Mercury Systems Inc · NASDAQ:MRCY
Mercury Systems — Q2 2025 Earnings Presentation
16 slides from Mercury Systems's earnings presentation, Feb 4, 2025
Slide 1: Second Quarter Fiscal Year 2025 Financial Results
SECOND QUARTER FISCAL YEAR 2025 FINANCIAL RESULTS Bill Ballhaus Chairman and CEO David Farnsworth Executive Vice President and CFO February 4, 2025, 5:00 pm ET WEBCAST LOGIN AT WWW.MRCY.COM/INVESTOR WEBCAST REPLAY AVAILABLE BY 7:00 P.M. ET FEBRUARY 4, 2025 1 © Mercury Systems, Inc.
Slide 2: Forward-looking safe harbor statement
Forward-looking safe harbor statement This presentation 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 under a refreshe
Slide 3: Today's call
Today’s call ▪ Opening remarks on business and results ▪ Update on our four focus areas ▪ Performance expectations for FY25 and beyond ▪ Q&A 3 © Mercury Systems, Inc. /Mercury Proprietary/No Tech Data/
Slide 4: Business and results
Business and results ▪ Confidence in strategic positioning and our expectations to deliver predictable organic growth with expanding margins and robust free cash flow. ▪ Revenue up 13% year over year with adjusted EBITDA of $22M (9.9% margin). ▪ Record free cash flow of $82M, up $44M year over year.
Slide 5: Delivering predictable performance
Delivering predictable performance ▪ Progress mitigating what we believe to be predominantly transitory impacts. ▪ Lowest level of net EAC change impacts in the last few years. This reflects progress in maturing our processes in program management, engineering, and operations. ▪ Continued progress r
Slide 6: Driving organic growth
Driving organic growth ▪ Q2 bookings of $242 million resulted in record backlog of $1.4 billion. ▪ Over 80% of trailing twelve-month bookings were production in nature. Recently announced workforce restructuring to align our team composition with increased production mix. ▪ Multiple competitive wins
Slide 7: Expanding margins
Expanding margins ▪ Remain focused on the following levers in our efforts to achieve targeted adjusted EBITDA margins in the low to mid 20% range: ‒ Executing on development programs and minimizing cost growth impacts. ‒ Getting back toward a more historical 20/80 mix of development to production pr
Slide 8: Driving improved free cash flow conversion and release
Driving improved free cash flow conversion and release ▪ Progress on drivers of free cash flow. Net working capital is at the lowest level since Q3 of FY22. ▪ FCF over the last three quarters is approximately $122M, and net debt is down to $349M the lowest level since Q2 of FY22. ▪ Focused on contin
Slide 9: Expectations for FY25 and beyond
Expectations for FY25 and beyond ▪ Focused on driving future results toward our target profile of above market top-line growth, adjusted EBITDA margins in the low to mid 20% range, and FCF conversion of 50%. ▪ Expecting FY25 revenue growth approaching mid-single-digits year over year versus our prio
Slide 10: Q2 FY25 vs. Q2 FY24
Q2 FY25 vs. Q2 FY24 Notes In $ millions, except percentage and per share data Q2 FY25(2) Q2 FY24(2) CHANGE (1) Non-GAAP, see reconciliation table. (2) All references in this presentation to the Bookings $242.4 $325.4 (26%) second quarter of fiscal 2025 are to the quarter ended December Book-to-Bill
Slide 11: Balance sheet
Balance sheet Notes As of (1) Rounded amounts used. (In $ millions)(1) 12/29/23 3/29/24 6/28/24 9/27/24 12/27/24 ASSETS Cash & cash equivalents $168.6 $142.6 $180.5 $158.1 $242.6 Accounts receivable and unbilled receivables, net 433.7 417.2 415.5 422.8 383.1 Inventory, net 354.2 343.0 335.3 351.1 34
Slide 12: Cash flow summary
Cash flow summary Notes For the Fiscal Quarters Ended (1) Rounded amounts used. (2) Non-GAAP, see reconciliation table. (In $ millions)(1) 12/29/23 3/29/24 6/28/24 9/27/24 12/27/24 Net Loss ($45.6) ($44.6) ($10.8) ($17.5) ($17.6) Depreciation and amortization 22.2 21.8 21.4 21.2 20.9 Other non-cash
Slide 13: Appendix
APPENDIX © Mercury Systems, Inc.
Slide 14: Adjusted EPS reconciliation
Adjusted EPS reconciliation Notes (1) Per share information is presented on a fully diluted basis. (2) Rounded amounts used. (3) Impact to income taxes is calculated by recasting income before income taxes to include the items involved in determining adjusted income and recalculating the income tax
Slide 15: Adjusted EBITDA reconciliation
Adjusted EBITDA reconciliation Notes (In thousands) (1)(2) Q2 FY24 Q2 FY25 LTM Q2 FY24 LTM Q2 FY25 (1) Rounded amounts used. (2) All references in this presentation to the second quarter of fiscal 2025 Net Loss $ (45,581) $ (17,579) $ (85,369) $ (90,455) and LTM Q2 FY25 are to the quarter ended Dece
Slide 16: Free cash flow reconciliation
Free cash flow reconciliation Notes (1) Rounded amounts used. 16 © Mercury Systems, Inc. /Mercury Proprietary/No Tech Data/