A month has gone by since the last earnings report for Mercury Systems (MRCY) . Shares have lost about 10.2% in that time frame, underperforming the S&P 500. Will the recent negative trend continue leading up to its next earnings release, or is Mercury Systems due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts. Mercury Systems Q4 Earnings & Revenues B ...

Where estimates-beating companies go, price target-raising analysts follow. Mercury Systems (MRCY 0.85%) stock appeared set to lock in a double-digit gain in share price this week. According to data compiled by S&P Global Market Intelligence, as of the wee hours Friday morning the defense communications company's shares were up by nearly 13% week to date. A strong earnings report was the key factor in that rise. Analyst estimates were obliterated Mercury published its fourth quarter of fiscal 2024 figures a ...

William_Potter In May, I analyzed Mercury Systems, Inc. and attached a hold rating to the stock with a $42.15 price target with FY26 eamings in mind against a peer group valuation and $42.91 with FY25 earnings in mind against the company median EV/EBITDA valuation. The company presented its fourth quarter results resently and the stock surged 17% to $40. I had a hold rating on the stock and perhaps that should have been a buy rating, but I was not impressed with the risk profile. In this report, I will be d ...

U.S. stocks traded mixed toward the end of trading, with the Dow Jones index gaining around 250 points on Wednesday. The Dow traded up 0.65% to 40,022.71 while the NASDAQ fell 0.20% to 17,153.85. The S&P 500 also rose, gaining, 0.24% to 5,447.57. Leading and Lagging Sectors Financials shares climbed by 1.1% on Tuesday. In trading on Tuesday, communication services shares fell 1.3%. Top Headline UBS Group AG UBS posted strong second-quarter earnings. UBS Group reported second-quarter FY24 sales of $11.9 bill ...

Aerospace and defense specialist Mercury Systems (NASDAQ:MRCY) — which offers advanced components, circuits, semiconductors and modules, among many other product categories — saw its shares skyrocket over 20% on Wednesday. Encouraging results tied to its fiscal fourth-quarter earnings disclosure are catapulting sentiment. Additionally, MRCY stock has benefited from surging relevancies in unmanned systems, one of Mercury's specialties. Earlier today, Mercury posted a net loss of $10.8 million or 19 cents a s ...

A strong fiscal fourth quarter has investors excited about what is to come. Defense electronics company Mercury Systems (MRCY 19.65%) reported a better-than-expected quarter, and management is confident the momentum can be sustained into the new fiscal year. Investors are excited, sending Mercury shares up 22% as of 11 a.m. ET on Wednesday. Turning a corner after a rough few years Mercury manufactures sensors, communications equipment, and other electronics components for the aerospace and defense industrie ...

Mercury Systems (MRCY) reported fourth-quarter fiscal 2024 results, wherein both top and bottom lines beat the Zacks Consensus Estimate. The aerospace and defense tech firm reported non-GAAP earnings of 23 cents per share against the Zacks Consensus Estimate of a loss of 7 cents. The bottom line surged 109.1% year over year. Mercury Systems' non-GAAP revenues decreased 1.8% to $248.6 million. The top line beat the consensus mark by 11.7%. The results reflected solid progress in each of the priority focus ar ...

Mercury Systems (MRCY) reported $248.56 million in revenue for the quarter ended June 2024, representing a year-over-year decline of 1.9%. EPS of $0.23 for the same period compares to $0.11 a year ago. The reported revenue represents a surprise of +11.07% over the Zacks Consensus Estimate of $223.8 million. With the consensus EPS estimate being -$0.07, the EPS surprise was +428.57%. While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wa ...

Financial Data and Key Metrics Changes - In Q4 FY '24, the company reported bookings of $284 million, resulting in a book-to-bill ratio of 1.14, and a full-year book-to-bill of 1.22, indicating strong demand [7][24] - Q4 revenue was $249 million, slightly down 2% year-over-year, while full-year revenue was $835 million, a decline of 14% compared to the previous year [17][24] - Adjusted EBITDA for Q4 was $31.2 million, up 42% year-over-year, while full-year adjusted EBITDA decreased to $9.4 million from $132.3 million in the prior year [23][26] - Free cash flow in Q4 reached $61.4 million, marking the highest quarterly free cash flow in the company's history, compared to $3.8 million in the prior year [23][29] Business Line Data and Key Metrics Changes - The company made significant progress in its four priority areas, including delivering predictable performance, driving organic growth, expanding margins, and improving free cash flow [5][8] - The backlog increased to a record $1.3 billion, up 16% year-over-year, with approximately 80% of firm fixed-price bookings being production-related [11][24] - The company retired risk on 13 of the original 19 challenged programs, with plans to ramp up production in the first half of FY '25 [10][14] Market Data and Key Metrics Changes - The company noted strong demand in growth markets, including sensors, electronic warfare, avionics, and C4I, which align with customer priorities [11] - The company is experiencing a shift towards production bookings, with 80% of firm fixed-price bookings being production in nature, indicating a positive trend in market positioning [11][36] Company Strategy and Development Direction - The company aims to achieve above-market top-line growth, adjusted EBITDA margins in the low-to-mid 20% range, and free cash flow conversion of 50% [14][42] - The focus for FY '25 includes reducing working capital and transitioning from a high mix of development programs to a more balanced production program mix [15][42] - The company is optimistic about its strategic positioning as a leader in mission-critical processing at the edge, with expectations for predictable organic growth and expanding margins [7][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver results in line with its target profile, despite not providing specific guidance for FY '25 [14][15] - The company anticipates that the first half of FY '25 will be relatively flat year-over-year, with an increase in run rate as operational capacity shifts towards production programs [15][16] - Management highlighted the importance of successful execution of development programs and the ramp-up of production as key factors influencing future performance [34][36] Other Important Information - The company ended Q4 with $181 million in cash after paying down $25 million of debt, with total funded debt at $592 million [27] - Working capital decreased by approximately $93 million year-over-year, reflecting efforts to reverse the trend of growth in working capital [28] Q&A Session Summary Question: Details on the Common Processing Architecture (CPA) programs - Management confirmed confidence in ramping up to full rate production in the first half of FY '25, with significant progress made in reliability testing and corrective actions [30] Question: Factors influencing FY '25 results - Management discussed visibility improvements due to a record backlog and progress in reducing volatility and improving cost structure, with a focus on development program execution [32][34] Question: Transitioning to a 20:80 split of development to production programs - Management indicated that the transition is expected to occur over the next 12 months, with a focus on pursuing new business opportunities while managing risk appropriately [36] Question: Impact of CPA-related programs on margins - Management stated that CPA-related programs are not expected to be margin dilutive and may even be additive due to strong market demand [37] Question: Expectations for EBITDA margins in FY '25 - Management expects to start FY '25 with high single-digit EBITDA margins, improving in the second half as backlog transitions and volume increases [39][40] Question: Tracking unbilled receivables and KPIs for FY '25 - Management emphasized the importance of KPIs related to top-line growth, margin improvement, and free cash flow conversion as indicators of progress in FY '25 [42]

Core Insights - Mercury Systems, Inc. reported a fourth quarter FY24 revenue of $248.6 million, a decrease from $253.2 million in the same quarter of FY23, with total bookings of $284.4 million, resulting in a book-to-bill ratio of 1.14 [4][5][8] - The company achieved a record backlog of $1.3 billion, reflecting a 16% year-over-year increase [3][10] - For FY24, the company reported total revenues of $835.3 million, down from $973.9 million in FY23, with total bookings of $1.02 billion and a book-to-bill ratio of 1.22 [8][9] Financial Performance - The GAAP net loss for Q4 FY24 was $10.8 million, or $0.19 per share, compared to a net loss of $8.2 million, or $0.15 per share, in Q4 FY23 [5][20] - Adjusted EBITDA for Q4 FY24 was $31.2 million, an increase from $21.9 million in Q4 FY23 [6][38] - Free cash flow for Q4 FY24 was $61.4 million, significantly up from $3.8 million in Q4 FY23 [7][41] Operational Highlights - The company made progress in addressing challenges in its business, focusing on mission-critical processing and organic growth with expanding margins [2][3] - Cash flows from operating activities in Q4 FY24 were $71.8 million, compared to $12.6 million in Q4 FY23 [7][41] - The company reversed a multi-year trend of growth in working capital, producing a record free cash flow [3] Yearly Overview - For FY24, the company reported a GAAP net loss of $137.6 million, or $2.38 per share, compared to a net loss of $28.3 million, or $0.50 per share, in FY23 [9][46] - Adjusted EPS for FY24 was ($0.69), down from $1.00 in FY23 [9][46] - The total backlog at the end of FY24 was $1.33 billion, with $758.9 million expected to be recognized as revenue within the next 12 months [10]