MRCYNasdaqElectronic Components & AccessoriesUS GAAP · USD

Mercury Systems Inc

Mercury Systems is a U.S.-based technology company that designs mission-critical processing hardware and integrated solutions for aerospace and defense customers. Its Mercury Processing Platform spans RF front end through system-level processing, enabling customers to turn sensor data into actionable decisions in demanding environments.

Revenue984m USD
+7.9 %y/y
Operating profit (EBIT)0.3m USD
+101.4 %y/y
EBIT margin0.0%
+2.2 ppy/y
Net income-29.7m USD
+21.7 %y/y
Free cash flow68.1m USD
−42.8 %y/y

Fiscal year 2026 · change from previous year

Development 2021–2026

-25002505007501,000m USD2021: 924 m USD2021: EBIT 81 m USD20212022: 988 m USD2022: EBIT 32 m USD20222023: 974 m USD2023: EBIT -22 m USD20232024: 835 m USD2024: EBIT -148 m USD20242025: 912 m USD2025: EBIT -20 m USD20252026: 984 m USD2026: EBIT 0.28 m USD20269840.28
RevenueOperating profit (EBIT)

Business

Share of revenue
Processing platforms and signal processing40 %

Core hardware and software-enabled processing capabilities from RF front end to human-machine interface.

Components and modules25 %

Standardized electronic components, modules, and sub-assemblies sold into defense and aerospace programs.

Subsystems and systems20 %

Higher-level integrated subsystems and systems built for mission-specific customer requirements.

Integrated solutions15 %

Custom and pre-integrated solutions developed with customers for long-duration defense programs.

Products

Reported · share of revenue
22.4%20.9%19.2%14.8%11.5%11.2%FY2026100 %
  • Land22.4 %
  • Components20.9 %
  • Radar End User Applications19.2 %
  • Other Sensor and Effector Applications14.8 %
  • Electronic Warfare End User Applications11.5 %
  • Naval11.2 %

Source: 10-K FY2026, revenue the company reports per product line (SEC XBRL). Shares are of the lines shown and add up to 100 %.

Customers

Mercury sells primarily to defense prime contractors, the U.S. government, and commercial aerospace OEMs. Customers buy its products to add secure processing, sensor fusion, and mission-ready electronics to platforms such as radar, electronic warfare, avionics, weapons, and C4I systems.

Defense prime contractors

Buy components, modules, and subsystems for radar, EW, avionics, and other platform programs where Mercury adds secure processing capability.

U.S. government

Procures mission-critical electronics and processing for defense programs that require trusted, secure, and qualified suppliers.

Commercial aerospace OEMs

Buy specialized processing and electronics for aircraft and aerospace systems where reliability and integration matter.

Foreign military sales programs

Indirect demand through U.S. prime contractors on international defense programs, often tied to government approvals and timing.

Strategy

Mercury is focused on making trusted, secure mission-critical technologies more accessible through its Mercury Processing Platform. The company is balancing a product model that scales across customers with a solutions model that develops custom capabilities for long-running defense programs.

Grow outsourced subsystem and processing contentMedium term

Defense customers are pushing more subsystem outsourcing to reduce risk and speed deployment.

Scale reusable product platformsMedium term

Reusable technologies improve design-win leverage and broaden addressable programs.

Convert development work into long production programsLong term

Solutions programs can generate multi-year revenue once they enter production.

Geography

Q1/2026

Mercury is headquartered in Andover, Massachusetts and operates from more than 20 locations worldwide. Its products are deployed in more than 300 programs across 35 countries, with sales tied mainly to the U.S. and European defense and aerospace ecosystems.

United States97 %
Europe2.7 %

Share of the revenue the company reports by geography.

Risks

Mercury’s business depends on defense budgets, program timing, and customer qualification requirements, so revenue can shift with government appropriations and procurement decisions. It also faces cybersecurity, supply chain, product quality, and IP-related risks because its products are mission-critical and often embedded in long-lived defense platforms.

Sorted by severity
LowMediumHighLowMediumHighImpact →Likelihood →Defense budget and procurement dependence1CMMC and cybersecurity compliance2Product defects and integration failures3Supply chain disruption4Foreign military sales and geopolitical exposure5
Impact is the risk’s severity and likelihood how probable it is over the next few years, both assessed from the company’s reports. Numbers match the list.
  1. Defense budget and procurement dependenceImpact: HighLikelihood: Medium

    Customer demand is tied to U.S. government appropriations and defense program funding decisions.

    Exposure: Revenue timing and backlog conversion

  2. CMMC and cybersecurity complianceImpact: HighLikelihood: Medium

    Failure to meet cybersecurity certification requirements could delay awards or increase costs.

    Exposure: U.S. government and prime contractor work

  3. Product defects and integration failuresImpact: HighLikelihood: Medium

    Mission-critical products must work inside complex customer systems over long periods.

    ExposureWarrantySupport costsCustomer relationships
  4. Supply chain disruptionImpact: MediumLikelihood: Medium

    Defense-grade suppliers may not be ready for compliance or qualification requirements.

    Exposure: Production schedules and margins

  5. Foreign military sales and geopolitical exposureImpact: MediumLikelihood: Medium

    FMS programs depend on multiple government approvals and can be affected by geopolitical events.

    Exposure: International defense demand

Accounting

Judgemental items
Revenue recognition timing

The company recognizes revenue both at a point in time and over time, so contract mix affects reported revenue and margin.

Impact: Quarterly revenue and gross margin volatility

Estimate-at-completion adjustments

Over-time programs can require EAC updates that change gross margin in the period recognized.

Impact: Gross margin and operating income

Goodwill impairment

Reporting unit valuations rely on discounted cash flow assumptions tied to future defense program performance.

Impact: Potential non-cash impairment charges

Intangible asset amortization

Developed technology and customer relationship intangibles reduce earnings through amortization.

Impact: Operating income and EPS

Restructuring charges

Restructuring and other charges can reflect portfolio or cost actions and affect comparability.

Impact: Reported operating results

Publicly listed companies with a comparable business focus.

Last updated: 24/09/2026