Mercury Systems (NASDAQ:MRCY) Posts Earnings Results, Beats Expectations By $0.09 EPS

Mercury Systems (NASDAQ:MRCY) issued its quarterly earnings data on Tuesday. The technology company reported $0.16 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.07 by $0.09, FiscalAI reports. The business had revenue of $232.87 million for the quarter, compared to analysts’ expectations of $209.96 million. Mercury Systems had a positive return on equity of 1.14% and a negative net margin of 3.53%.The company’s revenue for the quarter was up 4.4% on a year-over-year basis. During the same period in the prior year, the firm earned $0.07 EPS.

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

• Mercury beat expectations in Q2 with $288M bookings (1.23 book-to-bill), ~$1.5B backlog and revenue of $233M, producing record first-half revenue.
• Profitability improved as adjusted EBITDA rose ~36% to $30M and adjusted EBITDA margin expanded to 12.9% (up 300 bps YoY), with adjusted EPS of $0.16.
• Cash flow and leverage moved favorably—Q2 free cash flow of $46M, cash on hand of $335M, net debt down to $257M, and net working capital reduced by $61M year-over-year.
• Management held FY‑2026 guidance (low single‑digit revenue growth; EBITDA margin approaching mid‑teens) but warned Q3 revenue will be down YoY and Q3 free cash flow likely a net outflow due to roughly $30M of revenue/cash pulled into Q2.
• The company is adding automated capacity (additional ~50k sq ft in Phoenix for its Common Processing Architecture), consolidating sites, and burning through lower‑margin backlog toward a long‑term target of mid‑teens to low‑mid‑20s% EBITDA margins, though upside from programs like Golden Dome and increased defense budgets remains uncertain.

Mercury Systems Trading Down 23.1%

Shares of NASDAQ:MRCY traded down $22.95 on Wednesday, hitting $76.34. 1,147,334 shares of the company’s stock were exchanged, compared to its average volume of 748,229. The stock has a market capitalization of $4.59 billion, a price-to-earnings ratio of -134.38, a price-to-earnings-growth ratio of 4.16 and a beta of 0.75. Mercury Systems has a 12 month low of $39.89 and a 12 month high of $103.84. The company has a debt-to-equity ratio of 0.40, a current ratio of 3.37 and a quick ratio of 2.31. The business’s 50 day simple moving average is $82.80 and its two-hundred day simple moving average is $74.30.

Insider Transactions at Mercury Systems

In related news, CAO Douglas Munro sold 1,329 shares of the firm’s stock in a transaction dated Wednesday, November 12th. The shares were sold at an average price of $73.42, for a total value of $97,575.18. Following the transaction, the chief accounting officer owned 14,678 shares of the company’s stock, valued at $1,077,658.76. This trade represents a 8.30% decrease in their position. The transaction was disclosed in a filing with the SEC, which is accessible through the SEC website. Also, Director Debora A. Plunkett sold 1,700 shares of Mercury Systems stock in a transaction dated Friday, November 7th. The shares were sold at an average price of $73.99, for a total transaction of $125,783.00. Following the sale, the director owned 16,833 shares of the company’s stock, valued at $1,245,473.67. The trade was a 9.17% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Over the last ninety days, insiders have sold 1,003,029 shares of company stock worth $75,673,358. Insiders own 1.40% of the company’s stock.

Institutional Inflows and Outflows

Institutional investors have recently added to or reduced their stakes in the business. Focus Partners Wealth boosted its position in shares of Mercury Systems by 3.0% in the 3rd quarter. Focus Partners Wealth now owns 6,929 shares of the technology company’s stock worth $536,000 after purchasing an additional 199 shares in the last quarter. Osaic Holdings Inc. raised its stake in Mercury Systems by 53.2% in the second quarter. Osaic Holdings Inc. now owns 599 shares of the technology company’s stock valued at $32,000 after buying an additional 208 shares during the last quarter. Brevan Howard Capital Management LP boosted its holdings in Mercury Systems by 0.9% in the second quarter. Brevan Howard Capital Management LP now owns 22,861 shares of the technology company’s stock worth $1,231,000 after acquiring an additional 211 shares in the last quarter. Cerity Partners LLC boosted its holdings in Mercury Systems by 0.4% in the second quarter. Cerity Partners LLC now owns 57,552 shares of the technology company’s stock worth $3,100,000 after acquiring an additional 218 shares in the last quarter. Finally, EverSource Wealth Advisors LLC grew its stake in shares of Mercury Systems by 33.7% during the second quarter. EverSource Wealth Advisors LLC now owns 929 shares of the technology company’s stock worth $50,000 after acquiring an additional 234 shares during the last quarter. Hedge funds and other institutional investors own 95.99% of the company’s stock.

Mercury Systems News Roundup

Here are the key news stories impacting Mercury Systems this week:

• Positive Sentiment: Company reported revenue and adjusted EPS above Street expectations, bookings climbed and EBITDA expanded, and backlog hit a record ~$1.5B — signals of underlying demand strength. Zacks: Q2 Earnings Beat
• Positive Sentiment: Management highlighted record backlog and strong bookings on the earnings call, reinforcing revenue visibility in coming quarters. Yahoo Finance: Earnings Call Highlights
• Positive Sentiment: Analysts remain constructive — Truist raised its price target (to $109) and William Blair reiterated a Buy rating, indicating continued analyst conviction despite near-term volatility. Benzinga / TickerReport: Analyst Actions TipRanks: Buy Rating Coverage
• Neutral Sentiment: Official press release with full Q2 financials, slide deck and call transcript provide primary detail for investors to model forward cash flow and margins. GlobeNewswire: Q2 Results
• Neutral Sentiment: Full earnings call transcript is available for detail on product mix, defense program timing and margin drivers — useful for modeling but not an immediate market catalyst on its own. Seeking Alpha: Call Transcript
• Negative Sentiment: Despite beats, the company still shows GAAP-level losses and a negative net margin; some investors punished the stock after hours on concerns that underlying profitability or near-term cash conversion remain insufficient. Seeking Alpha: Slides After Hours
• Negative Sentiment: Market commentary notes that while sales grew year-over-year, margins and GAAP results leave uncertainty about when the company will deliver consistent GAAP profitability — a driver of today’s selling pressure. MSN: Sales vs Profitability

Analyst Ratings Changes

Several research analysts recently commented on MRCY shares. Truist Financial lifted their price target on Mercury Systems from $102.00 to $109.00 and gave the stock a “buy” rating in a research report on Wednesday. The Goldman Sachs Group raised 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. Raymond James Financial reiterated a “strong-buy” rating and issued a $100.00 target price on shares of Mercury Systems in a report on Wednesday, November 5th. Canaccord Genuity Group set a $102.00 price target on Mercury Systems in a report on Wednesday. Finally, Royal Bank Of Canada restated an “outperform” rating and issued a $105.00 price target on shares of Mercury Systems in a research report on Wednesday. One equities research analyst has rated the stock with a Strong Buy rating, four have assigned a Buy rating, two have given a Hold rating and two have issued a Sell rating to the company’s stock. According to data from MarketBeat.com, Mercury Systems presently has a consensus rating of “Hold” and a consensus target price of $87.13.

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.