Mercury Q1 FY2027 earnings review
Quarter ended October 2, 2026
For information only, not investment advice. No rating or price target.
Mercury Q1 FY2027 earnings review
Bookings rose 48.1% to $370.5M, and the company raised its fiscal 2027 outlook.
Mercury Systems, Inc. · Q1 FY2027 · Published Nov 11, 2026 · By DeepCell AI · Sources
1 · Mercury (MRCY) Q1 FY2027 earnings review
Bookings rose 48.1% to $370.5M, and the company raised its fiscal 2027 outlook
- 1.Bookings of $370.5M rose 48.1%, and backlog rose 44.7% to $2.1B
- 2.Revenue of $253.2M rose 12.4% and beat the $245M Yahoo Finance consensus
- 3.Adjusted EPS of $0.52 beat the $0.30 Yahoo Finance estimate
- 4.FY2027 adjusted EBITDA outlook was raised to around $210M
- 5.Shares were +2.7% in pre-market at $85.85 as of 8:13 AM EST, not a close
Note: Yahoo Finance revenue and EPS consensus are Nov 10 averages of 12 analysts. The EPS comparison uses official adjusted EPS, which matches the Yahoo year-ago figure of $0.26. Pre-market is not a close. Bookings, backlog and the raised outlook are from Exhibits 99.1 and 99.2.Source: Mercury Systems Form 8-K Ex. 99.1, Nov 10, 2026; Exhibit 99.2; Yahoo Finance, Nov 10, 2026; CNBC, Nov 11, 2026 8:13 AM EST
2 · Executive summary
Revenue beat the Yahoo Finance consensus by 3.3%, and adjusted EPS also beat
Q1 FY2027 results vs. Yahoo Finance consensus (Nov 10, 2026)
| Metric | Actual | Consensus | Variance | Result |
|---|---|---|---|---|
| Q1 revenue | $253.2M | $245M | +$8.2M / +3.3% | Beat |
| Q1 adjusted EPS | $0.52 | $0.30 | +$0.22 / +73.3% | Beat |
Share price, Nov 10 regular close to Nov 11 pre-market last
| Mercury Systems (Nasdaq) | Nov 10 close, 4:00 PM EST | Nov 11 pre-market, 8:13 AM EST | Change ($) | Change (%) |
|---|---|---|---|---|
| MRCY | $83.58 | $85.85 | +$2.27 | +2.7% |
Both prices are from the CNBC quote page, fetched at 8:13 AM EST on Nov 11, 2026. The pre-market last is not a close. The Nov 10 regular close was $83.58, up 5.0% from the Nov 9 close of $79.62. CNBC does not state a reason for the move.
Note: The Yahoo Finance EPS estimate of $0.30 is compared with official adjusted EPS of $0.52, because the Yahoo year-ago EPS of $0.26 matches official adjusted EPS for Q1 FY2026. Official GAAP diluted EPS was $0.21.Source: Mercury Systems Form 8-K Ex. 99.1, Nov 10, 2026; Yahoo Finance, Nov 10, 2026; CNBC, Nov 11, 2026 8:13 AM EST
3 · Q1 results vs. consensus
FY2027 revenue is now expected to approach $1.1B, and adjusted EBITDA is expected around $210M
FY2027 outlook, as published in Exhibit 99.2
| Metric | Prior view | Current view |
|---|---|---|
| FY2027 revenue | Approaching double-digit growth | Double-digit growth, approaching $1.1 billion |
| FY2027 adjusted EBITDA | Approaching $200 million, about 30% growth | $210M, about 40% growth |
| FY2027 free cash flow conversion | Approaching 35% | Approaching 40% |
Note: The outlook wording is from Exhibit 99.2. “Approaching $1.1 billion” is stored as $1,100 million for comparison with the Yahoo Finance FY2027 revenue average of $1.09 billion (12 analysts). The company also said Q2 revenue is expected to be up 10% year on year. FY28 reference points were not updated.Source: Mercury Systems Form 8-K Ex. 99.1, Nov 10, 2026; Yahoo Finance, Nov 10, 2026
4 · Guidance vs. consensus
Revenue rose 12.4% to $253.2M, and GAAP operating income turned positive
- Revenue increasedRevenue rose 12.4% to $253.2M from $225.2M.
- Gross margin widenedGross profit rose 41.8% to $89.2M, and gross margin widened to 35.2%.
- Net income turned positiveGAAP net income was $13.1M, or $0.21 a share diluted, versus a net loss of -$12.5M a year earlier.
Key figures
| $M unless noted | Q1 FY2026 | Q1 FY2027 | YoY |
|---|---|---|---|
| Revenue | $225.2M | $253.2M | 12.4% |
| Income from operations | -$8.6M | $18.5M | Swung to a profit from a loss |
| Adjusted EBITDA | $35.6M | $56.4M | 58.6% |
| Adjusted EPS ($) | $0.26 | $0.52 | 100.0% |
Note: The release rounds revenue to $253 million and $225 million. Adjusted EBITDA margin was 22.3%, up 648 basis points year on year as stated in Exhibit 99.2.Source: Mercury Systems Form 8-K Ex. 99.1, Nov 10, 2026; analysis of company data
5 · Q1 key financials
Bookings rose 48.1% to $370.5M, and total backlog rose 44.7% to $2.1B
Bookings and backlog
$M unless noted, from Exhibit 99.2
| Metric | Q1 FY2026 | Q1 FY2027 |
|---|---|---|
| Bookings | $250.2M | $370.5M |
| Book-to-bill (times) | 1.11 | 1.46 |
| Total backlog | $1,424.5M | $2,061.4M |
| Next-12-month backlog | $815.6M | $1,042.9M |
Exhibit 99.2 cites strength in effectors, radar and electronic warfare, including a competitive takeaway on the F-35 program.“We delivered strong first quarter fiscal 2027 results, with record first quarter bookings, revenue, and adjusted EBITDA, and record backlog. Based on this solid execution, we are raising our outlook for fiscal year 2027.” Bill Ballhaus, Chairman and CEO
Note: The presentation rounds bookings growth to 48% and backlog growth to 45%. Computed figures from the slide table are 48.1% and 44.7%. Next-12-month backlog rose 27.9%.Source: Mercury Systems Form 8-K Ex. 99.1, Nov 10, 2026; analysis of company data
6 · Bookings and backlog
Revenue rose 12.4%, or $27.9M, year on year
Revenue
$M, Q1 FY2026 vs Q1 FY2027
The company describes the growth as organic and does not publish a revenue split by end market in the 8-K
Note: Exhibit 99.2 says Q1 trailing 12-month revenue was just over $1 billion. Q2 revenue is expected to be up 10% year on year.Source: Mercury Systems Form 8-K Ex. 99.1, Nov 10, 2026; analysis of company data
7 · Revenue
Bookings rose 48.1% to $370.5M, for a book-to-bill of 1.46
Bookings
$M, Q1 FY2026 vs Q1 FY2027
Trailing 12-month bookings were $1.7 billion, the highest in the company's history, as stated in Exhibit 99.2
Note: The bookings column uses the Exhibit 99.2 table ($370.5 million vs $250.2 million). The press release rounds Q1 bookings to $370 million.Source: Mercury Systems Form 8-K Ex. 99.1, Nov 10, 2026; analysis of company data
8 · Bookings
GAAP operating income turned to $18.5M from a loss of -$8.6M
Note: Other operating items combine amortization of intangible assets, restructuring and other charges, and acquisition costs. SG&A declined year on year.Source: Mercury Systems Form 8-K Ex. 99.1, Nov 10, 2026; analysis of company data
9 · Operating income bridge
Gross margin widened to 35.2% from 27.9%, and adjusted EBITDA margin rose to 22.3%
Gross margin and adjusted EBITDA margin
Q1 FY2026 vs Q1 FY2027
Exhibit 99.2 attributes the 730 basis-point gross-margin increase to a favorable mix and improved average backlog margin
Note: Computed gross margin is 35.2% versus 27.9%. Computed adjusted EBITDA margin is 22.3% versus 15.8%, or 648 basis points, matching the presentation.Source: Mercury Systems Form 8-K Ex. 99.1, Nov 10, 2026; analysis of company data
10 · Margin analysis
Free cash outflow was -$24.4M, and the company repaid $100M of debt in the quarter
- Operating cash flow turned negativeCash used in operating activities was -$14.0M, compared with $2.2M provided a year earlier.
- Capital expenditure increasedPurchases of property and equipment were $10.4M, up from $6.5M.
- Debt was reducedThe company repaid $100M of debt in Q1 and has paid down $250 million over the last two quarters, as stated in Exhibit 99.2.
Cash flow
| $M | Q1 FY2026 | Q1 FY2027 |
|---|---|---|
| Operating cash flow | $2.2M | -$14.0M |
| Purchases of property and equipment | $6.5M | $10.4M |
| Free cash flow | -$4.4M | -$24.4M |
Note: The release describes the $24 million free cash outflow as better than expected. FY2027 free cash flow conversion is now expected to approach 40%, with positive Q2 free cash flow.Source: Mercury Systems Form 8-K Ex. 99.1, Nov 10, 2026; Exhibit 99.2; analysis of company data
11 · Cash flow and financing
FY2027 free cash flow conversion is now expected to approach 40%, up from 35%
- The conversion target was raisedExhibit 99.2 raises expected FY2027 free cash flow conversion to approaching 40% from approaching 35%.
- Q2 free cash flow is expected to be positiveThe presentation says second-half free cash flow is expected to be higher than in the first half.
- Working capital rose in dollars but fell as a ratioNet working capital was about $491 million, up $33 million year on year, but down 60 basis points as a share of trailing 12-month revenue.
Outlook for cash conversion
| Metric | Current view |
|---|---|
| FY2027 free cash flow conversion, approaching | 40% |
| Q1 free cash flow | -$24.4M |
| Q1 purchases of property and equipment | $10.4M |
Note: The $491 million net working capital figure and the 60 basis-point comparison are from Exhibit 99.2 and are not itemized in the balance sheet of Exhibit 99.1.Source: Mercury Systems Form 8-K Ex. 99.1, Nov 10, 2026; analysis of company data
12 · Capital expenditure plan
Net debt was $232M at Oct 2, 2026, after a $100M debt repayment
- Cash declined after the repaymentCash and cash equivalents were $109.7M, compared with $214.3M at Jul 3, 2026.
- Inventory and receivables increasedInventory rose to $398.6M, and accounts receivable rose to $80.8M.
- Long-term debt declinedLong-term debt fell to $341.5M from $441.5M.
Balance sheet
| $M | Jul 3, 2026 | Oct 2, 2026 |
|---|---|---|
| Cash and cash equivalents | $214.3M | $109.7M |
| Long-term debt | $441.5M | $341.5M |
| Net debt (official at Oct 2) | $227.2M | $232M |
| Total shareholders equity | $1,497.5M | $1,546.7M |
Note: Oct 2 net debt is the official $232 million (Exhibit 99.2). The July 3 figure is a DeepCell calculation (long-term debt less cash). Debt less cash at Oct 2 is $231.8 million, which rounds to the official figure.Source: Mercury Systems Form 8-K Ex. 99.1, Nov 10, 2026; Exhibit 99.2; analysis of company data
13 · Balance sheet and debt
Backlog conversion, working-capital use and uncounted program tailwinds are the main watch items
Indicator
What to watch
Implication
Latest reading
Free cash flow timing
Q1 free cash outflow was $24.4 million amid inventory investment
The 40% conversion target depends on a stronger second half
Q1 free cash flow -$24.4M
Backlog conversion
The raised outlook excludes further automation benefits and some program tailwinds
Revenue could lag bookings if conversion is slower than planned
Backlog $2.1B
Q2 execution
Q2 revenue is expected to be up 10% year on year
A miss versus that path would pressure the full-year double-digit view
Q2 revenue, up 10%
Accounting officer transition
CAO Douglas Munro’s last day is November 13, 2026
Brian Caulfield becomes acting CAO that day; a search continues
8-K Item 5.02, Nov 10, 2026
Source: Mercury Systems Form 8-K Ex. 99.1, Nov 10, 2026; Exhibit 99.2; Form 8-K Item 5.02, Nov 10, 2026
14 · Key risks to guidance
15 · Appendix: Bookings detail
Appendix: profit and costs
| Claim | Evidence | Calculation |
|---|---|---|
| Adjusted EBITDA | $35.6M to $56.4M | 58.6% year on year |
| Adjusted EPS | $0.26 to $0.52 | 100.0% year on year |
| Gross margin | 35.2% | Up 730 basis points |
| Total operating expenses | $70.7M | 1.2% year on year |
Source: Mercury Systems Form 8-K Ex. 99.1, Nov 10, 2026; analysis of company data
16 · Appendix: Profit and costs
Appendix: FY2027 outlook
| Claim | Evidence | Calculation |
|---|---|---|
| FY2027 revenue, approaching | $1.1B | Double-digit growth, up from approaching double digits |
| FY2027 adjusted EBITDA, around | $210M | Up from approaching $200 million |
| FY2027 FCF conversion, approaching | 40% | Up from approaching 35% |
| Q2 revenue growth outlook | 10.0% | As stated in Exhibit 99.2 |
17 · Appendix: Guidance detail
Appendix: cash and debt
| Claim | Evidence | Calculation |
|---|---|---|
| Cash and cash equivalents | $109.7M | Oct 2, 2026 |
| Long-term debt | $341.5M | After a $100 million repayment |
| Net debt, as stated | $232M | Down 19% year on year |
| Q1 free cash flow | -$24.4M | Operating cash flow less capex |
Source: Mercury Systems Form 8-K Ex. 99.1, Nov 10, 2026; analysis of company data
18 · Appendix: Cash and debt
Appendix: income statement detail
Revenue and costs
| $M unless noted | Q1 FY2026 | Q1 FY2027 | YoY |
|---|---|---|---|
| Revenue | $225.2M | $253.2M | 12.4% |
| Gross profit | $62.9M | $89.2M | 41.8% |
| Selling, general and administrative | $45.9M | $43.0M | (6.3%) |
| Research and development | $13.2M | $16.1M | 21.7% |
Earnings
| $M unless noted | Q1 FY2026 | Q1 FY2027 | YoY |
|---|---|---|---|
| Income from operations | -$8.6M | $18.5M | Swung to a profit from a loss of $8.6M |
| Net income (loss) | -$12.5M | $13.1M | Swung to a profit from a loss of $12.5M |
| Adjusted EBITDA | $35.6M | $56.4M | 58.6% |
| Adjusted EPS ($) | $0.26 | $0.52 | 100.0% |
Note: GAAP diluted EPS was $0.21 in Q1 FY2027, versus a loss of $0.21 a year earlier.Source: Mercury Systems Form 8-K Ex. 99.1, Nov 10, 2026; analysis of company data
19 · Appendix: Income statement
Appendix: sources
- Filing: Mercury Systems Form 8-K, Nov 10, 2026 — https://www.sec.gov/Archives/edgar/data/1049521/000104952126000096/0001049521-26-000096-index.html
- Results release, Q1 FY2027 (Ex. 99.1) — https://www.sec.gov/Archives/edgar/data/1049521/000104952126000096/a2027q1earningsreleaseex.htm
- Earnings presentation, Q1 FY2027 (Ex. 99.2) — https://www.sec.gov/Archives/edgar/data/1049521/000104952126000096/q1fy27earningspresentati.htm
- Investor relations — https://ir.mrcy.com/press-releases
- Consensus: Yahoo Finance, Nov 10, 2026 — https://finance.yahoo.com/quote/MRCY/analysis/
- Share price: CNBC MRCY quote, Nov 10, 2026 regular close $83.58 at 4:00 PM EST and Nov 11 pre-market last $85.85 at 8:13 AM EST — https://www.cnbc.com/quotes/MRCY
- Company figures are in U.S. dollars. Statement amounts originally in thousands were converted to millions. Non-GAAP figures follow the company's reconciliation tables. Bookings, backlog and outlook wording come from Exhibit 99.2.
- Chart and table values link to the model in the spreadsheet tabs of this file.
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20 · Sources
Important disclosures and disclaimer
For information only. This presentation is provided for information only. It is not investment, legal, tax or accounting advice, and it is not an offer, or a solicitation of an offer, to buy or sell any security.
No recommendation. It carries no rating, price target or buy, sell or hold view, and it was prepared without regard to any reader's investment objectives, financial situation or needs.
Sources and accuracy. Company figures come from Mercury Systems' Form 8-K of November 10, 2026 (Exhibits 99.1 and 99.2). Consensus estimates (Yahoo Finance) and share prices (CNBC) are third-party data, credited on the sources page. We have not independently verified third-party data.
Basis of presentation. Figures are GAAP unless labelled non-GAAP or identified as bookings or backlog, in U.S. dollars, for the quarters ended October 2, 2026 and September 26, 2025.
Forward-looking statements. Company commentary, consensus estimates and the watch items in this deck are forward-looking and may not be achieved. Readers should check the figures against the original filings.
Date of analysis. Share prices are the CNBC regular-session close at 4:00 PM EST on November 10, 2026, and the pre-market last at 8:13 AM EST on November 11, 2026. The pre-market last is not a close.
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21 · Disclosures
Sources
- Mercury Systems Form 8-K Exhibit 99.1, Nov 10, 2026 — https://www.sec.gov/Archives/edgar/data/1049521/000104952126000096/a2027q1earningsreleaseex.htm Filing
- Mercury Systems Form 8-K Exhibit 99.2, Nov 10, 2026 — https://www.sec.gov/Archives/edgar/data/1049521/000104952126000096/q1fy27earningspresentati.htm Filing
- Mercury Systems Form 8-K index, filed Nov 10, 2026 (accession 0001049521-26-000096) — https://www.sec.gov/Archives/edgar/data/1049521/000104952126000096/0001049521-26-000096-index.html Filing
- Mercury Systems investor relations — https://ir.mrcy.com/press-releases Filing
- Yahoo Finance MRCY analysis, Nov 10, 2026 — https://finance.yahoo.com/quote/MRCY/analysis/ Filing
- CNBC MRCY quote: Nov 10, 2026 regular close $83.58 at 4:00 PM EST; Nov 11 pre-market last $85.85 at 8:13 AM EST — https://www.cnbc.com/quotes/MRCY Filing
Not investment advice; no rating or price target.
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