Mercury Systems Inc. (NASDAQ: MRCY) shares fell 14.4% on Friday after the aerospace and defense electronics company reported fourth-quarter earnings that missed analyst expectations despite record revenue and bookings.
The company, based in Andover, Massachusetts, posted adjusted earnings per share of $0.37 for the quarter ended July 3, below the $0.39 consensus estimate among analysts. Revenue rose 6.1% year-over-year to a record $289.78 million, exceeding the $265.39 million estimate. Bookings surged 93.1% to a record $660 million, with a book-to-bill ratio of 2.28, while backlog grew 38.4% to exceed $1.9 billion.
Adjusted EBITDA totaled $49 million, representing a margin of 16.7%. Operating cash flow reached $42 million, with free cash flow at $29 million. For the full fiscal year 2026, revenue climbed to $984 million from $912 million in the prior year, while adjusted EPS improved to $1.06 from an adjusted loss of $0.64 per share in fiscal 2025.
Chairman and CEO Bill Ballhaus highlighted the company’s performance, stating that fiscal 2026 results exceeded expectations with record bookings, backlog, revenue, and EBITDA margin. He added that the company enters fiscal 2027 with increased visibility and plans to raise its organic growth outlook based on strong demand signals.
The stock decline followed the earnings release, with investors focusing on the EPS shortfall despite the company’s operational strength in revenue and bookings.
