Mercury Systems (MRCY) FY2026 Q4 Earnings Call: Record Backlog and FY2027 Outlook
Source Tradingkey
Key Takeaways
- Mercury Systems reported record fiscal Q4 2026 bookings of approximately $660 million, up 93.1% year over year, with a 2.28 book-to-bill ratio.
- Quarterly revenue reached a record of nearly $290 million, rising 6.1% organically. Adjusted EBITDA was approximately $49 million, representing a 16.7% margin.
- Fiscal 2026 revenue increased 7.9% to $984 million, while adjusted EBITDA grew 25.7% to $150 million. Full-year adjusted EBITDA margin expanded 217 basis points to 15.3%.
- Backlog exceeded $1.9 billion, up 38.4% year over year. Next-12-month backlog reached a record $1 billion, increasing 23.3% and strengthening visibility into fiscal 2027 and fiscal 2028.
- Management expects fiscal 2027 revenue to approach $1.1 billion, with growth approaching double digits. Adjusted EBITDA is projected to approach $200 million, with a high-teens margin.
- Fiscal 2027 free cash flow conversion is expected to approach 35%, below the company’s 50% target, as Mercury invests in inventory, automation and factory optimization.
Key Financial Data
| Metric | Fiscal Q4 2026 | Change / Comparison |
|---|---|---|
| Revenue | Nearly $290 million | Up 6.1% organically year over year |
| Bookings | Approximately $660 million | Up 93.1% year over year; record quarter |
| Book-to-bill | 2.28 | Reflects substantial order intake |
| Gross margin | 30.6% | Down from 31.0% a year earlier |
| Adjusted EBITDA | Approximately $49 million | Versus $51 million a year earlier |
| Adjusted EBITDA margin | 16.7% | Versus 18.8% a year earlier |
| GAAP net income | Approximately $1 million | Versus approximately $16 million a year earlier |
| GAAP EPS | $0.01 | Versus $0.27 a year earlier |
| Adjusted EPS | $0.37 | Versus $0.47 a year earlier |
| Free cash flow | Approximately $29 million | Versus $34 million a year earlier |
| Metric | Fiscal 2026 | Change / Comparison |
|---|---|---|
| Revenue | $984 million | Up 7.9% year over year |
| Bookings | Approximately $1.5 billion | Up 49.8%; record year |
| Book-to-bill | 1.57 | Supported record backlog |
| Gross margin | 28.6% | Up 70 basis points |
| Adjusted EBITDA | $150 million | Up 25.7% |
| Adjusted EBITDA margin | 15.3% | Up 217 basis points |
| GAAP net loss | Approximately $30 million | Improved from a $38 million loss |
| GAAP loss per share | $0.50 | Improved from $0.65 |
| Adjusted EPS | $1.06 | Versus $0.64 in fiscal 2025 |
| Free cash flow | Approximately $68 million | Versus $119 million in fiscal 2025 |
| Backlog | More than $1.9 billion | Up 38.4% year over year |
| Net debt | $227 million | Down $55 million, or 19.5% |
Business and Operating Performance
Disclaimer: For information purposes only. Past performance is not indicative of future results.
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