What guidance did Mercury Systems's management provide for the next earnings period?

What is Mercury Systems's gross profit margin?

What were the key takeaways from Mercury Systems’s earnings call?

What is the revenue and EPS growth rate for Mercury Systems year over year?

Did Mercury Systems beat or miss consensus estimates last quarter?

What does Mercury Systems do and what are its main business segments?

What were the key takeaways from Mercury Systems's earnings call?

What factors drove the changes in Mercury Systems's revenue and profit?

- **Revenue Beat Expectations**: 10.2% YoY growth to $225M, driven by high-margin program acceleration.
- **Margin Expansion**: EBITDA margin up 530 bps to 15.8%, gross margin at 28% (vs. 25.4% prior year).
- **Backlog Strength**: $1.4B record backlog, 6.5% YoY, with 1.11 book-to-bill ratio.
- **Cash Flow Improvement**: Q1 outflow of $4.4M, $16.5M YoY improvement, with second-half strength expected.
- **Strategic Momentum**: Phoenix factory expansion, Golden Dome initiatives, and European defense tailwinds position for long-term growth.

**【CEO Summary Section】**
- **Revenue Growth**: Q1 revenue of $225.2 million, up 10.2% YoY, driven by accelerated deliveries of $20 million in high-margin programs.
- **Backlog Expansion**: Record backlog of $1.4 billion, up 6.5% YoY, with a book-to-bill ratio of 1.11.
- **Margin Expansion**: Adjusted EBITDA margin of 15.8%, up 530 basis points YoY, with gross margin at 28% (up 260 bps YoY) due to favorable program mix.
- **Free Cash Flow**: Outflow of $4.4 million, improved by $16.5 million YoY, with expectations for second-half strength.
- **Strategic Priorities**: Focus on automation, scalability (e.g., Phoenix factory expansion), and Golden Dome initiatives for long-term growth.

**【CFO Financial Commentary】**
- **GAAP Net Loss**: $12.5 million, narrower than prior year's $17.5 million, due to margin improvements.
- **Operating Expenses**: Up 9.6% YoY, driven by compensation and litigation costs, offset by R&D reductions.
- **Working Capital**: Reduced by $105.7 million YoY, reflecting operational efficiency.
- **Liquidity**: $304.7 million in cash, with a $850 million credit facility amendment enhancing financial flexibility.

**【Q&A Highlights】**
- **Acceleration of Deliveries**: CEO emphasized ability to pull forward $20M in Q1, with potential for more if demand materializes.
- **European Growth**: 15% YoY growth in European business, driven by ReArm Europe and EW/radar programs.
- **Golden Dome**: Positioned across multiple layers (space, airborne, ground), with funding allocation key to future bookings.
- **Free Cash Flow**: Expect second-half strength, tied to reduced working capital and program execution.
- **Buyback Authorization**: $200M to return capital, reflecting confidence in growth prospects.

Mercury Systems, Inc. (MRCY) Q1 2026 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

MRCY

MRCY fundamentals

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