The raised FY27 guidance (revenue approaching $1.1B, adjusted EBITDA ~$210M) signals accelerating growth and margin expansion. Watch Q2 for continued backlog conversion and free cash flow turning positive as guided. The CAO departure is a minor distraction but the interim appointment and retention bonus mitigate risk.
Price Chart
Executive Summary
Mercury Systems reported record Q1 FY27 revenue of $253M (+12.4% YoY), record adjusted EBITDA of $56M (+58.6% YoY), and raised FY27 guidance. The company also formalized CFO Dave Farnsworth as COO and disclosed the departure of CAO Douglas Munro with an interim replacement.
Key Financial Metrics
Key Facts
- Record Q1 FY27 revenue of $253M, up 12.4% year-over-year from $225M
- Record Q1 adjusted EBITDA of $56M, up 58.6% year-over-year from $36M
- Adjusted EBITDA margin of 22.3%, up 648 bps year-over-year
- Record Q1 bookings of $370M, up 48% year-over-year; book-to-bill of 1.46
- Record backlog approaching $2.1B, up 44.7% year-over-year
- GAAP net income of $13M ($0.21 diluted EPS) vs net loss of $13M ($0.21 loss) in prior year
- Adjusted EPS of $0.52 vs $0.26 in prior year, up 100%
- FY27 guidance raised: revenue approaching $1.1B (double-digit growth), adjusted EBITDA around $210M (40% YoY growth), FCF conversion approaching 40%
- Debt repaid $100M in Q1; net debt of $232M down 19% year-over-year
- CAO Douglas Munro departing; Brian Caulfield named acting CAO
- CFO David Farnsworth formalized as COO in addition to CFO role
Financial Impact
Revenue $253M vs consensus $245M; adjusted EPS $0.52 vs consensus $0.30; guidance raised to ~$1.1B revenue and ~$210M adjusted EBITDA for FY27
Risk Factors
- Free cash flow was negative $24M in Q1, though management expects positive Q2 FCF and 40% conversion for FY27
- CAO departure creates interim leadership gap; search for permanent CAO underway
- Defense spending tailwinds may not fully materialize as expected
- Inventory increased to $399M from $367M, consuming cash
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 7 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 8-K Filing (Primary) | 0001049521-26-000096 |
| Document: mrcy-20261110.htm | 0001049521-26-000096 |
| Document: q1fy27earningspresentati.htm | 0001049521-26-000096 |
| Document: 0001049521-26-000096-index-headers.html | 0001049521-26-000096 |
| Document: 0001049521-26-000096-index.html | 0001049521-26-000096 |
| Document: 0001049521-26-000096.txt | 0001049521-26-000096 |
| 8-K Data (Synthetic) | 0001049521-26-000096 |
Track record
20 reports on MRCY
5 of 7 bullish or bearish reports moved the stock their way by T+20. Best: +64.82% at T+60 after the Apr 2, 2026 report. 5 of 7 went positive at some point.
Filters
- Nov 10, 2026today SC 13D/A Neutral 4/10 Entry $80.33 Now $88.33 +9.96% settles Dec 10
- Nov 10, 20261d ago 8-K Bullish 6/10 Viewing Entry price pending
- Nov 10, 20261d ago Press Release Bullish 6/10 Entry $86.00 Now $88.33 +2.71% settles Dec 10
- Nov 3, 20268d ago 8-K Neutral 2/10 Entry $71.76 Now $88.33 +23.09% settles Dec 3
- Oct 30, 202612d ago SC 13G/A Neutral 2/10 Entry $77.54 Now $88.33 +13.92% settles Nov 30
- Oct 13, 202629d ago Press Release Neutral 1/10 Entry $75.69 Now $88.33 +16.70% due Nov 11
- Sep 16, 20268w ago 8-K Neutral 3/10 Entry $87.25 to $76.71 Now $88.33 +1.24% ▼ −12.08% −15.26% vs SPY
- Aug 27, 202610w ago Insider Cluster Neutral 4/10 Entry $88.54 to $80.12 Now $88.33 −0.24% ▼ −9.51% −9.02% vs SPY
- Aug 25, 202611w ago Insider Cluster Bearish 5/10 Entry $89.76 to $83.18 Now $88.33 +1.59% ▲ +7.34% +7.56% vs SPY
- Aug 21, 202611w ago Insider Cluster Neutral 3/10 Entry $89.59 to $83.88 Now $88.33 −1.41% ▼ −6.37% −7.67% vs SPY
US Market Status
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