MRCY · Mercury Systems, Inc.

Mercury Systems reported strong fiscal third quarter 2026 results, with record bookings of $348 million (up 73.7% year-over-year) and a book-to-bill of 1.48, reflecting robust demand across missile, C4I, and space programs. Revenue of $236 million grew 11.5% organically year-over-year, driven by solid execution and accelerated customer deliveries. Gross margin expanded 230 basis points to 29.3%, benefiting from improved backlog margin mix and cost efficiencies. Adjusted EBITDA rose 46% to $36 million, with margin of 15.3% up 360 basis points. GAAP net loss narrowed to $3 million from $19 million a year ago, while adjusted EPS of $0.27 compared favorably to $0.06. Free cash flow was negative $2 million, but management expects positive free cash flow in Q4. Backlog reached a record $1.6 billion, up 18% year-over-year, with $891 million expected to convert within 12 months. Management raised full-year FY2026 revenue growth guidance to approaching mid single-digits (from low single-digits) and adjusted EBITDA margin to mid-teens (from approaching mid-teens). The company highlighted strong execution on its four priorities: driving performance excellence, organic growth, margin expansion, and free cash flow conversion. CEO Bill Ballhaus noted that results were ahead of expectations, with significant year-over-year growth in backlog, revenue, and adjusted EBITDA.