[Financial & Operational Highlights](index=1&type=section&id=Financial%20&%20Operational%20Highlights) Mercury Systems reported strong Q2 FY2025 results, exceeding expectations with significant growth in revenue, Adjusted EBITDA, and record free cash flow, driven by solid execution and a record backlog - The CEO stated that the company delivered solid results in Q2 FY2025, in line with or ahead of expectations, and is optimistic about ongoing efforts to improve performance[2](index=2&type=chunk) Q2 FY2025 Key Metrics | Metric | Value | Note | | :--- | :--- | :--- | | Bookings | $242.4 million | Book-to-bill ratio of 1.09 | | Trailing-Twelve-Month Book-to-Bill | 1.12 | - | | Revenue | $223.1 million | Up 13% YoY | | Adjusted EBITDA | $22.0 million | Up substantially YoY | | Adjusted EBITDA Margin | 9.9% | Up substantially YoY | | Free Cash Flow | $81.9 million | Record; up $44.4 million YoY | | Backlog | $1.4 billion | Record; up 6% YoY | - Progress was noted in all four priority areas, including reduced operating expenses and a **$114.9 million** year-over-year reduction in net working capital[3](index=3&type=chunk) [Detailed Financial Results](index=2&type=section&id=Detailed%20Financial%20Results) Mercury's Q2 FY2025 saw significant revenue growth, a narrowed GAAP net loss, positive adjusted EPS, and a strong recovery in Adjusted EBITDA, culminating in a record $1.4 billion backlog Q2 FY2025 vs. Q2 FY2024 Performance | Metric | Q2 FY2025 | Q2 FY2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | $223.1M | $197.5M | +13.0% | | Bookings | $242.4M | N/A | - | | Book-to-Bill Ratio | 1.09 | N/A | - | | GAAP Net Loss | $(17.6)M | $(45.6)M | +$28.0M | | GAAP Loss Per Share | $(0.30) | $(0.79) | +$0.49 | | Adjusted EPS | $0.07 | $(0.42) | +$0.49 | | Adjusted EBITDA | $22.0M | $(21.3)M | +$43.3M | | Operating Cash Flow | $85.5M | $45.5M | +$40.0M | | Free Cash Flow | $81.9M | $37.5M | +$44.4M | - The company's total backlog reached a record **$1.4 billion** as of December 27, 2024, an increase of approximately **$80.0 million** from the previous year[9](index=9&type=chunk) - Of the total backlog, **$789.9 million** is expected to be recognized as revenue within the next 12 months[9](index=9&type=chunk) [Financial Statements](index=7&type=section&id=Financial%20Statements) This section presents the unaudited consolidated balance sheets, statements of operations, and cash flows, detailing the company's financial position and performance [Unaudited Consolidated Balance Sheets](index=7&type=section&id=UNAUDITED%20CONSOLIDATED%20BALANCE%20SHEETS) As of December 27, 2024, Mercury Systems reported total assets of **$2.401 billion**, with increased cash and total liabilities, while shareholders' equity slightly decreased Consolidated Balance Sheet Highlights (in thousands) | Account | Dec 27, 2024 | Jun 28, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $242,565 | $180,521 | | Total current assets | $990,684 | $953,784 | | Goodwill | $938,093 | $938,093 | | **Total assets** | **$2,401,455** | **$2,378,905** | | **Liabilities & Equity** | | | | Total current liabilities | $273,533 | $234,416 | | Long-term debt | $591,500 | $591,500 | | **Total liabilities** | **$941,179** | **$906,130** | | **Total shareholders' equity** | **$1,460,276** | **$1,472,775** | [Unaudited Consolidated Statements of Operations](index=8&type=section&id=UNAUDITED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) For Q2 FY2025, net revenues increased to **$223.1 million**, and the GAAP net loss significantly narrowed to **$17.6 million**, driven by improved gross margin and reduced operating expenses Q2 Statement of Operations (in thousands, except per share data) | Metric | Q2 FY2025 | Q2 FY2024 | | :--- | :--- | :--- | | Net revenues | $223,125 | $197,463 | | Gross margin | $60,826 | $31,520 | | Loss from operations | $(12,415) | $(53,929) | | **Net loss** | **$(17,579)** | **$(45,581)** | | **Diluted net loss per share** | **$(0.30)** | **$(0.79)** | [Unaudited Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=UNAUDITED%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) Net cash provided by operating activities significantly increased to **$85.5 million** in Q2 FY2025, contributing to a strong ending cash balance of **$242.6 million** Q2 Statement of Cash Flows (in thousands) | Metric | Q2 FY2025 | Q2 FY2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $85,462 | $45,494 | | Net cash used in investing activities | $(1,655) | $(7,990) | | Net cash provided by financing activities | $1,492 | $41,217 | | Net increase in cash and cash equivalents | $84,442 | $79,277 | | **Cash and cash equivalents at end of period** | **$242,565** | **$168,646** | [Reconciliation of GAAP to Non-GAAP Measures](index=10&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Measures) Mercury Systems provides non-GAAP financial measures, including Adjusted EBITDA, Free Cash Flow, Adjusted Income, and Adjusted EPS, with detailed reconciliations to offer a clearer view of operational performance - The company provides non-GAAP financial measures like adjusted EBITDA, adjusted income, adjusted EPS, and free cash flow to help investors understand its past financial performance and future prospects[13](index=13&type=chunk) - Management uses these non-GAAP measures for internal budgeting, evaluating performance, establishing operational goals, and determining a portion of executive bonus compensation[36](index=36&type=chunk) - Adjustments to GAAP figures include items such as amortization, restructuring charges, acquisition costs, litigation expenses, and stock-based compensation[28](index=28&type=chunk)[29](index=29&type=chunk)[32](index=32&type=chunk) [Reconciliation of Net Loss to Adjusted EBITDA](index=12&type=section&id=Reconciliation%20of%20Net%20Loss%20to%20Adjusted%20EBITDA) Adjusted EBITDA for Q2 FY2025 significantly improved to **$22.0 million** from a negative **$(21.3) million** in Q2 FY2024, primarily due to adjustments for non-cash and specified items Reconciliation of Net Loss to Adjusted EBITDA (in thousands) | Description | Q2 FY2025 | Q2 FY2024 | | :--- | :--- | :--- | | Net loss (GAAP) | $(17,579) | $(45,581) | | Adjustments: | | | | Interest expense, net | 8,024 | 8,645 | | Income tax benefit | (6,725) | (18,141) | | Depreciation & Amortization | 20,922 | 22,193 | | Stock-based compensation | 11,424 | 10,195 | | Other adjustments | 5,963 | 1,331 | | **Adjusted EBITDA (Non-GAAP)** | **$22,029** | **$(21,308)** | [Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow](index=13&type=section&id=Reconciliation%20of%20Net%20Cash%20Provided%20by%20Operating%20Activities%20to%20Free%20Cash%20Flow) Free Cash Flow reached a record **$81.9 million** in Q2 FY2025, a substantial increase from the prior year, derived from operating cash flow less capital expenditures Free Cash Flow Reconciliation (in thousands) | Description | Q2 FY2025 | Q2 FY2024 | | :--- | :--- | :--- | | Net cash provided by operating activities (GAAP) | $85,462 | $45,494 | | Purchases of property and equipment | $(3,555) | $(7,990) | | **Free cash flow (Non-GAAP)** | **$81,907** | **$37,504** | [Reconciliation of Net Loss to Adjusted Income and Adjusted EPS](index=14&type=section&id=Reconciliation%20of%20Net%20Loss%20to%20Adjusted%20Income%20and%20Adjusted%20EPS) Q2 FY2025 saw a significant turnaround to Adjusted Income of **$3.9 million** and Adjusted EPS of **$0.07**, primarily due to adjustments for amortization and stock-based compensation Adjusted Income and EPS Reconciliation (in thousands, except per share data) | Description | Q2 FY2025 | Q2 FY2024 | | :--- | :--- | :--- | | Net loss (GAAP) | $(17,579) | $(45,581) | | Amortization of intangible assets | 11,154 | 12,270 | | Stock-based and other non-cash compensation | 11,424 | 10,195 | | Other adjustments | 5,963 | 1,383 | | Impact to income taxes | (7,022) | (2,446) | | **Adjusted income (loss) (Non-GAAP)** | **$3,940** | **$(24,181)** | | **Adjusted earnings (loss) per share (Non-GAAP)** | **$0.07** | **$(0.42)** | [Other Information](index=3&type=section&id=Other%20Information) This section provides supplementary information, including details for the investor conference call, a corporate overview of Mercury Systems, and a forward-looking safe harbor statement regarding potential risks - Management will host a conference call and webcast on February 4, 2025, to discuss the quarterly results and business outlook[11](index=11&type=chunk) - Mercury Systems is a technology company that delivers mission-critical processing power for aerospace and defense missions, with products deployed in over **300 programs** across **35 countries**[15](index=15&type=chunk) - The press release includes a forward-looking safe harbor statement, cautioning that actual results could differ materially from projections due to various risks and uncertainties, such as defense program funding, supply chain issues, and geopolitical unrest[17](index=17&type=chunk)

Core Insights - Mercury Systems, Inc. reported solid financial results for the second quarter of fiscal year 2025, with revenues and adjusted EBITDA showing significant year-over-year growth [1][2][4] Financial Performance - Bookings for the quarter reached $242.4 million, resulting in a trailing-twelve-month book-to-bill ratio of 1.12 [2][3] - Revenue for the second quarter was $223.1 million, reflecting a 13% increase compared to $197.5 million in the same quarter of fiscal 2024 [2][3] - Adjusted EBITDA was $22.0 million, a substantial improvement from $(21.3) million in the prior year [5][21] - Free cash flow reached a record $81.9 million, up from $37.5 million year-over-year [2][6] Backlog and Operational Efficiency - The total backlog as of December 27, 2024, was $1.4 billion, an increase of approximately $80.0 million from the previous year [7][9] - Operating expenses were reduced, contributing to increased positive operating leverage [2][6] Net Loss and Earnings - The GAAP net loss for the quarter was $17.6 million, or $0.30 per share, compared to a net loss of $45.6 million, or $0.79 per share, in the same quarter of fiscal 2024 [4][18] - Adjusted earnings per share (EPS) improved to $0.07 from $(0.42) in the prior year [4][41] Cash Flow and Liquidity - Cash flows from operating activities were $85.5 million, compared to $45.5 million in the same quarter of fiscal 2024 [6][20] - The company ended the quarter with cash and cash equivalents of $242.6 million, up from $180.5 million at the end of the previous fiscal year [16][20]

Mercury Systems’ (MRCY) shares appreciated 22.7% in the trailing six months, outperforming the Zacks Aerospace sector and the Zacks Aerospace – Defense Equipment Industry, and its peers, including Hexcel (HXL) , AAR (AIR) and Woodward (WWD) .Over the same timeframe, shares of Hexcel, AAR and Woodward have returned 11.3%, 8.4%, and 7%, respectively. Meanwhile, the sector and the industry have returned 7.3% and 20.4%, respectively.Mercury Systems’ positive share price movement reflects its ability to deliver ...

ANDOVER, Mass., Jan. 21, 2025 (GLOBE NEWSWIRE) -- Mercury Systems, Inc. (NASDAQ: MRCY, www.mrcy.com), a technology company that delivers mission-critical processing power to the edge, today announced it was awarded a $24.5 million contract to develop a data processing and storage subsystem for a U.S. Defense Department satellite program. Under a contract with an innovative space systems prime contractor, Mercury will deliver a number of these subsystems that leverage its commercial products and deep experti ...

Key Appointments - Tyler Hojo has been appointed as Vice President of Investor Relations, reporting to CFO David Farnsworth, and will be responsible for developing and implementing a comprehensive investor relations strategy [1] - Krishna Sinha has been appointed as Vice President of Strategy and Corporate Development, reporting to CFO David Farnsworth, and will lead the development of the company's long-term strategic plan, including inorganic acquisition and partnership strategies [1] - Robin Milton has been appointed as Chief Marketing and Communications Officer, reporting to Chief Human Resources Officer Steve Ratner, and will drive the development and execution of Mercury's strategic marketing plan [7] Company Overview - Mercury Systems is a technology company that delivers mission-critical processing power to the edge, enabling advanced technologies for aerospace and defense missions [2] - The Mercury Processing Platform allows customers to leverage innovative capabilities from silicon to system scale, turning data into actionable insights [2] - Mercury's products and solutions are deployed in over 300 programs across 35 countries, supporting mission computing, sensor processing, command and control, and communications [2] - The company is headquartered in Andover, Massachusetts, and has 23 locations worldwide [2] Leadership Perspective - Mercury Chairman and CEO Bill Ballhaus expressed excitement about the new hires, stating that they bring vital, diverse, and complementary skillsets to the leadership team [2] - The company believes it has now largely established the strategy, structure, and personnel necessary to drive its next phase of growth [2] Forward-Looking Statements - The press release contains forward-looking statements related to the company's strategic plan execution, but these statements involve risks and uncertainties that could cause actual results to differ materially from projections [3][4]

ANDOVER, Mass., Jan. 14, 2025 (GLOBE NEWSWIRE) -- Mercury Systems Inc. (NASDAQ: MRCY, www.mrcy.com), a technology company that delivers mission-critical processing power to the edge, will release its second quarter fiscal year 2025 financial results after the market close on Tuesday, February 4, 2025. Management will host a conference call and simultaneous webcast at 5:00 p.m. ET on the same day to discuss Mercury's quarterly financial results, business highlights, and outlook. In addition, Company represen ...

Mercury Systems (MRCY) has demonstrated remarkable resilience and growth potential, with its stock showing impressive momentum with a 29.6% return in the past year. Here are three compelling reasons why investors should consider adding MRCY to their portfolios in 2025.Strong Financial Performance and GrowthMercury Systems has shown robust financial performance in the first quarter of fiscal 2025, with bookings reaching $247.7 million, representing a significant 29% year-over-year increase. The company achie ...

Core Insights - Roger Krone has departed from the Board of Directors of Mercury Systems to focus on his role as President and CEO of the Boy Scouts of America [1][2] - Jean Bua, CFO of NetScout Systems, has been appointed as a new Independent Director on the Board, bringing extensive financial and accounting experience [1][2] Company Overview - Mercury Systems is a technology company that provides mission-critical processing power to the edge, supporting aerospace and defense missions [4] - The company operates globally, with products deployed in over 300 programs across 35 countries, focusing on mission computing, sensor processing, command and control, and communications [4] Leadership Changes - Roger Krone's departure is acknowledged by Bill Ballhaus, Chairman and CEO of Mercury Systems, who expressed gratitude for Krone's service [2] - Jean Bua's appointment is seen as a significant addition to the Board, enhancing its financial, governance, and compliance leadership [2][3] Jean Bua's Background - Jean Bua has over 40 years of experience in finance, accounting, and business, having served as CFO at NetScout Systems since 2011 [3] - Her previous roles include Executive Vice President of Finance at American Tower and various positions at Iron Mountain, Ernst & Young, and KPMG [3]

Core Points - Mercury Systems, Inc. has been awarded a two-year, $17 million development contract from a U.S. defense prime contractor for a program utilizing its Common Processing Architecture [1] - The new program will replace and upgrade existing processing capabilities with enhanced performance and security features, including BuiltSECURE technology, making it eligible for export to allied nations [2] - This contract follows a previous $49 million production agreement, indicating the company's progress in returning to full-rate production in its Common Processing Architecture product area [3] - The awards reflect strong demand for secure, high-performance processing solutions at the edge, showcasing customer confidence in the company's capabilities [4] 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 [8] - The Mercury Processing Platform enables customers to leverage innovative capabilities from silicon to system scale, facilitating timely decision-making [8] - The company's products are deployed in over 300 programs across 35 countries, covering various applications in mission computing, sensor processing, command and control, and communications [8]

If you want full access to all our reports, data and investing ideas, join The Aerospace Forum , the #1 aerospace, defense and airline investment research service on Seeking Alpha, with access to evoX Data Analytics, our in-house developed data analytics platform.Mercury Systems (NASDAQ: MRCY ) reported its Q1 FY25 earnings on the 5th of November, beating analyst estimates on revenues and EPS. The financial results seem to have appealed to investors, as the stock gained nearly 25% since then. In August, IDh ...