Q4 2025 Mercury Systems Inc Earnings Call Transcript
Key Points
- Mercury Systems Inc (MRCY) reported record quarterly bookings of $342 million, resulting in a record backlog of $1.4 billion.
- Q4 revenue increased by 9.9% year over year to $273 million, with full-year revenue up 9.2% to $912 million.
- The company achieved a Q4 adjusted EBITDA of $51 million, with an adjusted EBITDA margin of 18.8%, showing substantial year-over-year growth.
- Mercury Systems Inc (MRCY) ended Q4 with $309 million in cash on hand, reflecting strong cash flow management.
- The company made significant progress in reducing net working capital by $90 million year over year, or 16.7%.
- Despite strong performance, Mercury Systems Inc (MRCY) did not provide specific guidance for FY26, citing uncertainties in accelerating deliveries and market conditions.
- The company faces challenges with older low-margin programs that continue to impact backlog margins.
- There is a potential headwind from the $30 million of accelerated deliveries into Q4 of FY25, which may affect FY26 revenue growth.
- Mercury Systems Inc (MRCY) is still working through constraints in accelerating deliveries within FY26, which could impact revenue and margin expectations.
- The company has a significant amount of unbilled receivables, which, while beneficial for free cash flow, do not contribute to revenue growth.
Good day everyone and welcome to the Mercury Systems fourth quarter fiscal 2025 conference call. Today's call is being recorded at this time for opening remarks and introductions, I'd like to turn the call over to the company's Vice President of Investor Relations, Tyler Hojo. Please go ahead, Mr. Hojo?
Good afternoon and thank you for joining us. With me today is our Chairman and Chief Executive Officer, Bill Ballhaus; and our Executive Vice President and CFO Dave Farnsworth. If you have not received a copy of the earnings press release we issued earlier this afternoon, you can find it on our website at mrcy.com. The slide presentation that we will be referencing to is posted on the Investor Relations section of the website under events and presentation.
Turning the slide 2 in the presentation, I'd like to remind you that today's presentation includes forward-looking statements including information regarding Mercury's financial outlook, future plans, objectives, business prospects,
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