Mercury Systems Reports Fourth Quarter and Fiscal 2025 Results
Record Q4 FY25 Bookings of $341.5 million; book-to-bill of 1.25
Record backlog of $1.40 billion; up 6% year-over-year
Q4 FY25 Revenue of $273.1 million; GAAP net income of $16.4 million; and adjusted EBITDA of $51.3 million
Q4 FY25 Operating Cash Flow of $38.1 million with Free Cash Flow of $34.0 million, with record free cash flow of $119.0 million for FY25
ANDOVER, Mass., Aug. 11, 2025 (GLOBE NEWSWIRE) -- Mercury Systems, Inc. (NASDAQ:MRCY, www.mrcy.com)), reported operating results for the fourth quarter and fiscal year 2025, ended June 27, 2025.
"We delivered very strong results in the fourth quarter that were once again in line with or ahead of our expectations, resulting in solid year-over-year growth in backlog, revenue, net income, adjusted EBITDA, and free cash flow for our full fiscal year 2025," said Bill Ballhaus, Mercury's Chairman and CEO.
"In the fourth quarter we delivered record quarterly bookings of $341.5 million, and a book-to-bill of 1.25, resulting in a record backlog of $1.40 billion. Fourth quarter revenue of $273.1 million and full year revenue of $912.0 million were up 9.9% and 9.2% year-over-year, respectively. Fourth quarter adjusted EBITDA of $51.3 million with adjusted EBITDA margin of 18.8% and full year adjusted EBITDA of $119.4 million with full year adjusted EBITDA margin of 13.1%, were all up substantially year-over-year. Fourth quarter free cash flow of $34.0 million resulted in record full year free cash flow of $119.0 million."
Fourth Quarter Fiscal 2025 Results
Fourth quarter fiscal 2025 revenues were $273.1 million, compared to $248.6 million in the fourth quarter of fiscal 2024.
Total bookings for the fourth quarter of fiscal 2025 were $341.5 million, yielding a book-to-bill ratio of 1.25 for the quarter.
GAAP net income and diluted earnings per share for the fourth quarter of fiscal 2025 were $16.4 million, and $0.27, respectively, compared to GAAP net loss and loss per share of $10.8 million, and $0.19, respectively, for the fourth quarter of fiscal 2024. Adjusted earnings per share ("adjusted EPS") was $0.47 per share for the fourth quarter of fiscal 2025, compared to $0.23 per share in the fourth quarter of fiscal 2024.
Fourth quarter fiscal 2025 adjusted EBITDA was $51.3 million, compared to $31.2 million for the fourth quarter of fiscal 2024.
Cash flows provided by operating activities in the fourth quarter of fiscal 2025 were $38.1 million, compared to $71.8 million in the fourth quarter of fiscal 2024. Free cash flow, defined as cash flows from operating activities less capital expenditures for property and equipment, was $34.0 million for the fourth quarter of fiscal 2025 and $61.4 million for the fourth quarter of fiscal 2024.
Full Year Fiscal 2025 Results
Full year fiscal 2025 revenues were $912.0 million, compared to $835.3 million for full year fiscal 2024.
Total bookings for fiscal 2025 were $1.03 billion, yielding a book-to-bill ratio of 1.13 for the year.
GAAP net loss and loss per share for fiscal 2025 were $37.9 million, and $0.65, respectively, compared to GAAP net loss and loss per share of $137.6 million, and $2.38, respectively, for fiscal 2024. Adjusted earnings per share ("adjusted EPS") was $0.64 per share for fiscal 2025, compared to adjusted loss per share of $0.69 per share for fiscal 2024.
Fiscal 2025 adjusted EBITDA was $119.4 million, compared to $9.4 million for fiscal 2024.
Cash flows provided by operating activities in fiscal 2025 were $138.9 million, compared to $60.4 million in fiscal 2024. Free cash flow, defined as cash flows from operating activities less capital expenditures for property and equipment, was $119.0 million for fiscal 2025 and $26.1 million for fiscal 2024.
Backlog
Mercury's total backlog at June 27, 2025 was $1.40 billion, an approximate $79.2 million increase from a year ago. Of the June 27, 2025 total backlog, $807.8 million represents orders expected to be recognized as revenue within the next 12 months.
Conference Call Information
Management will host a conference call and simultaneous webcast at 5:00 p.m. ET on Monday, August 11, 2025, to discuss Mercury's quarterly financial results, business highlights and outlook. In addition, Company representatives may answer questions concerning business and financial developments and trends, the Company's view on earnings forecasts, and other business and financial matters affecting the Company, the responses to which may contain information that has not been previously disclosed.
To attend the conference call or webcast, participants should register online at ir.mrcy.com/events-presentations. Participants are requested to register a day in advance or at a minimum 15 minutes before the start of the call. A replay of the webcast will be available two hours after the call and archived on the same web page for six months.
Use of Non-GAAP Financial Measures In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, the Company provides adjusted EBITDA, adjusted income, adjusted earnings per share ("adjusted EPS") and free cash flow, which are non-GAAP financial measures. Adjusted EBITDA, adjusted income, and adjusted EPS exclude certain non-cash and other specified charges. The Company believes these non-GAAP financial measures are useful to help investors understand its past financial performance and prospects for the future. However, these non-GAAP measures should not be considered in isolation or as a substitute for financial information provided in accordance with GAAP. Management believes these non-GAAP measures assist in providing a more complete understanding of the Company's underlying operational results and trends, and management uses these measures along with the corresponding GAAP financial measures to manage the Company's business, to evaluate its performance compared to prior periods and the marketplace, and to establish operational goals. A reconciliation of GAAP to non-GAAP financial results discussed in this press release is contained in the attached exhibits.
Mercury Systems, Innovation that Matters®Mercury Systems is a technology company that delivers mission-critical processing power to the edge, making advanced technologies profoundly more accessible for today's most challenging aerospace and defense missions. The Mercury Processing Platform allows customers to tap into innovative capabilities from silicon to system scale, turning data into decisions on timelines that matter. Mercury's products and solutions are deployed in more than 300 programs and across 35 countries, enabling a broad range of applications in mission computing, sensor processing, command and control, and communications. Mercury is headquartered in Andover, Massachusetts, and has more than 20 locations worldwide. To learn more, visit mrcy.com. (NASDAQ:MRCY)
Investors and others should note that we announce material financial information using our website (www.mrcy.com), SEC filings, press releases, public conference calls, webcasts, and social media, including X (X.com/mrcy) and LinkedIn (www.linkedin.com/company/mercury-systems). Therefore, we encourage investors and others interested in Mercury to review the information we post on the social media and other communication channels listed on our website.
Forward-Looking Safe Harbor StatementThis press release contains certain forward-looking statements, as that term is defined in the Private Securities Litigation Reform Act of 1995, including those relating to the Company's focus on enhanced execution of the Company's strategic plan. You can identify these statements by the words "may," "will," "could," "should," "would," "plans," "expects," "anticipates," "continue," "estimate," "project," "intend," "likely," "forecast," "probable," "potential," and similar expressions. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected or anticipated. Such risks and uncertainties include, but are not limited to, continued funding of defense programs, the timing and amounts of such funding, general economic and business conditions, including unforeseen weakness in the Company's markets, effects of any U.S. federal government shutdown or extended continuing resolution, effects of geopolitical unrest and regional conflicts, competition, changes in technology and methods of marketing, delays in or cost increases related to completing development, engineering and manufacturing programs, changes in customer order patterns, changes in product mix, continued success in technological advances and delivering technological innovations, changes in, or in the U.S. government's interpretation of, federal export control or procurement rules and regulations, including tariffs, changes in, or in the interpretation or enforcement of, environmental rules and regulations, market acceptance of the Company's products, shortages in or delays in receiving components, supply chain delays or volatility for critical components, production delays or unanticipated expenses including due to quality issues or manufacturing execution issues, adherence to required manufacturing standards, capacity underutilization, increases in scrap or inventory write-offs, failure to achieve or maintain manufacturing quality certifications, such as AS9100, failure to achieve or maintain qualified business systems, such as those required by the DFARS, the impact of supply chain disruption, inflation and labor shortages, among other things, on program execution and the resulting effect on customer satisfaction, inability to fully realize the expected benefits from acquisitions, restructurings, and operational efficiency initiatives or delays in realizing such benefits, challenges in integrating acquired businesses and achieving anticipated synergies, effects of shareholder activism, increases in interest rates, changes to industrial security and cyber-security regulations and requirements and impacts from any cyber or insider threat events, changes in tax rates or tax regulations, changes to interest rate swaps or other cash flow hedging arrangements, changes to generally accepted accounting principles, difficulties in retaining key employees and customers, litigation, including the dispute arising with the former CEO over his resignation, unanticipated costs under fixed-price service and system integration engagements, and various other factors beyond our control. These risks and uncertainties also include such additional risk factors as are discussed in the Company's filings with the U.S. Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended June 27, 2025 and subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. The Company cautions readers not to place undue reliance upon any such forward-looking statements, which speak only as of the date made. The Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made.
Contact:Tyler Hojo, CFA, Vice President of Investor RelationsMercury Systems, Inc.978-967-3676
Mercury Systems and Innovation That Matters are registered trademarks of Mercury Systems, Inc. Other product and company names mentioned may be trademarks and/or registered trademarks of their respective holders.
MERCURY SYSTEMS, INC.
UNAUDITED CONSOLIDATED BALANCE SHEETS
(In thousands)
June 27,
June 28,
2025
2024
Assets
Current assets:
Cash and cash equivalents
$
309,099
$
180,521
Accounts receivable, net
109,588
111,441
Unbilled receivables and costs in excess of billings, net
278,475
304,029
Inventory
332,920
335,300
Prepaid income taxes
457
—
Prepaid expenses and other current assets
27,639
22,493
Total current assets
1,058,178
953,784
Property and equipment, net
101,440
110,353
Goodwill
938,093
938,093
Intangible assets, net
210,611
250,512
Operating lease right-of-use assets, net
52,264
60,860
Deferred tax asset
69,016
58,612
Other non-current assets
5,162
6,691
Total assets
$
2,434,764
$
2,378,905
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable
$
79,116
$
81,068
Accrued expenses
43,143
42,926
Accrued compensation
51,321
36,398
Income taxes payable
—
109
Deferred revenues and customer advances
126,797
73,915
Total current liabilities
300,377
234,416
Income taxes payable
4,046
7,713
Long-term debt
591,500
591,500
Operating lease liabilities
52,738
62,584
Other non-current liabilities
12,642
9,917
Total liabilities
961,303
906,130
Shareholders' equity:
Preferred stock
—
—
Common stock
590
581
Additional paid-in capital
1,287,478
1,242,402
Retained earnings
181,895
219,799
Accumulated other comprehensive income
3,498
9,993
Total shareholders' equity
1,473,461
1,472,775
Total liabilities and shareholders' equity
$
2,434,764
$
2,378,905
MERCURY SYSTEMS, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Fourth Quarters Ended
Twelve Months Ended
June 27, 2025
June 28, 2024
June 27, 2025
June 28, 2024
Net revenues
$
273,106
$
248,563
$
912,020
$
835,275
Cost of revenues(1)
188,338
175,351
657,526
639,374
Gross margin
84,768
73,212
254,494
195,901
Operating expenses:
Selling, general and administrative(1)
37,714
43,365
154,412
166,786
Research and development(1)
11,913
19,417
67,647
101,328
Amortization of intangible assets
10,275
11,311
42,849
47,661
Restructuring and other charges
(15
)
6,781
7,216
26,170
Acquisition costs and other related expenses
1,331
306
1,997
1,710
Total operating expenses
61,218
81,180
274,121
343,655
Income (loss) from operations
23,550
(7,968
)
(19,627
)
(147,754
