Mercury Systems Inc · NASDAQ:MRCY
Mercury Systems — Q1 2026 Earnings Presentation
16 slides from Mercury Systems's earnings presentation, Nov 5, 2025
Slide 1: First Quarter Fiscal Year 2026 Financial Results
FIRST QUARTER FISCAL YEAR 2026 FINANCIAL RESULTS Bill Ballhaus Chairman and CEO David Farnsworth Executive Vice President and CFO November 4, 2025, 5:00 pm ET WEBCAST LOGIN AT WWW.MRCY.COM/INVESTOR WEBCAST REPLAY AVAILABLE BY 7:00 P.M. ET NOVEMBER 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. You can identif
Slide 3: Today's call
Today’s call ▪ Opening remarks on business and results ▪ Update on our four priorities ▪ Performance expectations for FY26 and beyond ▪ Q&A 3 © Mercury Systems, Inc. /Mercury Propriet ary /No Tech Data/
Slide 4: Business and results
Business and results ▪ Results support our expectation to deliver robust organic growth, expanding margins, and positive free cash flow. ▪ Quarterly bookings of $250.2M and a 1.11 book-to-bill. ▪ Q1 revenue of $225.2M, up 10.2% year-over-year. ▪ Q1 adjusted EBITDA of $35.6M and adjusted EBITDA margi
Slide 5: Delivering predictable performance
Delivering predictable performance ▪ Our focus on performance excellence positively impacted our results primarily in two areas: • Net adverse EAC change impacts were in line with recent quarters, but down 51% year-over-year, which reflects maturing capabilities in program management, engineering, a
Slide 6: Driving organic growth
Driving organic growth ▪ Q1 bookings of $250.2M resulted in a record backlog of $1.4B and a book-to-bill of 1.11. ▪ Key contract awards received in the quarter included: • $26M in competitive takeaways, including a major RF subsystem win supporting a ramping U.S. missile program. • Multiple follow-o
Slide 7: Expanding margins
Expanding margins ▪ Remain focused on the following drivers in our efforts to achieve targeted adjusted EBITDA margins in the low to mid 20% range: • Backlog margin expansion as we convert low-margin backlog and add new bookings aligned with our target margin profile. • Ongoing initiatives to furthe
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 at approximately $458M, is down $106M year over year. ▪ Q1 free cash flow represented a $16.5M improvement over Q1 of last year. ▪ Focused on continued reduction in working capital and
Slide 9: Expectations for FY26 and beyond
Expectations for FY26 and beyond ▪ Optimistic about our expected ability to achieve our target profile over time of above market top-line growth, adjusted EBITDA margins in the low to mid 20% range, and FCF conversion of 50%. ▪ Expect full year fiscal 2026 revenue growth of low single-digits; first
Slide 10: Q1 FY26 vs. Q1 FY25
Q1 FY26 vs. Q1 FY25 Notes $ millions, except percentage and per share data Q1 FY26(2) Q1 FY25(2) CHANGE 1. Non-GAAP, see reconciliation table. 2. All references in this presentation to Bookings $250.2 $247.7 1% the first quarter of fiscal 2026 are to the quarter ended September 26, Book-to-Bill 1.11
Slide 11: Balance sheet
Balance sheet As of Notes 1. Rounded amounts used. (In $ millions) (1) 9/27/24 12/27/24 3/28/25 6/27/25 9/26/25 ASSETS Cash & cash equivalents $158.1 $242.6 $269.8 $309.1 $304.7 Accounts receivable and unbilled receivables, net 422.8 383.1 374.7 388.1 367.5 Inventory, net 351.1 344.4 352.7 332.9 340
Slide 12: Cash flow summary
Cash flow summary For the Fiscal Quarters Ended Notes 1. Rounded amounts used. (In $ millions) (1) 9/27/24 12/27/24 3/28/25 6/27/25 9/26/25 2. Non-GAAP, see reconciliation table. Net (loss) income ($17.5) ($17.6) ($19.2) $16.4 ($12.5) Depreciation and amortization 21.2 20.9 19.9 20.0 18.9 Other non-
Slide 13: Appendix
APPENDIX © Mercury Systems, Inc.
Slide 14: Adjusted EPS reconciliation
Adjusted EPS reconciliation Notes (In thousands, except per share data)(2) Q1 FY25 Q1 FY26 LTM Q1 FY25 LTM Q1 FY26 1. Per share information is presented on a fully diluted basis. Loss per share(1) ($0.30) ($0.21) ($2.05) ($0.57) 2. Rounded amounts used. 3. Impact to income taxes is calculated by
Slide 15: Adjusted EBITDA reconciliation
Adjusted EBITDA reconciliation Notes (In thousands)(1)(2) Q1 FY25 Q1 FY26 LTM Q1 FY25 LTM Q1 FY26 1. Rounded amounts used. 2. All references in this presentation to the first Net loss ($17,525) ($12,515) ($118,457) ($32,894) quarter of fiscal 2026 and LTM Q1 FY26 are to the quarter ended September
Slide 16: Free cash flow reconciliation
Free cash flow reconciliation Notes (In thousands)(1) Q1 FY25 Q1 FY26 LTM Q1 FY25 LTM Q1 FY26 1. Rounded amounts used. Cash (used in) provided by operating activities ($14,660) $2,182 $84,790 $155,693 Purchases of property and equipment (6,236) (6,548) (32,512) (20,115) Free cash flow ($20,896) ($4,