Mercury Systems Sets New Records, Faces Strategic Challenges in Q4 2025 Earnings Call

Mercury Systems Inc reported record Q4 bookings of $342 million and a record backlog of $1.4 billion. Revenue increased 9.9% YoY to $273 million, and adjusted EBITDA reached $51 million, with a margin of 18.8%. However, the company did not provide FY26 guidance due to uncertainties in accelerating deliveries and market conditions. It faces challenges with older low-margin programs and constraints in accelerating deliveries within FY26.

Mercury Systems Inc (MRCY) reported strong financial results for the fourth quarter and fiscal year 2025, with record bookings and a substantial backlog. The company's revenue increased 9.9% year-over-year (YoY) to $273 million, and adjusted EBITDA reached $51 million, with a margin of 18.8% [1].

Key highlights include:
- Record Q4 Bookings: MRCY reported record quarterly bookings of $342 million, resulting in a record backlog of $1.4 billion.
- Revenue Growth: Full-year revenue grew 9.2% YoY to $912 million.
- Adjusted EBITDA: The company achieved a Q4 adjusted EBITDA of $51 million, with an adjusted EBITDA margin of 18.8%.
- Free Cash Flow: Record full-year free cash flow of $119 million was reported.

However, despite these strong results, MRCY did not provide specific guidance for fiscal year 2026 due to uncertainties in accelerating deliveries and market conditions. The company faces challenges with older low-margin programs and constraints in accelerating deliveries within FY26 [2].

References:
[1] https://finance.yahoo.com/news/mercury-systems-inc-mrcy-q4-070641641.html
[2] https://ir.mrcy.com/news-releases/news-release-details/mercury-systems-reports-fourth-quarter-and-fiscal-2025-results