Mercury Systems (NASDAQ:MRCY) Releases Quarterly Earnings Results, Beats Expectations By $0.21 EPS

Mercury Systems (NASDAQ:MRCY) announced its quarterly earnings data on Tuesday. The technology company reported $0.27 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.06 by $0.21, FiscalAI reports. The business had revenue of $235.76 million for the quarter, compared to analysts’ expectations of $208.42 million. Mercury Systems had a positive return on equity of 1.28% and a negative net margin of 3.23%.The company’s revenue for the quarter was up 11.5% compared to the same quarter last year. During the same period last year, the firm earned $0.06 earnings per share.

Here are the key takeaways from Mercury Systems’ conference call:

• Q3 results beat expectations with $348.3M bookings (1.48 book-to-bill), nearly $1.6B backlog, $235.8M revenue (+11.5% organic) and adjusted EBITDA of $36.1M (15.3% margin, +360 bps YoY).
• Management raised FY‑2026 guidance to revenue growth approaching mid‑single digits (from low single digits), full‑year adjusted EBITDA now expected in the mid‑teens, and expects Q4 Free Cash Flow to be positive while reiterating a long‑term target of low‑to‑mid‑20% EBITDA margins.
• Operational execution accelerated conversion of backlog (~$25M revenue, ~$15M adjusted EBITDA and ~$25M cash timing benefits tied to Q4), added 50k sq ft of automated Phoenix capacity for Common Processing Architecture programs, and closed an acquisition of a manufacturing process technology provider to support ramping programs.
• Balance‑sheet and working‑capital progress includes $332M cash, $259.7M net debt, Net Working Capital down ~4.1% YoY and a $150M revolver paydown, although Q3 showed a slight Free Cash Flow outflow (~$1.8–2M).
• Upside remains conditional — potential tailwinds from initiatives like Golden Dome, LTAMDS and FMS orders are not yet reflected in bookings or guidance and depend on customer funding allocations and prime‑level awards.

Mercury Systems Stock Up 5.6%

Mercury Systems stock traded up $4.43 during midday trading on Tuesday, reaching $82.96. The company’s stock had a trading volume of 1,011,950 shares, compared to its average volume of 479,946. Mercury Systems has a fifty-two week low of $44.01 and a fifty-two week high of $103.84. The company has a quick ratio of 2.04, a current ratio of 2.96 and a debt-to-equity ratio of 0.41. The company has a market cap of $4.98 billion, a P/E ratio of -156.53, a P/E/G ratio of 7.61 and a beta of 0.83. The business has a 50-day simple moving average of $81.16 and a 200-day simple moving average of $80.45.

Insider Buying and Selling

In other Mercury Systems news, CAO Douglas Munro sold 582 shares of the firm’s stock in a transaction on Tuesday, February 17th. The stock was sold at an average price of $83.56, for a total value of $48,631.92. Following the sale, the chief accounting officer directly owned 14,328 shares in the company, valued at $1,197,247.68. This trade represents a 3.90% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available at this hyperlink. Also, EVP David E. Farnsworth sold 3,625 shares of the firm’s stock in a transaction on Thursday, April 16th. The shares were sold at an average price of $84.87, for a total value of $307,653.75. Following the completion of the sale, the executive vice president owned 157,701 shares in the company, valued at approximately $13,384,083.87. This represents a 2.25% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Insiders sold 863,383 shares of company stock valued at $74,789,584 over the last 90 days. 1.40% of the stock is currently owned by corporate insiders.

Institutional Trading of Mercury Systems

Hedge funds and other institutional investors have recently bought and sold shares of the business. Hsbc Holdings PLC acquired a new stake in shares of Mercury Systems during the fourth quarter worth about $248,000. T. Rowe Price Investment Management Inc. increased its position in shares of Mercury Systems by 1.4% during the fourth quarter. T. Rowe Price Investment Management Inc. now owns 1,542,851 shares of the technology company’s stock worth $112,644,000 after purchasing an additional 21,182 shares in the last quarter. Invesco Ltd. increased its position in shares of Mercury Systems by 25.1% during the fourth quarter. Invesco Ltd. now owns 1,910,742 shares of the technology company’s stock worth $139,503,000 after purchasing an additional 383,299 shares in the last quarter. Corient Private Wealth LLC increased its position in shares of Mercury Systems by 171.5% during the fourth quarter. Corient Private Wealth LLC now owns 15,622 shares of the technology company’s stock worth $1,145,000 after purchasing an additional 9,867 shares in the last quarter. Finally, Vident Advisory LLC increased its position in shares of Mercury Systems by 2.9% during the fourth quarter. Vident Advisory LLC now owns 121,888 shares of the technology company’s stock worth $8,899,000 after purchasing an additional 3,382 shares in the last quarter. 95.99% of the stock is currently owned by institutional investors and hedge funds.

Analyst Ratings Changes

Several brokerages have recently issued reports on MRCY. Royal Bank Of Canada reiterated an “outperform” rating and issued a $105.00 price objective on shares of Mercury Systems in a research note on Wednesday, February 4th. Jefferies Financial Group reduced their price objective on Mercury Systems from $85.00 to $80.00 and set a “hold” rating on the stock in a research note on Tuesday, April 7th. Truist Financial upgraded Mercury Systems to a “strong-buy” rating in a research note on Friday. The Goldman Sachs Group increased their price objective on Mercury Systems from $49.00 to $55.00 and gave the company a “sell” rating in a research note on Tuesday, January 20th. Finally, Canaccord Genuity Group set a $102.00 price objective on Mercury Systems in a research note on Wednesday, February 4th. Two investment analysts have rated the stock with a Strong Buy rating, three have assigned a Buy rating, three have given a Hold rating and two have issued a Sell rating to the stock. According to MarketBeat, the company has an average rating of “Moderate Buy” and an average target price of $86.33.

About Mercury Systems

Mercury Systems, Inc (NASDAQ: MRCY) is a technology company that designs, manufactures and markets secure processing subsystems for aerospace and defense applications. The company’s products are built to address the stringent security, safety and reliability requirements of mission-critical programs, with a focus on radar, electronic warfare, intelligence and other sensor and processing functions. Mercury’s offerings encompass rugged embedded computing modules, high-performance radio frequency (RF) and microwave components, digital signal processing subsystems and secure networking solutions.

Since its origins in advanced signal processing, Mercury Systems has expanded its capabilities through a combination of internal development and targeted acquisitions.