Why Is Mercury Systems (MRCY) Down 10.2% Since Last Earnings Report?

Core Viewpoint - Mercury Systems reported strong Q4 fiscal 2024 results, with both earnings and revenues exceeding estimates, indicating solid operational performance despite a slight decline in revenue year-over-year [2][3]. Financial Performance - Non-GAAP earnings were 23 cents per share, significantly surpassing the Zacks Consensus Estimate of a loss of 7 cents, marking a 109.1% increase year-over-year [2]. - Non-GAAP revenues decreased by 1.8% to $248.6 million, but still beat the consensus mark by 11.7% [2]. - Gross profit increased to $73.2 million, up 8.6% year-over-year, with gross margin expanding by 280 basis points to 29.5% [5]. - Adjusted EBITDA rose to $31.16 million, reflecting a 42.1% year-over-year increase, with the margin expanding by 390 basis points to 12.5% [5]. Bookings and Backlog - Total bookings for the quarter were $284.4 million, resulting in a book-to-bill ratio of 1.14 [4]. - Total backlog as of June 28, 2024, was $1.33 billion, an increase of $185.9 million from the previous year, with $758.9 million expected to be recognized as revenue within the next 12 months [4]. Cash Flow and Balance Sheet - Cash and cash equivalents increased to $180.52 million from $142.6 million as of March 29, 2024 [6]. - Operating cash flows for Q4 were $71.8 million, a significant rise from $12.6 million in the same quarter last year, with free cash flow reaching $61.4 million compared to $3.8 million previously [6]. Market Sentiment and Estimates - There has been a downward trend in estimates revisions, with the consensus estimate shifting by 15.91% [7]. - Mercury Systems holds a Zacks Rank of 3 (Hold), indicating expectations for an in-line return in the coming months [9].