Mercury Systems (MRCY) Q4 2026 earnings summary

Executive summary

• Achieved record Q4 FY26 bookings of $660M, up 93.1% year-over-year, with a book-to-bill ratio of 2.3 and record backlog exceeding $1.9B.

• Q4 FY26 revenue reached a record $290M, up 6.1% year-over-year, with adjusted EBITDA of $49M (16.7% margin).

• FY26 organic revenue grew 7.9%, with adjusted EBITDA up 25.7% year-over-year.

• Free cash flow for Q4 FY26 was $29M, with FY26 free cash flow at $68M and net debt reduced by 19.5% year-over-year to $227M.

• Entering FY27 with enhanced visibility, increased organic growth outlook, and strong demand signals.

Financial highlights

• FY26 bookings totaled $1.55B, up 50% year-over-year, with a book-to-bill of 1.57.

• FY26 revenue was $984M, up 7.9% year-over-year.

• FY26 adjusted EBITDA was $150M (15.3% margin), up 26% year-over-year.

• FY26 adjusted EPS was $1.06, up from $0.64 prior year.

• FY26 free cash flow was $68M, down 43% year-over-year.

Outlook and guidance

• FY27 revenue expected to approach $1.1B, with low double-digit organic growth and nearly 30% adjusted EBITDA growth, targeting high teens margin and adjusted EBITDA approaching $200M.

• FY27 free cash flow conversion expected near 35%, below 50% target, with higher cash flow in H2.

• FY28 reference points: low double-digit organic growth, adjusted EBITDA margin at low end of target, and free cash flow conversion returning to target.

• Outlook does not include potential upside from additional market tailwinds or the Palantir partnership.

• Enhanced visibility and increased organic growth outlook for FY27 based on strong demand and execution.