Mercury Systems, Inc. Q4 2026 Earnings Recap

Mercury Systems’ stock declined 10.7% following the earnings release, primarily due to a cautious outlook that tempered investor enthusiasm despite record bookings and backlog growth.

Key Takeaways

• Record Q4 bookings reached $660 million, up 93.1% year-over-year, nearly doubling previous quarterly records.
• Total backlog surpassed $1.9 billion, with next 12-month backlog hitting a record $1 billion.
• Organic revenue grew 7.9% for fiscal 2026, alongside a 25.7% increase in adjusted EBITDA, with margin expansion of 217 basis points to 16.7%.
• Free cash flow was solid at $29 million, while net debt declined 19.5% year-over-year to $227 million.
• Despite strong execution and growth in production programs, management’s cautious outlook and remarks on backlog conversion risks likely weighed on the stock.