Mercury Systems (NASDAQ:MRCY) Posts Earnings Results, Beats Estimates By $0.21 EPS

Mercury Systems (NASDAQ:MRCY) posted its earnings results on Tuesday. The technology company reported $0.27 EPS for the quarter, topping analysts’ consensus estimates of $0.06 by $0.21, FiscalAI reports. Mercury Systems had a negative net margin of 1.46% and a positive return on equity of 2.22%. The business had revenue of $235.76 million for the quarter, compared to analysts’ expectations of $208.56 million. During the same period in the previous year, the company posted $0.06 earnings per share. The business’s revenue for the quarter was up 11.5% compared to the same quarter last year.

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 Down 3.9%

MRCY traded down $3.60 during trading on Thursday, hitting $88.06. The company had a trading volume of 940,724 shares, compared to its average volume of 640,794. The company has a market cap of $5.28 billion, a PE ratio of -366.92, a P/E/G ratio of 8.04 and a beta of 0.83. The business has a 50-day moving average of $81.27 and a 200-day moving average of $80.55. The company has a debt-to-equity ratio of 0.41, a current ratio of 2.96 and a quick ratio of 2.04. Mercury Systems has a 1-year low of $44.01 and a 1-year high of $103.84.

Insider Transactions at Mercury Systems

In related news, Director Howard L. Lance sold 4,832 shares of the company’s stock in a transaction on Wednesday, February 25th. The shares were sold at an average price of $88.98, for a total value of $429,951.36. Following the sale, the director directly owned 27,272 shares of the company’s stock, valued at $2,426,662.56. This represents a 15.05% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which is accessible through this link. Also, EVP Stuart Kupinsky sold 2,287 shares of the company’s stock in a transaction on Tuesday, February 17th. The shares were sold at an average price of $83.56, for a total transaction of $191,101.72. Following the completion of the sale, the executive vice president directly owned 68,010 shares in the company, valued at $5,682,915.60. This represents a 3.25% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Insiders sold a total of 863,383 shares of company stock valued at $74,789,584 over the last ninety days. 1.40% of the stock is currently owned by corporate insiders.

Institutional Trading of Mercury Systems

A number of institutional investors and hedge funds have recently modified their holdings of the business. Maryland State Retirement & Pension System raised its holdings in shares of Mercury Systems by 1.8% during the fourth quarter. Maryland State Retirement & Pension System now owns 7,714 shares of the technology company’s stock worth $563,000 after purchasing an additional 134 shares during the period. Focus Partners Wealth grew its position in Mercury Systems by 3.0% in the 3rd quarter. Focus Partners Wealth now owns 6,929 shares of the technology company’s stock valued at $536,000 after buying an additional 199 shares in the last quarter. Osaic Holdings Inc. grew its position in Mercury Systems by 53.2% in the 2nd quarter. Osaic Holdings Inc. now owns 599 shares of the technology company’s stock valued at $32,000 after buying an additional 208 shares in the last quarter. Brevan Howard Capital Management LP grew its position in Mercury Systems by 0.9% in the 2nd quarter. Brevan Howard Capital Management LP now owns 22,861 shares of the technology company’s stock valued at $1,231,000 after buying an additional 211 shares in the last quarter. Finally, Cerity Partners LLC grew its position in Mercury Systems by 0.4% in the 2nd quarter. Cerity Partners LLC now owns 57,552 shares of the technology company’s stock valued at $3,100,000 after buying an additional 218 shares in the last quarter. 95.99% of the stock is owned by institutional investors and hedge funds.

Analysts Set New Price Targets

A number of research analysts have recently commented on the stock. Canaccord Genuity Group set a $106.00 target price on shares of Mercury Systems in a research report on Thursday. Royal Bank Of Canada reissued an “outperform” rating and set a $105.00 target price on shares of Mercury Systems in a research report on Wednesday, February 4th. Jefferies Financial Group reduced their target price on shares of Mercury Systems from $85.00 to $80.00 and set a “hold” rating on the stock in a research report on Tuesday, April 7th. The Goldman Sachs Group boosted their target price on shares of Mercury Systems from $49.00 to $55.00 and gave the stock a “sell” rating in a research report on Tuesday, January 20th. Finally, Weiss Ratings reaffirmed a “sell (d-)” rating on shares of Mercury Systems in a report on Tuesday, April 21st. Two equities research analysts have rated the stock with a Strong Buy rating, three have issued a Buy rating, three have given a Hold rating and two have given a Sell rating to the stock. Based on data from MarketBeat.com, the stock presently has a consensus rating of “Moderate Buy” and a consensus target price of $86.78.

Mercury Systems Company Profile

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.