MERCURY SYSTEMS INC

Mercury Systems, Inc.

Overview

Mercury Systems designs and manufactures aerospace and defense electronics, focused on signal and data processing for mission-critical edge computing. The company adapts commercial technologies into trusted, secure processing solutions for radar, sensors, electronic warfare, avionics, weapons, and C4I applications. Its core offering is the Mercury Processing Platform, an end-to-end ecosystem that integrates hardware and software to deliver modular, open-architecture solutions from silicon to system scale. Mercury emphasizes AI-ready processing, open standards, modular architectures, and onshore security and supply chain practices.

Business model and organization

• Revenue is generated through two U.S. product units and a unit focused on integrated processing solutions, plus a regional unit for EMEA.
  • U.S. product units: Signal Technologies and Processing Technologies.
  • Integrated Processing Solutions: delivers pre-integrated subsystems and solutions.
  • EMEA: supports global market expansion with edge processing capabilities.
• Engineering, Operations, and Mission Assurance are centralized to drive performance. The Advanced Concepts Group, Growth organization, and the Chief Technology Officer focus on innovation and future capability development.
• The company has applied AI and automation across operations to improve efficiency, quality, and cycle times.

Mercury Processing Platform

Platform components:

• Signal: Microwave and mixed-signal processing, including analog/digital conversion and RF front ends.
• Compute: High-performance digital processing with CPUs, GPUs, and coprocessors.
• Data Management: Recording, storage, encryption, and secure data handling.
• Display: Human-machine interfaces for rapid decision-making.
• Secure: Security engineering, trusted processing, anti-tamper measures, and cybersecurity features, with built-in security frameworks.

Product categories

• Components: Building blocks such as switches, converters, memory, and MMICs.
• Modules and Subassemblies: Boards and subsystems using open standards for interoperability.
• Integrated Solutions: Pre-integrated subsystems with software, typically in open-standards chassis.

The company supports open standards and MOSA and participates in standards bodies such as VITA and SOSA. Software platforms use heterogeneous processors, high-performance fabrics, and software-enabled hardware for future-proofing.

Market and customers

• Market focus: Global aerospace and defense electronics across air, land, sea, space, and cyberspace domains.
• Addressable market estimates:
  • Global aerospace and defense electronics: $193 billion in 2026, growing to $303 billion by 2031.
  • Tier 2 defense electronics market: $66 billion in 2026, growing to $106 billion by 2031.
• Key customers (percent of net revenues):
  • RTX Corporation: 15% in fiscal 2026; 13% in 2025; 10% in 2024.
  • Lockheed Martin Corporation: 11% in 2026; 10% in 2025; 11% in 2024.
  • Northrop Grumman: 10% in 2026; less than 10% in 2025 and 2024.
  • U.S. Navy: less than 10% in 2026; 10% in 2025; less than 10% in 2024.
  • L3Harris: less than 10% in 2026 and 2025; ~12% in 2024.

Backlog and order visibility

• Backlog of approximately $1.9 billion as of July 3, 2026, with $996.0 million expected to be recognized within the next 12 months.
• Backlog was approximately $1.4 billion as of June 27, 2025.

Growth drivers

Growth is driven by defense program outsourcing to specialized suppliers, increasing electronics content and platform modernization, space domain opportunities, cross-domain integration (JADC2), ruggedized onboard processing for harsh environments, and demand for secure, trusted edge processing with AI-enabled capabilities.

Financial and operating metrics

• Revenue and net income:
  • Fiscal 2026: Revenue $983.6 million; net loss $(29.7) million; diluted loss per share $(0.50).
  • Fiscal 2025: Revenue $912.0 million; net loss $(37.9) million; diluted loss per share $(0.65).
• Adjusted (non-GAAP):
  • Fiscal 2026: Adjusted EPS $1.06; Adjusted EBITDA $150.2 million.
  • Fiscal 2025: Adjusted EPS $0.64; Adjusted EBITDA $119.4 million.

Employees and geography

• Total employees: 2,102 as of July 3, 2026 (518 in R&D; 111 in sales/marketing; 1,186 in manufacturing and customer support; 287 in general and administrative). Contractors are included in these counts.
• Geography: Predominantly U.S.-based operations with 2,031 U.S. employees and 71 employees outside the U.S. International offices include Spain, Switzerland, and the United Kingdom.
• Corporate headquarters: Andover, Massachusetts.

Facilities and manufacturing

• Significant leased facilities include sites in Andover (MA), Phoenix (AZ), Hudson (NH), Oxnard (CA), Torrance (CA), Gulf Breeze (FL), Cypress (CA), Upper Saddle River (NJ), Alpharetta (GA), Chantilly (VA), and Huntsville (AL). The company is managing expirations and planned relocations for facilities with near-term lease expirations.
• Manufacturing is conducted primarily in AS9100-certified facilities. The Phoenix campus houses advanced microelectronics manufacturing (AMC) capabilities for secure, high-mix, low-volume production and packaging for system-on-chip and multi-chip modules.
• The company partners with contract manufacturers, including Cicor in Europe, to support local production requirements and accelerate delivery.

Intellectual property and security

• Mercury maintains a broad IP portfolio covering patents, designs, copyrights, trademarks, and trade secrets.
• The company emphasizes onshore security and trusted supply chain practices (BuiltSECURE, BuiltSAFE, cryptography, secure boot, etc.).
• Compliance participation includes export-control and security frameworks such as EAR/ITAR, FCPA, and DoD cybersecurity requirements related to CMMC considerations.

ESG, dividend policy, and liquidity

• ESG: Mercury reported an MSCI ESG rating of AAA in 2026.
• Dividend policy: The company has never paid cash dividends and does not anticipate paying dividends in the foreseeable future; earnings are intended to fund growth, debt reduction, and potential acquisitions.
• Debt and liquidity: The revolving credit facility was amended in November 2025 to an $850 million facility; $441.5 million was outstanding under the revolver as of July 3, 2026. Interest rates are variable, with a mix of SOFR- and prime-based rates; the company uses hedges and has a favorable rate swap on a portion of the balance.

Summary

Mercury Systems provides secure, standards-based, open-architecture processing solutions for defense and allied space programs. The company operates four business units, centralizes R&D and mission assurance, and reported $983.6 million in revenue for fiscal 2026 with a workforce of about 2,102 employees. Backlog stood at roughly $1.9 billion as of July 3, 2026, and top customers in 2026 included RTX, Lockheed Martin, and Northrop Grumman. Ongoing investments target R&D, manufacturing scale, onshore security, and AI-enabled edge processing.