Slide 1: Third Quarter Fiscal Year 2025 Financial Results
THIRD QUARTER FISCAL YEAR 2025 FINANCIAL RESULTS Bill Ballhaus Chairman and CEO David Farnsworth Executive Vice President and CFO May 6, 2025, 5:00 pm ET WEBCAST LOGIN AT WWW.MRCY.COM/INVESTOR WEBCAST REPLAY AVAILABLE BY 7:00 P.M. ET MAY 6, 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 focus areas ▪ Performance expectations for FY25 and beyond ▪ Q&A 3 © Mercury Systems, Inc. /Mercury Propriet ary /No Tech Data/
Slide 4: Business and results
Business and results ▪ Confident in strategic positioning and our expectations to deliver predictable organic growth with expanding margins and robust free cash flow. ▪ Backlog of $1.34 billion. Trailing twelve-month book to bill of 1.1x. ▪ Revenue of $211M; year-to-date revenue growth of 8.9%. ▪ Ad
Slide 5: Delivering predictable performance
Delivering predictable performance ▪ Our focus on predictable performance positively impacted our Q3 results primarily in two areas: • Net EAC change impacts down sequentially; this reflects maturing capabilities in program management, engineering, and operations and progress in completing developme
Slide 6: Driving organic growth
Driving organic growth ▪ Q3 bookings of $200 million resulted in backlog of $1.34 billion, up 4% year over year. ▪ Q3 included $40 million of production contracts for our Common Processing Architecture, adding to our backlog in this area. ▪ Notably, during April, we had several significant bookings
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: ‒ backlog margin expansion as we burn down lower margin existing backlog and expect to replace with new bookings aligned with our target margin profile.
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 Q2 of FY22. ▪ LTM FCF is approximately $146M, and net debt is down to $322M the lowest level since Q1 of FY22. ▪ Focused on continued reduction in working
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%. ▪ Continue to expect FY25 revenue growth approaching mid-single-digits year over year. ▪ Con
Slide 10: Q3 FY25 vs. Q3 FY24
Q3 FY25 vs. Q3 FY24 Notes $ millions, except percentage and per share data Q3 FY25(2) Q3 FY24(2) CHANGE 1. Non-GAAP, see reconciliation table. 2. All references in this presentation to Bookings $200.4 $219.9 (9%) the third quarter of fiscal 2025 are to the quarter ended March 28, 2025. All Book-to-B
Slide 11: Balance sheet
Balance sheet As of Notes 1. Rounded amounts used. (In $ millions) (1) 3/29/24 6/28/24 9/27/24 12/27/24 3/28/25 ASSETS Cash & cash equivalents $142.6 $180.5 $158.1 $242.6 $269.8 Accounts receivable and unbilled receivables, net 417.2 415.5 422.8 383.1 374.7 Inventory, net 343.0 335.3 351.1 344.4 352
Slide 12: Cash flow summary
Cash flow summary For the Fiscal Quarters Ended Notes (In $ millions)(1) 3/29/24 6/28/24 9/27/24 12/27/24 3/28/25 1. Rounded amounts used. 2. Non-GAAP, see reconciliation Net loss ($44.6) ($10.8) ($17.5) ($17.6) ($19.2) table. Depreciation and amortization 21.8 21.4 21.2 20.9 19.9 Other non-cash ite
Slide 13: Appendix
APPENDIX © Mercury Systems, Inc.
Slide 14: Adjusted EPS reconciliation
Adjusted EPS reconciliation Notes (In thousands, except per share data)(2) Q3 FY24 Q3 FY25 LTM Q3 FY24 LTM Q3 FY25 1. Per share information is presented on a fully diluted basis. Loss per share(1) ($0.77) ($0.33) ($2.35) ($1.12) 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) Q3 FY24 Q3 FY25 LTM Q3 FY24 LTM Q3 FY25 1. Rounded amounts used. 2. All references in this presentation to the third Net loss ($44,574) ($19,170) ($135,099) ($65,051) quarter of fiscal 2025 and LTM Q3 FY25 are to the quarter ended March 28,
Slide 16: Free cash flow reconciliation
Free cash flow reconciliation Notes (In thousands)(1) Q3 FY24 Q3 FY25 LTM Q3 FY24 LTM Q3 FY25 1. Rounded amounts used. Cash (used in) provided by operating activities ($17,805) $29,974 $1,231 $172,537 Purchases of property and equipment (7,938) (5,914) (32,789) (26,053) Free cash flow ($25,743) $24,