Mercury Systems Reports Record Backlog Amid Strong Booking Growth
On August 18, Mercury Systems (NASDAQ:MRCY) reported strong fiscal fourth-quarter and full-year results. The company saw bookings nearly double to $660 million in the quarter, with a book-to-bill ratio of 1.57, pushing annual bookings up by 49.8% to $1.5 billion. Backlog surged past $1.9 billion as of July 3, 2026—up 38.4% year over year—with the next twelve months expected to generate around $1 billion in revenue. Margin improvements were also notable: full-year gross margin rose by 70 basis points to 28.6%, and adjusted EBITDA reached a quarterly high of 16.7%. The company reduced operating expenses as a percentage of revenue, cut net debt by 19.5% to $227 million, and signed an AI collaboration with Palantir (NASDAQ:PLTR) aimed at improving factory efficiency. However, profitability lagged behind the strong order growth. Fourth-quarter adjusted earnings per share fell from $0.47 a year earlier to $0.37, while GAAP net income dropped sharply to just $1 million compared with $16 million in fiscal 2025. Free cash flow also declined by nearly half over the past year.
