported at $591.5 million as of March 27, 2025 [7] - Cash flows from operating activities for the third quarter were $30 million, down from $85.5 million in the previous quarter [7] - Free cash flow for the quarter was $24.1 million, compared to $81.9 million in the second quarter [8] Future Estimates - The Zacks Consensus Estimate for fourth-quarter fiscal 2025 revenues is $248.11 million, indicating a slight year-over-year decline of 0.18% [9] - The consensus estimate for earnings is 21 cents per share, reflecting an 8.7% decline from the same quarter last year [9] Market Performance - MRCY shares have gained 20% year to date, outperforming the Zacks Aerospace sector and peers such as Spirit Aerosystems and CAE [2] - Spirit Aerosystems and CAE have seen year-to-date growth of 8.1%, 4.9%, and 0.2%, respectively [2]

THIRD QUARTER FISCAL YEAR 2025 FINANCIAL RESULTS Bill Ballhaus Chairman and CEO David Farnsworth Executive Vice President and CFO May 6, 2025, 5:00 pm ET WEBCAST LOGIN AT WWW.MRCY.COM/INVESTOR WEBCAST REPLAY AVAILABLE BY 7:00 P.M. ET MAY 6, 2025 © Mercury Systems, Inc. 1 Forward-looking safe harbor statement This presentation contains certain forward-looking statements, as that term is defined in the Private Securities Litigation Reform Act of 1995, including those relating to the Company's focus on enhance ...